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Exhibit 4.2
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MCMS, INC.
as Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
-------------------------
INDENTURE
Dated as of February 26, 1998
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12 1/2% Subordinated Exchange Debentures due 2010
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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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;
11.02
(c)........................................................ N.A.
311(a)........................................................ 7.11
(b)........................................................ 7.11
(c)........................................................ N.A.
312(a)........................................................ 2.05
(b)........................................................ 11.03
(c)........................................................ 11.03
313(a)........................................................ 7.06
(b)(1)..................................................... N.A.
(b)(2)..................................................... 7.06
(c)........................................................ 7.06; 11.02
(d)........................................................ 7.06
314(a)........................................................ 4.07; 4.08;
11.02
(b)........................................................ N.A.
(c)(1)..................................................... 11.04
(c)(2)..................................................... 11.04
(c)(3)..................................................... N.A.
(d)........................................................ N.A.
(e)........................................................ 11.05
(f)........................................................ N.A.
315(a)........................................................ 7.01(b)
(b)........................................................ 7.05; 11.02
(c)........................................................ 7.01(a)
(d)........................................................ 7.01(c)
(e)........................................................ 6.11
316(a)(last sentence)......................................... 2.09
(a)(1)(A).................................................. 6.05
(a)(1)(B).................................................. 6.04
(a)(2)..................................................... N.A.
(b)........................................................ 6.07
(c)........................................................ 9.05
317(a)(1)..................................................... 6.08
(a)(2)..................................................... 6.09
(b)........................................................ 2.04
318(a)........................................................ 11.01
(c)........................................................ 11.01
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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 the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions......................................................1
SECTION 1.02. Incorporation by Reference of TIA...............................25
SECTION 1.03. Rules of Construction...........................................25
ARTICLE TWO
THE DEBENTURES
SECTION 2.01. Form and Dating.................................................26
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount........26
SECTION 2.03. Registrar and Paying Agent......................................29
SECTION 2.04. Paying Agent To Hold Assets in Trust............................29
SECTION 2.05. Securityholder Lists............................................30
SECTION 2.06. Transfer and Exchange...........................................30
SECTION 2.07. Replacement Debentures..........................................31
SECTION 2.08. Outstanding Debentures..........................................31
SECTION 2.09. Treasury Debentures.............................................32
SECTION 2.10. Temporary Debentures............................................32
SECTION 2.11. Cancellation....................................................32
SECTION 2.12. Defaulted Interest..............................................33
SECTION 2.13. CUSIP Numbers...................................................33
SECTION 2.14. Deposit of Moneys or Preferred Stock............................33
SECTION 2.16. Book-Entry Provisions for Global Security.......................35
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee..............................................36
SECTION 3.02. Selection of Debentures To Be Redeemed..........................37
SECTION 3.03. Notice of Redemption............................................38
SECTION 3.04. Effect of Notice of Redemption..................................39
SECTION 3.05. Deposit of Redemption Price.....................................39
SECTION 3.06. Debentures Redeemed in Part.....................................39
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Debentures...........................................40
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SECTION 4.02. Maintenance of Office or Agency.................................40
SECTION 4.03. Corporate Existence.............................................40
SECTION 4.04. Payment of Taxes and Other Claims...............................41
SECTION 4.05. Maintenance of Properties and Insurance.........................41
SECTION 4.06. Compliance Certificate; Notice of Default.......................42
SECTION 4.07. Compliance with Laws............................................43
SECTION 4.08. SEC Reports.....................................................43
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.........................44
SECTION 4.10. Limitation on Restricted Payments...............................44
SECTION 4.11. Limitation on Transactions with Affiliates......................47
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness.............48
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries..............................49
SECTION 4.14. Limitation on Preferred Stock of Restricted Subsidiaries........50
SECTION 4.15. Change of Control...............................................50
SECTION 4.16. Limitation on Asset Sales.......................................52
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets........................56
SECTION 5.02. Successor Corporation Substituted...............................58
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default...............................................58
SECTION 6.02. Acceleration....................................................60
SECTION 6.03. Other Remedies..................................................61
SECTION 6.04. Waiver of Past Defaults.........................................61
SECTION 6.05. Control by Majority.............................................62
SECTION 6.06. Limitation on Suits.............................................62
SECTION 6.07. Rights of Holders To Receive Payment............................63
SECTION 6.08. Collection Suit by Trustee......................................63
SECTION 6.09. Trustee May File Proofs of Claim................................63
SECTION 6.10. Priorities .................................................... 64
SECTION 6.11. Undertaking for Costs...........................................64
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee...............................................65
SECTION 7.02. Rights of Trustee...............................................66
SECTION 7.03. Individual Rights of Trustee....................................68
SECTION 7.04. Trustee's Disclaimer............................................68
SECTION 7.05. Notice of Default...............................................68
SECTION 7.06. Reports by Trustee to Holders...................................69
SECTION 7.07. Compensation and Indemnity......................................69
SECTION 7.08. Replacement of Trustee..........................................70
SECTION 7.09. Successor Trustee by Merger, Etc................................71
SECTION 7.10. Eligibility; Disqualification...................................72
SECTION 7.11. Preferential Collection of Claims Against Company...............72
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations........................72
SECTION 8.02. Legal Defeasance and Covenant Defeasance........................74
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance...........76
SECTION 8.04. Application of Trust Money......................................78
SECTION 8.05. Repayment to the Company........................................79
SECTION 8.06. Reinstatement...................................................79
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders......................................80
SECTION 9.02. With Consent of Holders.........................................81
SECTION 9.03. Effect on Senior Debt...........................................82
SECTION 9.04. Compliance with TIA.............................................82
SECTION 9.05. Revocation and Effect of Consents...............................82
SECTION 9.06. Notation on or Exchange of Debentures...........................83
SECTION 9.07. Trustee To Sign Amendments, Etc.................................84
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Debentures Subordinated to Senior Debt.........................84
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SECTION 10.02. No Payment on Debentures in Certain Circumstances..............85
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc.................86
SECTION 10.04. Payments May Be Paid Prior to Dissolution......................88
SECTION 10.05. Subrogation....................................................88
SECTION 10.06. Obligations of the Company Unconditional.......................89
SECTION 10.07. Notice to Trustee..............................................89
SECTION 10.08. Reliance on Judicial Order or Certificate of Liquidating
Agent...............................................90
SECTION 10.09. Trustee's Relation to Senior Debt..............................90
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Debt...............91
SECTION 10.11. Securityholders Authorize Trustee To Effectuate
Subordination of Debentures.........................92
SECTION 10.12. This Article Ten Not To Prevent Events of Default..............92
SECTION 10.13. Trustee's Compensation Not Prejudiced..........................92
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls...................................................93
SECTION 11.02. Notices .......................................................93
SECTION 11.03. Communications by Holders with Other Holders...................94
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.............94
SECTION 11.05. Statements Required in Certificate or Opinion..................94
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar......................95
SECTION 11.07. Legal Holidays.................................................95
SECTION 11.08. Governing Law..................................................95
SECTION 11.09. No Adverse Interpretation of Other Agreements..................96
SECTION 11.10. No Recourse Against Others.....................................96
SECTION 11.11. Successors.....................................................96
SECTION 11.12. Duplicate Originals............................................96
SECTION 11.13. Severability...................................................96
SIGNATURES
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Exhibit A Form of Exchange Debenture.............................. A-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture.
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INDENTURE, dated as of February 26, 1998, between MCMS, Inc., an
Idaho corporation (the "Company"), and UNITED STATES TRUST COMPANY OF NEW YORK,
a New York corporation, as Trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Debentures.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 6.02(a).
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with the Company or any of
its Restricted Subsidiaries or assumed in connection with the acquisition of
assets from such Person and in each case not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing. For purposes of this Indenture, BT Alex. Brown Incorporated, Bankers
Trust Company and their Affiliates shall not be deemed to be Affiliates of the
Company or its Restricted Subsidiaries.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
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"Agent Members" has the meaning provided in Section 2.16.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other than
a Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprise any division or line of business of
such Person or any other properties or assets of such Person other than in the
ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted Subsidiary
of the Company or (b) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that Asset Sales shall not include (i) a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $500,000,
(ii) the sale, lease, conveyance, disposition or other transfer of all or
substantially all of the assets of the Company as permitted under Section 5.01
or any disposition that constitutes a Change of Control, (iii) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof, (iv) the factoring of accounts receivable arising in the
ordinary course of business pursuant to arrangements customary in the region,
(v) the licensing of intellectual property, (vi) disposals or replacements of
obsolete equipment in the ordinary course of business, and (vii) the sale,
lease, conveyance, disposition or other transfer by the Company or any
Restricted Subsidiary of the Company of assets or property in connection with
Restricted Payments permitted by Section 4.10.
"Authenticating Agent" has the meaning provided in Section 2.02.
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"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Blockage Period" has the meaning provided in Section 10.02.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and preferred stock of such Person, and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or
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Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $250,000,000; (v)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (iv) above; and (vi) investments
in money market funds which invest substantially all their assets in securities
of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture) other than to the Permitted Holders; (ii) the approval by the holders
of Capital Stock of the Company of any plan or proposal for the liquidation or
dissolution of the Company (whether or not otherwise in compliance with the
provisions of this Indenture); (iii) any Person or Group (other than the
Permitted Holders) shall become the beneficial owner, directly or indirectly, of
shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company; or (iv)
the first day on which a majority of the members of the Board of Directors of
the Company during the two-year period immediately preceding such date are not
Continuing Directors. Notwithstanding anything to the contrary contained in the
foregoing sentence, a "Change of Control" shall not be deemed to occur upon
consummation of (A) the Recapitalization, (B) the merger of the Company with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction or (C) any transaction described in clause (i) or (iii) of
the immediately preceding sentence if, after giving effect to such transaction,
(1) the Permitted Holders shall beneficially own, directly or indirectly, shares
of Capital Stock representing at least 35% of the aggregate ordinary voting
power represented by the issued and outstanding Capital
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Stock of the Company and (2) no Persons or Group shall beneficially own,
directly or indirectly, a greater percentage of such voting power than the
Permitted Holders.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section
4.15.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Effective Date or issued after the Effective Date, and includes, without
limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes and foreign withholding taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or nonrecurring gains or
losses or taxes attributable to sales or dispositions outside the ordinary
course of business), (B) Consolidated Interest Expense and (C) Consolidated
Non-cash Charges less, to the extent Consolidated Net Income has been increased
thereby, any non-cash items increasing Consolidated Net Income for such period,
all as determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Pe-
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riod. In addition to and without limitation of the foregoing, for purposes of
this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries (and the application of the
proceeds thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to working
capital facilities, occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such incurrence or repayment, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the Four
Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA (including any pro forma
expense and cost reductions calculated on a basis consistent with Regulation S-X
under the Securities Act) attributable to the assets which are the subject of
the Asset Acquisition or Asset Sale during the Four Quarter Period) occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or Asset Acquisition (including the incurrence, assumption or liability for
any such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the preceding
sentence shall give effect to the incurrence of such guaranteed Indebtedness as
if such Person or any Restricted Subsidiary of such Person had directly incurred
or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1)
interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date and (2) notwithstanding
clause (1) above, interest on Indebtedness determined on a
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fluctuating basis, to the extent such interest is covered by agreements relating
to Interest Swap Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense,
plus (ii) the amount of all dividend payments on any series of preferred stock
of such Person (other than dividends paid in Qualified Capital Stock or the
amortization of deferred financing costs relating to the issuance of the
Preferred Stock) paid, accrued or scheduled to be paid or accrued during such
period.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount and (b) the net costs under
Interest Swap Obligations, but excluding any amortization or write-off of
deferred financing costs; and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that there shall be excluded therefrom (a) after-tax gains
and losses from Asset Sales (without giving effect to the proviso therein) or
abandonments or reserves relating thereto, (b) after-tax items classified as
extraordinary or nonrecurring gains and losses, (c) the net income or loss of
any Person acquired in a "pooling of interests" transaction accrued prior to the
date it becomes a Restricted Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Restricted Subsidiary of the
referent Person, (d) the net income (but not loss) of any Restricted Subsidiary
of the referent Person to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is restricted
by a contract, operation of law or otherwise, (e) the net loss of any Person
other than a Restricted Subsidiary of the Company, (f) the net income of any
Person, other than a Restricted Subsidiary of the referent Person, except to the
extent of cash dividends or distributions paid to
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the referent Person or to a Wholly Owned Restricted Subsidiary of the referent
Person by such Person, (g) income or loss attributable to discontinued
operations (including, without limitation, operations disposed of during such
period whether or not such operations were classified as discontinued), (h) in
the case of a successor to the referent Person by consolidation or merger or as
a transferee of the referent Person's assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets, (i)
non-cash, non-recurring charges reducing Consolidated Net Income (excluding any
such non-cash charge to the extent it represents an accrual of or reserve for
cash charges in any future period or amortization of prepaid cash expense that
was paid in a prior period not included in the calculation), (j) non-cash
compensation charges, including any arising from stock options, (k) gains and
losses due solely to fluctuations in currency values and the related tax effects
according to GAAP, (l) start-up costs and duplicative costs incurred in
connection with the transition services agreements in effect on the Effective
Date (as the same may be amended from time to time), not to exceed $200,000, (m)
costs relating to the implementation of the Baan information technology system
which have not been capitalized and (n) expenses related to the
Recapitalization.
"Consolidated Non-cash Charges" means, with respect to any Person,
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP (excluding any such
charges constituting an extraordinary item or loss or any such charge which
requires an accrual of or a reserve for cash charges for any future period).
"Consolidated Tangible Assets" means, with respect to any Person, as
of any date of determination, the total assets, less goodwill, deferred
financing costs and other intangibles and less accumulated amortization, shown
on the most recent balance sheet of such Person, determined on a consolidated
basis in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the first day of the two-year period immediately preceding
such date of determination or (ii) was nominated for election or elected to such
Board of Directors with, or whose election to such Board of Directors was
approved by, the affirmative vote
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of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election or (iii) is any designee of
the Principal or its Affiliates or was nominated by the Principal or its
Affiliates or any designees of the Principal or its Affiliates on the Board of
Directors.
"Covenant Defeasance" has the meaning provided in Section 8.02.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debentures" means the 12 1/2% Subordinated Exchange Debentures due
2010, as amended or supplemented from time to time in accordance with the terms
hereof, that are issued pursuant to this Indenture.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Default Notice" has the meaning provided in Section 10.02.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Debt" means (i) Indebtedness under or in respect
of the New Revolving Credit Facility and (ii) any other Indebtedness
constituting Senior Debt which, at the time of determination, has an aggregate
principal amount of at least $25.0 million and is specifically designated in the
instrument evidencing such Senior Debt as "Designated Senior Debt" by the
Company.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event
(other than upon the occurrence of a Change of Control), matures or is
man-
17
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datorily redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof on or prior to the final
maturity date of the Debentures.
"Effective Date" means the date of this Indenture.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Date" means the date on which shares of Exchangeable
Preferred Stock are exchanged by the Company for Debentures.
"fair market value" means, with respect to any asset or property,
the price 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 whom
is under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Effective Date. Except as otherwise set forth herein, all ratios and
computations based on GAAP contained in this Indenture shall be computed in
conformity with GAAP applied on a consistent basis.
"Global Debentures" has the meaning provided in Section 2.01.
"Holder" or "Securityholder" means the Person in whose name a
Debenture is registered on the Registrar's books.
"incur" has the meaning provided in Section 4.12.
18
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"Indebtedness" means with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business), (v) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction, (vi) guarantees and
other contingent obligations of such Person in respect of Indebtedness referred
to in clauses (i) through (v) above and clause (viii) below, (vii) all
obligations of any other Person of the type referred to in clauses (i) through
(vi) which are secured by any lien on any property or asset of such Person, the
amount of such obligation being deemed to be the lesser of the fair market value
of such property or asset or the amount of the obligation so secured, (viii) all
obligations under currency agreements and interest swap agreements of such
Person and (ix) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent Financial Advisor" means a firm (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 Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
19
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"Initial Purchaser" means BT Alex. Brown Incorporated.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Debentures.
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. For the purposes of Section 4.10, (i)
"Investment" shall include and be valued at the fair market value of the net
assets of any Restricted Subsidiary at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary and shall exclude the fair market value
of the net assets of any Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary and (ii) the
amount of any Investment shall be the original cost of such Investment plus the
cost of all additional Investments by the Company or any of its Restricted
Subsidiaries, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, reduced by
the payment of dividends or distri-
20
-13-
butions in connection with such Investment or any other amounts received in
respect of such Investment; provided that no such payment of dividends or
distributions or receipt of any such other amounts shall reduce the amount of
any Investment if such payment of dividends or distributions or receipt of any
such amounts would be included in Consolidated Net Income. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Common
Stock of any direct or indirect Restricted Subsidiary of the Company such that,
after giving effect to any such sale or disposition, the Company no longer owns,
directly or indirectly, 100% of the outstanding Common Stock of such Restricted
Subsidiary, the Company shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Common
Stock of such Restricted Subsidiary not sold or disposed of.
"Legal Defeasance" has the meaning provided in Section 8.02.
"Legal Holiday" has the meaning provided in Section 11.07.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Management Services Agreement" means the Management Services
Agreement between the Company and the Principal as in effect on the Effective
Date.
"Maturity Date" means March 1, 2010.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing arrangements, (c) repayment of Indebtedness
that is required to be repaid in connection with such Asset Sale and (d)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve, in ac-
21
-14-
cordance with GAAP, against any liabilities associated with such Asset Sale and
retained by the Company or any Restricted Subsidiary, as the case may be, after
such Asset Sale, including, without limitation, post-closing adjustments,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale.
"Net Proceeds Offer" has the meaning provided in Section 4.16.
"Net Proceeds Offer Payment Date" has the meaning provided in
Section 4.16.
"Net Proceeds Offer Trigger Date" has the meaning provided in
Section 4.16.
"New Revolving Credit Facility" means the credit agreement dated as
of February 26, 1998, among the Company, the lenders party thereto in their
capacities as lenders thereunder and Bankers Trust Company, as agent, together
with the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including,
without limitation, increasing the amount of available borrowings thereunder or
adding Restricted Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"Note Indenture" means the Indenture dated February 26, 1998, by and
among the Company and United States Trust Company of New York, as trustee,
governing the Notes, as amended or supplemented from time to time.
"Notes" means the $145,000,000 aggregate principal amount of 9 3/4%
Senior Subordinated Notes and $30,000,000 aggregate principal amount of Floating
Interest Rate Subordinated Term Securities due 2008, both issued by the Company
on February 26, 1998, and any other notes issued thereafter in accordance with
the Note Indenture, as amended or supplemented from time to time in accordance
with the terms of the Note Indenture.
22
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"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 11.04 and 11.05, as they relate to the making of an
Officers' Certificate.
"Opinion of Counsel" means a written opinion from legal counsel, who
may be counsel for the Company, and who is reasonably acceptable to the Trustee
and not rendered by any employee of the Company or any of its Affiliates or
Subsidiaries complying with the requirements of Sections 11.04 and 11.05, as
they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holders" means the Principal and its Affiliates.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Notes in an aggregate principal amount
not to exceed $175.0 million and Indebtedness under the Debentures;
(ii) Indebtedness incurred pursuant to the New Revolving Credit
Facility in an aggregate principal amount at any time outstanding not to
exceed the greater of (a) $40.0 million and (b) the excess of (1) the sum
of 50% of the book value of the inventory of the Company and its
Restricted Subsidiaries and 65% of the book value of the accounts
receivable of the Company and its Restricted Subsidiaries over (2) the
amount of Indebtedness of foreign
23
-16-
Restricted Subsidiaries of the Company outstanding pursuant to
clause (xiv) below;
(iii) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Effective Date reduced by the amount of
any scheduled amortization payments or mandatory prepayments when actually
paid or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company or any of its
Restricted Subsidiaries covering Indebtedness of the Company or any of its
Restricted Subsidiaries; provided, however, that such Interest Swap
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on Indebtedness incurred
in accordance with this Indenture to the extent the notional principal
amount of such Interest Swap Obligation does not exceed the principal
amount of the Indebtedness to which such Interest Swap Obligation relates;
(v) Indebtedness under Currency Agreements; provided that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of the
Company to the Company or to a Wholly Owned Restricted Subsidiary of the
Company for so long as such Indebtedness is held by the Company or a
Wholly Owned Restricted Subsidiary of the Company; provided that if as of
any date any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company owns or holds any such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company; provided that (a) any
Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of
the Company is unsecured and subordinated, pursuant to a written
agreement, to the Company's obligations under this Indenture and the
Debentures and (b) if as of any date any
24
-17-
Person other than a Wholly Owned Restricted Subsidiary of the Company owns
or holds any such Indebtedness, such date shall be deemed the incurrence
of Indebtedness not constituting Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within five business days of
incurrence;
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations in
connection with self-insurance or similar requirements in the ordinary
course of business;
(x) Indebtedness represented by Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company and its Restricted Subsidiaries
incurred in the ordinary course of business not to exceed the greater of
$7.5 million and 5% of Consolidated Tangible Assets of the Company at any
one time outstanding;
(xi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case incurred or assumed in connection with the disposition of any
business, assets or a Restricted Subsidiary of the Company in a principal
amount not to exceed the gross proceeds actually received by the Company
or any of its Restricted Subsidiaries in connection with such disposition;
(xii) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
of the Company in the ordinary course of business;
(xiii) guarantees by the Company and its Wholly Owned Restricted
Subsidiaries of each other's Indebtedness; provided that such Indebtedness
is permitted to be incurred under this Indenture;
25
-18-
(xiv) Indebtedness of foreign Restricted Subsidiaries of the Company
incurred to finance working capital of such foreign Restricted
Subsidiaries in an aggregate principal amount at any time outstanding not
to exceed the sum of 50% of the book value of the inventory of such
foreign Restricted Subsidiaries and 65% of the book value of the accounts
receivable of such foreign Restricted Subsidiaries;
(xv) Refinancing Indebtedness; and
(xvi) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $20.0 million
at any one time outstanding (which amount may, but need not, be incurred
in whole or in part under the New Revolving Credit Facility).
"Permitted Investments" means: (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Wholly Owned Restricted Subsidiary of the
Company or that will merge or consolidate into the Company or a Wholly Owned
Restricted Subsidiary of the Company; (ii) Investments in the Company by any
Restricted Subsidiary of the Company; provided that any Indebtedness evidencing
such Investment is unsecured and subordinated, pursuant to a written agreement,
to the Company's obligations under the Debentures and this Indenture; (iii)
Investments in cash and Cash Equivalents; (iv) loans and advances to employees
and officers of the Company and its Restricted Subsidiaries in the ordinary
course of business for bona fide business purposes not in excess of $500,000 at
any one time outstanding; (v) Currency Agreements and Interest Swap Obligations
entered into in the ordinary course of the Company's or its Restricted
Subsidiaries' businesses and otherwise in compliance with this Indenture; (vi)
Investments not to exceed the greater of $7.5 million and 5% of Consolidated
Tangible Assets of the Company at the time of such Investment at any one time
outstanding; (vii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers; (viii)
Investments made by the Company or its Restricted Subsidiaries as a result of
consideration received in connection with an Asset Sale made in compliance with
Section 4.16; (ix) accounts receivable created or acquired in the ordinary
course of business; (x) guarantees (a) by the Company of Indebtedness otherwise
permitted to be incurred by Restricted Subsidiaries of the Company under this
Indenture or (b) by a Restricted Subsidiary of the Company of Indebtedness
otherwise permitted to be incurred by the Com-
26
-19-
pany or Restricted Subsidiaries of the Company under this Indenture; and (xi)
Investments the payment for which consists exclusively of Qualified Capital
Stock of the Company.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.
"Physical Debentures" has the meaning provided in Section 2.01.
"preferred stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Preferred Stock" means the Company's 12 1/2% Senior Exchangeable
Preferred Stock and the 12 1/2% Series B Senior Exchangeable Preferred Stock
issued in accordance with the Certificate of Designation relating thereto.
"principal" of any Indebtedness (including the Debentures) means the
principal amount of such Indebtedness plus, when due, the premium, if any, on
such Indebtedness.
"Principal" means Cornerstone Equity Investors, L.L.C.
"Proceeds Purchase Date" has the meaning provided in Section 4.16.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company.
"Public Equity Offering" means an underwritten public offering of
Qualified Capital Stock of the Company pursuant to a registration statement
filed with the SEC in accordance with the Securities Act.
"Purchase Money Indebtedness" means Indebtedness of the Company and
its Restricted Subsidiaries incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment.
27
-20-
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Recapitalization" means the recapitalization of the Company on the
Effective Date pursuant to the Amended and Restated Recapitalization Agreement
dated as of February 1, 1998, as amended, by and among Micron Electronics, Inc.,
MEI California, Inc. Cornerstone Equity Investors, IV, L.P. and the Company.
"Record Date" means the Record Dates specified in the Debentures,
whether or not a Legal Holiday.
"Redemption Date," when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Debentures.
"Redemption Price," when used with respect to any Debenture to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Debentures.
"Reference Date" has the meaning provided in Section 4.10.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or
any Restricted Subsidiary of the Company of (A) for purposes of clause (xv) of
the definition of Permitted Indebtedness, Indebtedness incurred in accordance
with Section 4.12 (other than pursuant to clauses (ii), (iv), (v), (vi), (vii),
(viii), (ix), (x), (xi), (xii), (xiii), (xiv) or (xvi) of the definition of
"Permitted Indebtedness") or (B) for any other purpose, Indebtedness incurred in
accordance with Section 4.12, in each case that does not (1) result in an
increase in the aggregate principal amount of Indebtedness of such Person as of
the date of such proposed Refinancing (plus the amount of any premium required
to be paid under the terms of the instrument governing such Indebtedness and
plus the amount of reasonable expenses incurred by the Company in connection
with such Refinancing) except to the extent such increase is otherwise permitted
to be incurred under this Indenture or (2) create Indebtedness with a Weighted
Average Life to
28
-21-
Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced; provided that (x) if such Indebtedness being
Refinanced is Indebtedness solely of the Company, then such Refinancing
Indebtedness shall be Indebtedness solely of the Company and (y) if such
Indebtedness being Refinanced is subordinate or junior to the Debentures, then
such Refinancing Indebtedness is subordinate or junior to the Debentures at
least to the same extent and in the same manner as the Indebtedness being
Refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated February 26, 1998 between the Company and the Initial Purchaser,
as the same may be amended or modified from time to time in accordance with the
terms thereof.
"Replacement Assets" has the meaning provided in Section 4.16.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Debt; provided that if,
and for so long as, any Designated Senior Debt lacks such a representative, then
the Representative for such Designated Senior Debt shall at all times constitute
the holders of a majority in outstanding principal amount of such Designated
Senior Debt in respect of any Designated Senior Debt.
"Restricted Payment" has the meaning provided in Section 4.10.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property.
"SEC" means the Securities and Exchange Commission.
29
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"Secondary Debentures" has the meaning specified in paragraph 1 to
the form of Debenture attached hereto as Exhibit A.
"Securities Act" means, the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Effective Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Debentures. Without limiting the
generality of the foregoing, "Senior Debt" shall also include the principal of,
premium, if any, interest (including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of, (w) all monetary
obligations of every nature of the Company under the Notes, including, without
limitation, obligations to pay principal and interest, (x) all monetary
obligations (including guarantees thereof) of every nature of the Company under
the New Revolving Credit Facility, including, without limitation, obligations to
pay principal and interest, reimbursement obligations under letters of credit,
fees, expenses and indemnities, (y) all Interest Swap Obligations (including
guarantees thereof) and (z) all obligations (including guarantees thereof) under
Currency Agreements, in each case whether outstanding on the Effective Date or
thereafter incurred. Notwithstanding the foregoing, Senior Debt shall not
include (i) any Indebtedness of the Company to a Subsidiary of the Company or
any Affiliate of the Company or any of such Affiliate's Subsidiaries, (ii)
Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer
or employee of the Company or any Subsidiary of the Company (including, without
limitation, amounts owed for compensation), (iii) Indebtedness to trade
creditors and other amounts incurred in connection with obtaining goods,
materials or services, (iv) Indebtedness represented by Disqualified Capital
Stock, (v) any liability for federal, state, local or other taxes owed or owing
by the Company, (vi) that portion of any Indebtedness incurred in violation of
the provisions set forth under Section 4.12
30
-23-
(but, as to any such obligation, no such violation shall be deemed to exist for
purposes of this clause (vi) if the holder(s) of such obligation or their
representative and the Trustee shall have received an Officers' Certificate of
the Company to the effect that the incurrence of such Indebtedness does not (or,
in the case of revolving credit indebtedness, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate such provisions of this Indenture), (vii)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to the
Company and (viii) any Indebtedness (other than Indebtedness under the Notes)
which is, by its express terms, subordinated in right of payment to any other
Indebtedness of the Company.
"Significant Subsidiary", with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.
"Subsidiary", with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Surviving Entity" has the meaning provided in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.04.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
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"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided that (x) the
Company certifies to the Trustee that such designation complies with Section
4.10 and (y) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Company or any of its Restricted Subsidiaries. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if (x) immediately after giving effect to such designation, the
Company is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12 and (y) immediately
before and immediately after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing. Any such designation by
the Board of Directors shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final
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maturity, in respect thereof, by (ii) the number of years (calculated to the
nearest one-twelfth) which will elapse between such date and the making of such
payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than in the case of a foreign Restricted Subsidiary,
directors' qualifying shares or an immaterial amount of shares required to be
owned by other Persons pursuant to applicable law) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Debentures.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on these Debentures means the Company or any other obligor
on the Debentures.
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 GAAP as in effect on the date hereof;
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(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular; and
(5) "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 DEBENTURES
SECTION 2.01. Form and Dating.
The Debentures and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of Exhibit A hereto. The
Debentures may have notations, legends or endorsements required by law, stock
exchange rule or depository rule or usage. The Company and the Trustee shall
approve the form of the Debentures and any notation, legend or endorsement on
them. Each Debenture shall be dated the date of its authentication.
The terms and provisions contained in the Debentures, annexed hereto
as Exhibit A, shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Debentures shall be issued in the form of (i) one or more permanent
Global Debentures (the "Global Debentures"), in registered form, substantially
in the form of Exhibit A hereto deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legends set forth in Section 2.15 and/or
(ii) one or more permanent certificated Debentures, in registered form (the
"Physical Debentures"), substantially in the form of Exhibit A.
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount.
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or
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an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to, the Debentures
for the Company by manual or facsimile signature. The Company's seal shall also
be reproduced on the Debentures.
If an Officer or Assistant Secretary whose signature is on a
Debenture was an Officer or Assistant Secretary at the time of such execution
but no longer holds that office or position at the time the Trustee
authenticates the Debenture, the Debenture shall nevertheless be valid.
A Debenture shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Debenture. The
signature shall be conclusive evidence that the Debenture has been authenticated
under this Indenture.
The Trustee shall authenticate Debentures for original issue in the
aggregate principal amount of the liquidation preference of the outstanding
shares of Preferred Stock on the Exchange Date (including Preferred Stock issued
in lieu of cash dividends on the Preferred Stock), plus accumulated and unpaid
dividends (such Debentures to be substantially in the form of Exhibit A), upon
receipt of a written order of the Company in the form of an Officers'
Certificate. Such Officers' Certificate shall specify the amount of Debentures
to be authenticated and the date on which the Debentures are to be
authenticated. The aggregate principal amount of Debentures outstanding at any
time may not exceed the principal amount of the liquidation preference of the
outstanding shares of Preferred Stock on the Exchange Date (including Preferred
Stock issued in lieu of cash dividends on the Preferred Stock), plus accumulated
and unpaid dividends, except that the principal amount of Debentures outstanding
at any time may exceed such amount, as provided in Section 2.07 hereof or if
Secondary Debentures are issued in lieu of cash interest payments on the
Debentures.
If the Exchange Date occurs prior to an exchange offer effected
pursuant to the Registration Rights Agreement, this Indenture shall permit (i)
the Debentures to contain the appropriate restrictive legends as required by
applicable law and (ii) upon the consummation of an exchange offer as
contemplated by the Registration Rights Agreement, new Debentures to be issued
in the same aggregate principal amount of Debentures as those exchanged therefor
and with identical terms to the Debentures prior to the exchange offer, except
that the new Debentures will not contain restrictive legends.
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The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Debentures. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Debentures whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.
The Debentures shall be issuable in fully registered form only,
without coupons, in denominations of $1,000 and any integral multiple thereof;
provided, however, that Debentures may be issued, at the option of the Company,
in denominations of less than $1,000 (but not less than $1.00) upon the initial
exchange of the Preferred Stock for the Debentures such that each holder of
Preferred Stock shall receive Debentures in a principal amount equal to the full
liquidation preference of the Preferred Stock on the Exchange Date (including
Preferred Stock issued in lieu of cash dividends on the Preferred Stock), plus
accumulated and unpaid dividends (as specified to the Trustee in the Officers'
Certificate delivered pursuant to this Section 2.02); provided, further,
however, that Secondary Debentures may be issued in denominations of less than
$1,000 (but not less than $1.00).
In the event that the Company shall issue and the Trustee shall
authenticate any Debentures issued under this Indenture subsequent to the
Exchange Date pursuant to paragraph 1 of the Debenture, the Company shall use
its reasonable efforts to obtain the same "CUSIP" number for such Debentures as
is printed on the Debentures outstanding at such time; provided, however, that
if any series of Debentures issued under this Indenture subsequent to the
Exchange Date is either determined, pursuant to an Opinion of Counsel of the
Company in a form reasonably satisfactory to the Trustee, or deemed under
standard practices to be a different class of security than the Debentures
outstanding at such time for federal income tax purposes, the Company shall
obtain a "CUSIP" number for such Debentures that is different than the "CUSIP"
number printed on the Debentures then outstanding.
Notwithstanding the foregoing, all Debentures issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Debentures may vote or consent) as one class and no series of Debentures
will have the right to vote or consent as a separate class on any matter.
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SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New York)
where (a) Debentures may be presented or surrendered for registration of
transfer ("Registrar"), (b) Debentures may be presented or surrendered for
payment ("Paying Agent") and (c) notices and demands to or upon the Company in
respect of the Debentures and this Indenture may be served. The Registrar shall
keep a register of the Debentures and of their transfer and exchange. The
Company, upon prior written notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional Paying Agent.
Neither the Company nor any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of demands and notices in connection with the
Debentures, until such time as the Trustee has resigned or a successor has been
appointed. The Paying Agent or Registrar may resign upon 30 days notice to the
Company.
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 the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Debentures (whether such assets
have been distributed to it by the Company or any other obligor on the
Debentures), and the Company and the Paying Agent shall notify the Trustee of
any Default by the Company (or any other obligor on the Debentures) 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
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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, the
Paying Agent shall have no further liability for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee five (5) Business Days before each
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 the Holders, which list may be conclusively relied upon
by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Section 2.15 and 2.16, when Debentures
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Debentures or to exchange such Debentures for an equal
principal amount of Debentures of other authorized denominations, 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
Debentures presented or surrendered for registration of 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 transfer and exchanges, the Company shall execute and
the Trustee shall authenticate Debentures at the Registrar's or co-Registrar's
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
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.10, 3.06, 4.15, 4.16 or 9.06, in
which event the Company shall be responsible for the payment of such taxes).
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The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Debenture (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Debentures 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,
except the unredeemed portion of any Debenture being redeemed in part.
SECTION 2.07. Replacement Debentures.
If a mutilated Debenture is surrendered to the Trustee or if the
Holder of a Debenture claims that the Debenture has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Debenture if the Trustee's requirements are met. If required by the
Trustee or the Company, such Holder must provide an affidavit of lost
certificate and an indemnity bond or other indemnity, sufficient in the judgment
of both the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Debenture is replaced. The
Company may charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Debenture, including reasonable fees and expenses of counsel. Every
replacement Debenture shall constitute an additional obligation of the Company.
SECTION 2.08. Outstanding Debentures.
Debentures outstanding at any time are all the Debentures that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.09, a Debenture does not cease to be
outstanding because the Company or any of its Affiliates holds the Debenture.
If a Debenture is replaced pursuant to Section 2.07 (other than a
mutilated Debenture surrendered for replacement), it ceases to be outstanding
unless the Trustee receives an Opinion of Counsel that the replaced Debenture is
held by a bona fide purchaser. A mutilated Debenture ceases to be outstanding
upon surrender of such Debenture and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Debentures payable on that date and is not
prohibited
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from paying such money to the Holders thereof pursuant to the terms of this
Indenture, then on and after that date such Debentures cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.09. Treasury Debentures.
In determining whether the Holders of the required principal amount
of Debentures have concurred in any direction, waiver, consent or notice,
Debentures owned by the Company or any of its Affiliates shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Debentures which a Trust Officer of the Trustee actually knows
are so owned shall be so considered. The Company shall notify the Trustee, in
writing, when it or any of its Affiliates repurchases or otherwise acquires
Debentures, of the aggregate principal amount of such Debentures so repurchased
or otherwise acquired.
SECTION 2.10. Temporary Debentures.
Until definitive Debentures are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Debentures 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 Debentures to be
authenticated and the date on which the temporary Debentures are to be
authenticated. Temporary Debentures shall be substantially in the form of
definitive Debentures but may have variations that the Company considers
appropriate for temporary Debentures. 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 Debentures in exchange for
temporary Debentures.
SECTION 2.11. Cancellation.
The Company at any time may deliver Debentures to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Debentures 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,
shall dispose of all Debentures surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new Debentures
to replace Debentures that it has paid or delivered to the Trustee for
can-
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cellation. If the Company shall acquire any of the Debentures, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Debentures unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Debentures,
it shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest at the rate of interest then borne by the
Debentures to the Persons who are Holders on a subsequent special record date,
which date shall be the fifteenth day next 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, as of a recent date
selected by the Company, 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.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Debentures may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that no
representation is hereby deemed to be made by the Trustee as to the correctness
or accuracy of the CUSIP number printed in the notice or on the Debentures, and
that reliance may be placed only on the other identification numbers printed on
the Debentures. The Company shall promptly notify the Trustee of any change in
the CUSIP numbers.
SECTION 2.14. Deposit of Moneys or Preferred Stock.
Except where the Company has elected to pay interest in Secondary
Debentures in accordance with paragraph 1 of the Debentures, prior to 10:00 a.m.
New York City time on each Interest Payment Date and on the Maturity Date, the
Company shall have deposited with the Paying Agent in immediately available
funds money sufficient to make cash payments, if any, due on such Interest
Payment Date or Maturity Date, as the case may be, in a timely manner which
permits the Paying Agent to remit
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payment to the Holders on such Interest Payment Date or Maturity Date, as the
case may be.
In the event Secondary Debentures will be issued in lieu of cash
interest payments on the Debentures in accordance with paragraph 1 of the
Debentures, prior to 10:00 a.m. New York City time on the day prior to each
applicable Record Date, the Company shall authorize the Trustee to authenticate
the specified amount of Secondary Debentures by transmitting to the Trustee a
written order in the form of an Officer's Certificate.
2.15 Restrictive Legends.
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE
OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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.
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SECTION 2.16. Book-Entry Provisions for Global Security.
(a) Any Global Debenture initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Section 2.15.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Debenture
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Debenture, and the Depository may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
the Global Debenture for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Debenture.
(b) Transfers of the Global Debenture shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Note may be transferred
or, subject to Section 2.01, exchanged for Physical Debentures in accordance
with the rules and procedures of the Depository. In addition, Physical
Debentures shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Debenture if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the Global
Debenture 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 written request from the Depository to issue
Physical Debentures.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Debenture to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Debentures are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Debenture in an amount equal to the principal
amount of the beneficial interest in the Global Debenture to be transferred, and
the Company shall execute, and
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the Trustee shall authenticate and deliver, one or more Physical Debentures of
like tenor and amount.
(d) In connection with the transfer of the entire Global Debenture
to beneficial owners pursuant to paragraph (b), the Global Debenture shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Debenture, an equal aggregate principal amount of Physical Debentures
of authorized denominations.
(e) The Holder of the Global Debenture may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Debenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Debentures pursuant to Paragraph 6
(a) or (b) of the Debentures, it shall notify the Trustee and the Paying Agent
in writing of the Redemption Date and the principal amount of the Debentures to
be redeemed.
Except as set forth in the succeeding paragraph, the Company shall
give each notice provided for in this Section 3.01 at least 30 days, but not
more than 60 days, before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the
Debentures.
If the Company is required to make an offer to redeem Debentures
pursuant to the provisions of Section 4.15 or 4.16 hereof, it shall furnish to
the Trustee at least 30 days but not more than 60 days before a Redemption Date,
in the case of an offer to redeem pursuant to Section 4.16 and at least 60 days
but not more than 90 days before a Redemption Date, in the case of an offer to
redeem pursuant to Section 4.15 (or such
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shorter period as may be agreed to by the Trustee in writing), an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount
of Debentures to be redeemed, (iv) the redemption price and (v) a statement to
the effect that (a) the Company or one of its Restricted Subsidiaries has
effected an Asset Sale and the conditions set forth in Section 4.16 have been
satisfied or (b) a Change of Control has occurred and the conditions set forth
in Section 4.15 have been satisfied, as applicable.
SECTION 3.02. Selection of Debentures To Be Redeemed.
If fewer than all of the Debentures are to be redeemed, selection of
the Debentures to be redeemed will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Debentures are listed or, if the Debentures are not then listed on a national
securities exchange, on a pro rata basis, by lot or in such other fair and
reasonable manner chosen at the discretion of the Trustee; provided, however,
that if a partial redemption is made with the proceeds of a Public Equity
Offering, selection of the Debentures or portion thereof for redemption shall be
made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as
practicable (subject to the Depository's procedures), unless such method is
otherwise prohibited. The Company shall promptly notify the Trustee and the
Paying Agent in writing of the date of listing and the name of the securities
exchange if and when the Debentures are listed on a principal national
securities exchange. The Trustee shall make the selection from the Debentures
outstanding and not previously called for redemption and shall promptly notify
the Company in writing of the Debentures selected for redemption and, in the
case of any Debenture selected for partial redemption, the principal amount
thereof to be redeemed. Debentures in denominations of $1,000 or less may be
redeemed only in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Debentures that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Debentures called for redemption also apply to portions of Debentures called
for redemption. On and after the date of redemption, interest will cease to
accrue on the Debentures or portions thereof called for redemption as long as
the Company has deposited with the Paying Agent funds in satisfaction of the
applicable redemption price pursuant to this Indenture.
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SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail, postage prepaid, to each Holder whose Debentures are to be redeemed,
with a copy to the Trustee and any Paying Agent. At the Company's written
request, the Trustee shall give the notice of redemption in the Company's name
and at the Company's expense.
Each notice for redemption shall identify the Debentures to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Debentures pursuant to which such
redemption is being made;
(5) that Debentures called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Debentures called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Debentures is to receive payment of the Redemption Price plus
accrued interest, if any, upon surrender to the Paying Agent of the
Debentures redeemed;
(7) if any Debenture is being redeemed in part, the portion of the
principal amount of such Debenture to be redeemed and that, after the
Redemption Date, and upon surrender of such Debenture, a new Debenture or
Debentures in the aggregate principal amount equal to the unredeemed
portion thereof will be issued; and
(8) if fewer than all the Debentures are to be redeemed, the
identification of the particular Debentures (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Debentures to be
redeemed and the aggregate principal amount of Debentures to be
outstanding after such partial redemption.
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SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Debentures called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Debentures called for redemption shall be paid at
the Redemption Price (which shall include accrued interest thereon to the
Redemption Date, except that installments of interest, the maturity of which is
on or prior to the Redemption Date, shall be payable to Holders of record at the
close of business on the relevant record dates referred to in the Debentures).
SECTION 3.05. Deposit of Redemption Price.
On or before 10:00 a.m. New York City time on the Redemption Date,
the Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the Redemption Price plus accrued interest, if any, of all Debentures to be
redeemed on that date. The Paying Agent shall promptly return to the Company any
U.S. Legal Tender so deposited which is not required for that purpose, except
with respect to monies owed as obligations to the Trustee pursuant to Article
Seven.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price plus accrued
interest, if any, interest on the Debentures to be redeemed will cease to accrue
on and after the applicable Redemption Date, whether or not such Debentures are
presented for payment.
SECTION 3.06. Debentures Redeemed in Part.
Upon surrender of a Debenture that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate for the Holder a new
Debenture or Debentures equal in principal amount to the unredeemed portion of
the Debenture surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Debentures.
The Company shall pay the principal of and interest on the
Debentures on the dates and in the manner provided in the Debentures and in this
Indenture. An installment of principal of or interest on the Debentures shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or an Affiliate of the Company) holds on that date U.S. Legal Tender
designated for and sufficient to pay the installment in full and is not
prohibited from paying such money to the Holders pursuant to the terms of this
Indenture.
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
borne by the Debentures. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prior 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 11.02.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five and Section 4.16, the
Company shall do or cause to be done, at its own cost and expense, all things
necessary to preserve and keep
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in full force and effect its corporate existence and the corporate existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each such Restricted Subsidiary and the material
rights (charter and statutory) and franchises of the Company and each such
Restricted Subsidiary.
SECTION 4.04. 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, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any of
its Subsidiaries or properties of it or any of its Subsidiaries and (ii) all
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon the property of it or any of its Subsidiaries; 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 properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.
SECTION 4.05. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its material properties in good working order and
condition (subject to ordinary wear and tear) and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto, all as
in the judgment of the Company or such Restricted Subsidiary may be appropriate
in order to conduct and carry on its business; provided, however, that nothing
in this Section 4.05 shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the operation and maintenance of any of its
properties, if such discontinuance is, in the good faith judgment of the Board
of Directors of the Company or the Restricted Subsidiary, as the case may be,
desirable in the conduct of their respective businesses.
(b) The Company shall provide or cause to be provided, for itself
and each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the
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Board of Directors of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Restricted Subsidiaries, with reputable
insurers or with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the good faith judgment of the Board of
Directors of the Company, for companies similarly situated in the industry.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within (i) 90 days
after the end of the Company's fiscal year, and (ii) 15 days after the Trustee's
written request stating that the Trustee has a reasonable basis to believe an
Event of Default has occurred, an Officers' Certificate stating that a review of
its activities and the activities of its Subsidiaries during the preceding
fiscal year, in the case of (a)(i) of this Section 4.06, or the preceding four
fiscal quarters in the case of (a)(ii) of this Section 4.06, has been made under
the supervision of the signing Officers with a view to determining whether the
Company has complied with its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
such Officer's knowledge the Company during such preceding fiscal year has
complied with each and every such covenant and no Default or Event of Default
occurred during such year and at the date of such certificate there is no
Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered pursuant to Section
4.08 shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Article Four, Five or Six of this Indenture insofar as they relate
to accounting matters or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
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(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Debentures, the Company
shall deliver to the Trustee, at its address set forth in Section 11.02 hereof,
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
becoming aware of such occurrence.
SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Restricted Subsidiaries, taken
as a whole.
SECTION 4.08. SEC Reports.
(a) Upon consummation of the Exchange Offer (as defined in the
Registration Rights Agreement) and so long as the Debentures are outstanding,
the Company (at its own expense) shall file with the SEC and shall file with the
Trustee within 15 days after it files them with the SEC copies of the quarterly
and annual reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) to be filed pursuant to Section 13 or 15(d) of the
Exchange Act (without regard to whether the Company is subject to the
requirements of such Section 13 or 15(d) of the Exchange Act).
(b) At the Company's expense, the Company shall cause an annual
report if furnished by it to stockholders generally and each quarterly or other
financial report if furnished by it to stockholders generally to be filed with
the Trustee and mailed to the Holders at their addresses appearing in the
register of Debentures maintained by the Registrar at the time of such mailing
or furnishing to stockholders.
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SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will 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 that would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on the Debentures as
contemplated herein, 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 will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.10. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
in Qualified Capital Stock of the Company) on or in respect of shares of the
Company's Capital Stock to holders of such Capital Stock, (b) purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock, (c) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund payment,
any Indebtedness of the Company that is subordinate or junior in right of
payment to the Debentures or (d) make any Investment (other than Permitted
Investments) (each of the foregoing actions set forth in clauses (a), (b), (c)
and (d) being referred to as a "Restricted Payment"), if at the time of such
Restricted Payment or immediately after giving effect thereto, (i) a Default or
an Event of Default shall have occurred and be continuing or (ii) the Company is
not able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12 or (iii) the aggregate
amount of Restricted Payments (including such proposed Restricted Payment) made
subsequent to the Effective Date (the amount expended for such purposes, if
other than in cash, being the fair market
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value of such property as determined reasonably and in good faith by the Board
of Directors of the Company) shall exceed the sum of: (w) 50% of the cumulative
Consolidated Net Income (or if cumulative Consolidated Net Income shall be a
loss, minus 100% of such loss) of the Company earned subsequent to February 26,
1998 and on or prior to the date the Restricted Payment occurs (the "Reference
Date") (treating such period as a single accounting period); plus (x) 100% of
the aggregate net cash proceeds received by the Company from any Person (other
than a Subsidiary of the Company) from the issuance and sale subsequent to the
Effective Date and on or prior to the Reference Date of Qualified Capital Stock
of the Company; plus (y) without duplication of any amounts included in clause
(iii)(x) above, 100% of the aggregate net cash proceeds of any equity
contribution received by the Company from a holder of the Company's Capital
Stock); plus (z) without duplication, the sum of (1) the aggregate amount
returned in cash on or with respect to Investments (other than Permitted
Investments) made subsequent to the Effective Date whether through interest
payments, principal payments, dividends or other distributions or payments, (2)
the net cash proceeds received by the Company or any of its Restricted
Subsidiaries from the disposition of all or any portion of such Investments
(other than to a Subsidiary of the Company) and (3) upon redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of
such Subsidiary; provided, however, that the sum of clauses (1), (2) and (3)
above shall not exceed the aggregate amount of all such Investments made
subsequent to the Effective Date.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
or the consummation of any irrevocable redemption within 60 days after the date
of declaration of such dividend or notice of such redemption if the dividend or
the payment of the redemption price, as the case may be, would have been
permitted on the date of declaration or notice; (2) if no Default or Event of
Default shall have occurred and be continuing, the acquisition of any shares of
Capital Stock of the Company, either (i) solely in exchange for shares of
Qualified Capital Stock of the Company or (ii) through the application of net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock of the Company; (3) if no
Default or Event of Default shall have occurred and be continuing, the
acquisition of any Indebtedness of the Company that is subordinate or junior in
right of payment to the Debentures either (i) solely in exchange for shares of
Qualified Capital Stock of the Company, or (ii) through the application of net
proceeds of
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a substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of (A) shares of Qualified Capital Stock of the Company or (B)
Refinancing Indebtedness; (4) payments for the purpose of and in an amount equal
to the amount required to permit the Company to redeem or repurchase its equity
or options in respect thereof, in each case in connection with the terms of any
employee stock option or stock purchase agreements or other agreements to
compensate management or other employees; provided that such redemptions or
repurchases pursuant to this clause (4) shall not exceed $3.0 million (which
amount shall be increased by the amount of any net cash proceeds to the Company
from (x) sales of Capital Stock of the Company to management or other employees
subsequent to the Effective Date to the extent such amounts have not been
included in clause (iii) in the foregoing paragraph and (y) any "key-man" life
insurance policies which are used to make such redemptions or repurchases) in
the aggregate; provided, further, that the cancellation of Indebtedness owing to
the Company from management or other employees of the Company or any of its
Restricted Subsidiaries in connection with a repurchase of Capital Stock of the
Company will not be deemed to constitute a Restricted Payment under this
Indenture; (5) repurchases of Capital Stock deemed to occur upon the exercise of
stock options if such Capital Stock represents a portion of the exercise price
thereof; (6) so long as no Default or Event of Default shall have occurred and
be continuing, payments not to exceed $500,000 in the aggregate to enable the
Company to make payments to holders of its Capital Stock in lieu of issuance of
fractional shares of its Capital Stock; (7) payments or other distributions made
in connection with the Recapitalization; and (8) if no Default or Event of
Default shall have occurred and be continuing, other Restricted Payments in an
aggregate amount not to exceed $10.0 million. In determining the aggregate
amount of Restricted Payments made subsequent to the Effective Date in
accordance with clause (iii) of the immediately preceding paragraph, (a) amounts
expended (to the extent such expenditure is in the form of cash) pursuant to
clauses (1), (2)(ii), (4) and (8) shall be included in such calculation;
provided that such expenditures pursuant to clause (4) shall not be included to
the extent of cash proceeds received by the Company from any "key-man" life
insurance policies and (b) amounts expended pursuant to clauses (2)(i), (3),
(5), (6) and (7) shall be excluded from such calculation.
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SECTION 4.11. Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions on terms that are not materially less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary. All Affiliate
Transactions (and each series of related Affiliate Transactions which are
similar or part of a common plan) involving aggregate payments or other property
with a fair market value in excess of $1.0 million shall be approved by the
Board of Directors of the Company or such Restricted Subsidiary, as the case may
be, such approval to be evidenced by a Board Resolution stating that such Board
of Directors has determined that such transaction complies with the foregoing
provisions. If the Company or any Restricted Subsidiary of the Company enters
into an Affiliate Transaction (or a series of related Affiliate Transactions
related to a common plan) that involves an aggregate fair market value of more
than $10.0 million, the Company or such Restricted Subsidiary, as the case may
be, shall, prior to the consummation thereof, obtain a favorable opinion as to
the fairness of such transaction or series of related transactions to the
Company or the relevant Restricted Subsidiary, as the case may be, from a
financial point of view, from an Independent Financial Advisor and file the same
with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to and indemnity provided on behalf of
officers, directors, employees or consultants of the Company or any Restricted
Subsidiary of the Company as determined in good faith by the Company's Board of
Directors or senior management (including, without limitation, fees and
compensation under the Management Services Agreement with the Principal as in
effect on the Effective Date); (ii) transactions exclusively between or among
the Company and any of its Restricted Subsidiaries or exclusively between or
among such Restricted Subsidiaries, provided such transactions are not otherwise
prohibited by this Indenture; (iii) any agreement as in effect as of the
Effective Date or
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any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so long
as any such amendment or replacement agreement is not more disadvantageous to
the Holders in any material respect than the original agreement as in effect on
the Effective Date; (iv) Restricted Payments permitted by this Indenture; (v)
the existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of, any stockholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the Effective Date and any similar
agreements which it may enter into thereafter; provided, however, that the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under, any future amendment to any such existing
agreement or under any similar agreement entered into after the Effective Date
shall only be permitted by this clause (v) to the extent that the terms of any
such amendment or new agreement are not otherwise disadvantageous to the Holders
of the Debentures in any material respect; (vi) transactions permitted by, and
complying with, the provisions of Article Five; (vii) the Recapitalization and
the transactions contemplated by the Recapitalization Agreement; and (viii)
transactions with customers, clients, suppliers, joint venture partners or
purchasers or sellers of goods or services, in each case in the ordinary course
of business (including, without limitation, pursuant to joint venture
agreements) and otherwise in compliance with the terms of this Indenture, which
are fair to the Company or its Restricted Subsidiaries, in the reasonable
determination of the Board of Directors of the Company or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party.
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "incur") any Indebtedness
(other than Permitted Indebtedness); provided, however, that if no Default or
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company may incur
Indebtedness (including, without limitation, Acquired Indebtedness) and
Restricted Subsidiaries of the Company may incur Acquired Indebtedness, in
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each case if on the date of the incurrence of such Indebtedness, after giving
effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio
of the Company is greater than 2.0 to 1.0.
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary of the Company to (a) pay dividends or
make any other distributions on or in respect of its Capital Stock; (b) make
loans or advances or to pay any Indebtedness or other obligation owed to the
Company or any other Restricted Subsidiary of the Company; or (c) transfer any
of its property or assets to the Company or any other Restricted Subsidiary of
the Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture, the Note Indenture and the
New Revolving Credit Facility; (3) non-assignment provisions of any contract or
any lease; (4) any instrument governing Acquired Indebtedness, which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person or the properties or assets of the Person so
acquired; (5) agreements existing on the Effective Date to the extent and in the
manner such agreements are in effect on the Effective Date; (6) restrictions on
the transfer of assets subject to any Lien imposed by the holder of such Lien;
(7) restrictions imposed by any agreement to sell assets or Capital Stock
permitted under this Indenture to any Person pending the closing of such sale;
(8) any agreement or instrument governing Capital Stock of any Person that is
acquired; (9) any agreement or instrument governing Indebtedness (whether or not
outstanding) of foreign Restricted Subsidiaries of the Company permitted to be
incurred pursuant to this Indenture; (10) other Indebtedness permitted to be
incurred subsequent to the Effective Date pursuant to the provisions of Section
4.12; provided that any such restrictions are ordinary and customary with
respect to the type of Indebtedness being incurred (under the relevant
circumstances); (11) restrictions on cash or other deposits or net worth imposed
by customers under contracts entered into in the ordinary course of business;
and (12) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instru-
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ments or obligations referred to in clauses (2) through (11) above; provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the good faith
judgment of the Company's Board of Directors, no more restrictive with respect
to such dividend and other payment restrictions than those contained in the
dividend or other payment restrictions prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing.
SECTION 4.14. Limitation on Preferred Stock of Restricted
Subsidiaries.
The Company shall not permit any of its Restricted Subsidiaries to
issue any preferred stock (other than to the Company or to a Wholly Owned
Restricted Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company) to own any
preferred stock of any Restricted Subsidiary of the Company.
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer to purchase all outstanding Debentures pursuant to the offer
described in paragraph (b) below (the "Change of Control Offer") at a purchase
price equal to 101% of the principal amount thereof plus accrued interest, if
any, to the date of purchase. Prior to the mailing of the notice referred to
below, but in any event within 60 days following any Change of Control, the
Company shall (i) repay in full and terminate all commitments under Indebtedness
under the Note Indenture, the New Revolving Credit Facility and all other Senior
Debt the terms of which require repayment upon a Change of Control or offer to
repay in full and terminate all commitments under all Indebtedness under the
Note Indenture, the New Revolving Credit Facility and all other such Senior Debt
and to repay the Indebtedness owed to each lender which has accepted such offer
or (ii) obtain the requisite consents under the Note Indenture, the New
Revolving Credit Facility and all other Senior Debt to permit the repurchase of
the Debentures as provided below. The Company shall first comply with the
covenant in the immediately preceding sentence before it shall be required to
repurchase Debentures pursuant to the provisions described in this Section 4.15.
The Company's failure to comply with the immediately preceding two sentences
shall constitute an Event of Default under Section 6.01(3) and not under Section
6.01(2).
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(b) Within 60 days following the date upon which the Change of
Control occurred (the "Change of Control Date"), the Company shall send, by
first class mail, a notice to each Holder, with a copy to the Trustee, which
notice shall govern the terms of the Change of Control Offer. The notice to the
Holders shall contain all instructions and materials necessary to enable such
Holders to tender Debentures pursuant to the Change of Control Offer. Such
notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Debentures tendered and not withdrawn will be
accepted for payment;
(2) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 60 days nor later
than 90 days from the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
(3) that any Debenture not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in making payment therefor,
any Debenture accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Debenture purchased pursuant to
a Change of Control Offer will be required to surrender the Debenture,
with the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Debenture completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the third Business Day
prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Debentures the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Debentures purchased;
(7) that Holders whose Debentures are purchased only in part will be
issued new Debentures in a principal amount equal to the unpurchased
portion of the Debentures
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surrendered; provided that each Debenture purchased and each new Debenture
issued shall be in an original principal amount of $1,000 or integral
multiples thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Debentures or portions thereof validly tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price plus accrued interest, if any, of
all Debentures so tendered and (iii) deliver to the Trustee Debentures so
accepted together with an Officers' Certificate stating the Debentures or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to the Holders of Debentures so accepted payment in an amount equal to the
purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holders new Debentures equal in principal amount
to any unpurchased portion of the Debentures surrendered. Any Debentures not so
accepted shall be promptly mailed by the Company to the Holder thereof. For
purposes of this Section 4.15, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Debentures pursuant to a
Change of Control Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Debentures pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.15 by virtue thereof.
SECTION 4.16. Limitation on Asset Sales.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable 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
assets sold or otherwise disposed of (as determined in good faith by the
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Company's Board of Directors), (ii) at least 75% of the consideration received
by the Company or the Restricted Subsidiary, as the case may be, from such Asset
Sale shall be in the form of cash or Cash Equivalents and is received at the
time of such disposition; and (iii) upon the consummation of an Asset Sale, the
Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash
Proceeds relating to such Asset Sale within 365 days of receipt thereof either
(A) to prepay any Senior Debt (and, in the case of any Senior Debt under any
revolving credit facility, including the New Revolving Credit Facility, effect a
permanent reduction in the availability under such revolving credit facility),
(B) to make an investment in properties and assets that replace the properties
and assets that were the subject of such Asset Sale or in properties and assets
of a kind used or usable in the business of the Company and its Restricted
Subsidiaries ("Replacement Assets"), or (C) a combination of prepayment and
investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the
366th day after an Asset Sale or such earlier date, if any, as the Board of
Directors of the Company or of such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding
sentence (each a "Net Proceeds Offer Amount") shall be applied by the Company or
such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds
Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor
more than 60 days following the applicable Net Proceeds Offer Trigger Date (or
if the Net Proceeds Offer has been deferred as described in the last sentence of
this paragraph, the date that the unutilized Net Proceeds Offer Amount equals or
exceeds $7.5 million), from all Holders on a pro rata basis, that amount of
Debentures equal to the Net Proceeds Offer Amount at a price equal to 100% of
the principal amount of the Debentures to be purchased, plus accrued and unpaid
interest thereon, if any, to the date of purchase; provided, however, that if at
any time any non-cash consideration received by the Company or any Restricted
Subsidiary of the Company, as the case may be, in connection with any Asset Sale
is converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this covenant. The
Company may defer the Net Proceeds Offer until there is an ag-
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gregate unutilized Net Proceeds Offer Amount equal to or in excess of $7.5
million resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not just the amount in excess of $7.5
million, shall be applied as required pursuant to this paragraph).
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Article Five, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this covenant, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale. In addition, the fair
market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this covenant.
Each Net Proceeds Offer will be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date (or if the Net Proceeds Offer has been deferred as described in the
first paragraph of this Section 4.16(a), the date that the aggregate unutilized
Net Proceeds Offer Amount equals or exceeds $7.5 million), with a copy to the
Trustee, and shall comply with the procedures set forth in this Indenture. Upon
receiving notice of the Net Proceeds Offer, Holders may elect to tender their
Debentures in whole or in part in integral multiples of $1,000 in exchange for
cash. To the extent Holders properly tender Debentures in an amount exceeding
the Net Proceeds Offer Amount, Debentures of tendering Holders will be purchased
on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall
remain open for a period of at least 20 and not more than 30 Business Days or
such longer period as may be required by law. To the extent that the aggregate
amount of Debentures tendered pursuant to a Net Proceeds Offer is less than the
Net Proceeds Offer Amount, the Company may use any remaining Net Proceeds Offer
Amount for general corporate purposes. Upon completion of any such Net Proceeds
Offer, the Net Proceeds Offer Amount shall be reset at zero.
(b) Subject to the deferral of the Net Proceeds Offer Trigger Date
contained in the first paragraph of subsection (a) above, each notice of a Net
Proceeds Offer pursuant to this Section 4.16 shall be mailed or caused to be
mailed, by first class mail, by the Company not more than 25 days after the Net
Proceeds Offer Trigger Date to all Holders at their last regis-
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tered addresses as of a date within 15 days of the mailing of such notice, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Debentures pursuant to the Net
Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section
4.16 and that all Debentures tendered will be accepted for payment;
provided, however, that if the aggregate principal amount of Debentures
tendered in a Net Proceeds Offer exceeds the aggregate amount of the Net
Proceeds Offer, the Company shall select the Debentures to be purchased on
a pro rata basis based on the amounts tendered (with such adjustments as
may be deemed appropriate by the Company so that only Debentures in
denominations of $1,000 or multiples thereof shall be purchased);
(2) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be at least 20 and not more than 30
Business Days from the date of mailing of notice of such Net Proceeds
Offer, or such longer period as required by law) (the "Proceeds Purchase
Date");
(3) that any Debenture not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in making payment therefor,
any Debenture accepted for payment pursuant to the Net Proceeds Offer
shall cease to accrue interest after the Proceeds Purchase Date;
(5) that Holders electing to have a Debenture purchased pursuant to
a Net Proceeds Offer will be required to surrender the Debenture, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Debenture completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day prior to
the Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Proceeds Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Debentures the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Debenture purchased; and
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(7) that Holders whose Debentures are purchased only in part will be
issued new Debentures in a principal amount equal to the unpurchased
portion of the Debentures surrendered; provided that each Debenture
purchased and each new Debenture issued shall be in an original principal
amount of $1,000 or integral multiples thereof;
On or before the Proceeds Purchase Date, the Company shall (i)
accept for payment Debentures or portions thereof validly tendered pursuant to
the Net Proceeds Offer which are to be purchased in accordance with item (b)(1)
above, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the purchase price plus accrued interest, if any, of all Debentures to be
purchased and (iii) deliver to the Trustee Debentures so accepted together with
an Officers' Certificate stating the Debentures or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to the Holders of
Debentures so accepted payment in an amount equal to the purchase price plus
accrued interest, if any. For purposes of this Section 4.16, the Trustee shall
act as the Paying Agent.
Any amounts remaining after the purchase of Debentures pursuant to a
Net Proceeds Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Debentures pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or other-
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wise dispose of (or cause or permit any Restricted Subsidiary of the Company to
sell, assign, transfer, lease, convey or otherwise dispose of) all or
substantially all of the Company's assets (determined on a consolidated basis
for the Company and the Company's Restricted Subsidiaries) whether as an
entirety or substantially as an entirety to any Person unless: (i) either (1)
the Company shall be the surviving or continuing corporation or (2) the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the Company
and of the Company's Restricted Subsidiaries substantially as an entirety (the
"Surviving Entity") (x) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the District of
Columbia and (y) shall expressly assume, by supplemental indenture (in form and
substance satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal and interest on all of the
Debentures and the performance of every covenant of the Debentures, the
Indenture and the Registration Rights Agreement on the part of the Company to be
performed or observed; (ii) immediately after giving effect to such transaction
and the assumption contemplated by clause (i)(2)(y) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to
be incurred in connection with or in respect of such transaction), the Company
or such Surviving Entity, as the case may be, shall be able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.12; (iii) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause (i)(2)(y) above
(including, without limitation, giving effect to any Indebtedness and Acquired
Indebtedness incurred or anticipated to be incurred and any Lien granted in
connection with or in respect of the transaction), no Default or Event of
Default shall have occurred or be continuing; and (iv) the Company or the
Surviving Entity shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such transaction
have been satisfied. Notwithstanding clause (ii) of the preceding sentence, (a)
any Restricted Subsidiary of the Company may consolidate with, merge into or
transfer all or part of its properties and assets to the Company and (b) the
Company may merge
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with an Affiliate incorporated solely for the purpose of reincorporating the
Company in another jurisdiction.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Debentures with the same effect as if such surviving
entity had been named as such.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Debentures when the
same becomes due and payable and the Default continues for a period of 30
days (whether or not such payment shall be prohibited by Article Ten of
this Indenture); or
(2) the Company fails to pay the principal on any Debentures when
such principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Debentures
tendered pursuant to a Change of Control Offer or a Net Proceeds
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Offer) (whether or not such payment shall be prohibited by Article Ten);
or
(3) the Company defaults in the observance or performance of any
other covenant or agreement contained in this Indenture, which default
continues for a period of 30 days after the Company receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Debentures (except in the case of a
default with respect to Section 5.01, which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement); or
(4) the Company fails to pay at final stated maturity (giving effect
to any applicable grace periods and any extensions thereof) the principal
amount of any Indebtedness for borrowed money of the Company or any
Restricted Subsidiary of the Company, and such failure continues for a
period of 20 days or more, or the acceleration of the final stated
maturity of any such Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 20 days of receipt by the Company or
such Restricted Subsidiary of notice of any such acceleration) if the
aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to
pay principal at final stated maturity or which has been accelerated, in
each case with respect to which the 20-day period described above has
passed, aggregates $10.0 million or more at any time; or
(5) one or more judgments for the payment of money in an aggregate
amount in excess of $10.0 million shall have been rendered against the
Company or any of its Restricted Subsidiaries and such judgments remain
undischarged, unpaid or unstayed for a period of 60 days after such
judgment or judgments become final and non-appealable; or
(6) the Company or any Significant Subsidiary of the Company (A)
commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or
order for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (C) consents to the appointment of a Custodian of it or
for substantially all of its property,
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(D) consents to or acquiesces in the institution of a bankruptcy or an
insolvency proceeding against it, (E) makes a general assignment for the
benefit of its creditors, or (F) takes any corporate action to authorize
or effect any of the foregoing; or
(7) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary
of the Company in an involuntary case or proceeding under any Bankruptcy
Law, which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any such Significant Subsidiary, (B) appoint a Custodian of the
Company or any such Significant Subsidiary or for substantially all of its
property or (C) order the winding-up or liquidation of its affairs; and
such judgment, decree or order shall remain unstayed and in effect for a
period of 60 consecutive days.
SECTION 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified
in Section 6.01(6) or (7) with respect to the Company) occurs and is continuing
and has not been waived pursuant to Section 6.04, then the Trustee or the
Holders of at least 25% in principal amount of outstanding Debentures may
declare the principal of and accrued interest on all the Debentures to be due
and payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the New Revolving
Credit Facility, shall become immediately due and payable upon the first to
occur of an acceleration under the New Revolving Credit Facility or 5 business
days after receipt by the Company and the Representative under the New Revolving
Credit Facility of such Acceleration Notice but only if such Event of Default is
then continuing. Upon any such declaration, but subject to the immediately
preceding sentence, such amount shall be immediately due and payable.
(b) If an Event of Default specified in Section 6.01(6) or (7)
occurs and is continuing with respect to the Company, all unpaid principal and
accrued and unpaid interest on all of the outstanding Debentures 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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(c) At any time after a declaration of acceleration with respect to
the Debentures in accordance with Section 6.02(a), the Holders of a majority in
principal amount of the outstanding Debentures may, on behalf of the Holders of
all of the Debentures, rescind and cancel such declaration and its consequences
(i) if the rescission would not conflict with any judgment or decree, (ii) if
all existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration,
(iii) to the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid, (iv) if the Company has
paid the Trustee its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances and (v) in the event of the cure or waiver
of an Event of Default of the type described in Section 6.01(6) or (7), the
Trustee shall have received an Officers' Certificate and an Opinion of Counsel
that such Event of Default has been cured or waived. No such rescission shall
affect any subsequent Default or impair any right consequent thereto. The
Holders of a majority in principal amount of the outstanding Debentures may
waive any existing Default or Event of Default under this Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any Debentures.
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 principal of or interest on the Debentures or to enforce the
performance of any provision of the Debentures or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Debentures 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
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority
in principal amount of the outstanding Debentures by notice to the Trustee may
waive an existing Default or Event
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of Default and its consequences, except a Default in the payment of principal of
or interest on any Debenture as specified in clauses (1) and (2) of Section
6.01. When a Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Debentures 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, including, without limitation, any remedies
provided for in Section 6.03. Subject to Section 7.01, however, the Trustee may
refuse to follow any direction that the Trustee reasonably believes conflicts
with any 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 that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction; and
provided further that this provision shall not affect the rights of the Trustee
set forth in Section 7.01(d).
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Debentures unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the outstanding
Debentures make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee indemnity in its sole
discretion satisfactory to the Trustee against any loss, liability, claim
or expense (including, without limitation, attorney's fees) to be incurred
in compliance with such request;
(4) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer of satisfactory indemnity; and
(5) during such 45-day period the Holders of a majority in principal
amount of the outstanding Debentures
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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 principal of and interest on a Debenture, on or
after the respective due dates expressed in such Debenture, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 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 Debentures for the whole amount of principal
and accrued interest remaining unpaid, together with interest on overdue
principal and, to the extent that payment of such interest is lawful, interest
on overdue installments of interest at the rate set forth in Section 4.01 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, consultants 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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Debentures, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other securities or property payable or deliverable upon the
exchange of the Debentures or upon any such claims and to distribute the
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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, taxes, disbursements and advances of the Trustee, its agents,
consultants and counsel, and any other amounts due the Trustee under Section
7.07. The Company's payment obligations under this Section 6.09 shall be secured
in accordance with the provisions of Section 7.07 hereunder. 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 Debentures 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 in the following order:
First: to the Trustee for amounts due under Sections 6.09 and 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Debentures for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Debentures for
principal and interest, respectively; and
Fourth: to the Company or any other obligor on the Debentures, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to 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
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any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or
Holders of more than 10% in principal amount of the outstanding Debentures.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and the TIA and no covenants or obligations
shall be implied in this Indenture against the Trustee.
(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 (including Officers'
Certificates) or opinions (including Opinions of Counsel) furnished to the
Trustee and conforming to the requirements of this Indenture. However, as
to any certificates or opinions which are required to be delivered or
provided to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
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(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(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
negligent in ascertaining the pertinent facts.
(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 6.02, 6.04 or 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 in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not herein expressly provided, 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 or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, note or other paper or document believed by it to be genuine and to
have been signed or presented by the proper
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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 consult
with counsel and may require an Officers' Certificate, an Opinion of
Counsel or both, which shall conform to Sections 11.04 and 11.05. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or
through agents or attorneys and the Trustee shall not be responsible for
the misconduct or negligence of any agent or attorney appointed with due
care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, 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, upon reasonable
notice to the Company, to examine the books, records, and premises of the
Company, personally or by agent or attorney and to consult with the
officers and representatives of the Company, including the Company's
accountants and attorneys, at the sole cost of the Company and shall incur
no liability or additional liability of any kind by reason of such inquiry
or investigation.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity satisfactory to the Trustee in its sole discretion against
the costs, expenses and liabilities
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which may be incurred by it in compliance with such request, order or
direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The recitals contained herein and in the Debentures shall be taken
as statements of the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Debentures, and it shall not be accountable for the
Company's use of the proceeds from the Debentures, and it shall not be
responsible for any statement of the Company in this Indenture or the Debentures
other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 60 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Debenture, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or on the Proceeds Purchase Date pursuant
to a Net Proceeds Offer and, except in the case of a failure to comply with
Article Five hereof, the Trustee may withhold the notice if and so long as its
Board of Directors, the executive committee of its Board of Directors or a
committee of its directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Holders.
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SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15, the Trustee shall, to the extent
that any of the events described in TIA ss. 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Holder a brief report dated as of
such date that complies with TIA ss. 313(a). The Trustee also shall comply with
TIA ss.ss. 313(b), (c) and (d).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the SEC and each stock exchange, if any, on
which the Debentures are listed.
The Company shall promptly notify the Trustee if the Debentures
become listed on any stock exchange and the Trustee shall comply with TIA ss.
313(d).
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services (including, without limitation, as Registrar, and
agent for service of demands and notices). 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 fees and
expenses, including out-of-pocket expenses incurred or made by it in connection
with the performance of its duties under this Indenture. Such expenses shall
include the reasonable fees and expenses of the Trustee's agents, consultants
and counsel.
The Company shall indemnify the Trustee and its agents, employees,
stockholders and directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the administration of this trust
(including, without limitation, as Paying Agent, Registrar and agent for service
of demands and notices) including the reasonable costs and expenses of enforcing
this Indenture against the Company (including, without limitation, Section 7.07
hereof) and defending themselves against any claim (whether asserted by a
Securityholder or the Company) or liability in connection with the exercise or
performance of any of their rights, powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. At the Trustee's rea-
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sonable discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; provided that any settlement of a
claim shall be approved in writing by the Trustee, if such settlement would
result in an admission of liability by the Trustee or if such settlement would
not be accompanied by a full release of the Trustee for all liability arising
out of the events giving rise to such claim. Alternatively, the Trustee may at
its option have separate counsel of its own choosing and the Company shall pay
the reasonable fees and expenses of such counsel; provided that the Company will
not be required to pay such fees and expenses if it assumes the Trustee's
defense and there is no conflict of interest between the Company and the Trustee
in connection with such defense as reasonably determined by the Trustee. The
Company need not pay for any settlement made without its written consent. The
Company need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Debentures on all assets or money
held or collected by the Trustee, in its capacity as Trustee, except assets or
money held in trust to pay principal of or interest on particular Debentures.
The Trustee's right to receive payment of any amounts due under this Section
7.07 shall not be subordinate to any other liability or indebtedness of the
Company (even though the Debentures may be subordinate to such other liability
or indebtedness).
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(6) or (7) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law; provided, however, that this shall not
affect the Trustee's rights as set forth in the preceding paragraph or Section
6.10.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Debentures may remove the
Trustee by so notifying the Company and the Trustee and may appoint a successor
Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
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(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Debentures 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. Immediately after that,
the retiring Trustee shall transfer 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 all 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 of the outstanding Debentures may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any 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, the resulting, surviving or transferee corporation without any
further act shall, if
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such resulting, surviving or transferee corporation is otherwise eligible
hereunder, be the successor Trustee; provided that such corporation shall be
otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.ss. 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $100
million as set forth in its most recent publicly available annual report of
condition and have a corporate trust office in New York City. In addition, if
the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA ss. 310(a)(2). The Trustee shall comply with 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. The provisions of TIA ss. 310 shall apply to the Company, as
obligor on the Debentures, and any other obligor on the Debentures.
SECTION 7.11. Preferential Collection of Claims Against 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. The
provisions of TIA ss. 311 shall apply to the Company, as obligor on the
Debentures, and any other obligor on the Debentures.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.
The Company may terminate its obligations under the Debentures and
this Indenture, except those obligations re-
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ferred to in the penultimate paragraph of this Section 8.01, if all Debentures
previously authenticated and delivered (other than destroyed, lost or stolen
Debentures which have been replaced or paid or Debentures for whose payment U.S.
Legal Tender or non-callable U.S. Government Obligations, or a combination
thereof, has theretofore been deposited with the Trustee or the Paying Agent in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company, as provided in Section 8.05) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Debentures under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Debentures have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, U.S. Legal Tender or non-callable
U.S. Government Obligations, or a combination thereof, in such amount as
is sufficient without consideration of reinvestment of such interest, to
pay principal of, premium, if any, and interest on the outstanding
Debentures to maturity or redemption, as well as the Trustee's fees and
expenses; provided that the Trustee shall have been irrevocably instructed
to apply such U.S. Legal Tender to the payment of said principal and
interest with respect to the Debentures; provided, further, that no
deposits made pursuant to this Section 8.01(b) shall cause the Trustee to
have a conflicting interest as defined in and for the purposes of the TIA;
provided, further, that from and after the time of deposit, the money
deposited shall not be subject to the rights of holders of Senior Debt
pursuant to the provisions of Article Ten and provided, further, that, as
confirmed by an Opinion of Counsel, no such deposit shall result in the
Company, the Trustee or the trust becoming or being deemed to be an
"investment company" under the Investment Company Act of 1940;
(c) no Default or Event of Default with respect to this Indenture or
the Debentures shall have occurred and
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be continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach or violation of,
or constitute a default under, any other material instrument to which the
Company is a party or by which it is bound (other than a Default or Event
of Default resulting from the incurrence of Indebtedness, all or a portion
of which will be used to defease the Debentures concurrently with such
incurrence);
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of the Company's
obligations under the Debentures and this Indenture have been complied
with. Such Opinion of Counsel shall also state that such satisfaction and
discharge does not result in a default under the Note Indenture (if then
in effect) or the New Revolving Credit Facility (if then in effect) or any
other agreement or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05 and 8.06 shall
survive until the Debentures are no longer outstanding pursuant to the last
paragraph of Section 2.08. After the Debentures are no longer outstanding, the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Debentures and this Indenture except for those surviving obligations
specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the Board
of Directors of the Company, at any time, elect to have either paragraph (b) or
(c) below be applied to all outstanding Debentures upon compliance with the
conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Com-
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pany shall, subject to the satisfaction of the conditions set forth in Section
8.03, be deemed to have been discharged from its obligations with respect to all
outstanding Debentures on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Debentures, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 8.04 hereof and the other
Sections of this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Debentures and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), and Holders of the Debentures and
any amounts deposited under Section 8.03 hereof shall cease to be subject to any
obligations to, or the rights of, any holder of Senior Debt under Article Ten or
otherwise, except for the following provisions, which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Debentures to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of and interest on such Debentures when such payments
are due, (ii) the Company's obligations with respect to such Debentures under
Article Two and Section 4.02 hereof, (iii) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (iv) this Article Eight. Subject to compliance with
this Article Eight, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03 hereof, be released
from its obligations under the covenants contained in Sections 4.10 through 4.16
and Article Five hereof with respect to the outstanding Debentures on and after
the date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Debentures shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Debentures shall not be deemed outstanding for
accounting purposes) and Holders of the Debentures and any amounts deposited
under Section 8.03 hereof shall cease to be
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subject to any obligations to, or the rights of, any holder of Senior Debt under
Article Ten or otherwise. For this purpose, such Covenant Defeasance means that,
with respect to the outstanding Debentures, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event or Default
under Section 6.01(3) hereof, but, except as specified above, the remainder of
this Indenture and such Debentures shall be unaffected thereby. In addition,
upon the Company's exercise under paragraph (a) hereof of the option applicable
to this paragraph (c), subject to the satisfaction of the conditions set forth
in Section 8.03 hereof, Sections 6.01(3), 6.01(4) and 6.01(5) shall not
constitute Events of Default.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02(b) or 8.02(c) hereof to the outstanding Debentures:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or U.S. Government
Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms, will provide, not later
than one day before the due date of any payment on the Debentures, U.S.
Legal Tender, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest
on the outstanding Debentures on the stated date for payment thereof or on
the applicable redemption date, as the case may be, of such principal or
installment of principal of or interest on the Debentures; provided that
the Trustee shall have received an irrevocable written order from the
Company instructing the Trustee to apply such U.S. Legal Tender or the
proceeds of such U.S. Government Obligations to said payments with respect
to the Debentures;
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(b) in the case of an election under Section 8.02(b) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Debentures will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred; provided, however, that
notwithstanding the foregoing, the Opinion of Counsel required by this
Section 8.03(b) with respect to Legal Defeasance need not be delivered if
all of the Debentures not theretofore delivered to the Trustee for
cancellation (x) have become due and payable, (y) will become due and
payable on the maturity date within one year or (z) are to be called for
redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at
the expense, of the Company;
(c) in the case of an election under Section 8.02(c) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the Debentures will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Debentures shall have occurred and be continuing on the
date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of
which will be used to defease the Debentures pursuant to this Article
Eight concurrently with such incurrence) or insofar as Sections 6.01(6)
and 6.01(7) hereof are concerned, at any time in the period ending on the
91st day after the date of such deposit;
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(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of or constitute a default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Senior Debt, including, without limitation, those
arising under this Indenture, and (ii) assuming no intervening bankruptcy
or insolvency of the Company between the date of deposit and the 91st day
following the date of deposit and that no Holder is an insider of the
Company, after the 91st day following the date of deposit, the trust funds
will not be subject to the effect of any applicable Bankruptcy Law.
SECTION 8.04. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Article Eight, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of and
interest on the Debentures. The Trustee shall be under no obligation to invest
said U.S. Legal Tender or U.S. Government Obligations except as it may agree
with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.03 hereof or the
principal and interest received in respect thereof other than any such tax,
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fee or other charge which by law is for the account of the Holders of the
outstanding Debentures.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U. S. Government Obligations held by it as
provided in Section 8.03 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.05. Repayment to the Company.
Subject to Article Eight, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided that the
Trustee or such Paying Agent, 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 will be repaid to the
Company. After payment to the Company, Holders entitled to such money must look
to the Company for payment as general creditors unless an applicable law
designates another Person.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Article Eight 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 Debentures
shall be revived and reinstated as though no deposit had occurred pursuant to
Article Eight until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with
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Article Eight; provided that if the Company has made any payment of interest on
or principal of any Debentures because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Debentures
to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Debentures without
notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
(4) to maintain compliance with any requirements of the SEC in order
to effect or maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect in any material
respect the rights of any Holder; or
(6) to provide for issuance of new Debentures in connection with an
exchange offer pursuant to the Registration Rights Agreement which will
have terms substantially identical in all material respects to the
Debentures, except that the transfer restrictions contained in the
Debentures will be modified or eliminated, as appropriate, in the new
Debentures;
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provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Debentures, or if prior to the Exchange Date, the holders of at least a majority
of the issued and outstanding shares of Preferred Stock, may amend or supplement
this Indenture or the Debentures, without notice to any other Holders or other
holders of shares of Preferred Stock, as the case may be. Subject to Sections
6.04 and 6.07, the Holder or Holders of a majority in aggregate principal amount
of the outstanding Debentures may waive compliance by the Company with any
provision of this Indenture or the Debentures without notice to any other
Holder. No amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, shall, without the consent of each Holder of each Debenture or if
prior to the Exchange Date, each holder of shares of Preferred Stock affected
thereby:
(1) reduce the amount of Debentures whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any
Debentures;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Debentures, or change the date on which any
Debentures may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor;
(4) make any Debentures payable in money other than that stated in
the Debentures;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Debenture on or after the due date thereof or to bring suit to
enforce such payment, or permitting Holders of a majority in principal
amount of Debentures to waive Defaults or Events of Default;
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(6) amend, modify, change or waive any provision of this Section
9.02;
(7) amend, modify or change in any material respect the obligation
of the Company to make or consummate a Change of Control Offer in the
event of a Change of Control or make and consummate a Net Proceeds Offer
in respect of any Asset Sale that has been consummated or modify any of
the provisions or definitions with respect thereto after a Change of
Control has occurred or the subject Asset Sale has been consummated; or
(8) modify Article Ten or the definitions used in Article Ten to
adversely affect the Holders of the Debentures in any material respect.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby or if
no Holders, the holders of shares of Preferred Stock 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 supplemental indenture.
SECTION 9.03. Effect on Senior Debt.
No amendment of this Indenture shall adversely affect the rights of
any holder of Senior Debt under Article Ten of this Indenture, without the
consent of such holder.
SECTION 9.04. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Debentures shall comply with the TIA as then in effect.
SECTION 9.05. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Debenture or por-
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tion of a Debenture that evidences the same debt as the consenting Holder's
Debenture, even if notation of the consent is not made on any Debenture. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Debenture or portion of such Debenture 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 outstanding Debentures have consented (and not theretofore
revoked such consent) to the amendment, supplement or waiver (at which time such
amendment, supplement or waiver shall become effective).
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders 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 (1)
through (8) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Debenture who has consented to it and every
subsequent Holder of a Debenture or portion of a Debenture that evidences the
same debt as the consenting Holder's Debenture; provided that any such waiver
shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Debenture, on or after the respective due dates
expressed in such Debenture, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
The provisions of this Section 9.05 shall relate to holders of
shares of Preferred Stock, if an amendment becomes effective prior to the
Exchange Date.
SECTION 9.06. Notation on or Exchange of Debentures.
If an amendment, supplement or waiver changes the terms of a
Debenture, the Trustee may require the Holder of
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such Debenture to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Debenture about the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Debenture shall issue and the Trustee shall
authenticate a new Debenture that reflects the changed terms. Any such notation
or exchange shall be made at the sole cost and expense of the Company.
SECTION 9.07. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that 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. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Debentures Subordinated to Senior Debt.
The Company covenants and agrees, and each Holder of the Debentures,
by its acceptance thereof, likewise covenants and agrees, that all Debentures
shall be issued subject to the provisions of this Article Ten; and the Trustee
and each Person holding any Debenture, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that the payment of
all Obligations on the Debentures by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all Obligations on the
Senior Debt; that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Debt, and that each holder of
Senior Debt whether now outstanding or hereafter created, incurred, assumed or
guaranteed shall be deemed to have acquired Senior Debt in reliance
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upon the covenants and provisions contained in this Indenture and the
Debentures.
SECTION 10.02. No Payment on Debentures in Certain Circumstances.
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Senior Debt, no
payment of any kind or character (except in securities substantially identical
to the Debentures issued by the Company in payment of interest accrued thereon)
shall be made by, or on behalf of, the Company or any other Person on its or
their behalf with respect to any Obligations on the Debentures, or to acquire
any of the Debentures for cash or property or otherwise. In addition, if any
other event of default occurs and is continuing with respect to any Designated
Senior Debt, as such event of default is defined in the instrument creating or
evidencing such Designated Senior Debt, permitting the holders of such
Designated Senior Debt then outstanding to accelerate the maturity thereof and
if the Representative for the respective issue of Designated Senior Debt gives
notice of the event of default to the Trustee (a "Default Notice"), then, unless
and until all events of default have been cured or waived or have ceased to
exist or the Trustee receives notice thereof from the Representative for the
respective issue of Designated Senior Debt terminating the Blockage Period (as
defined below), during the 180 days after the delivery of such Default Notice
(the "Blockage Period"), neither the Company nor any other Person on its behalf
shall (x) make any payment of any kind or character (except in securities
substantially identical to the Debentures issued by the Company in payment of
interest accrued thereon) with respect to any Obligations on the Debentures or
(y) acquire any of the Debentures for cash or property or otherwise.
Notwithstanding anything herein to the contrary, in no event will a Blockage
Period extend beyond 180 days from the date the payment on the Debentures was
due and only one such Blockage Period may be commenced within any 360
consecutive days. No event of default which existed or was continuing on the
date of the commencement of any Blockage Period with respect to the Designated
Senior Debt shall be, or be made, the basis for the commencement of a second
Blockage Period by the Representative of such Designated Senior Debt whether or
not within a period of 360 consecutive days, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days (it
being acknowledged that any
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subsequent action, or any breach of any financial covenants for a period
commencing after the date of commencement of such Blockage Period that, in
either case, would give rise to an event of default pursuant to any provisions
under which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 10.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (pro rata to such
holders on the basis of the respective amount of Senior Debt held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Senior Debt, if any, received from the holders of
Senior Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Company and only amounts
included in the information provided to the Trustee shall be paid to the holders
of Senior Debt.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Debentures to take any action to accelerate the
maturity of the Debentures pursuant to Section 6.02 or to pursue any rights or
remedies hereunder; provided that all Senior Debt thereafter due or declared to
be due shall first be paid in full in cash or Cash Equivalents before the
Holders are entitled to receive any payment of any kind or character with
respect to Obligations on the Debentures.
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc.
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Debt shall
first be paid in full in cash or Cash Equivalents, or such payment duly provided
for to the satisfaction of the holders of Senior Debt, before any payment or
distribution of any kind or character is made on ac-
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count of any Obligations on the Debentures, or for the acquisition of any of the
Debentures for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Debentures
or the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders or by the Trustee under this Indenture if received by them,
directly to the holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash or Cash
Equivalents after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Senior Debt.
(b) To the extent any payment of Senior Debt (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by Section 10.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment
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of Senior Debt remaining unpaid until all such Senior Debt has been paid in full
in cash or Cash Equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Senior Debt.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Senior Debt
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article Five hereof.
SECTION 10.04. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
10.02 and 10.03, from making payments at any time for the purpose of making
payments of principal of and interest on the Debentures, or from depositing with
the Trustee any moneys for such payments, or (ii) in the absence of actual
knowledge by the Trustee that a given payment would be prohibited by Section
10.02 or 10.03, the application by the Trustee of any moneys deposited with it
for the purpose of making such payments of principal of, and interest on, the
Debentures to the Holders entitled thereto unless at least two Business Days
prior to the date upon which such payment would otherwise become due and payable
a Trust Officer shall have actually received the written notice provided for in
the second sentence of Section 10.02(a) or in Section 10.07 (provided that,
notwithstanding the foregoing, such application shall otherwise be subject to
the provisions of the first sentence of Section 10.02(a) and Section 10.03). The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 10.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt, the Holders of the Debentures shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Debt until the
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Debentures shall be paid in full; and, for the purposes of such subrogation, no
such payments or distributions to the holders of the Senior Debt by or on behalf
of the Company or by or on behalf of the Holders by virtue of this Article Ten
which otherwise would have been made to the Holders shall, as between the
Company and the Holders of the Debentures, be deemed to be a payment by the
Company to or on account of the Senior Debt, it being understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Debentures, on the one hand,
and the holders of the Senior Debt, on the other hand.
SECTION 10.06. Obligations of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Debt, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of and any interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Debt, nor shall anything herein or therein
prevent the Holder of any Debenture or the Trustee on its behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Debentures pursuant to the provisions of this
Article Ten. Regardless of anything to the contrary contained in this Article
Ten or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Debt or a
Representative therefor, together with proof satisfactory to the Trustee of such
holding of Senior Debt or of the authority of such Representative, and, prior to
the receipt of any such written notice, the Trustee shall be entitled
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to assume (in the absence of actual knowledge to the contrary) that no such
facts exist.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Debentures shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, receiver, assignee
for the benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or the Holders of the Debentures, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Ten.
SECTION 10.09. Trustee's Relation to Senior Debt.
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article Ten with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
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With respect to the holders of Senior Debt, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to holders
or owners of Senior Debt, the distribution may be made and the notice may be
given to their Representative, if any.
SECTION 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Debentures and without
impairing or releasing the subordination provided in this Article Ten or the
obligations hereunder of the Holders of the Debentures to the holders of the
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt, or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the payment or collection of Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.
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SECTION 10.11. Securityholders Authorize Trustee To Effectuate
Subordination of Debentures.
Each Holder of Debentures by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior Debt
and the Holders of Debentures, the subordination provided in this Article Ten,
and appoints the Trustee its attorney-in-fact for such purposes, including, in
the event of any dissolution, winding-up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Company, the filing of a claim for the unpaid balance of its Debentures and
accrued interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Debentures. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt or their Representative to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.12. This Article Ten Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Debentures by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
SECTION 10.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
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ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required TIA provision shall control.
SECTION 11.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by commercial courier service, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company:
MCMS, Inc.
16399 Franklin Road
Nampa, ID 83687
Facsimile No.: (208) 898-7411
Attn: Corporate Counsel
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Facsimile No.: (212) 852-1627
Attention: Corporate Trust and Agency Services
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when receipt is confirmed if delivered by commercial courier service;
when answered back, if telexed; when receipt is acknowledged, if faxed; and five
(5) calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee).
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Any notice or communication mailed to a Holder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. 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 Debentures. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA ss. 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
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(1) a statement that the Person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
(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 reasonably 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 each such
Person, such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 11.08. Governing Law.
THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE.
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SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company or of the Trustee shall not have any liability for any
obligations of the Company under the Debentures 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 Debenture waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Debentures.
SECTION 11.11. Successors.
All agreements of the Company in this Indenture and the Debentures
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Debentures shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
Issuer:
MCMS, INC.
By: /s/ Chris J. Anton
------------------------------------
Name: Chris J. Anton
Title: Vice President, Finance & CEO
Trustee:
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By: /s/ James E. Logan
------------------------------------
Name: James E. Logan
Title: Vice President
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EXHIBIT A
CUSIP No.:
MCMS, INC.
12 1/2% Subordinated Exchange Debentures due 2010
No. $
MCMS, INC., an Idaho corporation (the "Company"), for value
received, promises to pay to or registered assigns, the principal sum
of Dollars, on March 1, 2010.
Interest Payment Dates: March 1 and September 1.
Record Dates: February 15 and August 15.
Reference is made to the further provisions of this Debenture
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Debenture to be
signed manually or by facsimile by its duly authorized officers.
Dated:
MCMS, INC.
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 12 1/2% Subordinated Exchange Debentures due 2010 referred to
in the within-mentioned Indenture.
Dated:
United States Trust Company of
New York, as Trustee
By:
---------------------------------
Authorized Signatory
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(REVERSE OF SECURITY)
12 1/2% SUBORDINATED EXCHANGE DEBENTURES DUE 2010
1. Interest. MCMS, INC., an Idaho corporation (the "Company"),
promises to pay interest on the principal amount of this Debenture at the rate
per annum shown above. Interest on the Debentures will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from [ ].* The Company will pay interest semi-annually in arrears on each
Interest Payment Date, commencing [ ].** Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding anything herein to the contrary, on each Interest
Payment Date through and including March 1, 2003, the entire amount of the
interest payment on the Debentures may be paid, at the option of the Company, in
additional Debentures ("Secondary Debentures") (valued at 100% of the principal
amount thereof). The Company may, at its option, pay cash in lieu of issuing any
Secondary Debenture to the extent the principal amount of such Secondary
Debenture is not an integral multiple of $1,000. The Company shall notify the
Trustee of the Company's election to pay interest in Secondary Debentures not
less than 10 days prior to the Record Date for an Interest Payment Date. On each
such Interest Payment Date, the Trustee shall authenticate Secondary Debentures
for original issuance to each holder of Debentures on the preceding Record Date,
as shown on the Debenture register, in the amount required to pay such interest.
For purposes of determining the principal amount of Secondary Debentures to be
issued in payment of interest, the Company shall be entitled to aggregate as to
each holder the principal amount of all Debentures and Secondary Debentures held
of record by such holder.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Debentures and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful.
- ----------
* Insert date of original issuance.
** Insert first Interest Payment Date following the date of original
issuance.
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2. Method of Payment. The Company shall pay interest on the
Debentures (except defaulted interest) to the Persons who are the registered
Holders at the close of business on the Record Date immediately preceding the
Interest Payment Date even if the Debentures are cancelled on registration of
transfer or registration of exchange after such Record Date. Holders must
surrender Debentures to a Paying Agent to collect principal payments. The
Company shall pay principal and, except to the extent the Company issues
Secondary Debentures in lieu of cash interest in accordance with paragraph 1
hereof, 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 principal and, except to the extent the Company
issues Secondary Debentures in lieu of cash interest in accordance with
paragraph 1 hereof, interest by its 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, United States Trust
Company of New York, a New York corporation (the "Trustee"), will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders.
4. Indenture. The Company issued the Debentures under an Indenture,
dated as of February 26, 1998 (the "Indenture"), between the Company and the
Trustee. This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its 12 1/2% Subordinated Exchange Debentures due 2010 (the
"Debentures"). The Debentures are limited (except as otherwise provided in the
Indenture or this Debenture) in aggregate principal amount equal to the
liquidation preference of the outstanding shares of Preferred Stock on the
Exchange Date (including Preferred Stock issued in lieu of cash dividends on the
Preferred Stock), plus accumulated and unpaid dividends, which may be issued
under the Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Debentures include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Debentures are subject to all such terms, and Holders
of Debentures are referred to the Indenture and said Act for a statement of
them. The Debentures are general unsecured obligations of the Company.
5. Subordination. The Debentures are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full in cash or Cash
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Equivalents of all Senior Debt of the Company, whether outstanding on the date
of the Indenture or thereafter created, incurred, assumed or guaranteed. Each
Holder by its acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on its behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustee its attorney-in-fact for such
purposes.
6. Redemption.
(a) Optional Redemption. The Debentures will be redeemable, at the
Company's option, in whole or in part, at any time, on and after March 1, 2003,
upon not less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on March 1 of the year set forth
below, plus, in each case, accrued and unpaid interest thereon, if any, to the
date of redemption:
Year Percentage
- ---- ----------
2003......................................................... 106.250%
2004......................................................... 104.167%
2005......................................................... 102.083%
2006 and thereafter.......................................... 100.000%
(b) Optional Redemption upon Public Equity Offerings. At any time,
or from time to time, on or prior to March 1, 2001, the Company may, at its
option, use the net cash proceeds of one or more Public Equity Offerings to
redeem, in whole or in part, the Debentures at a redemption price equal to
112.5% of the principal amount thereof plus accrued and unpaid interest thereon,
if any, to the date of redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Debentures to be redeemed at such Holder's registered address.
Debentures in denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Debentures called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
inter-
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est, if any, the Debentures called for redemption will cease to bear interest
from and after such Redemption Date and the only right of the Holders of such
Debentures will be to receive payment of the Redemption Price plus accrued and
unpaid interest, if any.
8. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales and upon the occurrence of a Change of
Control, and subject to further limitations contained therein, the Company will
make an offer to purchase certain amounts of the Debentures in accordance with
the procedures set forth in the Indenture.
9. Denominations; Transfer; Exchange. The Debentures are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000, except as otherwise provided in the Indenture or this
Debenture. A Holder shall register the transfer of or exchange Debentures 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 Debentures during a period beginning 15 days
before the mailing of a redemption notice for any Debentures or portions thereof
selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Debenture
shall be treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Debentures to redemption
or maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Debentures (including certain covenants, but excluding its obligation to
pay the principal of and interest on the Debentures).
13. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Debentures may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Debentures then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Deben-
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tures then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Debentures to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Debentures in addition to or in place of certificated Debentures, or comply with
Article Five of the Indenture or make any other change that does not adversely
affect in any material respect the rights of any Holder of a Debenture.
14. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Debentures and the
Indenture, the predecessor will be released from those obligations.
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 of Debentures then outstanding may declare all the Debentures to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Debentures may not enforce the Indenture or the Debentures
except as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Debentures unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Debentures then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Debentures notice of any
continuing Default or Event of Default (except a Default in payment of principal
or interest) 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
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become the owner or pledgee of Debentures and may otherwise deal with the
Company, its Subsidiaries or their respective 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 Debentures 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 Debenture by accepting a Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Debentures.
19. Authentication. This Debenture shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Debenture.
20. Governing Law. The laws of the State of New York shall govern
this Debenture and the Indenture, without regard to principles of conflict of
laws.
21. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Debenture or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. 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 Debentures as a convenience to the Holders of
the Debentures. No representation is made as to the accuracy of such numbers as
printed on the Debentures and reliance may be placed only on the other
identification numbers printed hereon.
23. Indenture. Each Holder, by accepting a Debenture, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
The Company will furnish to any Holder of a Debenture upon written
request and without charge a copy of the Indenture which has the text of this
Debenture in larger type. Requests may be made to: MCMS, Inc., 16399 Franklin
Road, Nampa, ID 83687, Attn: Corporate Counsel.
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ASSIGNMENT FORM
If you the Holder want to assign this Debenture, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Debenture to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ______________________________________, agent to
transfer this Debenture on the books of the Company. The agent may substitute
another to act for him.
Date: Signed:
----------------------------- -----------------------------
(Sign exactly as your name
appears on the other side of
this Debenture)
Signature Guarantee:
------------------------------------
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[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Debenture purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Debenture purchased
by the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state
the amount you elect to have purchased:
$_______________________
Dated:
-------------------------- ------------------------------------------
NOTICE: The signature on this assignment
must correspond with the name as it
appears upon the face of the within
Debenture in every particular without
alteration or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:
------------------------------------
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