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EXHIBIT 4.1
INDENTURE dated as of December 15, 1998, among SDI ACQUISITION
CORP., a Delaware corporation ("SDI Acquisition"), as issuer, the GUARANTORS
named herein and UNITED STATES TRUST COMPANY OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
The Securities are being sold in connection with the
Recapitalization of Special Devices, Incorporated, a Delaware corporation
("Special Devices"), pursuant to the Recapitalization Agreement. The
Recapitalization Agreement provides for the merger (the "Merger") of SDI
Acquisition with and into Special Devices with Special Devices surviving the
Merger. The time of the consummation of the Recapitalization and the Merger is
referred to herein as the "Effective Time."
Immediately after the Effective Time, (i) Special Devices and Scot,
Inc., a Delaware corporation and a wholly owned subsidiary of Special Devices
("Scot, Inc."), will execute an assumption agreement (the "Assumption
Agreement"), pursuant to which Special Devices, as survivor of the Merger, will
(a) assume all of the obligations of SDI Acquisition under this Indenture, and
cause Scot, Inc. to become a party to this Indenture as a Guarantor and
unconditionally guarantee the Securities on an unsecured, senior subordinated
basis; (b) assume all of the obligations of SDI Acquisition under the Purchase
Agreement, dated as of December 11, 1998, by and among SDI Acquisition and the
Initial Purchasers (the "Purchase Agreement"), and cause Scot, Inc. to become a
party to the Purchase Agreement as a guarantor; and (c) assume all of the
obligations of SDI Acquisition under the Registration Rights Agreement, dated as
of December 15, 1998, by and among SDI Acquisition and the Initial Purchasers
(the "Registration Rights Agreement") and cause Scot, Inc. to become a party to
the Registration Rights Agreement as a guarantor; and (ii) Special Devices,
Scot, Inc. and the Trustee will enter into a first supplemental indenture to
this Indenture (the "First Supplemental Indenture") providing for the express
assumption by Special Devices, as survivor of the Merger, of the covenants,
agreements and undertakings of SDI Acquisition in the Indenture, under the
Securities, and the guarantee of the Securities by Scot, Inc.
As used herein, the "Company" shall mean SDI Acquisition prior to
the Effective Time and Special Devices as of and after the execution and
delivery of the First Supplemental Indenture. References to this Indenture as of
and after the execution and delivery of the First Supplemental Indenture will
refer to this Indenture and the First Supplemental Indenture and references to
each of the Purchase Agreement and the Registration Rights Agreement as of and
after the Effective Time will refer to such agreement together with the
Assumption Agreement.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"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 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.
"Affiliate Transaction" see Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"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 comprises 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, or the consolidation or merger
of the Company with any other Person, in each case as permitted under Section
5.01, (iii) any disposition of property of the Company or any of its Restricted
Subsidiaries that, in the reasonable judgment of the Company, has become
uneconomic, damaged, obsolete or worn out, (iv) the sale of inventory in the
ordinary course of business, (v) the sale or discount, in each case without
recourse (other than recourse for a breach of a
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representation or warranty) of accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection
thereof, (vi) sales of Cash Equivalents, (vii) surrender or waiver of contract
rights or the settlement, release or surrender of contract, tort or other claims
of any kind, (viii) granting of Liens not prohibited by this Indenture, (ix) to
the extent such would constitute an Asset Sale, transfers of leasehold
improvements, fixtures, consumables or other equipment made in connection with
the relocation to the Moorpark Facility, (x) the licensing of intellectual
property, including, without limitation, licensing in connection with any
European joint venture, (xi) the sale, lease, conveyance, disposition or other
transfer of Permitted Investments or the Capital Stock of or any Investment in
any Unrestricted Subsidiary, (xii) leases or subleases to third persons not
interfering in any material respect with the business of the Company or any of
its Restricted Subsidiaries and (xiii) the making of any Permitted Investments
or other Restricted Payments permitted by the covenant described under Section
4.06.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"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 a day that is not a Saturday, a Sunday or a day
on which banking institutions in New York, New York are not required to be open.
"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,
membership or other equity interests of such Person.
"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.
"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 S&P or
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Moody's; (iii) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having one of the two highest
ratings obtainable from S&P or 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
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 with assets of $5,000,000 or greater.
"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 and its Restricted Subsidiaries, taken as a whole, 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 a
Subsidiary of the Company, the Principals and their Related Parties; (ii) 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 Principals and their Related Parties) shall become the owner,
directly or indirectly, beneficially or of record, 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 replacement of a majority
of the Board of Directors of the Company over a two-year period from the
directors who constituted the Board of Directors of the Company at the beginning
of such period, and such replacement shall not have been approved by a vote of
at least a majority of the Board of Directors of the Company then still in
office who either were members of such Board of Directors at the beginning of
such period or whose election as a member of such Board of Directors was
previously so approved.
"Change of Control Payment Date" see Section 4.14(c).
"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
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" has the meaning ascribed to such term in the introductory
paragraphs to this Indenture, until a successor to Special Devices shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean 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 of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary or nonrecurring gains or losses or taxes attributable to Asset
Sales and other sales or dispositions outside the ordinary course of business to
the extent that gains or losses from such transactions have been excluded from
the computation of Consolidated Net
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Income), (B) Consolidated Interest Expense and (C) Consolidated Non-cash Charges
less 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") for which financial statements
are available to Consolidated Fixed Charges of such Person for the Four Quarter
Period. 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 other dispositions 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 Exchange Act)
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale or other disposition 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
other disposition or Asset Acquisition (including the incurrence, assumption or
liability for any such 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. If since the beginning of
such period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary since the beginning
of such period) shall have made any Asset Acquisition or Asset Sale or other
disposition that would have required adjustment pursuant to this definition,
then the Consolidated Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect thereto as if such Asset Acquisition or Asset Sale or other
disposition had occurred at the beginning of the applicable Four Quarter Period.
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 average rate of interest on such Indebtedness in effect on the 30
Business Days preceding the Transaction Date; (2) if interest on any
Indebtedness actually
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incurred on the Transaction Date may optionally be determined at an interest
rate based upon a factor of a prime or similar rate, a eurocurrency interbank
offered rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the Four Quarter
Period; and (3) notwithstanding clause (1) above, interest on Indebtedness
determined on a 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 product of (x) the amount of all dividend payments on any series
of Preferred Stock of such Person and, in the case of the Company, any series of
Preferred Stock of the Guarantors (other than dividends paid in Qualified
Capital Stock) paid, accrued or scheduled to be paid or accrued during such
period times (y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal, state and
local income tax rate of such Person, expressed as a decimal; provided that
Consolidated Fixed Charges shall not include (x) gain or loss from the
extinguishment of debt, including, without limitation, write-off of debt
issuance costs, commissions, fees and expenses, (y) amortization of debt
issuance costs, commissions, fees and expenses or (z) customary commitment,
administrative and transaction fees or charges.
"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 amortization or write-off
deferred financing costs, (b) the net costs under Interest Swap Obligations, (c)
all capitalized interest and (d) the interest portion of any deferred payment
obligation; and (ii) the interest component of Capitalized Lease Obligations
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
or losses from Asset Sales or other sales of assets outside the ordinary course
of business of the Company or abandonments or reserves relating thereto (other
than after-tax gains from sales of Unrestricted Subsidiaries and other
Investments made in compliance with Section 4.06, but only to the extent not
already included in clause (z) of the first paragraph of Section 4.06, (b)
after-tax items classified as extraordinary or nonrecurring gains or losses, (c)
solely for purposes of calculating Consolidated Net Income for the covenant
described in Section 4.06, the net income 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, except to the extent that such net income is actually paid to the
Company or one of its Restricted Subsidiaries by loans, advances, intercompany
transfers, principal payments or otherwise; provided, however, that for purposes
of determining compliance with the covenant described in Section 4.04, any net
income of such
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Restricted Subsidiary, which net income is subject to any restriction permitted
under clause (8) of Section 4.16, shall be included, (e) 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 the referent Person or to a
Restricted Subsidiary of the referent Person by such Person, (f) any restoration
to income of any contingency reserve, except to the extent that provision for
such reserve was made out of Consolidated Net Income accrued at any time
following the Issue Date, (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, and (i)
the fees, expenses and other costs incurred in connection with the
Recapitalization, including payments to management contemplated by the
Recapitalization Agreement.
"Consolidated Non-cash Charges" means, with respect to any Person,
for any period, (a) the sum of (i) the aggregate depreciation, amortization and
other non-cash expenses or charges of such Person and its Restricted
Subsidiaries reducing Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period (including amortization of goodwill, the non-cash
costs of agreements evidencing Interest Swap Obligations, Currency Agreements,
license agreements, noncompetition agreements, non-cash amortization of
Capitalized Lease Obligations or management fees and organization costs), (ii)
expenses and charges relating to any equity offering or incurrence of
Indebtedness permitted to be incurred by this Indenture (including any such
expenses or charges relating to the Recapitalization), (iii) the amount of any
restructuring charge or reserve, (iv) unrealized gains and losses from hedging,
foreign currency or commodities translations and transactions, and (v) the
amount of any reduction representing a minority interest in Guarantors, minus
(b) any cash payment with respect to which a charge or reserve referred to in
clause (a) was taken in a prior period, in each case, determined on a
consolidated basis in accordance with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.02 or such other address as the Trustee may
give notice to the Company.
"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.
"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.
"Defeasance Trust Payment" see Section 8.02.
"Depositary" means, with respect to the Securities issued in the
form of one or more Global Securities, DTC or another Person designated as
Depositary by the Company, which must be a clearing agency registered under the
Exchange Act.
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"Designated Senior Indebtedness" means (i) Indebtedness under or in
respect of the New Credit Facility and (ii) any other Indebtedness constituting
Senior Indebtedness which, at the time of determination, has an aggregate
principal amount of at least $25,000,000 and is specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" 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 at the option of the holder), or
upon the happening of any event, matures or is mandatorily 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 Securities;
provided that any Capital Stock that would not constitute Disqualified Capital
Stock but for provisions therein giving holders thereof the right to cause the
issuer thereof to repurchase or redeem such Capital Stock upon the occurrence of
an "Asset Sale" or "Change of Control" occurring prior to the final stated
maturity of the Securities will not constitute Disqualified Capital Stock if the
"Asset Sale" or "Change of Control" provisions applicable to such Capital Stock,
taken as a whole, are not materially more favorable to the holders of such
Capital Stock than the provisions described in Sections 4.05 and 4.14.
"DTC" means The Depository Trust Company.
"Effective Time" has the meaning ascribed to such term in the
introductory paragraphs to this Indenture.
"Event of Default" see Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Offer" has the meaning provided in the Registration
Rights Agreement.
"Exchange Securities" means the 11 3/8% Senior Subordinated Notes
due 2008, Series B, to be issued in exchange for the Initial Securities pursuant
to the Registration Rights Agreement.
"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 in
good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"Final Maturity Date" means December 15, 2008.
"First Supplemental Indenture" has the meaning ascribed to such term
in the introductory paragraphs to this Indenture.
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"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
Issue Date.
"Global Securities" means one or more IAI Global Securities, Reg.
S Global Securities and 144A Global Securities.
"guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness or other obligations.
"Guarantee" means the guarantee of the Obligations of the Company
with respect to the Securities by each Guarantor pursuant to the terms of this
Indenture, a form of which is attached hereto as part of Exhibits A and B. When
used as a verb, "Guarantee" shall have a corresponding meaning.
"Guarantor" means each of (i) Scot, Inc. as of the Effective Time
and (ii) each of the Company's Restricted Subsidiaries that in the future
executes a supplemental indenture in which such Restricted Subsidiary agrees to
be bound by the terms of this Indenture as a Guarantor; provided that any Person
constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the terms
of this Indenture.
"Guarantor Senior Indebtedness" means with respect to any Guarantor,
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 a Guarantor, whether
outstanding on the Issue 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
Guarantee of such Guarantor. Without limiting the generality of the foregoing,
"Guarantor Senior Indebtedness" 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, (x) all
obligations (including guarantees thereof) of every nature of such Guarantor
under the New 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 Issue Date or
thereafter incurred. Notwithstanding the foregoing, "Guarantor Senior
Indebtedness" shall not include (i) any Indebtedness of such Guarantor to a
Restricted Subsidiary of such Guarantor or any Affiliate of such Guarantor or
any of such Affiliate's
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Subsidiaries (other than an Affiliate which is also a lender or an Affiliate of
a lender under the New Credit Facility), (ii) Indebtedness to, or guaranteed on
behalf of, any shareholder (other than a shareholder which is also a lender or
an Affiliate of a lender under the New Credit Facility), director, officer or
employee of such Guarantor or any Restricted Subsidiary of such Guarantor
(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 such Guarantor, (vi) that portion of any Indebtedness
incurred in violation of the provisions set forth in Section 4.04 (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 Section 4.04), (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 which is, by its express terms, subordinated in right of payment to
any other Indebtedness of such Guarantor.
"Holder" means the registered holder of any Security.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
to Institutional Accredited Investors.
"incur" see Section 4.04.
"Indebtedness" means with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness 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, (v) all obligations for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations 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 the Senior
Subordinated Indenture, and if such price is based upon, or
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measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined in good faith by the Board of Directors of the
issuer of such Disqualified Capital Stock. Notwithstanding the foregoing, the
term "Indebtedness" shall not include: (a) trade accounts payable and other
accrued liabilities arising in the ordinary course of business, (b) Obligations
of such Person other than principal, (c) any liability for federal, state or
local taxes or other taxes or by such Person and (d) Obligations of such Person
with respect to performance and surety bonds and completion guarantees in the
ordinary course of business, and the accretion of original issue discount will
not be considered the incurrence of Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"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.
"Initial Securities" means the 11 3/8% Senior Subordinated Notes due
2008, Series A, of the Company.
"Initial Purchasers" means BT Alex. Brown Incorporated and
Paribas Corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" means, with respect to any Securities, the sum of any
cash interest and any Liquidated Damages on such Securities.
"Interest Payment Date" means each semiannual interest payment date
on June 15 and December 15 of each year, commencing June 15, 1999.
"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the June 1
or December 1 (whether or not a Business Day), as the case may be, immediately
preceding such Interest Payment Date.
"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.
"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
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other 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. 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, greater than 50% 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.
"Issue Date" means December 15, 1998, the date of first issuance of
the Securities.
"JFL Equity" means J.F. Lehman Equity Investors I, L.P.
"Lehman" means J.F. Lehman & Company, Inc.
"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).
"Liquidated Damages" has the meaning provided in the Registration
Rights Agreement.
"Merger" has the meaning ascribed to such term in the
introductory paragraphs to this Indenture.
"Moody's" means Moody's Investors Service, Inc.
"Moorpark Facility" means the Company's new production facility
located in Moorpark, California.
"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 or dividends) received by the Company or any of its Restricted
Subsidiaries from such Asset Sale net of (a) reasonable 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 relating to such Asset Sale, (c) repayment of Indebtedness that is
secured by such assets or required to be repaid in connection with such Asset
Sale, (d) appropriate amounts to be provided by the Company or any Restricted
Subsidiary, as the case may be, as a reserve, in accordance 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, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale and (e) amounts
required to be paid to any Person (other than the Company or any Restricted
Subsidiary) owning a
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beneficial interest in the assets that are subject to the Asset Sale (by way of
holding Capital Stock of the Person owning such assets or otherwise).
"Net Proceeds Offer" see Section 4.05(a).
"Net Proceeds Offer Amount" see Section 4.05(a).
"Net Proceeds Offer Payment Date" see Section 4.05(a).
"Net Proceeds Offer Trigger Date" see Section 4.05(a).
"New Credit Facility" means the Credit Agreement dated as of the
Issue Date, among the Company, the lenders party thereto in their capacities as
lenders thereunder and Bankers Trust Company, as lead arranger, administrative
agent and a lender, 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 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.
"Newhall Facility" means the Company's existing facility located in
Newhall, California, from which operations are expected to be relocated to the
Moorpark Facility.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offering" means the offer and sale of the $100,000,000 aggregate
principal amount of Initial Securities to the Initial Purchasers.
"Officer" of any Person means the Chairman of the Board, the
President, any Executive Vice President, Senior Vice President or Vice President
(whether or not such title is preceded or followed by one or more words or
phrases), the Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of such Person.
"Officers' Certificate" of any Person means a certificate signed on
behalf of such Person or the general partner, in the case of a limited
partnership, or member, in the case of a limited liability company, of such
Person by the Chairman of the Board, the President, any Executive Vice
President, Senior Vice President or Vice President (whether or not such title is
preceded or followed by one or more words or phrases) and by the Treasurer or
any Assistant Treasurer or the Secretary or any Assistant Secretary of such
Person, that meets the requirements set forth in Sections 13.04 and 13.05 of
this Indenture.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Rule 144A.
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"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee and the Company. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Other Asset Sale Indebtedness" has the meaning set forth in
Section 4.05(a).
"Participant" has the meaning set forth in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Payment Blockage Notice" see Section 8.02.
"Payment Blockage Period" see Section 8.02.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Securities in an aggregate principal
amount of $100,000,000 and the related Guarantees;
(ii) Indebtedness incurred pursuant to the New Credit Facility in an
aggregate principal amount at any time outstanding not to exceed (a) $70,000,000
with respect to Indebtedness under a term loan facility, less the amount of all
mandatory principal payments actually made by the Company in respect of such
term loans with the Net Cash Proceeds of an Asset Sale pursuant to Section 4.05
and (b) the greater of (x) $25,000,000 (reduced by the amount of any required
permanent repayments or commitment reductions made with the Net Cash Proceeds of
an Asset Sale pursuant to Section 4.05) and (y) 60% of inventory plus 85% of
accounts receivable (each as determined in accordance with GAAP, but excluding
accounts receivable that are past due by more than 60 days, other than by reason
of any laws governing insolvency or bankruptcy) as of the end of the last fiscal
quarter for which financial statements have been prepared;
(iii) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid or
permanent reductions thereof;
(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;
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(vi) Indebtedness of a 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, a Wholly Owned Restricted Subsidiary
of the Company or the lenders or collateral agent under any senior secured
Indebtedness permitted to be incurred under this Indenture, in each case subject
to no Lien held by a Person other than the Company or such other lenders or
collateral agent, a Wholly Owned Restricted Subsidiary of the Company or such
other lenders or collateral agent; provided that if as of any date any Person
other than the Company, a Wholly Owned Restricted Subsidiary of the Company or
the lenders or collateral agent under the New Credit Facility owns or holds any
such Indebtedness or holds a Lien in respect of such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness pursuant to this clause (vi);
(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 or the lenders or collateral agent
under any senior secured Indebtedness permitted to be incurred under this
Indenture, in each case subject to no Lien held by such Person other than a
Wholly Owned Restricted Subsidiary or such other lenders or collateral agent;
provided that (a) any Indebtedness of the Company to any Wholly Owned Restricted
Subsidiary of the Company which is not a Guarantor is unsecured and
subordinated, pursuant to a written agreement, to the Company's obligations
under this Indenture and the Securities and (b) if as of any date any Person
other than a Wholly Owned Restricted Subsidiary of the Company or such other
lenders or collateral agent owns or holds any such Indebtedness or any Person
holds a Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
Company pursuant to this clause (vii);
(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, issued in the ordinary course of
business of the Company or such Restricted Subsidiary, including, without
limitation, in order to provide security for workers' compensation claims or
payment obligations in connection with self-insurance or similar requirements in
the ordinary course of business and other Indebtedness with respect to workers'
compensation claims, self- insurance obligations, performance, surety and
similar bonds and completion guarantees provided by the Company or any
Restricted Subsidiary in the ordinary course of business;
(x) Indebtedness (A) represented by Capitalized Lease Obligations
and (B) Purchase Money Indebtedness of the Company and its Restricted
Subsidiaries or under purchase money mortgages or secured by purchase money
security interests, in the case of (A) or (B) incurred for the purpose of
leasing or financing or refinancing all or any part of the purchase price or
cost of construction or improvement of any property (real or personal) or other
assets that are used or useful in the business of the Company or such Restricted
Subsidiary (whether through the direct purchase of assets or the Capital Stock
of any Person owning such assets and whether such Indebtedness is owed to the
seller or Person carrying out such construction or improvement or to any third
party), so long as (x) such Indebtedness is not secured by any
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property or assets of the Company or any Restricted Subsidiary other than the
property or assets so leased, acquired (directly or indirectly), constructed or
improved and (y) such Indebtedness is created within 90 days of the acquisition
or completion of construction or improvement of the related property or asset
provided that the aggregate principal amount of Indebtedness under clauses (A)
and (B) does not exceed $10,000,000 and any Refinancing of Indebtedness
permitted under clause (A) or (B) the aggregate of which does not exceed
$10,000,000;
(xi) Refinancing Indebtedness;
(xii) guarantees of Indebtedness otherwise permitted under this
Indenture;
(xiii) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at any
one time outstanding (which amount may, but need not, be incurred in whole or in
part under the New Credit Facility);
(xiv) Indebtedness arising from any agreement entered into by the
Company or any of its Restricted Subsidiaries providing for indemnification,
purchase price adjustment or similar obligations, in each case incurred or
assumed in connection with any Asset Sale;
(xv) Indebtedness arising from a Sale and Leaseback Transaction or
from the creation of a mortgage, in either case with respect to the Moorpark
Facility in an amount not to exceed $25,000,000; provided that the Net Cash
Proceeds from such Sale and Leaseback Transaction or from the creation of such
mortgage are applied in accordance with Section 4.05(a)(iii)(A) as if such
transaction were an Asset Sale thereunder; provided, further, however that any
Net Cash Proceeds remaining after the foregoing proviso is complied with shall
be applied in accordance with the other provisions described in Section 4.05 as
if such transaction were an Asset Sale thereunder; and
(xvi) Indebtedness arising from a Sale and Leaseback Transaction or
from the creation of a mortgage, in either case with respect to the Company's
facility in Mesa, Arizona in an amount not to exceed $15,000,000; provided that
the Net Cash Proceeds from such Sale and Leaseback Transaction or from the
creation of such mortgage are applied in accordance with Section 4.05(a)(iii)(A)
as if such transaction were an Asset Sale thereunder; provided, further, however
that any Net Cash Proceeds remaining after the foregoing proviso is complied
with shall be applied in accordance with the other provisions described in
Section 4.05 as if such transaction were an Asset Sale thereunder.
"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 Restricted Subsidiary of the Company or that
will merge or consolidate into the Company or a Restricted Subsidiary of the
Company, (ii) Investments in the Company by any Restricted Subsidiary of the
Company; provided that any Indebtedness evidencing such Investment to the extent
held by a Restricted Subsidiary that is not a Guarantor is unsecured and
subordinated, pursuant to a written agreement, to the Company's obligations
under the Securities 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 $1,000,000 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 in securities of trade
creditors or customers received
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pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers or in good faith
settlement of delinquent obligations of such trade creditors or customers; (vii)
Investments made pursuant to the Recapitalization; (viii) guarantees of
Indebtedness otherwise permitted under this Indenture; (ix) obligations of one
or more officers or other employees of the Company or any of its Restricted
Subsidiaries in connection with such officer's or employee's acquisition of
shares of Common Stock of the Company so long as no cash is paid by the Company
or any of its Restricted Subsidiaries to such officers or employees in
connection with the acquisition of any such obligations; (x) 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 4.05; (xi)
additional Investments not to exceed an amount equal to (a) $10,000,000 plus (b)
to the extent not previously reinvested under this clause (xi), any return of
capital realized on a Permitted Investment made pursuant to this clause (xi);
provided that in no event shall the aggregate amount of Investments pursuant to
clauses (a) and (b) of this clause (xi) exceed $10,000,000 in the aggregate at
any one time outstanding; (xii) any acquisition of assets solely in exchange for
the issuance of Qualified Capital Stock of the Company; (xiii) commission,
travel, payroll, entertainment, relocation and similar advances to officers and
employees of the Company or any Restricted Subsidiary made in the ordinary
course of business; and (xiv) Investments in one or more joint ventures relating
to the Company's expansion into the European market not to exceed an amount
equal to (a) $4,000,000 plus (b) to the extent not previously reinvested under
this clause (xiv) any return of capital realized on a Permitted Investment made
pursuant to this clause (xiv); provided that in no event shall the aggregate
amount of Investments pursuant to clauses (a) and (b) of this clause (xiv)
exceed $4,000,000 in the aggregate at any one time outstanding.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries shall
have set aside on its books such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business in connection therewith, or to secure
the performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed
money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company or any
of its Restricted Subsidiaries;
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(vi) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or assets
which is not leased property subject to such Capitalized Lease Obligation;
(vii) purchase money Liens to finance property or assets of the
Company or any Restricted Subsidiary of the Company; provided, however, that (A)
the related purchase money Indebtedness shall not exceed the cost of the
acquisition, construction or improvement of such property or assets and shall
not be secured by any property or assets of the Company or any Restricted
Subsidiary of the Company other than the property and assets so acquired whether
through the direct acquisition of such property or assets or indirectly through
the acquisition of the Capital Stock of any Person owning such property or
assets constructed or improved and (B) the Lien securing such Indebtedness shall
be created within 90 days of such acquisition or completion of construction or
improvement;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xii) Liens securing Capitalized Lease Obligations and Purchase
Money Indebtedness permitted pursuant to Section 4.04; provided, however, that
in the case of Purchase Money Indebtedness (A) the Indebtedness shall not exceed
the cost of such property or assets and shall not be secured by any property or
assets of the Company or any Restricted Subsidiary of the Company other than the
property and assets so acquired or constructed and (B) the Lien securing such
Indebtedness shall be created within 180 days of such acquisition or
construction or, in the case of a Refinancing of any Purchase Money
Indebtedness, within 180 days of such Refinancing;
(xiii) Liens securing Indebtedness under Currency Agreements;
(xiv) any lease or sublease to a third party;
(xv) Liens placed upon assets of a Restricted Subsidiary of the
Company not organized under the laws of the United States or any subdivision
thereof to service the Indebtedness of such Restricted Subsidiary that is
otherwise permitted under this Indenture;
(xvi) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.04; provided that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company and were
not granted in anticipation of the incurrence of such Acquired Indebtedness by
the Company or a Restricted Subsidiary of the Company and (B) such Liens do
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not extend to or cover any property or assets of the Company or of any of its
Restricted Subsidiaries other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary of the Company;
(xvii) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company; provided that such
Liens were not incurred in connection with, or in contemplation of, such
acquisition;
(xviii) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to obligations
that do not exceed $5,000,000 at any one time outstanding and that (a) are not
incurred in connection with the borrowing of money or the obtaining of advances
of credit (other than trade credit in the ordinary course of business) and (b)
do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the Company or
such Restricted Subsidiary;
(xix) Liens on materials, inventory or consumables and the proceeds
therefrom securing trade payables relating to such materials, inventory or
consumables;
(xx) Liens in favor of customs and revenues authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xxi) Liens in connection with workmen's compensation obligations
and general liability exposure of the Company and its Restricted Subsidiaries;
(xxii) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or assets
which are not leased pursuant to such Capitalized Lease Obligation;
(xxiii) Liens for judgments, attachments, seizures or levies not to
exceed $500,000 in the aggregate at any one time;
(xxiv) Liens on property or assets of the Company or any of its
Restricted Subsidiaries securing Indebtedness incurred under clause (xiii) of
the definition of "Permitted Indebtedness" and any guarantees relating thereto;
and
(xxv) any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (i) through (xxiv) provided that the
Lien so extended, renewed or replaced does not extend to any additional property
or assets.
"Person" means an individual, partnership, corporation,
unincorporated organization, limited liability company, trust or joint venture,
or a governmental agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities in
registered form.
"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.
"principal" of a debt security means the principal of the security,
plus, when appropriate, the premium, if any, on the security.
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"Principals" means (i) Lehman, JFL Equity and each Affiliate of
Lehman and JFL Equity as of the Issue Date; (ii) each officer or employee of
Lehman or any such member referred to in clause (i) as of the Issue Date; and
(iii) each of the foregoing's family members, legal representatives or
guardians, heirs and legatees and trusts, partnerships and corporations the sole
beneficiaries, partners or shareholders, as the case may be, of which are family
members.
"Private Exchange Securities" means the Private Exchange Securities
as defined in the Registration Rights Agreement and any similar securities
issued in compliance with Section 2.02 in accordance with any other registration
rights agreement.
"Private Placement Legend" means the legend initially set forth on
the Initial Securities in the form set forth on Exhibit A hereto.
"Proceeds Purchase Date" see Section 4.05(b).
"Purchase Agreement" has the meaning ascribed to such term in the
introductory paragraphs to this Indenture.
"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.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Qualified Proceeds" means any of the following or any combination
of the following: (i) cash, (ii) Cash Equivalents, (iii) assets that are used or
usable in the business of the Company and its Subsidiaries as existing on the
Issue Date or a business reasonably related or complementary thereto and (iv)
Capital Stock of any Person engaged primarily in the business of the Company and
its Subsidiaries as existing on the Issue Date or a business reasonably related
or complementary thereto if, in connection with the receipt by the Company or
any Restricted Subsidiary of the Company of such Capital Stock (A) such Person
becomes a Restricted Subsidiary or (B) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or any Restricted Subsidiary of
the Company.
"Recapitalization" means the recapitalization of Special Devices
pursuant to which SDI Acquisition will be merged with and into Special Devices.
"Recapitalization Agreement" means the Amended and Restated
Agreement and Plan of Merger dated as of June 19, 1998 by and between Special
Devices and SDI Acquisition (as amended through the date hereof and together
with all ancillary agreements entered into in connection therewith).
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"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
"Reference Date" see Section 4.06.
"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 (whose proceeds are applied within 60 days
after the incurrence thereof) 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 Indebtedness incurred in accordance
with Section 4.04 (other than pursuant to clause (ii), (iv), (v), (vi), (vii),
(viii), (ix), (x), (xii), (xiii), (xiv), (xv) or (xvi) of the definition of
Permitted Indebtedness), in each case that does not (1) result in an increase in
the aggregate principal amount (or accreted value, if applicable) of
Indebtedness of such Person as of the date of such proposed Refinancing (plus
the amount of any penalties, interest or premium required to be paid under the
terms of the instrument governing such Indebtedness and plus the amount of
reasonable fees, discounts, commissions and other expenses incurred by the
Company in connection with such Refinancing) or (2) create Indebtedness with (A)
a Weighted Average Life to Maturity that is less than the Weighted Average Life
to Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier
than the final maturity of the Indebtedness being Refinanced; provided that (x)
if such Indebtedness being Refinanced is solely Indebtedness 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
Securities, then such Refinancing Indebtedness shall be subordinate or junior to
the Securities at least to substantially the same extent and in substantially
the same manner as the Indebtedness being Refinanced.
"Reg. S Global Security" means a global security in registered form
representing the aggregate principal amount of Securities sold pursuant to
Regulation S under the Securities Act.
"Registrar" see Section 2.03.
"Registration" means a registered exchange offer for the Securities
by the Company or other registration of the Securities under the Securities Act
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
"Registration Date" see Section 4.12.
"Registration Rights Agreement" has the meaning ascribed to such
term in the introductory paragraphs to this Indenture.
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"Related Party" with respect to any Principal means (A) any
controlling stockholder or 80% (or more) owned Subsidiary of such Principal or
(B) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (A).
"Replacement Assets" see Section 4.05(a).
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Indebtedness; provided
that if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Indebtedness in respect of any Designated
Senior Indebtedness.
"Restricted Payment" see Section 4.06.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether or not any Security constitutes a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard and Poor's Corporation.
"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.
"Scot, Inc." has the meaning ascribed to such term in the
introductory paragraphs to this Indenture.
"SDI Acquisition" has the meaning ascribed to such term in the
introductory paragraphs to this Indenture.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities" means, collectively, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms of this Indenture.
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"Securities Act" means the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.
"Senior Indebtedness" 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 Issue 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 Securities. Without limiting the
generality of the foregoing, "Senior Indebtedness" 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, (x) all obligations (including guarantees thereof) of every nature of the
Company under the New 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 Issue Date or thereafter incurred. Notwithstanding the foregoing, "Senior
Indebtedness" 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 (other than an Affiliate which is also a lender or an
Affiliate of a lender under the New Credit Facility), (ii) Indebtedness to, or
guaranteed on behalf of, any shareholder (other than a shareholder which is also
a lender or an Affiliate of a lender under the New Credit Facility), 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
Section 4.04 (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
Section 4.04), (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 which is, by its express
terms, subordinated in right of payment to any other Indebtedness of the
Company.
"Shelf Registration Statement" has the meaning provided in the
Registration Rights Agreement.
"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
Exchange Act.
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"Special Devices" has the meaning ascribed to such term in the
introductory paragraphs to this Indenture.
"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" see Section 5.01.
"TIA" means the Trust Indenture Act of 1939, as amended, as in
effect on the date of this Indenture (except as provided in Section 10.03) until
such time as this Indenture is qualified under the TIA, and thereafter as in
effect on the date on which this Indenture is qualified under the TIA.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of this Indenture and thereafter means such successor.
"Trust Officer" means any officer within Corporate Trust
Administration (or any successor group of the Trustee), and also means, with
respect to a particular corporate trust matter, any other officer to whom such
trust matter is referred because of his knowledge of and familiarity with the
particular subject, 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.
"United States Government Obligations" means direct non-callable
obligations of the United States for the payment of which the full faith and
credit of the United States is pledged.
"United States 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.
"Unrestricted Securities" means one or more Securities that do not
and are not required to bear the Private Placement Legend in the form set forth
in Exhibit A hereto, including, without limitation, the Exchange Securities and
any Securities registered under the Securities Act pursuant to and in accordance
with the Registration Rights Agreement.
"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
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complies with Section 4.06 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 4.04
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.
"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 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 Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Guarantees.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, a
Guarantor or any other obligor on the Securities.
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All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles in effect from
time to time, and any other reference in this Indenture to "generally accepted
accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall approve the forms of the Securities and any notation,
legend or endorsement on them. Each Security shall be dated the date of its
issuance and shall show the date of its authentication. Global Securities shall
bear the legend set forth in Exhibit C hereto. The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary,
as hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers, including no more than one signing solely as Assistant
Secretary, shall sign, or one Officer (other than as an Assistant Secretary)
shall sign and the Secretary or an Assistant Secretary (each of whom shall, in
each case, have been duly authorized by all requisite
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corporate actions) shall attest to such Officer's signature, the Securities of
the Company by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities issued by SDI
Acquisition for original issue in an aggregate principal amount not to exceed
$150,000,000 in one or more series; provided that the aggregate principal amount
of Initial Securities on the Issue Date shall not exceed $100,000,000; and
provided further that the Company complies with Section 4.04, (ii) upon
cancellation of the Initial Securities issued by SDI Acquisition, Initial
Securities issued by Special Devices for original issue in an aggregate amount
not to exceed $150,000,000 in one or more series; provided that the aggregate
principal amount of Initial Securities on the Issue Date shall not exceed
$100,000,000, and provided further that the Company complies with Section 4.04,
(iii) Private Exchange Securities from time to time only in exchange for a like
principal amount of the same type of Initial Securities and (iv) Unrestricted
Securities from time to time (A) in exchange for a like principal amount of the
same type of Initial Securities or a like principal amount of the same type of
Private Exchange Securities or (B) as the Company may determine in accordance
with this Indenture, in each case upon a written order of the Company in the
form of an Officers' Certificate. Each such written order shall specify the
amount of and the type of Securities to be authenticated and the date on which
the Securities are to be authenticated, whether the Securities are to be Initial
Securities, Private Exchange Securities or Unrestricted Securities and whether
the Securities are to be issued as Physical Securities or Global Securities and
such other information as the Trustee may reasonably request. The aggregate
principal amount of Securities outstanding at any time may not exceed
$150,000,000, except as provided in Sections 2.07 and 2.08.
In the event that the Company shall issue and the Trustee shall
authenticate any Securities issued under this Indenture subsequent to the Issue
Date pursuant to clauses (ii) and (iii) of the first sentence of the immediately
preceding paragraph, the Company shall use its reasonable best efforts to obtain
the same "CUSIP" number for such Securities as is printed on the Securities
outstanding at such time; provided, however, that if any series of Securities
issued under this Indenture subsequent to the Issue Date is determined, pursuant
to an Opinion of Counsel of the Company in a form reasonably satisfactory to the
Trustee to be a different class of security than the Securities outstanding at
such time for federal income tax purposes, the Company may obtain a "CUSIP"
number for such Securities that is different than the "CUSIP" number printed on
the Securities then outstanding.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
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The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange (the "Registrar"), (b)
Securities may be presented or surrendered for payment (the "Paying Agent") and
(c) notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company, upon notice to the Trustee, may appoint one
or more co-Registrars and one or more additional Paying Agents. The term "Paying
Agent" includes any additional Paying Agent and the term "Registrar" includes
any co-Registrar. Except as provided herein, the Company or any Guarantor may
act as Paying Agent, Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fail to maintain a Registrar or Paying
Agent, or fail to give the foregoing notice, the Trustee shall act as such and
shall be entitled to appropriate compensation in accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed. The Company initially appoints DTC to act as Depositary with respect
to the Global Notes.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee of
any Default by the Company in making any such payment. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent (if
other than the Company), the Paying Agent shall have no further liability for
such assets. If the Company or any Guarantor or any of their respective
Affiliates acts as Paying Agent, it shall, on or before each due date of the
principal of or interest on the Securities,
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segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least five days before each Interest Record Date and at such other
times as the Trustee may request in writing a list as of such date and in such
form as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal principal amount of
Securities of other authorized denominations of the same series, the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however, that the
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Securities (and
each of the Guarantors shall execute a Guarantee thereon) at the Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith payable by the transferor of such Securities (other than any such
transfer taxes or other governmental charge payable upon exchanges or transfers
pursuant to Section 2.10, 3.06, 4.05, 4.14 or 10.05). The Registrar shall not be
required to register the transfer or exchange of any Security (i) during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Securities and ending at the close of business on the
day of such mailing and (ii) selected for redemption in whole or in part
pursuant to Article Three hereof, except the unredeemed portion of any Security
being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent shall treat the person in whose
name the Security is registered as the owner thereof for all purposes whether or
not the Security shall be overdue, and neither the Company, the Trustee nor any
Agent shall be affected by notice to the contrary. Any Holder of a beneficial
interest in a Global Security shall, by acceptance of such beneficial interest
in a Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Depositary (or its agent), and that ownership of a beneficial interest in a
Global Security shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
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If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of Securities
are met. If required by the Company or the Trustee, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee and any Agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge such Holder for its reasonable expenses in replacing a Security,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company and the Guarantors.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those canceled by it, those delivered
to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Proceeds Purchase Date or the Final
Maturity Date the Paying Agent holds money sufficient to pay all of the
principal and interest due on the Securities payable on that date, and is not
prohibited from paying such money to the Holders pursuant to the terms of this
Indenture, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company, a Guarantor or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer of the Trustee actually knows are so owned shall
be disregarded.
The Company shall notify the Trustee, in writing, when the Company,
a Guarantor or any of their respective Affiliates repurchases or otherwise
acquires Securities and of the aggregate principal amount of such Securities so
repurchased or otherwise acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the
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Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of temporary Securities to be authenticated and the date on
which the temporary Securities are to be authenticated.
Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company consider
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation. If the Company or any Guarantor shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to
time on demand at the applicable rate of interest then borne by the Securities.
The Company shall, to the extent lawful, pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the rate of
interest then borne by the Securities.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day preceding the date
fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(i) shall be paid
to Holders as of the Interest Record Date for the Interest Payment Date for
which interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number and
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to
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Holders; provided, however, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m., New York time, on each Interest Payment Date,
Redemption Date, Proceeds Purchase Date and the Final Maturity Date, the Company
shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Redemption Date, Proceeds Purchase Date or Final Maturity Date, as the case may
be, in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date, Redemption Date, Proceeds Purchase Date
or Final Maturity Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depositary or the nominee of such Depositary, (ii) be delivered to
the Trustee as custodian for such Depositary and (iii) bear legends as set forth
in Exhibit C.
Members of, or participants in, the Depositary ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Security, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and Participants, the operation of customary practices governing the
exercise of the rights of a beneficial holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depositary and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for any Global Security and a successor Depositary is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depositary to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial
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owner identified by the Depositary in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount of Physical
Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal principal
amount of Physical Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.16 for such
transactions are met; provided, however, that the Physical Securities presented
or surrendered for Registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing; and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Company, by
the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the Registrar
by a Holder for Registration in the name of such Holder,
without transfer, a certification from such Holder to that
effect (substantially in the form of Exhibit D hereto); or
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and a transferee letter of representation
substantially in the form of Exhibit E hereto and, at the
option of the Company, an
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Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act; or
(D) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification
to that effect (substantially in the form of Exhibit D hereto)
and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably acceptable to the
Company to the effect that such transfer is in compliance with
the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a Physical
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Registrar, together with:
(A) certification, substantially in the form of Exhibit D hereto,
that such Physical Security is being transferred (I) to a QIB
or (II) to an Accredited Investor and, with respect to (II),
at the option of the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is
in compliance with the Securities Act; and
(B) written instructions directing the Registrar to make, or to
direct the Depositary to make, an endorsement on the
applicable Global Security to reflect an increase in the
aggregate amount of the Securities represented by the Global
Security,
then the Registrar shall cancel such Physical Security and cause, or direct the
Depositary to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Registrar, the principal amount of
Securities represented by the applicable Global Security to be increased
accordingly. If no Global Security is then outstanding, the Company shall,
unless either of the events in the proviso to Section 2.15(b) have occurred and
are continuing, issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate such a Global Security in
the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor. Upon receipt by the Registrar of written instructions, or
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such other instruction as is customary for the Depositary, from the Depositary
or its nominee, requesting the Registration of transfer of an interest in a
Global Security to another type of Global Security, together with the applicable
Global Securities (or, if the applicable type of Global Security required to
represent the interest as requested to be transferred is not then outstanding,
only the Global Security representing the interest being transferred), the
Registrar shall cancel such Global Securities (or Global Security) and the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate new Global Securities of
the types so canceled (or the type so canceled and applicable type required to
represent the interest as requested to be transferred) reflecting the applicable
increase and decrease of the principal amount of Securities represented by such
types of Global Securities, giving effect to such transfer. If the applicable
type of Global Security required to represent the interest as requested to be
transferred is not outstanding at the time of such request, the Company shall
issue and the Trustee shall, upon written instructions from the Company in
accordance with Section 2.02, authenticate a new Global Security of such type in
principal amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Physical Security;
provided, however, that prior to the Registration, a transferee that is a QIB or
Institutional Accredited Investor may not exchange a beneficial interest in
Global Security for a Physical Security. Upon receipt by the Registrar of
written instructions, or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any Person (subject
to the previous sentence) having a beneficial interest in a Global Security and
upon receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a beneficial
interest in Securities the offer and sale of which have not been registered
under the Securities Act, the following additional information and documents:
(A) if such beneficial interest is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act; or
(B) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act,
then the Registrar will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Registrar, the aggregate principal amount of the applicable Global
Security to be reduced and, following such reduction, the Company will
execute and, upon receipt of an authentication order in the form of an
Officers'
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Certificate in accordance with Section 2.02, the Trustee will authenticate
and deliver to the transferee a Physical Security in the appropriate
principal amount.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar in writing. The Registrar shall deliver such Physical
Securities to the Persons in whose names such Physical Securities are so
registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless, and the Trustee is hereby authorized to
deliver Securities without the Private Placement Legend if, (i) there is
delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act; (ii) such Security has been sold pursuant to
an effective registration statement under the Securities Act (including pursuant
to a Registration); or (iii) the date of such transfer, exchange or replacement
is two years after the later of (x) the Issue Date and (y) the last date that
the Company or any affiliate (as defined in Rule 144 under the Securities Act)
of the Company was the owner of such Securities (or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 7 or
8 of the Securities at the applicable redemption price set forth thereon, it
shall notify the Trustee in writing of the Redemption Date and the principal
amount of Securities to be redeemed, together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed at any time,
the Trustee shall select such Securities for redemption in compliance with the
requirements of the principal national securities exchange, if any, on which
such Securities are listed or, if such Securities are not then listed on a
national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however, that no
Securities of a principal amount of $1,000 or less shall be redeemed in part;
provided, further, that if a partial redemption is made with the proceeds of a
Public Equity Offering, selection of the Securities or portions thereof for
redemption shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to DTC procedures), unless such
method is otherwise prohibited.
Securities and portions of them that the Trustee so selects shall be
in amounts of $1,000 principal amount or integral multiples thereof. The Trustee
shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of Securities
called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each Holder
whose Securities are to be redeemed at such Holder's registered address.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the paragraph of the Securities pursuant to which the Securities are
being redeemed;
(2) the Redemption Date;
(3) the redemption price;
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(4) the name and address of the Paying Agent to which the Securities are
to be surrendered for redemption;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making the redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders is to receive
payment of the redemption price upon surrender to the Paying Agent; and
(7) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the Redemption
Date, upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion thereof will be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense; provided that the Company shall give notice of redemption to the
Trustee at least 10 days before the date the notice of redemption is requested
by the Company to be mailed to the Holders (unless a shorter notice period shall
be agreed to by the Trustee in writing).
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption Date,
but interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date. The Trustee or Paying Agent shall promptly return
to the Company any money deposited with the Trustee or the Paying Agent by the
Issuers in excess of the amount necessary to pay the redemption price of, and
accrued and unpaid interest on, all Notes to be redeemed.
SECTION 3.05. Deposit of Redemption Price.
Prior to 10:00 a.m, New York time, on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company is Paying Agent,
shall, on or before the Redemption Date, segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Securities or the portions of Securities called for redemption. If a
Security is redeemed on or after an Interest Record Date but on or prior to the
related Interest Payment Date, then any accrued and unpaid interest shall be
paid to the person in whose name such Security was registered at the close of
business on such
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record date. Upon surrender of a Security for redemption in accordance with the
notice given pursuant to Section 3.03 hereof, such Security shall be purchased
by the Company at the redemption price, together with accrued and unpaid
interest to the redemption date.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure of
the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if any,
thereon shall, until paid or duly provided for, bear interest as provided in
Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities and the Registration Rights
Agreement. An installment of principal or interest shall be considered paid on
the date due if the Trustee or Paying Agent (other than the Company, a Guarantor
or any of their respective Affiliates) holds on that date money designated for
and sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders of the Securities pursuant to the terms of this
Indenture.
The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the applicable Securities. The Company shall pay cash
interest on overdue installments of interest at the same rate per annum borne by
the applicable Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13. The
Company hereby initially designates the Trustee at its address set forth in
Section 13.02 as its office or agency in the Borough of Manhattan, The City of
New York, for such purposes.
SECTION 4.03. Limitations on Transactions with Affiliates
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(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, taken as a whole, 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 $2,500,000 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 $7,500,000, 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 the financial terms of such transaction or series
of related transactions, taken as a whole, 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) above shall not apply
to (i) reasonable fees and compensation paid to, indemnity provided for the
benefit of and benefit plans provided for, officers, directors, employees or
consultants of the Company or any Restricted Subsidiary of the Company as
determined in good faith by the Company's or such Restricted Subsidiary's Board
of Directors or senior management; (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) the transactions and payments
contemplated by any agreement as in effect as of the Issue Date (including,
without limitation, the Recapitalization Agreement) or any amendment thereto in
any replacement agreement therefor so long as any such amendment or replacement
agreement, taken as a whole, is not more disadvantageous to the Holders in any
material respect than the original agreement as in effect on the Issue Date;
(iv) the payment to the Principals or their Related Parties and affiliates of
annual management and advisory fees and related expenses; provided that the
amount of such fees shall not exceed $1,000,000 in any fiscal year; (v) loans
and advances (or guarantees of third party loans) to officers or employees of
the Company or any of its Restricted Subsidiaries in the ordinary course of
business not to exceed $500,000 at any time outstanding; (vi) the payment of
fees and expenses related to the Recapitalization; (vii) Permitted Investments
and Restricted Payments permitted by this Indenture; (viii) any employment
agreement, collective bargaining agreement, employee benefit plan, related trust
agreement, indemnification agreement, benefit plan or similar arrangement for
the benefit of directors, officers entered into in the ordinary course of
business; (ix) the lease (expired) between the Company and Placerita Land and
Farming Company relating to the Newhall Facility, on a month-to-month basis, as
in effect in all material respects on the Issue Date subject to annual increases
based on the Consumers Price Index; and (x) purchases of parts and components
from Ordnance Products, Inc. and Multi-Screw, Inc. consistent with past
practice.
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(c) In addition, the last sentence of paragraph (a) shall not apply
to (i) payments by the Company or any of its Restricted Subsidiaries to the
Principals or their Related Parties and Affiliates for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities, including in connection with acquisition or divestitures,
which payments are approved by the Board of Directors of the Company in good
faith, and (ii) Indebtedness permitted by paragraph (xiii) of the definition of
"Permitted Indebtedness."
SECTION 4.04. 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 and/or any
Guarantor may incur Indebtedness (including, without limitation, Acquired
Indebtedness) 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 (a) 2.0 to 1.0 if the date of such
incurrence is on or prior to December 15, 2000, or (b) 2.25 to 1.0 if the date
of such incurrence is after December 15, 2000.
For the purposes of determining compliance with this Section 4.04,
in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Indebtedness or is otherwise entitled to be incurred
pursuant to this Section 4.04, the Company shall, in its sole discretion,
classify (or reclassify) such item of Indebtedness in any manner that complies
with this Section 4.04 and such items of Indebtedness will be treated as having
been incurred pursuant to only one of such clauses or pursuant to the first
paragraph hereof. Accrual of interest or accretion of accreted value will not be
deemed to be an incurrence of Indebtedness for purposes of this Section 4.04.
SECTION 4.05. 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
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 Qualified Proceeds; provided that the amount of (x)
any liabilities of the Company or any Restricted Subsidiary of the Company (as
shown on the Company's or on such Restricted Subsidiary's most recent balance
sheet) (other than liabilities that are by their terms subordinated to the
Securities or, in the case of a Restricted Subsidiary, its Guarantee) that are
assumed by the transferee of any such assets and (y) any securities, notes or
other obligations received by the Company or any such Restricted Subsidiary from
such transferee that are converted by the Company or such Restricted Subsidiary
into cash (to the extent of the cash received) within 180 days after receipt,
shall be deemed to be cash for the purposes of this clause (ii); provided,
further, however, that (A) this clause (ii) shall not apply to any sale of
Capital Stock of or other
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Investments in Unrestricted Subsidiaries or (B) any Sale and Leaseback
Transaction 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 360 days of receipt thereof either (A) to
prepay any Senior Indebtedness or Guarantor Senior Indebtedness or Indebtedness
of a Restricted Subsidiary that is not a Guarantor (and, in the case of any
Senior Indebtedness or Guarantor Senior Indebtedness or Indebtedness of a
Restricted Subsidiary that is not a Guarantor under any revolving credit
facility, including the New Credit Facility, effect a permanent reduction in the
availability under such revolving credit facility) or effect a permanent
reduction in the availability under any revolving credit facility regardless of
the fact that no prepayment is required in order to do so (in which case no
prepayment shall be required), (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 that are used or usable in the business
of the Company and its Subsidiaries as existing on the Issue Date or in
businesses reasonably related or complementary thereto ("Replacement Assets"),
it being understood that (i) the receipt of Qualified Proceeds (other than cash
or Cash Equivalents) and (ii) the payment of expenses related to the relocation
to the Moorpark Facility (including, without limitation, reimbursement to the
Company of expenses incurred prior to the Issue Date) are deemed to be a valid
application of such Qualified Proceeds pursuant to this clause (iii)(B), or (C)
a combination of prepayment and investment permitted by the foregoing clauses
(iii)(A) and (iii)(B). On the 361st 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 immediately
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 immediately 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 20 Business Days nor more than 30 Business
Days following the date that notice of the Net Proceeds Offer is mailed to the
Holders, from all Holders, together with holders of other Indebtedness that is
not by its terms subordinated to the Securities (the "Other Asset Sale
Indebtedness") of the Company or any Restricted Subsidiary to whom an offer of
Net Cash Proceeds relating to such Asset Sale must be made pursuant to the terms
of the instruments governing such Other Asset Sale Indebtedness on a pro rata
basis, that amount of Securities and such Other Asset Sale Indebtedness equal to
the Net Proceeds Offer Amount at a price equal to 100% of the principal amount
of the Securities or such Other Asset Sale Indebtedness (as the case may be) 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 or dividends 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 Section 4.05. Notwithstanding the
foregoing, the Company may defer the Net Proceeds Offer until there is an
aggregate unutilized Net Proceeds Offer Amount equal to or in excess of
$10,000,000 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
$10,000,000, shall be applied as required pursuant to this paragraph). Upon
completion of a
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Net Proceeds Offer, the amount of Net Cash Proceeds and the amount of aggregate
unutilized Net Proceeds Offer Amount will be reset to zero. Accordingly, to the
extent that any Net Proceeds remain after consummation of a Net Proceeds Offer,
the Company may use such Net Proceeds for any purpose not prohibited by this
Indenture.
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 Section 5.01, the
successor corporation shall be deemed for purposes of this Section 4.05 to have
sold the properties and assets of the Company and its Restricted Subsidiaries
not so transferred, and shall comply with the provisions of this Section 4.05
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 Section 4.05.
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, 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 Securities in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
Securities in an amount exceeding the Net Proceeds Offer Amount, Securities 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 20 Business
Days or such longer period as may be required by law.
(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 4.05 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 registered 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 Securities pursuant to the Net Proceeds Offer and
shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section 4.05 and
that all Securities tendered will be accepted for payment; provided, however,
that if the aggregate principal amount of Securities tendered in a Net Proceeds
Offer exceeds the aggregate amount of the Net Proceeds Offer, the Company shall
select the Securities 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 Securities 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 Security not tendered will continue to accrue interest;
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(4) that, unless the Company defaults in making payment therefor, any
Security 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 Security purchased pursuant to a Net
Proceeds Offer will be required to surrender the Security, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Security
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the 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 Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased portion of
the Securities surrendered; provided that each Security purchased and each new
Security issued shall be in an original principal amount of $1,000 or integral
multiples thereof;
On or before 10:00 a.m., New York time, on the Proceeds Purchase
Date, the Company shall (i) accept for payment Securities 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 United
States Legal Tender sufficient to pay the purchase price plus accrued interest,
if any, of all Securities to be purchased and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price plus accrued interest, if any. For purposes
of this Section 4.05, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities 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 Securities pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.05, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.05 by virtue thereof.
SECTION 4.06. 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)
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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 Securities (except the prepayment, purchase, repurchase
or other acquisition or retirement of Indebtedness in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of prepayment, purchase, repurchase or other
acquisition or retirement) 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 4.04 or (iii) the aggregate
amount of Restricted Payments (including such proposed Restricted Payment) made
subsequent to the Issue Date (the amount expended for such purposes, if other
than in cash, being the fair market 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 the Issue Date through the last day of the
Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such proposed Restricted Payment (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 Restricted Subsidiary of the Company) from the issuance and sale
subsequent to the Issue Date and on or prior to the Reference Date of (i)
Qualified Capital Stock of the Company and (ii) Indebtedness or Disqualified
Capital Stock that has been converted into or exchanged for Qualified Capital
Stock together with the aggregate net cash proceeds received by the Company or
any Restricted Subsidiary at the time of such conversion or exchange; 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 (excluding, in the case of
clauses (iii)(x) and (y), any net cash proceeds from a Public Equity Offering to
the extent used to redeem the Securities); 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 Issue 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 Restricted 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 Issue 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 the giving of such irrevocable redemption if
the dividend or redemption would have been permitted on the date of declaration
or the giving of such irrevocable redemption; (2) if no Default or Event
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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 (within
10 Business Days of the sale thereof) of net proceeds of a sale for cash (other
than to a Restricted 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 purchase, redemption, repayment, retirement, defeasance
or other acquisition of any Indebtedness of the Company that is subordinate or
junior in right of payment to the Securities either (i) solely in exchange for
shares of Qualified Capital Stock of the Company, (ii) through the application
(within 60 days of the sale thereof) of net proceeds of a sale for cash (other
than to a Restricted Subsidiary of the Company) of (A) shares of Qualified
Capital Stock of the Company or (B) Refinancing Indebtedness or (iii) solely in
exchange for the issuance of Refinancing Indebtedness; (4) so long as no Default
or Event of Default shall have occurred and be continuing, repurchases by the
Company of Common Stock of the Company from directors, officers or employees of
the Company or any of its Subsidiaries or their authorized representatives upon
the death, disability or termination of employment of such officers or
employees, in an aggregate amount not to exceed, in any calendar year, the sum
of $1.0 million (provided that if at the time of any such repurchase the
Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to
1.0 then such amount may be up to $3.0 million) and the net cash proceeds
received by the Company after the Issue Date from the sale of Qualified Capital
Stock to employees, directors or officers of the Company and its Subsidiaries
that occurs in such fiscal year (to the extent such proceeds do not provide the
basis for any other Restricted Payment); and (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 of such options.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available internal quarterly
financial statements.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the second
paragraph of this Section 4.06, amounts expended pursuant to clauses (1),
(2)(ii), 3(ii)(A) and (4) of such paragraph shall be included in such
calculation. Notwithstanding the foregoing, in determining whether any
Restricted Payment is permitted by this Section 4.06, the Company may allocate
or reallocate all or any portion of such Restricted Payment among clauses (1)
through (5) of the second preceding paragraph or among such clauses and the
first paragraph of this Section 4.06; provided that at the time of such
allocation or reallocation, all such Restricted Payments, or allocated portions
thereof, would be permitted under the various provisions of this Section 4.06.
In making the computations required by this Section 4.06, (i) the
Company may use audited financial statements for the portions of the relevant
period for which audited financial statements are available on the date of
determination and unaudited financial statements and other current financial
data based on the books and records of the Company for the remaining portion of
such period and (ii) the Company will be permitted to rely in good faith on the
financial statements and other financial data derived from its books and records
that are available on the date of determination. If the Company makes a
Restricted Payment that, at the time of the
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making of such Restricted Payment, would in the good faith determination of the
Company be permitted under the requirements of this Indenture, such Restricted
Payment will be deemed to have been made in compliance with this Indenture
notwithstanding any subsequent adjustments made in good faith to the Company's
financial statements which adjustments affect any of the financial data used to
make the calculations with respect to such Restricted Payment.
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. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Restricted Subsidiary or upon the income, profits or property of the Company or
any Restricted Subsidiary and (2) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability, or Lien upon the property, of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made.
SECTION 4.09. Notice of Defaults.
Upon becoming aware of any Default or Event of Default, the Company
shall promptly deliver an Officers' Certificate to the Trustee specifying the
Default or Event of Default.
SECTION 4.10. Maintenance of Properties and Insurance.
(a) Subject to Article Five, the Company shall cause all material
properties owned by or leased to it or any Restricted Subsidiary and used or
useful in the conduct of its business or the business of any Restricted
Subsidiary to be maintained and kept in normal condition, repair and working
order (other than ordinary wear and tear) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 4.10 shall prevent the Company or any
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of the Company or the
Restricted Subsidiary concerned, or of
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an Officer (or other agent employed by the Company or of any Restricted
Subsidiary) of the Company or such Restricted Subsidiary having managerial
responsibility for any such property, desirable in the conduct of the business
of the Company or any Restricted Subsidiary.
(b) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions as, in the judgment of the Company, may be
necessary.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 90 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer of the
Company stating that a review of the activities of the Company has been made
under the supervision of the signing officers with a view to determining whether
a Default or Event of Default has occurred and whether or not the signers know
of any Default or Event of Default by the Company that occurred during such
fiscal year and is continuing. If they do know of such a Default or Event of
Default, the certificate shall describe all such Defaults or Events of Default,
their status and the action the Company is taking or proposes to take with
respect thereto. The first certificate to be delivered by the Company pursuant
to this Section 4.11 shall be for the fiscal year ending October 31, 1999.
SECTION 4.12. Reports to Holders.
At all times from and after the earlier of (i) the date of the
commencement of an Exchange Offer or the effectiveness of the Shelf Registration
Statement (the "Registration Date") and (ii) the date 180 days after the Issue
Date, in either case, whether or not the Company is then required to file
reports with the Commission, the Company will file with the Commission (to the
extent accepted by the Commission) annual reports containing the information
required to be contained in Form 10-K promulgated under the Exchange Act,
quarterly reports containing the information required to be contained in Form
10-Q promulgated under the Exchange Act and from time to time such other
information as is required to be contained in Form 8-K promulgated under the
Exchange Act. The Company will also be required (a) to supply the Trustee and
each Holder of Securities, or supply to the Trustee for forwarding to each such
Holder, without cost to such Holder, copies of such reports and other documents
within 15 days after the date on which the Company files such reports and
documents with the Commission or the date on which the Company would be required
to file such reports and documents if the Company were so required and (b) if
filing such reports and documents with the Commission is not accepted by the
Commission or is prohibited under the Exchange Act, to supply at the Company's
cost copies of such reports and documents to any prospective Holder of
Securities promptly upon written request. In addition, at all times prior to the
earlier of the Registration Date and the date 180 days after the Issue Date, the
Company will, at its cost, deliver to each Holder of the Securities quarterly
and annual reports substantially equivalent to those that would be required by
the Exchange Act. Furthermore, at all times prior to the Registration Date, the
Company will supply at the Company's cost copies of such reports and documents
to any prospective Holder of Securities promptly upon written request and as
required by Rule 144A(d)(4) under the Securities Act.
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SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law, which would prohibit or forgive the
Company or such Guarantor from paying all or any portion of the principal of
and/or interest, if any, on the Securities 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 and each Guarantor hereby expressly waive all
benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.14. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will
have the right to require that the Company purchase all or a portion of such
Holder's Securities pursuant to the offer described below (the "Change of
Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in any
event within 30 days following any Change of Control, the Company covenants to
(i) repay in full and terminate all commitments under Indebtedness under the New
Credit Facility and all other Senior Indebtedness 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 New Credit Facility and all other
such Senior Indebtedness and to repay the Indebtedness owed to each lender which
has accepted such offer or (ii) obtain the requisite consents under the New
Credit Facility and all other such Senior Indebtedness to permit the repurchase
of the Securities as provided below. The Company shall first comply with the
covenant in the immediately preceding sentence before it shall be required to
repurchase Securities pursuant to the provisions described below. The Company's
failure to comply with the covenant described in the second preceding sentence
shall constitute an Event of Default described in clause (iii) and not in clause
(ii) of Section 6.01.
(c) Within 30 days following the date upon which the Change of
Control occurred, the Company must 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. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Securities tendered and not withdrawn will be accepted
for payment;
(2) the purchase price (including the amount of accrued interest) and the
purchase date, which must be no earlier than 30 days nor later than 60 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 Security not tendered will continue to accrue interest;
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(4) that, unless the Company defaults in making payment therefor, any
Security 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 Security purchased pursuant to a
Change of Control Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the 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 Securities the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Securities purchased;
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased portion of
the Securities surrendered; provided that each Security purchased and each new
Security 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 10:00 a.m., New York time, on the Change of Control
Payment Date, the Company shall (i) accept for payment Securities or portions
thereof validly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent United States Legal Tender sufficient to pay the purchase
price plus accrued interest, if any, of all Securities so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities 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
Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Any Securities not so accepted shall be promptly mailed
by the Company to the Holder thereof. For purposes of this Section 4.14, the
Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Change of Control Offer shall be returned by the Trustee to the Company.
The Company will 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 Securities pursuant to a Change of Control Offer. To the extent
that the provisions of any securities laws or regulations conflict with this
Section 4.14, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.14 by virtue thereof.
SECTION 4.15. Prohibition on Incurrence of Senior Subordinated Debt.
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Neither the Company nor the Guarantors will incur or suffer to exist
Indebtedness that is senior in right of payment to the Securities or the
Guarantees, as the case may be, and subordinate in right of payment to any other
Indebtedness of the Company or the Guarantors, as the case may be.
SECTION 4.16. 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) this Indenture and the Securities; (2) any security or pledge
agreements, leases or options (or similar agreements) containing customary
restrictions on transfers of the assets encumbered thereby or leased or subject
to option or on the transfer or subletting of the leasehold interest represented
thereby; (3) 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; (4) agreements existing on the Issue Date to the extent and in the
manner such agreements are in effect on the Issue Date; (5) any contracts for
the sale of assets, including, without limitation, any restriction with respect
to a Restricted Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of all or substantially all of the Capital Stock or assets
of such Restricted Subsidiary, pending the closing of such sale or disposition;
provided that any such restriction relates solely to the assets that are the
subject of such agreement; (6) restrictions on cash or other deposits or net
worth and prohibitions on assignment imposed by leases entered into in the
ordinary course of business; (7) customary provisions in joint venture
agreements and other similar agreements; (8) the New Credit Facility and any
instruments issued pursuant thereto; (9) any agreement or instrument governing
Capital Stock of any Person that is acquired; (10) purchase money obligations
for assets acquired in the ordinary course of business that impose restrictions
of the nature described in (c) above on the property so acquired; (11) Liens
permitted to be incurred pursuant to the provisions of Section 4.18; (12) any
agreement relating to a Sale and Leaseback Transaction or Capitalized Lease
Obligation, but only on the property subject to such Sale and Leaseback
Transaction or such Capitalized Lease Obligation and only to the extent that
such restrictions or encumbrances are customary with respect to such
arrangements; (13) any licensing or technology transfer agreement entered into
in the ordinary course of business, including, without limitation, those entered
into in connection with any European joint venture; (14) applicable law; and
(15) any encumbrances or restrictions imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of contracts, instruments or obligations referred to in clauses (1)
through (13); provided that the dividend and other transfer restrictions imposed
under such contract, instrument, agreement or obligation as amended, modified,
restated, renewed, increased, supplemented, refunded, replaced or Refinanced
are, taken as a whole, in the good faith judgment of the Board of Directors of
the Company, whose judgment shall be conclusively binding, not materially more
restrictive than
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those contained in such contract, instrument, agreement or obligation
immediately prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or Refinancing.
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries that
are not Guarantors to issue to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary of the Company) Preferred Stock 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 that is
not a Guarantor.
SECTION 4.18. Limitation on Liens.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on the
Issue Date or acquired after the Issue Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless (i) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Securities, the Securities are
secured by a Lien on such property, assets or proceeds that is senior in
priority to such Liens and (ii) in all other cases, the Securities are equally
and ratably secured, except in the case of either clause (i) or (ii) for (A)
Liens existing as of the Issue Date to the extent and in the manner such Liens
are in effect on the Issue Date; (B) Liens securing Senior Indebtedness and
Liens securing Guarantor Senior Indebtedness; (C) Liens securing the Securities
and the Guarantees; (D) Liens of the Company or a Wholly Owned Restricted
Subsidiary of the Company on assets of any Subsidiary of the Company; (E) Liens
securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under this Indenture and
which has been incurred in accordance with the provisions of this Indenture;
provided, however, that such Liens (I) are no less favorable to the Holders and
are not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being Refinanced and (II) do not extend to
or cover any property or assets of the Company or any of its Restricted
Subsidiaries not securing the Indebtedness so Refinanced; and (F) Permitted
Liens.
SECTION 4.19. Limitation of Guarantees by Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries that
are organized under the laws of the United States or a subdivision thereof,
directly or indirectly, by way of the pledge of any intercompany note or
otherwise, to guarantee any Indebtedness of the Company unless, in any such
case, (a) such Restricted Subsidiary executes and delivers a supplemental
indenture to this Indenture providing a Guarantee by such Restricted Subsidiary
and (b) if any such guarantee of such Restricted Subsidiary is provided in
respect of Indebtedness that is expressly subordinated to the Securities, such
guarantee or other instrument provided by such Restricted Subsidiary in respect
of such subordinated Indebtedness shall be subordinated to the Guarantee
pursuant to subordination provisions no less favorable to the Holders of the
Securities than those contained in this Indenture.
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Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary shall provide by its terms that it shall be automatically and
unconditionally released and discharged, without any further action required on
the part of the Trustee or any Holder, upon: (i) the unconditional release of
such Restricted Subsidiary from its liability in respect of the Indebtedness in
connection with which such Guarantee was executed and delivered pursuant to the
preceding paragraph; (ii) any sale or other disposition (by merger or otherwise)
to any Person which is not a Restricted Subsidiary of the Company of all of the
Company's Capital Stock in, or all or substantially all of the assets of, such
Restricted Subsidiary; provided that such sale or disposition of such Capital
Stock or assets is otherwise in compliance with the terms of this Indenture;
(iii) the designation of such Subsidiary as an Unrestricted Subsidiary in
accordance with the provisions of this Indenture; or (iv) the sale or other
disposition of shares of Capital Stock of such Subsidiary to a Person other than
the Company or a Restricted Subsidiary such that such Subsidiary ceases to
constitute a Subsidiary of the Company, provided such disposition is otherwise
in accordance with the provisions of this Indenture.
SECTION 4.20. Conduct of Business.
The Company and its Restricted Subsidiaries will not engage in any
businesses which are not the same, similar or reasonably related or
complementary to the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date (as determined in good faith by the
Board of Directors of the Company).
SECTION 4.21. Corporate Existence.
Except as otherwise permitted by Article Five, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each Restricted Subsidiary and the rights (charter
and statutory) of the Company and each of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
corporate existence of any Restricted Subsidiary if the Board of Directors of
the Company shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Restricted Subsidiaries,
taken as a whole, and that the loss thereof is not, and will not be, adverse in
any material respect to the Holders.
ARTICLE FIVE
MERGERS; SUCCESSORS
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 (other than in
connection with the Recapitalization), or sell, assign, transfer, lease, convey
or otherwise 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
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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 of, and premium, if any, and
interest on all of the Securities and the performance of every covenant of the
Securities, this 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 4.04; (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 the foregoing clauses (ii), (iii) and (iv), (a) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its property and assets to the Company or any other Restricted Subsidiary and
(b) the Company may merge 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.
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.05)
will not, and the Company will not cause or permit any Guarantor to, consolidate
with or merge with or into any Person other than the Company or any other
Guarantor unless: (i) the entity formed by or surviving any such consolidation
or merger (if other than the Guarantor) or to which such sale, lease, conveyance
or other disposition shall have been made is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia; (ii) such entity assumes by
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supplemental indenture all of the obligations of the Guarantor on the Guarantee;
(iii) immediately after giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing; and (iv) immediately after
giving effect to such transaction and the use of any net proceeds therefrom on a
pro forma basis, the Company could satisfy the provisions of clause (ii) of the
first paragraph of this Section 5.01. Notwithstanding the foregoing clause (iv),
(a) any Guarantor may consolidate with, merge into or transfer all or part of
its property and assets to the Company or any other Guarantor and (b) any
Guarantor formed solely for the purpose of merging with and into any other
Person, may merge with or into such Person.
SECTION 5.02. Successor 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 Securities 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.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
(i) the failure to pay interest on any Securities 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 the subordination provisions
of this Indenture);
(ii) the failure to pay the principal on any Securities, when such
principal becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Securities tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer) (whether or not
such payment shall be prohibited by the subordination provisions of this
Indenture);
(iii) a default in the observance or performance of any other covenant
or agreement contained in this Indenture which default continues for a period of
60 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 Securities (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);
(iv) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or
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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 after 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 maturity or which has been
accelerated, in each case with respect to which the 20-day period described
above has passed, aggregates $7,500,000 or more at any time;
(v) one or more judgments in an aggregate amount in excess of
$7,500,000 (net of any amounts with respect to which a reputable insurance
company has acknowledged liability in writing) shall have been rendered against
the Company or any of its Significant Subsidiaries and such judgments remain
undischarged, unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and nonappealable;
(vi) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law: (a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against it in an involuntary
case or proceeding; (c) consents or acquiesces in the institution of a
bankruptcy or insolvency proceeding against it; (d) consents to the appointment
of a Custodian of it or for all or substantially all of its property; or (e)
makes a general assignment for the benefit of its creditors, or any of them
takes any action to authorize or effect any of the foregoing;
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (a) is for relief against the Company or any
Significant Subsidiary in an involuntary case or proceeding; (b) appoints a
Custodian of the Company or any Significant Subsidiary for all or substantially
all of its property; or (c) orders the liquidation of the Company or any
Significant Subsidiary; and in each case the order or decree remains unstayed
and in effect for 60 days; provided, however, that if the entry of such order or
decree is appealed and dismissed on appeal, then the Event of Default hereunder
by reason of the entry of such order or decree shall be deemed to have been
cured; or
(viii) any of the Guarantees of a Guarantor that is a Significant
Subsidiary ceases to be in full force and effect or any of such Guarantees is
declared to be null and void and unenforceable or any of such Guarantees is
found to be invalid or any of such Guarantors denies its liability under its
Guarantee (other than by reason of release of a Guarantor in accordance with the
terms of this Indenture).
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (vi) or (vii) of Section 6.01 with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Securities may declare the principal of and accrued
interest on all the Securities 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 Credit Facility, shall become immediately due and
payable upon the first to occur of an acceleration under the New Credit
Facility, or five Business Days after receipt by the Company and the
Representative under the
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New Credit Facility of such Acceleration Notice but only if such Event of
Default is then continuing. If an Event of Default specified in clause (vi) or
(vii) of Section 6.01 with respect to the Company occurs and is continuing, then
all unpaid principal of, and premium, if any, and accrued and unpaid interest on
all of the outstanding Securities shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount of the Securities may 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
clause (vii) of Section 6.01, 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.
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 Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, the Holders of not less
than a majority in aggregate principal amount of the outstanding Securities by
written notice to the Trustee may waive an existing Default or Event of Default
and its consequences, except a Default in the payment of the principal of or
interest on any Securities. The Company shall deliver to the Trustee an
Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Securities, respectively.
This paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of
the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded
from this Indenture and the Securities, as permitted by the TIA.
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Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the then outstanding Securities may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture or that the
Trustee determines may be unduly prejudicial to the rights of another Holder, or
that may involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any action or
follows any direction pursuant to this Indenture, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. This Section
6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
the outstanding Securities make a written request to the Trustee to pursue a
remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and premium, if any or interest on
a Security, on or after the respective due dates expressed in the Security, or
to bring suit for the enforcement of any such
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payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in Section 6.01(i) or (ii) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Securities for the whole amount of principal and
accrued interest remaining unpaid, together with interest overdue on principal
and to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company or any other
obligor upon the Securities, their respective creditors or their respective
property and shall be entitled and empowered to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same, and any Custodian in any such judicial proceedings is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities
for principal and interest, respectively; and
Third: to the Company.
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The Trustee, upon prior written 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 any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance of such
duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions conforming to the requirements
of this Indenture; however, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its own
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; and
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(3) The Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel, which shall conform
to the provisions of Section 13.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence of
any agent or attorney (other than an agent who is an employee of the
Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officers' Certificate and any resolution
of the Board of Directors may be sufficiently evidenced by a Board
Resolution.
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(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney.
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Trust Officer of the Trustee has actual knowledge thereof
or unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, subject to
Section 7.10 hereof. Any Agent may do the same with like rights. However, the
Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and the
Trustee knows of such Defaults or Events of Default, the Trustee shall mail to
each Holder notice of the Default or Event of Default within 30 days after the
occurrence thereof. Except in the case of a Default or an Event of Default in
payment of principal of or interest on any Security or a Default or Event of
Default in complying with Section 5.01, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interest of Holders. This Section 7.05 shall be
in lieu of the proviso to Section 315(b) of the TIA and such proviso to Section
315(b) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
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SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each December 15 of each year beginning with
1999, the Trustee shall, to the extent that any of the events described in TIA
Section 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
Section 313(a). The Trustee also shall comply with TIA Sections 313(b),
313(c) and 313(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 securities exchange, if
any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees, disbursements and expenses of its agents and
counsel) incurred or made by it in addition to the compensation for its services
except any such disbursements, expenses and advances as may be attributable to
the Trustee's negligence or bad faith. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents,
accountants, experts and counsel and any taxes or other expenses incurred by a
trust created pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its own negligence or bad faith. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. However, the failure by the Trustee to so notify
the Company shall not relieve the Company of their obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the defense
(and may employ its own counsel) at the Company's expense; provided, however,
that the Company's reimbursement obligation with respect to counsel employed by
the Trustee will be limited to the reasonable fees and expenses of such counsel.
The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Trustee as a result of the
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violation of this Indenture by the Trustee, or arising out of the Trustee's
negligence or willful misconduct.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(vi) or (vii) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy Law;
(c) a custodian or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
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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 Securities may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible
to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of TIA Section
310(b), the Trustee and the Company shall comply with the provisions of TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.10, the Trustee
shall resign immediately in the manner and with the effect hereinbefore
specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each Holder of
the Securities by his acceptance thereof likewise covenant and agree, (i) that
all Securities shall be
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issued subject to the provisions of this Article Eight; and each Person holding
any Security, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees that all payments of the principal of and
interest on the Securities by the Company shall, to the extent and in the manner
set forth in this Article Eight, be subordinated and junior in right of payment
to the prior payment in full in cash or Cash Equivalents of all amounts payable
under Senior Indebtedness of the Company, whether outstanding on the Issue Date
or thereafter incurred, and (ii) that the subordination is for the benefit of,
and shall be enforceable directly by, the holders of Senior Indebtedness, and
that each holder of Senior Indebtedness whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have acquired Senior
Indebtedness in reliance upon the covenants and provisions contained in this
Indenture and the Securities.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by acceleration 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 Indebtedness,
no payment of any kind or character shall be made by or on behalf of the Company
or any other Person on its behalf with respect to any Obligations on the
Securities or to acquire any of the Securities for cash or property or otherwise
(except that holders of the Securities may receive payments from a trust
described under Article Nine so long as, on the date or dates the respective
amounts were paid into the trust, such payments were made with respect to the
Securities in accordance with the provisions of Article Nine and without
violating the provisions of Article Eight or Article Twelve of this Indenture (a
"Defeasance Trust Payment").
In addition, if any other event of default occurs and is continuing
with respect to any Designated Senior Indebtedness, as such event of default is
defined in the instrument creating or evidencing such Designated Senior
Indebtedness, permitting the holders of such Designated Senior Indebtedness then
outstanding to accelerate the maturity thereof and if the Representative for the
respective issue of Designated Senior Indebtedness gives written notice of the
event of default to the Trustee (a "Payment Blockage Notice"), then, unless and
until all events of default have been cured or waived or have ceased to exist or
the Trustee receives notice from the Representative for the respective issue of
Designated Senior Indebtedness terminating the Payment Blockage Period, during
the 180 days after the delivery of such Payment Blockage Notice (the "Payment
Blockage Period"), neither the Company nor any other Person on either of their
behalf shall (x) make any payment of any kind or character with respect to any
Obligations on the Securities or (y) acquire any of the Securities for cash or
property or otherwise (except that holders of the Securities may receive
Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will a
Payment Blockage Period extend beyond 180 days from the date the Payment
Blockage Notice is delivered and only one such Payment 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 Payment Blockage Period
with respect to the Designated Senior Indebtedness shall be, or be made, the
basis for commencement of a second Payment Blockage Period by the Representative
of such Designated Senior Indebtedness whether or not within a
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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 subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such Payment
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).
In the event that, notwithstanding the foregoing provisions of this
Section 8.02 prohibiting such payment or distribution, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), shall be received by the Trustee or any Holder of Securities at a time
when such payment or distribution is prohibited by the first two paragraphs of
this Section 8.02 and before all Obligations in respect of Senior Indebtedness
of the Company are paid in full in cash or Cash Equivalents, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered to, the holders of Senior Indebtedness of the Company
(pro rata to such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders) or their representatives, or to the trustee
or trustees or agent or agents under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of such Senior Indebtedness remaining
unpaid until all such Senior Indebtedness has been paid in full in cash or Cash
Equivalents after giving effect to any prior or concurrent payment, distribution
or provision therefor to or for the holders of such Senior Indebtedness.
SECTION 8.03. 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 Indebtedness
(including interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Indebtedness whether or not such interest is
an allowed claim in such proceeding) 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 Indebtedness, before any payment or distribution of any kind
or character is made on account of any Obligations on the Securities, or for the
acquisition of any of the Securities for cash or property or otherwise (except
that holders of the Securities may receive Defeasance Trust Payments). Before
any payment may be made by, or on behalf of, the Company of any Obligations on
the Securities upon any such dissolution or winding-up or total liquidation or
reorganization, any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities
(excluding any Defeasance Trust Payment), to which the Holders of the Securities
or the Trustee on their behalf would be entitled, but for the subordination
provisions of this Indenture, shall be made by the Company or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, directly to the holders of the Senior Indebtedness of
the Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their representatives or to the
trustee or trustees or agent or agents under any agreement or
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indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent necessary to pay
all such Senior Indebtedness in full in cash or Cash Equivalents after giving
effect to any prior or concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any Defeasance Trust Payment), shall be received by the
Trustee or any Holder of Securities at a time when such payment or distribution
is prohibited by Section 8.03(a) and before all Obligations in respect of Senior
Indebtedness of the Company are paid in full in cash or Cash Equivalents, such
payment or distribution shall be received and held in trust for the benefit of,
and shall be paid over or delivered to, the holders of Senior Indebtedness of
the Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their representatives, or to the
trustee or trustees or agent or agents under any indenture pursuant to which any
of such Senior Indebtedness may have been issued, as their respective interests
may appear, for application to the payment of such Senior Indebtedness remaining
unpaid until all such Senior Indebtedness has been paid in full in cash or Cash
Equivalents after giving effect to any prior or concurrent payment, distribution
or provision therefor to or for the holders of such Senior Indebtedness.
(c) To the extent any payment of Senior Indebtedness (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 Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment has not occurred.
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 its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 8.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full in cash or Cash Equivalents of all Senior
Indebtedness of the Company, the Holders of the Securities shall be subrogated
to the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such Senior
Indebtedness until the principal of and interest on the Securities shall be paid
in full in cash or Cash Equivalents; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of the
Company of any cash, property or securities to which the Holders of the
Securities or the Trustee
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on their behalf would be entitled except for the provisions of this Article
Eight, and no payment over pursuant to the provisions of this Article Eight to
the holders of Senior Indebtedness of the Company by Holders of the Securities
or the Trustee on their behalf shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness of the Company. It is understood that the provisions of this
Article Eight are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness of the Company, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Eight shall have been applied, pursuant to the provisions of this
Article Eight, to the payment of all amounts payable under Senior Indebtedness,
then and in such case, the Holders of the Securities shall be entitled to
receive from the holders of such Senior Indebtedness any payments or
distributions received by such holders of Senior Indebtedness in excess of the
amount required to make payment in full in cash of such Senior Indebtedness.
SECTION 8.05. Obligations of the Company Unconditional.
Nothing contained in this Article Eight or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities 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 of the Securities and creditors of the
Company other than the holders of the Senior Indebtedness of the Company, nor
shall anything herein or therein prevent the Holder of any Security or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Eight of the holders of the Senior Indebtedness of the
Company in respect of cash, property or securities of the Company received upon
the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained
in this Article Eight shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Senior Indebtedness of the
Company then due and payable shall first be paid in full in cash or Cash
Equivalents before the Holders of the Securities or the Trustee are entitled to
receive any direct or indirect payment from, or on behalf of, the Company on
account of any Obligations on the Securities.
SECTION 8.06. 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 Securities pursuant to the provisions of this
Article Eight (although the failure to give any such notice shall not affect the
subordination provisions set forth in this Article Eight). The Trustee shall not
be charged with knowledge of the existence of any event of default with respect
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to any Senior Indebtedness of the Company 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 at its Corporate Trust Office to
that effect signed by an Officer of the Company, or by a holder of Senior
Indebtedness or trustee or agent therefor; and prior to the receipt of any such
written notice, the Trustee shall, subject to Article Seven, be entitled to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 8.06 at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Security), then, regardless of
anything herein to the contrary, the Trustee shall have full power and authority
to receive any moneys from the Company and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date (although the
receipt of such moneys by any Holder of Securities shall otherwise be subject to
the provisions of this Article Eight). Nothing contained in this Section 8.06
shall limit the right of the holders of Senior Indebtedness of the Company to
recover payments from Holders as contemplated by Section 8.02 or 8.03. The
Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself or itself to be a holder of any Senior Indebtedness
of the Company (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
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 Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article Eight, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness of the Company 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 Eight, 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 8.07. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets or securities referred to
in this Article Eight, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness of the Company 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 Eight.
SECTION 8.08. Trustee's Relation to Senior Indebtedness.
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The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Eight with respect to any Senior Indebtedness of the
Company 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 Indebtedness of the
Company, and nothing in this Indenture shall deprive the Trustee or any Paying
Agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Eight, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness of
the Company 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
Indebtedness of the Company (except as provided in Section 8.03(b)). The Trustee
shall not be liable to any such holders if the Trustee shall in good faith
mistakenly pay over or distribute to Holders of Securities or to the Company or
to any other person cash, property or securities to which any holders of Senior
Indebtedness of the Company shall be entitled by virtue of this Article Eight or
otherwise.
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
of the Company 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. The provisions of this Article Eight are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness of the Company.
SECTION 8.10. Holders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Eight, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
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 or his Securities 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
any proceeding referred to in Section 6.09 prior to 30 days before the
expiration of the time to file such claim or claims, then any of the holders of
the Senior Indebtedness or their Representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Securities. Nothing
herein contained shall be deemed to authorize the Trustee or the holders of
Senior Indebtedness 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 Securities or the rights of any Holder
thereof, or to authorize the Trustee or the holders of Senior
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Indebtedness or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Eight shall not be
construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Eight shall apply to amounts due to the
Trustee, in its capacity as such, pursuant to other sections in this Indenture.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Eight or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness of the Company, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing such Senior Indebtedness; (c)
release any Person liable in any manner for the collection of such Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable to Money Held in
Trust for Holders.
All money and United States Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Article Nine shall be
for the sole benefit of the Holders and shall not be subject to this Article
Eight.
SECTION 8.15. Amendments.
As long as the New Credit Facility is outstanding or any amounts are
outstanding thereunder, the provisions of this Article Eight (and the definition
used herein) shall not be amended or modified without the written consent of the
majority of the lenders under the New Credit Facility.
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
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SECTION 9.01. Termination of the Company's Obligations.
The Company may terminate its obligations under the Securities and
this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 9.01, if all Securities previously authenticated and
delivered (other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment United States Legal Tender or
non-callable United States 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 9.05) 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 Securities under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Securities 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, United States Legal Tender or
non-callable United States Government Obligations, or a combination
thereof, in such amount as is sufficient without consideration of
reinvestment of such interest, to pay principal and interest on the
outstanding Securities 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 United States Legal Tender to the payment of said
principal and interest with respect to the Securities; provided, further,
that no deposits made pursuant to this Section 9.01(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 Indebtedness pursuant to the provisions of Article Eight 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 Securities shall have occurred and 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 Securities 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
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to the termination of the Company's obligations under the Securities 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 any 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, 9.05 and 9.06 shall
survive until the Securities are no longer outstanding pursuant to the last
paragraph of Section 2.08. After the Securities are no longer outstanding, the
Company's obligations in Sections 7.07, 9.05 and 9.06 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 Securities and this Indenture except for those surviving obligations
specified above.
SECTION 9.02. 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 Securities upon compliance with the
conditions set forth in Section 9.03.
(b) Upon exercise under paragraph (a) hereof of the option
applicable to this paragraph (b), the Company and, if it so selects, each of the
Guarantors, shall, subject to the satisfaction of the conditions set forth in
Section 9.03, be deemed to have been discharged from its obligations with
respect to all outstanding Securities 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 Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 9.04
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 Securities 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
Securities and any amounts deposited under Section 9.03 hereof shall cease to be
subject to any obligations to, or the rights of, any holder of Senior
Indebtedness under Article Eight or otherwise, except for the following
provisions, which shall survive until otherwise terminated or discharged
hereunder:
(i) the rights of Holders of outstanding Securities to receive
solely from the trust fund described in Section 9.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of and interest
on such Securities when such payments are due;
(ii) the Company's obligations with respect to such Securities 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 Nine.
Subject to compliance with this Article Nine, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) hereof.
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(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 9.03 hereof, be released
from its obligations under the covenants contained in Sections 4.03 through
4.06, inclusive, Sections 4.08 through 4.10, inclusive, Sections 4.12 through
4.20, inclusive, and Article Five hereof with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Securities 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 Securities shall
not be deemed outstanding for accounting purposes) and Holders of the Securities
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 Indebtedness under
Article Eight or otherwise. For this purpose, such Covenant Defeasance means
that, with respect to the outstanding Securities, 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(iii) hereof, but, except as specified above, the remainder of
this Indenture and such Securities 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 9.03 hereof, Sections 6.01(iii), 6.01(iv) and 6.01(v) shall not
constitute Events of Default.
SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 9.02(b) or 9.02(c) hereof to the outstanding Securities:
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 cash in United States Legal Tender,
non-callable United States Government Obligations, 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 Securities on the
stated date for payment thereof or on the applicable redemption date, as
the case may be;
(b) in the case of Legal Defeasance, 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 here 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 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;
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(c) in the case of Covenant Defeasance, 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 will not
recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 6.01(vi) and
(vii) are concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under this Indenture
(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
Securities concurrently with such incurrence) 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, subject to customary assumptions and
conclusions, after the 91st day following the deposit, the trust funds (i)
assuming no intervening bankruptcy or insolvency of the Company between
the date of deposit and the 91st day following the deposit and that no
Holder is an insider of the Company, will not be part of any "estate"
formed by the bankruptcy or reorganization of the Company or subject to
the "automatic stay" under the Bankruptcy Code or, (ii) in the case of
Covenant Defeasance, will be subject to a Lien in favor of the Trustee for
the benefit of the Holders.
Notwithstanding the foregoing, the Opinion of Counsel required by clause (b)
above with respect to a Legal Defeasance need not be delivered if all Securities
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.
SECTION 9.04. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust United States Legal
Tender or United States Government Obligations deposited with it pursuant to
Article Eight, and shall apply the deposited United States Legal Tender and the
money from United States Government
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Obligations in accordance with this Indenture to the payment of principal of and
interest on the Securities. The Trustee shall be under no obligation to invest
said United States Legal Tender or United States 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 United States Legal Tender or
United States Government Obligations deposited pursuant to Section 9.03 hereof
or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Article Nine to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any United States Legal Tender or United States Government Obligations
held by it as provided in Section 9.03 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 9.05. Repayment to Company.
Subject to this Article Nine, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess United States Legal Tender
or United States 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 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
Legal Tender or United States Government Obligations in accordance with this
Article Nine by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Nine until such time as the
Trustee or Paying Agent is permitted to apply all such United States Legal
Tender or United States Government Obligations in accordance with Article Nine;
provided that if the Company has made any payment of interest on or principal of
any Securities because of the reinstatement of their obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from
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the United States Legal Tender or United States Government Obligations held by
the Trustee or Paying Agent.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and each Guarantor, when authorized by a resolution of
their respective Boards of Directors, and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any Holder:
(a) to evidence the succession of another Person to the Company or
any Guarantor and the assumption by any such successor of the covenants of
the Company or any Guarantor in this Indenture and in the Securities;
(b) to add to the covenants of the Company or any Guarantor for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or any Guarantor;
(c) to add additional Events of Defaults;
(d) to provide for uncertificated Securities in addition to or in
place of the certificated Securities;
(e) to evidence and provide for the acceptance of appointment under
this Indenture by a successor Trustee;
(f) to secure the Securities or any Guarantee pursuant to the
requirements of Section 4.18 or otherwise;
(g) to cure any ambiguity, to correct or supplement any provision in
this Indenture that may be defective or inconsistent with any other
provisions in this Indenture, or to make any other provisions with respect
to matters or questions arising under this Indenture; provided that such
actions taken pursuant to this clause (g) do not, in the opinion of the
Trustee, adversely affect the interests of the Holders in any material
respect;
(h) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the TIA;
(i) to release any Guarantor from its Guarantee (including in
connection with a sale of all of the Capital Stock or all or substantially
all of the assets of such Guarantor) or to add a Guarantor, in each case
pursuant to the requirements of Section 4.19; or
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(j) to provide for the issuance of Securities subsequent to the
Issue Date pursuant to Section 2.02;
provided, however, that the Company deliver to the Trustee an Opinion of Counsel
stating that such amendment or supplement does not adversely affect the rights
of any Holder and otherwise complies with the provisions of this Section 10.01.
In formulating its opinion on the matters in clause (g), the Trustee
will be entitled to rely on such evidence as it deems appropriate, including,
without limitation, solely on an Opinion of Counsel.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and each Guarantor, when
authorized by a resolution of their respective Boards of Directors, and the
Trustee may amend or supplement this Indenture or the Securities, or waive
compliance with any provision hereof or thereof, with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Securities). However, without the
consent of each Holder affected, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.04, may not:
(a) reduce the amount of Securities whose Holders must consent to an
amendment;
(b) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any
Securities;
(c) reduce the principal of or change or have the effect of changing
the fixed maturity of any Securities, or change the date on which any
Securities may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor;
(d) make any Securities payable in money other than that stated in
the Securities;
(e) make any change in the express provisions of this Indenture
protecting the right of each Holder to receive payment of principal of and
interest on such Security 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 Securities to waive Defaults or Events of Default;
(f) after the Company's obligation to purchase Securities arises
hereunder, amend, change or modify in any material respect the obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate a Net Proceeds Offer
with respect to any Asset Sale that has been consummated or, after such
Change of Control has occurred or such Asset Sale has been consummated,
modify any of the provisions or definitions with respect thereto;
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(g) modify or change any provision of this Indenture or the related
definitions affecting the subordination or ranking of the Securities in a
manner which adversely affects the Holders; or
(h) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of
this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of that Security or portion of that Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security. Subject to the following paragraph, any
such Holder or subsequent Holder may revoke the consent as to such Holder's
Security or portion of such Security by notice to the Trustee or the Company
received before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (h) of Section 10.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
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SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determine, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company and
each Guarantor, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
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ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally guarantees to each Holder of a
Security authenticated by the Trustee and to the Trustee and its successors and
assigns that: the principal of and interest on the Securities will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise, and interest on the overdue principal
and interest on any overdue interest on the Securities and all other obligations
of the Company to the Holders or the Trustee hereunder or under the Securities
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; subject, however, to the limitations set forth in Section
11.03. Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of such Guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that the Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to return to
the Company or any Guarantor or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or a Guarantor, any amount
paid by the Company or a Guarantor to the Trustee or such Holder, the Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Guarantor further agrees that, as between such Guarantor, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity
of the obligations guaranteed hereby may be accelerated as provided in Article
Six for the purpose of the Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six, such obligations (whether or not due and payable)
shall become due and payable by such Guarantor for the purpose of the Guarantee.
SECTION 11.02. Severability.
In case any provision of this Article Eleven shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirm that it is the intention of all such parties that the
Guarantee does not constitute a fraudulent transfer or conveyance for purposes
of Title 11 of the United States Code, as
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amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar U.S. Federal or state or other applicable law. To effectuate
the foregoing intention, each Holder and each Guarantor hereby irrevocably agree
that the obligations of a Guarantor under its Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor, and after giving effect to any collections from
or payments made by or on behalf of such Guarantor in respect of the obligations
of such Guarantor pursuant to Section 11.04, result in the obligations of such
Guarantor not constituting such a fraudulent transfer or conveyance.
SECTION 11.04. Execution of Guarantee.
To further evidence the Guarantee to the Holders, each Guarantor
hereby agrees to execute a guarantee to be endorsed on and made a part of each
Security ordered to be authenticated and delivered by the Trustee. Each
Guarantor hereby agrees that its guarantee set forth in Section 11.01 shall
remain in full force and effect notwithstanding any failure to endorse on each
Security a guarantee. Each such guarantee shall be signed on behalf of each
Guarantor by its Chairman of the Board, its President or one of its Vice
Presidents prior to the authentication of the Security on which it is endorsed,
and the delivery of such Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of such guarantee on behalf of
such Guarantor. Such signature upon the guarantee may be a manual or facsimile
signature of such officer and may be imprinted or otherwise reproduced on the
guarantee, and in case such officer who shall have signed the guarantee shall
cease to be such officer before the Security on which such guarantee is endorsed
shall have been authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or
disposed of as though the Person who signed the guarantee had not ceased to be
such officer of such Guarantor.
SECTION 11.05. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under the Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Senior Indebtedness and
Guarantor Senior Indebtedness in accordance with the provisions provided
therefor in this Indenture.
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Senior Indebtedness.
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Securities by its acceptance thereof likewise covenant and agrees, (i)
that the Guarantee shall be issued subject to the provisions of this Article
Twelve; and each Person holding any Security, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that all
payments of the principal of and interest on the Securities pursuant to the
Guarantee made by or on behalf of the Guarantor shall, to the extent and in the
manner set forth in this Article Twelve, be subordinated and junior in right of
payment to the prior payment in full in cash or Cash Equivalents of all amounts
payable under Guarantor Senior Indebtedness of such Guarantor, whether
outstanding on the Issue Date or thereafter incurred, and (ii) that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Guarantor Senior Indebtedness, and that each holder of Guarantor
Senior Indebtedness whether now outstanding or hereafter created, incurred,
assumed or guaranteed shall be deemed to have acquired Guarantor Senior
Indebtedness in reliance upon the covenants and provisions contained in this
Indenture and the Guarantees.
SECTION 12.02. Payment Over of Proceeds upon Dissolution, etc.; No Payment
in Certain Circumstances
(a) Upon any payment or distribution of assets of the Guarantor 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 Guarantor
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Guarantor or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Guarantor Senior
Indebtedness (including interest after the commencement of any such proceeding
at the rate specified in the applicable Guarantor Senior Indebtedness whether or
not such interest is an allowed claim in such proceeding) shall first be paid in
full in cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Indebtedness, before any payment
or distribution of any kind or character is made by or on behalf of the
Guarantor on account of any Obligations on the Guarantee or for the acquisition
of any of the Securities for cash or property or otherwise (except that holders
of the Securities may receive Defeasance Trust Payments). Before any payment may
be made by, or on behalf of, the Guarantor of any Obligations on the Securities
upon any such dissolution or winding-up or total liquidation or reorganization,
any payment or distribution of assets or securities of the Guarantor of any kind
or character, whether in cash, property or securities, to which the Holders of
the Securities or the Trustee on their behalf would be entitled, but for the
subordination provisions of this Indenture, shall be made by the Guarantor or by
any receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, directly to the holders of the Guarantor
Senior Indebtedness of the Guarantor (pro rata to such holders on the basis of
the respective amounts of such Guarantor Senior Indebtedness held by such
holders) or their
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representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all such Guarantor Senior Indebtedness in full in
cash or Cash Equivalents after giving effect to any prior or concurrent payment,
distribution or provision therefor to or for the holders of such Guarantor
Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Guarantor of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Holder of
Securities at a time when such payment or distribution is prohibited by Section
12.02(a) and before all Obligations in respect of the Guarantor Senior
Indebtedness of the Guarantor are paid in full in cash or Cash Equivalents, such
payment or distribution shall be received and held in trust for the benefit of,
and shall be paid over or delivered to, the holders of such Guarantor Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
such Guarantor Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Guarantor Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of such Guarantor Senior Indebtedness remaining unpaid until all such
Guarantor Senior Indebtedness has been paid in full in cash or Cash Equivalents
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
(c) To the extent any payment of Guarantor Senior Indebtedness of a
Guarantor (whether by or on behalf of such Guarantor, 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 Guarantor
Senior Indebtedness or part thereof originally intended to be satisfied shall be
deemed to be reinstated and outstanding as if such payment has not occurred.
The consolidation of the Guarantor with, or the merger of the
Guarantor with or into, another corporation or the liquidation or dissolution of
the Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 12.02
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by acceleration 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 Guarantor Senior
Indebtedness, no payment of any kind or character shall be made by or on behalf
of the Guarantor or any other Person on its behalf with respect to any
Obligations on
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the Guarantee or to acquire any of the Securities for cash or property or
otherwise (except that holders of the Securities may receive Defeasance Trust
Payments).
In addition, if any other event of default occurs and is continuing
with respect to any Designated Senior Indebtedness, as such event of default is
defined in the instrument creating or evidencing such Designated Senior
Indebtedness, permitting the holders of such Designated Senior Indebtedness then
outstanding to accelerate the maturity thereof and if the Representative for the
respective issue of Designated Senior Indebtedness gives a Payment Blockage
Notice to the Trustee, then, unless and until all events of default have been
cured or waived or have ceased to exist or the Trustee receives notice from the
Representative for the respective issue of Designated Senior Indebtedness
terminating the Payment Blockage Period, during the Payment Blockage Period,
neither the Guarantor, nor any other Person on the Guarantor's behalf, shall (x)
make any payment of any kind or character with respect to any Obligations on the
Guarantee or (y) acquire any of the Securities for cash or property or otherwise
(except that holders of the Securities may receive Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will a
Payment Blockage Period extend beyond 180 days from the date the Payment
Blockage Notice is delivered and only one such Payment 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 Payment Blockage Period
with respect to the Designated Senior Indebtedness shall be, or be made, the
basis for commencement of a second Payment Blockage Period by the Representative
of such Designated Senior Indebtedness 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 subsequent action, or any breach of any financial covenants for a period
commencing after the date of commencement of such Payment 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).
In the event that, notwithstanding the provisions of the two
paragraphs preceding the immediately preceding paragraph of this Section 12.02
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Guarantor of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Holder of
Securities at a time when such payment or distribution is prohibited by the two
paragraphs preceding the immediately preceding paragraph of this Section 12.02
and before all Obligations in respect of the Guarantor Senior Indebtedness of
the Guarantor are paid in full in cash or Cash Equivalents, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered to, the holders of such Guarantor Senior Indebtedness
(pro rata to such holders on the basis of the respective amounts of such
Guarantor Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Guarantor Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of such Guarantor Senior Indebtedness remaining unpaid until all such
Guarantor Senior Indebtedness has been paid in full in cash or Cash Equivalents
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
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SECTION 12.03. Subrogation.
Upon the payment in full in cash or Cash Equivalents of all
Guarantor Senior Indebtedness of a Guarantor, the Holders of the Securities
shall be subrogated to the rights of the holders of such Guarantor Senior
Indebtedness to receive payments or distributions of cash, property or
securities of such Guarantor made on such Guarantor Senior Indebtedness until
the principal of and interest on the Securities shall be paid in full in cash or
Cash Equivalents; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Guarantor Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee on
their behalf would be entitled except for the provisions of this Article Twelve,
and no payment over pursuant to the provisions of this Article Twelve to the
holders of such Guarantor Senior Indebtedness by Holders of the Securities or
the Trustee on their behalf shall, as between such Guarantor, its creditors
other than holders of such Guarantor Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by such Guarantor to or on account of such
Guarantor Senior Indebtedness. It is understood that the provisions of this
Article Twelve are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of Guarantor Senior Indebtedness of any such Guarantor on the other
hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Twelve shall have been applied, pursuant to the provisions of this
Article Twelve, to the payment of all amounts payable under Guarantor Senior
Indebtedness of the Guarantors, then and in such case, the Holders of the
Securities shall be entitled to receive from the holders of such Guarantor
Senior Indebtedness any payments or distributions received by such holders of
Guarantor Senior Indebtedness in excess of the amount required to make payment
in full in cash of such Guarantor Senior Indebtedness.
SECTION 12.04. Obligations of Guarantors Unconditional.
Subject to Sections 11.03 and 8.02, nothing contained in this
Article Twelve or elsewhere in this Indenture or in the Securities is intended
to or shall impair, as among any Guarantor and the Holders of the Securities,
the obligation of such Guarantor, which is absolute and unconditional, to pay to
the Holders of the Securities the principal of and interest on the Securities as
and when the same shall become due and payable in accordance with the terms of
the Guarantee, or is intended to or shall affect the relative rights of the such
Guarantor of the Securities and creditors of any Guarantor other than the
holders of Guarantor Senior Indebtedness of such Guarantor, as the case may be,
nor shall anything herein or therein prevent the Holder of any Security or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Twelve of the holders of Guarantor Senior Indebtedness in
respect of cash, property or securities of such Guarantor received upon the
exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained
in this Article Twelve shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Guarantor Senior Indebtedness
of each Guarantor then due and payable shall first be paid in full in cash or
Cash
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Equivalents before the Holders of the Securities or the Trustee are entitled to
receive any direct or indirect payment from, or on behalf of, such Guarantor on
account of any Obligations on the Securities pursuant to the Guarantee.
SECTION 12.05. 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 Securities pursuant to the provisions of this
Article Twelve (although the failure to give any such notice shall not affect
the subordination provisions set forth in this Article Twelve). The Trustee
shall not be charged with knowledge of the existence of any event of default
with respect to any Guarantor Senior Indebtedness of a Guarantor 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 at its Corporate
Trust Office to that effect signed by an Officer of the Company, or by a holder
of Guarantor Senior Indebtedness of a Guarantor or trustee or agent therefor;
and prior to the receipt of any such written notice, the Trustee shall, subject
to Article Seven, be entitled to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section 12.05 at least two Business Days prior to the date upon which by
the terms of this Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Guarantor and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date (although the receipt of such moneys by any Holder of Securities
shall otherwise be subject to the provisions of this Article Twelve). Nothing
contained in this Section 12.05 shall limit the right of the holders of
Guarantor Senior Indebtedness of a Guarantor to recover payments as contemplated
by Section 12.02. The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
any Guarantor Senior Indebtedness of a Guarantor (or a trustee on behalf of, or
other representative of, such holder) to establish that such notice has been
given by a holder of such Guarantor Senior Indebtedness or a trustee or
representative on behalf of any such holder.
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
Guarantor Senior Indebtedness of a Guarantor to participate in any payment or
distribution pursuant to this Article Twelve, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Guarantor Senior Indebtedness 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
Twelve, 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 12.06. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Article Twelve, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy,
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dissolution, winding-up, liquidation or reorganization proceedings are pending,
or upon a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, delivered to
the Trustee or to the Holders of the Securities for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of
Guarantor Senior Indebtedness of such Guarantor and other indebtedness of such
Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Twelve.
SECTION 12.07. Trustee's Relation to Guarantor Senior Indebtedness of a
Guarantor.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Twelve with respect to any Guarantor Senior
Indebtedness of a Guarantor which may at any time be held by them in their
individual or any other capacity to the same extent as any other holder of
Guarantor Senior Indebtedness of such Guarantor, and nothing in this Indenture
shall deprive the Trustee or any Paying Agent of any of its rights as such
holder.
With respect to the holders of Guarantor Senior Indebtedness of any
Guarantor, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article Twelve,
and no implied covenants or obligations with respect to the holders of such
Guarantor Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness of any Guarantor (except as provided in
Section 12.02(b)). The Trustee shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or securities
to which any holders of Guarantor Senior Indebtedness of a Guarantor shall be
entitled by virtue of this Article Twelve or otherwise.
SECTION 12.08. Subordination Rights Not Impaired by Acts or Omissions of
Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness of a Guarantor 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 such Guarantor or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by such Guarantor with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with. The provisions of this Article Twelve are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Guarantor Senior Indebtedness of any Guarantor.
SECTION 12.09. Holders Authorize Trustee To Effectuate Subordination of
Guarantee.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Twelve, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
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liquidation or reorganization of any Guarantor (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 any Guarantor, the filing of a claim
for the unpaid balance of its or his Securities 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 any proceeding referred to in Section 6.09 prior to 30 days
before the expiration of the time to file such claim or claims, then any of the
holders of the Guarantor Senior Indebtedness or their Representative is hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Securities. Nothing herein contained shall be deemed to authorize the Trustee or
the holders of Guarantor Senior Indebtedness 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 Securities
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Guarantor Senior Indebtedness or their Representative to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 12.10. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Twelve shall not be
construed as preventing the occurrence of an Event of Default.
SECTION 12.11. Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve shall apply to amounts due to the
Trustee, in its capacity as such, pursuant to other sections in this Indenture.
SECTION 12.12. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.08, the
holders of Guarantor Senior Indebtedness of any Guarantor, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders of
the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in this
Article Twelve or the obligations hereunder of the Holders of the Securities to
the holders of such Guarantor Senior Indebtedness, may do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Guarantor Senior Indebtedness or any
instrument evidencing the same or any agreement under which such Guarantor
Senior Indebtedness is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Guarantor Senior Indebtedness; (c) release any Person liable in any manner for
the collection of such Guarantor Senior Indebtedness; and (d) exercise or
refrain from exercising any rights against the Guarantor and any other Person.
SECTION 12.13. Amendments.
As long as the New Credit Facility is outstanding or any amounts are
outstanding thereunder, the provisions of this Article Twelve (and the
definition used herein) shall not be amended or modified without the written
consent of the majority of the lenders under the New Credit Facility.
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ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of any indenture subject to the TIA. If any provision of
this Indenture modifies any TIA provision that may be so modified, such TIA
provision shall be deemed to apply to this Indenture as so modified. If any
provision of this Indenture excludes any TIA provision that may be so excluded,
such TIA provision shall be excluded from this Indenture.
The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company and the Guarantors:
Special Devices, Incorporated
16830 West Placerita Canyon Road
Newhall, California 91321
Attention: Chief Financial Officer
Facsimile: (805) 254-4721
Telephone: (805) 259-0753
with copies to:
J.F. Lehman & Company
450 Park Avenue
New York, New York 10022
Attention: Keith Oster
Facsimile: (212) 634-1155
Telephone: (212) 634-0100
and
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Paul D. Ginsberg, Esq.
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Facsimile: (212) 757-3990
Telephone: (212) 373-3000
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, New York 10036
Attention: Corporate Trust Department
Facsimile: (212) 852-1626
Telephone: (212) 852-1674
Each party by notice to the others may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to
a Holder, including any notice delivered in connection with TIA Section 310(b),
TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall be mailed
to such Holder at the address as set forth on the list maintained pursuant to
Section 2.05 and shall be sufficiently given to him if so mailed within the time
prescribed. To the extent required by the TIA, any notice or communication shall
also be mailed to any Person described in TIA Section 313(c).
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Except for
a notice to the Trustee, which is deemed given only when received, if a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture after the date
hereof, the Company shall furnish to the Trustee at the request of 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,
if any, provided for in this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, and such other opinions as the Trustee may
reasonably require.
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SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.07. Governing Law.
This Indenture and the Securities will be governed by, and construed
in accordance with, the laws of the State of New York but without giving effect
to applicable principles of conflicts of law to the extent that the application
of the law of another jurisdiction would be required thereby.
SECTION 13.08. No Recourse Against Others.
No director, officer, employee, stockholder or member of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Securities.
SECTION 13.09. Successors.
All agreements of a party to this Indenture contained in this
Indenture shall bind such party's successors.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
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SECTION 13.11. Severability.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, and a Holder shall have no claim therefor against any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
[Signature Pages Follow]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
COMPANY:
SDI ACQUISITION CORP.
By:/s/ Keith Oster
----------------------------------------
Keith Oster, Secretary
GUARANTOR:
[NOT APPLICABLE]
By:
----------------------------------------
Name:
Title:
TRUSTEE:
UNITED STATES TRUST COMPANY OF NEW YORK
By:/s/ Gerard F. Ganey
----------------------------------------
Gerard F. Ganey, Senior Vice President
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