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Exhibit 4.1
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INDENTURE
Dated as of August 24, 1999
Between
FEDDERS NORTH AMERICA, INC., as Issuer,
and
FEDDERS CORPORATION, as Guarantor,
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
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Up to $100,000,000
9 3/8% Senior Subordinated Notes due 2007
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CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
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ss.310(a)(1) .......................................... 7.10
(a)(2) .......................................... 7.10
(a)(3) .......................................... N.A.
(a)(4) .......................................... N.A.
(a)(5) .......................................... 7.08, 7.10.
(b) ............................................. 7.08; 7.10; 13.02
(C) ............................................. N.A.
ss.311(a) ............................................. 7.11
(b) ............................................. 7.11
(c) ............................................. N.A.
ss.312(a) ............................................. 2.05
(b) ............................................. 13.03
(C) ............................................. 13.03
ss.313(a) ............................................. 7.06
(b)(1) .......................................... 7.06
(b)(2) .......................................... 7.06
(c) ............................................. 7.06; 13.02
(d) ............................................. 7.06
ss.314(a) ............................................. 4.11; 4.12; 13.02
(b) ............................................. N.A.
(c)(1) .......................................... 13.04
(c)(2) .......................................... 13.04
(c)(3) .......................................... N.A.
(d) ............................................. N.A.
(e) ............................................. 13.05
(f) ............................................. N.A.
ss.315(a) ............................................. 7.01(b)
(b) ............................................. 7.05; 13.02
(c) ............................................. 7.01(a)
(d) ............................................. 7.01(c)
(e) ............................................. 6.11
ss.316(a)(last sentence) .............................. 2.09
(a)(1)(A) ....................................... 6.05
(a)(1)(B) ....................................... 6.04
(a)(2) .......................................... N.A.
(b) ............................................. 6.07
(c) ............................................. 10.04
ss.317(a)(1) .......................................... 6.08
(a)(2) .......................................... 6.09
(b) ............................................. 2.04
ss.318(a) ............................................. 13.01
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N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions ............................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act ......... 16
SECTION 1.03. Rules of Construction ..................................... 16
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating ........................................... 17
SECTION 2.02. Execution and Authentication .............................. 18
SECTION 2.03. Registrar and Paying Agent ................................ 19
SECTION 2.04. Paying Agent to Hold Assets in Trust ...................... 19
SECTION 2.05. Securityholder Lists ...................................... 20
SECTION 2.06 Transfer and Exchange ..................................... 20
SECTION 2.07. Replacement Securities .................................... 32
SECTION 2.08. Outstanding Securities .................................... 32
SECTION 2.09. Treasury Securities ....................................... 32
SECTION 2.10. Temporary Securities ...................................... 33
SECTION 2.11. Cancellation .............................................. 33
SECTION 2.12. Defaulted Interest ........................................ 33
SECTION 2.13. CUSIP Number .............................................. 33
SECTION 2.14. Deposit of Moneys ......................................... 33
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee ........................................ 34
SECTION 3.02. Selection of Securities to Be Redeemed .................... 34
SECTION 3.03. Notice of Redemption ...................................... 35
SECTION 3.04. Effect of Notice of Redemption ............................ 35
SECTION 3.05. Deposit of Redemption Price ............................... 36
SECTION 3.06. Securities Redeemed in Part ............................... 36
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities ..................................... 36
SECTION 4.02. Maintenance of Office or Agency ........................... 36
SECTION 4.03. Transactions with Affiliates .............................. 37
SECTION 4.04. Limitation on Incurrence of Indebtedness .................. 38
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SECTION 4.05. Limitation on Certain Asset Sales ......................... 38
SECTION 4.06. Limitation on Restricted Payments ......................... 41
SECTION 4.07. Corporate Existence ....................................... 43
SECTION 4.08. Payment of Taxes and Other Claims ......................... 43
SECTION 4.09. Notice of Defaults ........................................ 43
SECTION 4.10. Maintenance of Properties and Insurance ................... 43
SECTION 4.11. Compliance Certificate .................................... 44
SECTION 4.12. Provision of Financial Information ........................ 44
SECTION 4.13. Waiver of Stay, Extension or Usury Laws ................... 44
SECTION 4.14. Change of Control ......................................... 45
SECTION 4.15. Limitation on Senior Subordinated Indebtedness ............ 46
SECTION 4.16. Limitations on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries ........................ 46
SECTION 4.17. Designation of Restricted and Non-Restricted Subsidiaries . 47
SECTION 4.18. Limitation on Liens ....................................... 48
SECTION 4.19. Limitation on Sale and Leaseback Transactions ............. 48
SECTION 4.20. Limitation on Guarantees of Company Indebtedness by
Restricted Subsidiaries .................................. 48
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidation and Sale of Assets ................. 49
SECTION 5.02. Successor Corporation Substituted ......................... 49
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default ......................................... 49
SECTION 6.02. Acceleration .............................................. 51
SECTION 6.03. Other Remedies ............................................ 51
SECTION 6.04. Waiver of Past Default .................................... 51
SECTION 6.05. Control by Majority ....................................... 52
SECTION 6.06. Limitation on Suits ....................................... 52
SECTION 6.07. Rights of Holders to Receive Payment ...................... 53
SECTION 6.08. Collection Suit by Trustee ................................ 53
SECTION 6.09. Trustee May File Proofs of Claim .......................... 53
SECTION 6.10. Priorities ................................................ 53
SECTION 6.11. Undertaking for Costs ..................................... 54
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee ......................................... 54
SECTION 7.02. Rights of Trustee ......................................... 55
SECTION 7.03. Individual Rights of Trustee .............................. 56
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SECTION 7.04. Trustee's Disclaimer ...................................... 56
SECTION 7.05. Notice of Defaults ........................................ 56
SECTION 7.06. Reports by Trustee to Holders ............................. 57
SECTION 7.07. Compensation and Indemnity ................................ 57
SECTION 7.08. Replacement of Trustee .................................... 58
SECTION 7.09. Successor Trustee by Merger, etc. ......................... 59
SECTION 7.10. Eligibility; Disqualification ............................. 59
SECTION 7.11. Preferential Collection of Claims Against Company ......... 59
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness ............ 59
SECTION 8.02. No Payment on Securities in Certain Circumstances ......... 60
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc. ........... 61
SECTION 8.04. Subrogation ............................................... 62
SECTION 8.05. Obligations of Company Unconditional ...................... 62
SECTION 8.06. Notice to Trustee ......................................... 63
SECTION 8.07. Reliance on Judicial Order or Certificate of
Liquidating Agent ........................................ 63
SECTION 8.08. Trustee's Relation to Senior Indebtedness ................. 63
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness ......... 64
SECTION 8.10. Securityholders Authorize Trustee to Effectuate
Subordination of Securities .............................. 64
SECTION 8.11. This Article Not to Prevent Events of Default ............. 64
SECTION 8.12. Trustee's Compensation Not Prejudiced ..................... 64
SECTION 8.13. No Waiver of Subordination Provisions ..................... 64
SECTION 8.14. Subordination Provisions Not Applicable to Collateral
Held in Trust for Securityholders; Payments May Be
Paid Prior to Dissolution ................................ 65
SECTION 8.15. Acceleration of Securities ................................ 65
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Discharge of Indenture .................................... 65
SECTION 9.02. Legal Defeasance .......................................... 66
SECTION 9.03. Covenant Defeasance ....................................... 66
SECTION 9.04. Conditions to Legal Defeasance or Covenant Defeasance ..... 66
SECTION 9.05. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions ......... 68
SECTION 9.06. Reinstatement ............................................. 68
SECTION 9.07. Moneys Held by Paying Agent ............................... 69
SECTION 9.08. Moneys Held by Trustee .................................... 69
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ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders ............................... 69
SECTION 10.02. With Consent of Holders .................................. 70
SECTION 10.03. Compliance with Trust Indenture Act ...................... 71
SECTION 10.04. Revocation and Effect of Consents ........................ 71
SECTION 10.05. Notation on or Exchange of Securities .................... 72
SECTION 10.06. Trustee to Sign Amendments, etc. ......................... 72
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee .................................. 72
SECTION 11.02. Severability ............................................. 73
SECTION 11.03. Limitation of Guarantor's Liability ...................... 73
SECTION 11.04. Subordination of Subrogation and Other Rights ............ 73
SECTION 11.05. Delivery of Guarantee .................................... 73
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor
Senior Indebtedness ..................................... 74
SECTION 12.02. No Payment on Guarantee in Certain Circumstances ......... 74
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc. .......... 75
SECTION 12.04. Subrogation .............................................. 76
SECTION 12.05. Obligations of Guarantor Unconditional ................... 77
SECTION 12.06. Notice to Trustee ........................................ 77
SECTION 12.07. Reliance on Judicial Order or Certificate of
Liquidating Agent ....................................... 78
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness ...... 78
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions
of the Guarantor or Holders of Guarantor Senior
Indebtedness ............................................ 78
SECTION 12.10. Securityholders Authorize Trustee to Effectuate
Subordination of Guarantee .............................. 78
SECTION 12.11. This Article Not to Prevent Events of Default ............ 79
SECTION 12.12. Trustee's Compensation Not Prejudiced .................... 79
SECTION 12.13. No Waiver of Guarantee Subordination Provisions .......... 79
SECTION 12.14. Payments May Be Paid Prior to Dissolution ................ 79
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls ............................. 80
SECTION 13.02. Notices .................................................. 80
SECTION 13.03. Communications by Holders with Other Holders ............. 81
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SECTION 13.04. Certificate and Opinion as to Conditions Precedent ....... 81
SECTION 13.05. Statements Required in Certificate or Opinion ............ 81
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar ................ 82
SECTION 13.07. Governing Law ............................................ 82
SECTION 13.08. No Recourse Against Others ............................... 82
SECTION 13.09. Successors ............................................... 82
SECTION 13.10. Counterpart Originals .................................... 82
SECTION 13.11. Severability ............................................. 82
SECTION 13.12. No Adverse Interpretation of Other Agreements ............ 83
SECTION 13.13. Legal Holidays ........................................... 83
SIGNATURES ..............................................................S-1
EXHIBIT A Form of Security .........................................A-1
EXHIBIT B Form of Certificate of Transfer ..........................B-1
EXHIBIT C Form of Certificate of Exchange ..........................C-1
EXHIBIT D Form of Certificate from Acquiring
Institutional Accredited Investor ........................D-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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INDENTURE dated as of August 24, 1999, between FEDDERS NORTH
AMERICA, INC., a Delaware corporation (the "Company"), FEDDERS CORPORATION, a
Delaware corporation (the "Guarantor"), and STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"1997 Notes" means the Company's existing 9 3/8% Senior Subordinated
Notes due 2007, originally issued on August 18, 1997, as to which the Securities
are pari passu.
"Acceleration Notice" see Section 6.02.
"Additional Securities" means, subject to the Company's compliance
with Section 4.04, 9 3/8% Senior Subordinated Notes due 2007 issued from time to
time after August 24, 1999 under the terms of this Indenture (other than those
issued pursuant to Section 2.06, 2.07, 2.10, 3.06, 4.05, 4.14 or 10.05 of this
Indenture).
"Affiliate" means any of the following: (i) any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, (ii) any spouse, immediate family member or other
relative who has the same principal residence as any Person described in clause
(i) above, (iii) any trust in which any such Person described in clause (i) or
(ii) above has a beneficial interest, and (iv) any corporation or other
organization of which any such Person described above collectively owns 10% or
more of the equity of such entity.
"Affiliate Transaction" see Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of, or for beneficial interests in, any Global Security, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Asset Sale" means the sale, lease, conveyance or other disposition
by the Company or a Restricted Subsidiary of assets or property whether owned on
August 18, 1997 or thereafter acquired, in a single transaction or in a series
of related transactions; provided that Asset Sales will not include such sales,
leases, conveyances or dispositions in connection with (i) the surrender or
waiver of contract rights or the settlement, release or surrender of contract,
tort or other claims of any kind, (ii) the sale of inventory in the ordinary
course of business, (iii) a sale-leaseback of assets within one year following
the acquisition of such assets, (iv) the grant of any license of patents,
trademarks, registration therefor and other similar intellectual prop-
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erty, (v) a transfer of assets by the Company or a Restricted Subsidiary to the
Company or a Restricted Subsidiary, (vi) the designation of a Restricted
Subsidiary as a Non-Restricted Subsidiary pursuant to Section 4.17, (vii) the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Company as permitted under Section 5.01, (viii) the sale or
disposition of obsolete equipment or other obsolete assets, (ix) Restricted
Payments permitted by Section 4.06 or (x) the exchange of assets for other
non-cash assets that (a) are useful in the business of the Company and its
Restricted Subsidiaries and (b) have a fair market value at least equal to the
fair market value of the assets being exchanged (as determined in good faith by
the Board of Directors or the board of directors of the Restricted Subsidiary
which owns such assets).
"Asset Sale Disposition Date" see Section 4.05.
"Asset Sale Offer" see Section 4.05.
"Asset Sale Purchase Date" see Section 4.05.
"Asset Sale Trigger Date" see Section 4.05.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" see Section 6.01.
"Board of Directors" means the Company's board of directors or any
authorized committee of such board of directors.
"Broker-Dealer" means any broker-dealer that receives Series B
Securities for its own account in an Exchange Offer in exchange for Series A
Securities that were acquired by such broker-dealer as a result of market-making
or other trading activities.
"Business Day" means a day (other than a Saturday or Sunday) on
which the Depositary and banks in New York, and banks in the city in which the
Corporate Trust Office of the Trustee is located, are open for business.
"Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of corporate stock, including any
Preferred Stock.
"Cash Flow" means, for any given period and Person, the sum of,
without duplication, Consolidated Net Income, plus (a) any provision for taxes
based on income or profits to the extent such income or profits were included in
computing Consolidated Net Income, plus (b) Consolidated Interest Expense, to
the extent deducted in computing Consolidated Net Income, plus (c) the
amortization of all intangible assets, to the extent such amortization was
deducted in computing Consolidated Net Income (including, but not limited to,
inventory write-ups, goodwill, debt and financing costs), plus (d) all
depreciation and all other non-cash charges (including, without limitation,
those charges relating to purchase accounting adjustments and LIFO adjustments),
to the extent deducted in computing Consolidated Net Income, plus (e) any
interest income, to the extent such income was not included in computing
Consolidated Net Income, plus (f) all dividend payments
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on Preferred Stock (whether or not paid in cash) to the extent deducted in
computing Consolidated Net Income; provided, however, that, if any such
calculation includes any period during which an acquisition or sale of a Person
or the incurrence or repayment of Indebtedness occurred, then such calculation
for such period shall be made on a Pro Forma Basis.
"Cash Flow Coverage Ratio" means, for any given period and Person,
the ratio of: (i) Cash Flow, divided by (ii) the sum of Consolidated Interest
Expense (except dividends paid or payable in additional shares of Capital Stock
(other than Disqualified Stock)) in each case, without duplication; provided,
however, that if any such calculation includes any period during which an
acquisition or sale of a Person or the incurrence or repayment of Indebtedness
occurred, then such calculation for such period shall be made on a Pro Forma
Basis.
"CEDEL" means Cedel Bank, Societe Anonyme (or any successor
securities clearing agency).
"Change of Control" means the occurrence of any of the following:
(i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), excluding the Existing Stockholders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Stock of the Company or of the
Guarantor; or (ii) the Company or the Guarantor consolidates with, or merges
with or into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any person, or
any person consolidates with, or merges with or into, the Company or the
Guarantor, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company or of the Guarantor is converted into or exchanged
for cash, securities or other property, other than any such transaction where
(A) the outstanding Voting Stock of the Company or of the Guarantor is converted
into or exchanged for (1) Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation or (2) cash, securities and other property
in an amount which could be paid by the Company as a Restricted Payment under
the Indenture and (B) immediately after such transaction no "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
excluding the Existing Stockholders, is the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
Voting Stock of the surviving or transferee corporation; or (iii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors or the board of directors of the Guarantor
(together with any new directors whose election by such Board of Directors or
the board of directors of the Guarantor whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who are entitled to vote to elect such new
director and were either directors at the beginning of such period or persons
whose election as directors or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors or the board of directors of the Guarantor then in office.
"Change of Control Offer" see Section 4.14.
"Change of Control Purchase Date" see Section 4.14.
"Change of Control Trigger Date" see Section 4.14.
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"Commission" means the Securities and Exchange Commission.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President or its Treasurer, and by
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Interest Expense" means, for any given period and
Person, the aggregate of (i) the interest expense in respect of all Indebtedness
of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP (including amortization
of original issue discount on any such Indebtedness, all non-cash interest
payments, the interest portion of any deferred payment obligation and the
interest component of capital lease obligations, but excluding amortization of
deferred financing fees if such amortization would otherwise be included in
interest expense) and (ii) the product of (a) all cash dividend payments (and
non-cash dividend payments in the case of a Person that is a Restricted
Subsidiary) on any series of Preferred Stock of such Person and its Restricted
Subsidiaries payable to a party other than the Company or a wholly owned
Subsidiary, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, on a
consolidated basis and in accordance with GAAP; provided, however, that for the
purpose of the Cash Flow Coverage Ratio, Consolidated Interest Expense shall be
calculated on a Pro Forma Basis.
"Consolidated Net Income" means, for any given period and Person,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that: (i) the Net Income of any Person acquired in a pooling
of interests transaction for any period prior to the date of such acquisition
shall be excluded, (ii) the Net Income (but not loss) of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person, (iii) the Net Income of any
Restricted Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary of
that Net Income is not at the date of determination permitted without any prior
governmental approval (which has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, (iv) the cumulative effect of a
change in accounting principles shall be excluded, (v) income or loss
attributable to discontinued operations shall be excluded and (vi) all other
extraordinary, unusual or nonrecurring gains or losses shall be excluded;
provided, however, that for purposes of determining the Cash Flow Coverage
Ratio, Consolidated Net Income shall be calculated on a Pro Forma Basis.
"Consolidated Net Worth" means, with respect to any Person at any
date, the sum of (i) the consolidated stockholders' equity of such Person less
the amount of such stockholders' equity attributable to Disqualified Stock of
such Person and its Subsidiaries (Restricted Subsidiaries, in the case of the
Company), as determined on a consolidated basis in accordance with GAAP
consistently applied and (ii) the amount of any Preferred Stock of such Person
not included in the stockholders' equity of such Person in accordance with GAAP,
which Preferred Stock does not constitute Disqualified Stock.
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"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.
"Covenant Defeasance Option" see Section 9.02.
"Credit Agreement" means collectively, the Accounts Financing
Agreement between Columbia Specialties, Inc. and Congress Financial Corporation
dated December 23, 1992, and the Accounts Financing Agreement by and among
Fedders North America, Inc., Emerson Quiet Kool Corporation and Congress
Financial Corporation dated December 23, 1992, together with all loan documents
and instruments thereunder (including, without limitation, any guarantee
agreements, covenant supplements and security documents), in each case as such
agreements have been or may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including, without limitation, increasing the amount of available
borrowings thereunder, and all Obligations with respect thereto, in each case,
to the extent permitted by Section 4.04 or adding 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.
"Custodian" see Section 6.01.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"defeasance trust" see Section 9.04.
"Definitive Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A that do not include the information
called for by footnote 1 and 6 thereof.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Securities, until a successor shall
have been appointed and become such Depositary pursuant to the applicable
provision of this Indenture, and, thereafter, "Depositary" shall mean or include
such successor.
"Designated Guarantor Senior Indebtedness" means (i) the guarantee
by the Guarantor of any Indebtedness outstanding under the Credit Agreement and
(ii) any other Guarantor Senior Indebtedness of the Guarantor the principal
amount of which is $20,000,000 or more.
"Designated Senior Indebtedness" means (i) any Indebtedness
outstanding under the Credit Agreement and (ii) any other Senior Indebtedness
permitted under this Indenture the principal amount of which is $20,000,000 or
more and that has been designated by the Company as Senior Indebtedness.
"Disposition" see Section 5.01.
"Disqualified Stock" with respect to any Person means any Capital
Stock or Equity Interests that by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part on, or prior to, the
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maturity date of the Securities, or any Capital Stock or Equity Interests in any
Restricted Subsidiary of such Person.
"Distribution Compliance Period" means the period as defined in
Regulation S; provided that promptly after the expiration of such period, the
Company shall give written notice thereof, identifying therein the day on which
such period expires.
"Equity Interests" means Capital Stock or partnership interests or
warrants, options or other rights to acquire Capital Stock or partnership
interests (but excluding (i) any debt security that is convertible into, or
exchangeable for, Capital Stock or partnership interests, and (ii) any other
Indebtedness or Obligation).
"Equity Offering" means a public or private offering by the Company
or the Guarantor for cash of Capital Stock or other Equity Interests and all
warrants, options or other rights to acquire Capital Stock, other than an
offering of Disqualified Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, or its successor, as operator of the Euroclear system.
"Event of Default" see Section 6.01.
"Excess Proceeds" see Section 4.05.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission thereunder.
"Exchange Offer" means an offer that may be made by the Company
pursuant to a Registration Rights Agreement to exchange Series B Securities for
Series A Securities.
"Exchange Offer Registration Statement" has the meaning given to
such term in a Registration Rights Agreement.
"Existing Stockholders" means the officers and directors of each of
the Company and the Guarantor on August 18, 1997 and their respective Affiliates
and family members and trusts for the benefit of any of the foregoing.
"Final Maturity Date" means August 15, 2007.
"GAAP" means generally accepted accounting principles, consistently
applied, as in effect in the United States from time to time. All financial and
accounting determinations and calculations under the Indenture will be made in
accordance with GAAP.
"Global Security" means a Security that is the form of the Security
attached hereto as Exhibit A that contains the paragraph referred to in footnote
1 and the additional schedule referred to in footnote 6 to such Exhibit A.
14
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"Global Security Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Securities issued
under this Indenture.
"Guarantee" means the guarantee of the Obligations of the Company
with respect to the Securities by the Guarantor pursuant to the terms of Article
11 hereof.
"Guaranteed Obligations" see Section 11.01.
"Guarantor" means Fedders Corporation, the sole stockholder of the
Company.
"Guarantor Blockage Period" see Section 12.02(a).
"Guarantor Payment Blockage Notice" see Section 12.02(a).
"Guarantor Senior Indebtedness" means, with respect to the
Guarantor, the Guarantor's guarantee of the Company's obligations under the
Credit Agreement and any other Indebtedness of the Guarantor (other than as
otherwise provided in this definition), whether outstanding on August 18, 1997
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.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" will not include
(i) Indebtedness evidenced by the Guarantee; (ii) Indebtedness of the Guarantor
that is subordinate or junior in right of payment to any other Indebtedness of
the Guarantor; (iii) Indebtedness of the Guarantor which, when incurred and
without respect to any other election under Section 1111(b) of the Bankruptcy
Law, is without recourse to the Guarantor; (iv) Indebtedness which is
represented by Disqualified Stock of the Guarantor; (v) any liability for
foreign, federal, state, local or other taxes owed or owing by the Guarantor;
(vi) Indebtedness of the Guarantor to a Subsidiary or any other Affiliate of the
Guarantor or any of such Affiliate's subsidiaries; (vii) that portion of any
Indebtedness which, when incurred, is issued in violation of this Indenture; and
(viii) trade payables owed or owing by the Guarantor.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Persons under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) foreign exchange
contracts, currency swap agreements or similar agreements, and (iii) other
agreements or arrangements designed to protect such Person against fluctuations,
or otherwise to establish financial hedges in respect of, exchange rates,
currency rates or interest rates.
"Holder," "holder of Securities," "Securitvholders" or other similar
terms mean the registered holder of any Security.
"Indebtedness" means, with respect to any Person, (i) any
indebtedness, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing the
deferred and unpaid balance of the purchase price of any property (including
pursuant to capital leases), except any such balance that constitutes an accrued
expense or a trade payable, and any Hedging Obligations, if and to the extent
such indebtedness (other than a Hedging Obligation) would appear as a liability
upon a balance sheet of such Person prepared on a consolidated basis in
accordance with GAAP, and also includes, to the extent not otherwise included,
the guarantee of items that would be included within this definition; (ii)
Disqualified Stock of such Person; or (iii) Preferred Stock issued by a
Restricted Subsidiary of such Person.
15
-8-
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Indirect Participant" means, with respect to the Depositary,
Euroclear or Cedel, a Person that clears through or maintains a direct or
indirect custodial relationship with a Participant.
"Initial Purchaser" means (i) with respect to the Series A
Securities issued on August 24, 1999, Donaldson, Lufkin & Jenrette Securities
Corporation and (ii) with respect to each issuance of Additional Securities, the
Person(s) purchasing such Additional Securities under the related Purchase
Agreement.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 50l(a)(1), (2), (3) or (7)
under the Securities Act, who is not also a QIB.
"Interest Payment Date" means each semiannual interest payment date
on February 15 and August 15 of each year.
"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the
February 1 or August 1 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Investment" means any capital contribution to, or other debt or
equity investment in, any Person. For the purposes of Section 4.06, the amount
of any Investment shall be the original cost of such Investment plus the cost of
all additional Investments by the Company or any of its Restricted Subsidiaries,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the
payment of dividends or distributions in connection with such investment or any
other amounts received by the Company or any Restricted Subsidiary in respect of
such Investment to the extent not included in Consolidated Net Income.
"issue" means create, issue, assume, guarantee, incur or otherwise
become directly or indirectly liable for any Indebtedness or Capital Stock, as
applicable; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be issued
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary.
For this definition, the terms "issuing," "issuer," "issuance" and "issued" have
meanings correlative to the foregoing.
"Legal Defeasance Option" see Section 9.02.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Securities for use by
such Holders in connection with an Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Liquidated Damages" has the meaning provided in the Registration
Rights Agreement.
16
-9-
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP, excluding, however,
any gain or loss, together with any related provision for taxes, realized in
connection with any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions).
"Net Proceeds" means, with respect to any Asset Sale, the aggregate
amount of cash proceeds (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, and including
any amounts received as disbursements or withdrawals from any escrow or similar
account established in connection with any such Asset Sale, but, in either such
case, only as and when so received) received by the Company or any of its
Restricted Subsidiaries in respect of such Asset Sale, net of: (i) the cash
expenses of such Asset Sale (including, without limitation, the payment of
principal of, and premium, if any, and interest on, Indebtedness required to be
paid as a result of such Asset Sale (other than the Securities) and legal,
accounting, management and advisory and investment banking fees and sales
commissions), (ii) taxes paid or payable as a result thereof, and (iii) any
portion of cash proceeds that the Company determines in good faith should be
reserved for post-closing adjustments, it being understood and agreed that on
the day that all such post-closing adjustments have been determined, the amount
(if any) by which the reserved amount in respect of such Asset Sale exceeds the
actual post-closing adjustments payable by the Company or any of its Restricted
Subsidiaries shall constitute Net Proceeds on such date.
"New York Presenting Agent" see Section 4.02.
"Non-Restricted Subsidiary" means any Subsidiary of the Company
other than a Restricted Subsidiary.
"Obligations" means, with respect to any Indebtedness, all
principal, interest, premiums, penalties, fees, indemnities, expenses (including
legal fees and expenses), reimbursement obligations and other liabilities
payable to the holder of such Indebtedness under the documentation governing
such Indebtedness, and other claims of such holder arising in respect of such
Indebtedness.
"Officer" means the Chairman, the Vice Chairman, the President, any
Vice President, the Chief Financial Officer, or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or Assistant Secretary of the
Company complying with Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Other Company Indebtedness Guarantee" see Section 4.20.
"Other Permitted Indebtedness" means (i) Indebtedness of the Company
and its Restricted Subsidiaries existing as of August 18, 1997 and all related
Obligations as in effect on such date; (ii) Indebtedness of the Company and its
Restricted Subsidiaries in respect of bankers acceptances and letters of credit
(including, without limitation, letters of credit in respect of workers'
compensation claims) issued in the ordinary course of business, or other
Indebtedness in respect of reimbursement-type obligations regarding workers'
compensation claims; (iii) Refinancing Indebtedness; provided that: (A) the
principal amount of such Refinancing Indebtedness shall not exceed the
outstanding principal amount of Indebtedness (including unused
17
-10-
commitments) extended, refinanced, renewed, replaced, substituted or refunded
plus any amounts incurred to pay premiums, fees and expenses in connection
therewith, and (B) the Refinancing Indebtedness shall have a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of the Indebtedness being extended, refinanced, renewed, replaced, substituted
or refunded; (iv) intercompany Indebtedness of and among the Company and its
wholly owned Restricted Subsidiaries (excluding guarantees by Restricted
Subsidiaries of Indebtedness of the Company not issued in compliance with
Section 4.20); (v) Indebtedness of any Non-Restricted Subsidiary created after
August 18, 1997; provided that such Indebtedness is nonrecourse to the Company
and its Restricted Subsidiaries and the Company and its Restricted Subsidiaries
have no Obligations with respect to such Indebtedness; (vi) Indebtedness of the
Company and its Restricted Subsidiaries under Hedging Obligations; (vii)
Indebtedness of the Company and its Restricted Subsidiaries 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, which will
not be, and will not be deemed to be, inadvertent) drawn against insufficient
funds in the ordinary course of business; (viii) guarantees by a Restricted
Subsidiary of Indebtedness of the Company if the Indebtedness so guaranteed is
permitted under this Indenture and the Securities are guaranteed by such
Restricted Subsidiary to the extent required by Section 4.20; (ix) Indebtedness
of the Company and its Restricted Subsidiaries in connection with performance,
surety, statutory, appeal or similar bonds in the ordinary course of business;
(x) intercompany Indebtedness of the Company to the Guarantor; provided such
Indebtedness does not bear interest; and (xi) the 1997 Notes.
"Owner Securities Certification" see Section 2.01.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depositary Trust Company, shall include
Euroclear and Cedel).
"Paying Agent" see Section 2.03.
"Payment Blockage Notice" see Section 8.02(a).
"Payment Blockage Period" see Section 8.02(a).
"Permitted Liens" means with respect to the Company and its
Restricted Subsidiaries, (i) Liens for taxes, assessments, governmental charges
or claims which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor; (ii) statutory Liens of landlords and carriers',
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other like
Liens arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate proceedings, if a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor; (iii) Liens incurred on
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (iv)
Liens incurred on deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, government contracts,
performance and return of money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (v) easements, rights-of-way, zoning or other
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the business of the
Company or any of its Restricted Subsidiaries incurred in the ordinary course of
business; (vi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; (vii) judgment and attachment Liens not giving
18
-11-
rise to an Event of Default; (viii) leases or subleases granted to others not
interfering in any material respect with the business of the Company or any of
its Restricted Subsidiaries; (ix) Liens securing Indebtedness under Hedging
Obligations; (x) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements; (xi) Liens
arising out of consignment or similar arrangements for the sale of goods entered
into by the Company or its Restricted Subsidiaries in the ordinary course of
business; (xii) Liens arising from filing Uniform Commercial Code financing
statements regarding leases; (xiii) Liens existing on August 18, 1997 and any
extensions, refinancings, renewals, replacements, substitutions or refundings
thereof; (xiv) any Lien granted to the Trustee and any substantially equivalent
Lien granted to any trustee or similar institution under any indenture for the
1997 Notes or any Senior Indebtedness permitted by the terms of this Indenture;
(xv) Liens securing Senior Indebtedness or Indebtedness of a Restricted
Subsidiary if such Indebtedness is incurred pursuant to the Credit Agreement or
is permitted to be incurred pursuant to paragraph (a) of Section 4.04; (xvi)
Liens securing Indebtedness of the Company and its Restricted Subsidiaries in
connection with capital leases, sale and leaseback transactions, purchase money
obligations, capital expenditures or similar financing transactions, which
Indebtedness is permitted under Section 4.04 or 4.19; (xvii) Liens on property
existing at the time of acquisition thereof by the Company or a Restricted
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such acquisition; and (xviii) additional Liens at any one
time outstanding in respect of properties or assets where aggregate fair market
value does not exceed $2,000,000 (the fair market value to be determined on the
date such Lien is granted on such properties or assets).
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock" of any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
principal" of a debt security means the principal of the security,
plus, when appropriate, the premium, if any, on the security.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i), which is required to be placed on all Securities issued under this
Indenture except where otherwise permitted by the provisions of this Indenture.
"Pro Forma Basis" means, for purposes of determining Consolidated
Net Income in connection with the Cash Flow Coverage Ratio (including in
connection with Sections 4.06, 4.17 and 5.01, the incurrence of Indebtedness
pursuant to paragraph (a) of Section 4.04 and Consolidated Net Worth for
purposes of Section 5.01), giving pro forma effect to (x) any acquisition or
sale of a Person, business or asset, related incurrence, repayment or
refinancing of Indebtedness or other related transactions, including any
Restructuring Charges which would otherwise be accounted for as an adjustment
permitted by Regulation S-X under the Securities Act or on a pro forma basis
under GAAP, or (y) any incurrence, repayment or refinancing of any Indebtedness
and the application of the proceeds therefrom, in each case, as if such
acquisition or sale and related transactions, restructurings, consolidations,
cost savings, reductions, incurrence, repayment or refinancing were realized on
the first day of the relevant period permitted by Regulation S-X under the
Securities Act or on a pro forma basis under GAAP. Furthermore, in calculating
the Cash Flow Coverage Ratio, (1) interest on outstanding Indebtedness
determined on a fluctuating basis as of the determination date and which will
con-
19
-12-
tinue to be so determined thereafter shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest on such Indebtedness in effect on
the determination date; (2) if interest on any Indebtedness actually incurred on
the determination 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 determination date will
be deemed to have been in effect during the relevant 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 rate swaps or similar interest rate protection Hedging Obligations,
shall be deemed to accrue at the rate per annum resulting after giving effect to
the operation of such agreements.
"Purchase Agreement" means (i) with respect to the Series A
Securities issued on August 24, 1999, the Purchase Agreement dated August 19,
1999 between the Company, the Guarantor and the Initial Purchaser and (ii) with
respect to each issuance of Additional Securities, the Purchase Agreement or
underwriting agreement among the Company, the Guarantor and the Persons
purchasing such Additional Securities.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"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.
"Refinancing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries issued or given in exchange for, or the proceeds of
which are used to, extend, refinance, renew, replace, substitute for or refund
the Securities or Indebtedness contemplated by clause (i) of the definition of
Other Permitted Indebtedness or any Indebtedness issued to so extend, refinance,
renew, replace, substitute for or refund such Indebtedness.
"Reg S Global Security" means a Reg S Temporary Global Security or
Reg S Permanent Global Security.
"Reg S Permanent Global Security" means a permanent Global Security
in the form of Exhibit A hereto bearing the Global Security Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Reg S Temporary Global Security upon
expiration of the Distribution Compliance Period.
"Reg S Temporary Global Security" means a temporary Global Security
in the form of Exhibit A hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Securities initially sold in reliance on Rule 903 of Regulation S.
"Register" see Section 2.03.
"Registrar" see Section 2.03.
20
-13-
"Registration" means the registration of an Exchange Offer by the
Company and the Guarantor or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of a Registration
Rights Agreement.
"Registration Rights Agreement" means (i) with respect to the Series
A Securities issued on August 24. 1999, the Registration Rights Agreement dated
as of August 24, 1999 between the Company, the Guarantor and the Initial
Purchaser and (ii) with respect to each issuance of Additional Securities issued
in transactions exempt from the registration requirements of the Securities Act,
the registration rights agreement, if any, among the Company, any guarantors
thereunder and the Persons purchasing such Additional Securities under the
related Purchase Agreement.
"Registration Statement" means the registration statement(s) as
defined and described in a Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Definitive Security" means a Definitive Security bearing
the Private Placement Legend.
"Restricted Global Security" means a Global Security bearing the
Private Placement Legend.
"Restricted Investment" means any Investment in any Person; provided
that Restricted Investments will not include: (i) Investments in marketable
securities and other negotiable instruments permitted by the Indenture; (ii)
Investments in the Company; (iii) Investments in any Restricted Subsidiary or in
a Person that becomes a Restricted Subsidiary as a result of such investment
(provided that any Investment in a Restricted Subsidiary or in a Person that
becomes a Restricted Subsidiary is made for fair market value (as determined by
the Board of Directors in good faith)); or (iv) Investments which existed on
August 18, 1997. The amount of any Restricted Investment shall be the amount of
cash and the fair market value at the time of transfer of all other property (as
determined by the Board of Directors in good faith) initially invested or paid
for such Restricted Investment, plus all additions thereto, without any
adjustments for increases or decreases in value of or write-ups, write-downs or
write-offs with respect to, such Restricted Investment.
"Restricted Payments" see Section 4.06.
"Restricted Security" means a Security, unless or until it has been
(i) effectively registered under the Securities Act and issued or disposed of in
accordance with the registration statement covering it or (ii) distributed to
the public pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act.
"Restricted Subsidiary" means: (i) any Subsidiary of the Company
existing on August 18, 1997, and (ii) any other Subsidiary of the Company
formed, acquired or existing after August 18, 1997 that is designated as a
"Restricted Subsidiary" by the Company pursuant to a resolution approved by a
majority of the Board of Directors; provided, however, that the term Restricted
Subsidiary shall not include any Subsidiary of the Company that has been
redesignated by the Company pursuant to a resolution approved by a majority of
the Board of Directors as a Non-Restricted Subsidiary in accordance with Section
4.17 unless such Subsidiary shall have subsequently been redesignated a
Restricted Subsidiary in accordance with clause (ii) of this definition.
21
-14-
"Restructuring Charges" means any charges or expenses in respect of
restructuring or consolidating any business, operations or facilities, any
compensation or headcount reduction, or any other cost savings, of any Persons
or businesses either alone or together with the Company or any Restricted
Subsidiary, as permitted by GAAP or Regulation S-X under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act, as it may be
amended from time to time, and any successor provision thereto.
"Securities" means, collectively, the Series A Securities and the
Series B Securities, all of which should be treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the Commission thereunder.
"Securities Custodian" means the Trustee, as custodian with respect
to the Global Securities, or any successor entity 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 August 18, 1997 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, all monetary obligations (including guarantees thereof) of every nature of
the Company under the Credit Agreement, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities and the guarantee of any
obligations owing by any Subsidiary under the Credit Agreement. "Senior
Indebtedness" shall not include (i) any Indebtedness of the Company to a
Subsidiary of the Company, (ii) Indebtedness to, or guaranteed on behalf of, any
shareholder, director, officer or employee of either 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 Stock, (v) any liability for federal, state, local
or other taxes owed or owing by the Company, (vi) that portion of any
Indebtedness incurred in violation of the Indenture provisions set forth in
Section 4.04 and (vii) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Company.
"Series A Securities" means (a) $50.0 million principal amount of
9 3/8% Senior Subordinated Notes due 2007 of the Company issued pursuant to this
Indenture and sold pursuant to the Purchase Agreement on August 24, 1999, and
(b) Additional Securities, if any, issued in the form of 9 3/8% Senior
Subordinated Notes due 2007, Series A, or other series of 9 3/8% Senior
Subordinated Notes due 2007 in a transaction exempt from the registration
requirements of the Securities Act.
"Series B Securities" means (a) 9 3/8% Senior Subordinated Notes due
2007 of the Company to be issued pursuant to this Indenture in exchange for the
Series A Securities pursuant to an Exchange Offer
22
-15-
and a Registration Rights Agreement and (b) Additional Securities, if any,
issued in the form of 9 3/8% Senior Subordinated Notes due 2007, Series B, or
other series of 9 3/8% Senior Subordinated Notes due 2007 in a transaction
registered under the Securities Act.
"Services Agreement" means the Services Agreement dated as of July
31, 1997 between the Company and the Guarantor.
"Shelf Registration Statement" shall have the meaning set forth in a
Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that would be a "significant subsidiary" as defined in clause (2) of the
definition of such term in Rule 1-02 of Regulation S-X under the Securities Act
and the Exchange Act.
"Subsidiary" of any Person means any entity of which the Equity
Interests entitled to cast at least a majority of the votes that may be cast by
all Equity Interests having ordinary voting power for the election of directors
or other governing body of such entity are owned by such Person (regardless of
whether such Equity Interests are owned directly by such Person or through one
or more Subsidiaries).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss.77aaa-77bbb), as amended, as in effect on the date of this Indenture,
except as provided in Section 10.03.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the Private Placement Legend, the Global Note Legend or the Reg
S Temporary Global Note Legend set forth in Section 2.06 hereof.
"Trust Officer" means any officer within the corporate trust
department (or any successor group) of the Trustee including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York.
"U.S. Global Security" means a Global Security in the form of
Exhibit A hereto bearing the Global Security Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Securities sold in reliance on Rule 144A.
"U.S. Government Obligations" means direct non-callable obligations
of the United States of America for the payment of which the full faith and
credit of the United States is pledged.
"U.S. Person" means a "U.S. person" as defined in Rule 902 under the
Securities Act.
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"Unrestricted Definitive Security" means one or more Definitive
Securities that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Global Security" means a permanent Global Security in
the form of Exhibit A attached hereto that bears the Global Security Legend and
that has the "Schedule of Exchanges of Definitive Securities" attached thereto,
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Securities that do not bear the Private
Placement Legend.
"Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect the board of directors.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the sum of the
product(s) obtained by multiplying (a) 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 (b) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission 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;
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(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(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 Securities and the Trustee's certificate of authentication with
respect thereto shall be substantially in the form of Exhibit A hereto. The
Securities may have notations, legends or endorsements (including notations
relating to the Guarantee) required by law, stock exchange rule or usage. The
Company and the Trustee shall approve the form of the Securities and any
notation, legend or endorsement (including notations relating to the Guarantee)
on them. Each Security shall be dated the date of its authentication, shall bear
interest from the applicable date which shall be payable on each Interest
Payment Date as long as such Security is outstanding and shall be payable on the
Final Maturity Date.
The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
(a) Securities offered and sold in their initial distribution to
Qualified Institutional Buyers in reliance on Rule 144A or in offshore
transactions in reliance on Regulation S and (b) Additional Securities issued in
the form of Series B Securities may, unless the applicable Holder requests
Securities in the form of Definitive Securities, which shall be substantially in
the form of Exhibit A, be initially issued in the form of Global Securities in
fully registered form without interest coupons, substantially in the form of
Exhibit A, with such applicable legends as are provided for in Exhibit A.
Securities offered and sold in their initial distribution to
Qualified Institutional Buyers in reliance on Rule 144A shall be issued in the
form of one or more U.S. Global Securities which shall be registered in the name
of the Depositary or its nominee and deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided, for credit by the Depositary to the respective
accounts of beneficial owners of the Securities represented thereby (or such
other accounts as they may direct).
Securities offered and sold in reliance on Regulation S shall
initially be in the form of one or more Reg S Temporary Global Securities which
shall be registered in the name of the Depositary or its nominee and deposited
with the Trustee, as custodian for the Depositary, duly executed by the Company
and
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authenticated by the Trustee as hereinafter provided, for credit by the
Depositary to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct), provided that
upon such deposit all such Securities shall be credited to or through accounts
maintained at the Depositary by or on behalf of Euroclear or CEDEL.
Additional Securities offered and sold in their initial distribution
in the form of Series B Securities in a transaction registered under the
Securities Act shall initially be in the form of one or more Unrestricted Global
Securities which shall be registered in the name of the Depositary or its
nominee and deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided, for credit by the Depositary to the respective accounts of beneficial
owners of the Securities represented thereby (or such other accounts as they may
direct).
Securities issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the Global Security Legend and the
"Schedule of Exchanges of Definitive Securities" attached thereto). Securities
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Security Legend and without the
"Schedule of Exchanges of Definitive Securities" attached thereto). Each Global
Security shall represent such of the outstanding Securities as shall be
specified therein and each shall provide that it shall represent the aggregate
principal amount of outstanding Securities from time to time endorsed thereon
and that the aggregate principal amount of outstanding Securities represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the aggregate principal amount
of outstanding Securities represented thereby shall be made by the Trustee or
the Securities Custodian, at the direction of the Company, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or an Assistant Secretary (each of
whom shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless. Each
execution of a Security by the Company shall be accompanied by the execution of
a Guarantee by the Guarantor (and by any Restricted Subsidiary that guarantees
Indebtedness of the Company pursuant to Section 4.20).
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.
Upon receipt of a written order of the Company in the form of an
Officers' Certificate, on August 24, 1999 the Trustee shall authenticate Series
A Securities for original issue in the aggregate principal amount not to exceed
$50,000,000. In addition, subject to Section 4.04, from time to time, the
Trustee shall authenticate Additional Securities for original issue after August
24, 1999 in an aggregate principal amount not to exceed $50,000,000 upon receipt
of a written order of the Company in the form of an Officers' Certificate. Each
such Officers' Certificate shall specify the amount of Securities to be
authenticated, the series of Securities and the date on which the Securities are
to be authenticated, and, in the case of issuance of Additional Se-
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curities pursuant to Section 2.15 after August 24, 1999, shall certify that such
issuance is not prohibited by Section 4.04. The aggregate principal amount of
Securities outstanding at any time may not exceed $100,000,000, except as
provided in Section 2.07.
Upon receipt of a written order of the Company in the form of an
Officers' Certificate, the Trustee shall authenticate Securities in substitution
for Securities originally issued to reflect any name change of the Company.
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 has 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 where (a) Securities
may be presented or surrendered for registration of transfer or for exchange
("Registrar"), (b) Securities may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands in respect of the Securities and
this Indenture may be served. The Registrar shall keep a register (the
"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. Except as provided herein, the Company, or any Subsidiary may act
as Paying Agent, Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails 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 The Depositary Trust Company ("DTC")
to act as Depositary with respect to the Global Securities.
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 premium, if any, or interest or Liquidated Damages, if any, 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
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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, any Subsidiary 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, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal or premium, if any, or, interest or Liquidated Damages, if any, 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. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee 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.
(a) Transfer and Exchange of Global Securities. A Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Securities will be exchanged by the Company for Definitive Securities if (i) the
Company delivers to the Trustee notice from the Depositary that it is unwilling
or unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 30 days after the date of such
notice from the Depositary, (ii) the Company, at its option, determines that the
Global Securities (in whole but not in part) should be exchanged for Definitive
Securities and delivers a written notice to such effect to the Trustee or (iii)
upon request of the Trustee or Holders of a majority of the aggregate principal
amount of outstanding Securities if there shall have occurred and be continuing
a Default or Event of Default with respect to the Securities; provided that in
no event shall a Reg S Temporary Global Security be exchanged by the Company for
Definitive Securities prior to (x) the expiration of the applicable Distribution
Compliance Period and (y) the receipt by the Registrar of any certificates
identified by the Company or its counsel to be required pursuant to Rule 903 or
Rule 904 under the Securities Act. Upon the occurrence of any of the preceding
events in (i), (ii) or (iii) above, Definitive Securities shall be issued in
such names as the Depositary shall instruct the Trustee. Global Securities also
may be exchanged or replaced, in whole or in part, as provided in this Section
2.06 or in Sections 2.07 and 2.10 hereof. Every Security authenticated and
delivered in exchange for, or in lieu of, a Global Security or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Security. A
Global Security may not be exchanged for another Security other than as provided
in this Section 2.06(a). Beneficial interests in a Global Security may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Securities. The transfer and exchange of beneficial interests in the Global
Securities shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Securities shall be subject to restrictions on transfer
comparable to those set forth herein to the extent
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required by the Securities Act. Transfers of beneficial interests in the Global
Securities also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Security.
Beneficial interests in any Restricted Global Security may be transferred
to Persons who take delivery thereof in the form of a beneficial interest
in the same Restricted Global Security in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the applicable Distribution Compliance
Period, transfers of beneficial interests in a Reg S Temporary Global
Security may not be made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser). Beneficial interests in
any Unrestricted Global Security may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Security. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Securities. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar
either (A) (1) an order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be credited a beneficial
interest in another Global Security in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing information regarding
the Participant account to be credited with such increase or (B) (1) an
order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Security in an amount equal
to the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Security
shall be registered to effect the transfer or exchange referred to in (B)
(1) above; provided that in no event shall Definitive Securities be issued
upon the transfer or exchange of beneficial interests in a Reg S Temporary
Global Security prior to (x) the expiration of the applicable Distribution
Compliance Period and (y) the receipt by the Registrar of any certificates
identified (by written notice to the Registrar) by the Company or its
counsel to be required pursuant to Rule 903 and Rule 904 under the
Securities Act. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Securities. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Securities
contained in this Indenture and the Securities or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Security(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Security. A beneficial interest in any Restricted Global Security may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Security if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in a U.S. Global Security, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof; and
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(B) if the transferee will take delivery in the form of a
beneficial interest in a Reg S Temporary Global Security or a Reg S
Permanent Global Security, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Security for Beneficial Interests in the Unrestricted Global
Security. A beneficial interest in any Restricted Global Security may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Security or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Security if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to an
Exchange Offer in accordance with a Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1)
a Broker-Dealer, (2) a Person participating in the distribution of
the Series B Securities or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to a Shelf Registration
Statement in accordance with a Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the holder of
such beneficial interest in a Restricted Global Security proposes to
exchange such beneficial interest for a beneficial interest in an
Unrestricted Global Security, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item
(1)(a) thereof; or (2) if the holder of such beneficial interest in
a Restricted Global Security proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Security, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and, in each such
case set forth in this subparagraph (D), an Opinion of Counsel in
form reasonably acceptable to the Registrar and the Company which
expressly permits reliance thereon by the Company and the Registrar
to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Security has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Security cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Security.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Securities.
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(i) Beneficial Interests in Restricted Global Securities to
Restricted Definitive Securities. If any holder of a beneficial interest
in a Restricted Global Security proposes to exchange such beneficial
interest for a Restricted Definitive Security or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of
a Restricted Definitive Security, then, upon receipt by the Registrar of
the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Security proposes to exchange such beneficial interest for a
Restricted Definitive Security, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Security to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and, upon receipt of an
Authentication Order pursuant to Section 2.02, the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Restricted Definitive Security in the appropriate principal amount. Any
Restricted Definitive Security issued in exchange for a beneficial
interest in a Restricted Global Security pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from the Depositary and
the Participant or Indirect Participant. The Trustee shall deliver such
Restricted Definitive Securities to the Persons in whose names
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such Securities are so registered. Any Restricted Definitive Security
issued in exchange for a beneficial interest in a Restricted Global
Security pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer
contained therein.
(ii) Beneficial Interests in Restricted Global Securities to
Unrestricted Definitive Securities. A holder of a beneficial interest in a
Restricted Global Security may exchange such beneficial interest for an
Unrestricted Definitive Security or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Security only if:
(A) such exchange or transfer is effected pursuant to an
Exchange Offer in accordance with a Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Series B Securities or (3) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) such transfer is effected pursuant to a Shelf Registration
Statement in accordance with a Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the holder of
such beneficial interest in a Restricted Global Security proposes to
exchange such beneficial interest for a Definitive Security that
does not bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit C hereto, including the certifications
in item (l)(b) thereof; or (2) if the holder of such beneficial
interest in a Restricted Global Security proposes to transfer such
beneficial interest to a Person who shall take delivery thereof in
the form of a Definitive Security that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Registrar
and the Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Beneficial Interests in Unrestricted Global Securities to
Unrestricted Definitive Securities. If any holder of a beneficial interest
in an Unrestricted Global Security proposes to exchange such beneficial
interest for an Unrestricted Definitive Security or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of
an Unrestricted Definitive Security, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall
cause the aggregate principal amount of the applicable Unrestricted Global
Security to be reduced accordingly pursuant to Section 2.06(h) hereof, and
the Company shall execute and, upon receipt of an Authentication Order
pursuant to Section 2.02, the Trustee shall authenticate and deliver to
the Person designated in the instructions an Unrestricted Definitive
Security in the appropriate principal amount. Any Unrestricted Definitive
Security issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions
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from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Unrestricted Definitive Securities to the
Persons in whose names such Securities are so registered. Any Unrestricted
Definitive Security issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(iii) shall not bear the Private Placement Legend.
(iv) Transfer or Exchange of Reg S Temporary Global Securities.
Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial
interest in a Reg S Temporary Global Security may not be (A) exchanged for
a Definitive Security prior to (x) the expiration of the applicable
Distribution Compliance Period (unless such exchange is effected by the
Company, does not require an investment decision on the part of the
holder thereof and does not violate the provisions of Regulation S) and
(y) the receipt by the Registrar of any certificates identified by the
Company or its counsel to be required pursuant to Rule 903(c)(3)(B) under
the Securities Act or (B) transferred to a Person who takes delivery
thereof in the form of a Definitive Security prior to the events set forth
in clause (A) above or unless the transfer is pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.
(d) Transfer and Exchange of Definitive Securities for Beneficial
Interests.
(i) Restricted Definitive Securities to Beneficial Interests in
Restricted Global Securities. If any Holder of a Restricted Definitive
Security proposes to exchange such Security for a beneficial interest in a
Restricted Global Security or to transfer such Restricted Definitive
Securities to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Security, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Security
proposes to exchange such Security for a beneficial interest in a
Restricted Global Security, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Security is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof; or
(C) if such Restricted Definitive Security is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (2) thereof,
the Trustee shall cancel the Restricted Definitive Security, increase or
cause to be increased the aggregate principal amount of, in the case of
subparagraph (A) above, the appropriate Restricted Global Security, in the
case of subparagraph (B) above, the applicable U.S. Global Security and,
in the case of subparagraph (C) above, the applicable Reg S Global
Security.
(ii) Restricted Definitive Securities to Beneficial Interests in
Unrestricted Global Securities. A Holder of a Restricted Definitive
Security may exchange such Security for a beneficial interest in an
Unrestricted Global Security or transfer such Restricted Definitive
Security to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security only if:
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(A) such exchange or transfer is effected pursuant to an
Exchange Offer in accordance with a Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Series B Securities or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to a Shelf Registration
Statement in accordance with a Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the Holder of
such Restricted Definitive Securities proposes to exchange such
Securities for a beneficial interest in the Unrestricted Global
Security, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or (2)
if the Holder of such Restricted Definitive Securities proposes to
transfer such Securities to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Security, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof; and, in
each such case set forth in this subparagraph (D), an Opinion of
Counsel in form reasonably acceptable to the Registrar and the
Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Restricted
Definitive Securities so transferred or exchanged and increase or cause to
be increased the aggregate principal amount of the Unrestricted Global
Security.
(iii) Unrestricted Definitive Securities to Beneficial Interests in
Unrestricted Global Securities. A Holder of an Unrestricted Definitive
Security may exchange such Security for a beneficial interest in an
Unrestricted Global Security or transfer such Definitive Securities to a
Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Security at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Security and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Securities.
If any such exchange or transfer from a Definitive Security to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) of this Section 2.06(d) at a time when an Unrestricted Global
Security has not yet been issued, the Company shall issue and, upon
receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate one or more Unrestricted Global Securities
in an aggregate principal amount equal to the principal amount of
Definitive Securities so transferred.
(e) Transfer and Exchange of Definitive Securities for Definitive
Securities. Upon request by a Holder of Definitive Securities and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Securities. In such case, the
Company shall issue and the Trustee shall authenticate and deliver Definitive
Securities as appropriate to effect such transfer. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Securities duly endorsed or accompanied by a written
instruction of transfer in form satis-
34
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factory to the Registrar duly executed by such Holder or by its attorney, duly
authorized in writing. In addition, the requesting Holder shall provide any
additional certifications, documents and information, as applicable, required
pursuant to the following provisions of this Section 2.06(e).
(i) Restricted Definitive Securities to Restricted Definitive
Securities. Any Restricted Definitive Security may be transferred to and
registered in the name of Persons who take delivery thereof in the form of
a Restricted Definitive Security if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Securities to Unrestricted Definitive
Securities. Any Restricted Definitive Security may be exchanged by the
Holder thereof for an Unrestricted Definitive Security or transferred to a
Person or Persons who take delivery thereof in the form of an Unrestricted
Definitive Security if:
(A) such exchange or transfer is effected pursuant to an
Exchange Offer in accordance with a Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Series B Securities or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) any such transfer is effected pursuant to a Shelf
Registration Statement in accordance with a Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the Holder of
such Restricted Definitive Securities proposes to exchange such
Securities for an Unrestricted Definitive Security, a certificate
from such Holder in the form of Exhibit C hereto, including the
certifications in item (1 )(d) thereof; or (2) if the Holder of such
Restricted Definitive Securities proposes to transfer such
Securities to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Security, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof; and, in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Registrar and the Company to the effect that such
exchange or transfer is in compliance with the Securities
35
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Act and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Securities to Unrestricted Definitive
Securities. A Holder of Unrestricted Definitive Securities may transfer
such Securities to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Security. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Definitive
Securities pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of an Exchange Offer in
accordance with a Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 and, if
requested by the Holders of at least a majority in principal amount of the
outstanding Series A Securities entitled to the benefits of the applicable
Registration Rights Agreement, an Opinion of Counsel for the Company as to
certain matters discussed in this Section 2.06(f), the Trustee shall
authenticate (i) one or more Unrestricted Global Securities in an aggregate
principal amount equal to the sum of (A) the principal amount of the beneficial
interests in the Restricted Global Securities tendered for acceptance by Persons
that certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Series B
Securities and (z) they are not affiliates (as defined in Rule 144) of the
Company, and accepted for exchange in the applicable Exchange Offer and (B) the
principal amount of Definitive Securities exchanged or transferred for
beneficial interests in Unrestricted Global Securities in connection with the
applicable Exchange Offer pursuant to Section 2.06(d)(ii), and (ii) Definitive
Securities in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Securities accepted for exchange in the applicable
Exchange Offer (other than Definitive Securities described in clause (i)(B)
immediately above). Concurrently with the issuance of such Securities, the
Trustee shall cause the aggregate principal amount of the applicable Restricted
Global Securities to be reduced accordingly, and the Company shall execute and,
upon receipt of an Authentication Order pursuant to Section 2.02, the Trustee
shall authenticate and deliver to the Persons designated by the Holders of
Definitive Securities so accepted Definitive Securities in the appropriate
principal amount.
The Opinion of Counsel for the Company referenced above shall be
addressed to the Trustee and shall state that:
(i) the Series B Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of this
Indenture and delivered in exchange for Series A Securities in accordance
with this Indenture and the applicable Exchange Offer, will be entitled to
the benefits of this Indenture and will be valid and binding obligations
of the Company, enforceable in accordance with their terms except as (x)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(ii) when the Series B Securities are executed and authenticated in
accordance with the provisions of this Indenture and delivered in exchange
for Series A Securities in accordance with this Indenture and the
applicable Exchange Offer, any Guarantees thereof will be entitled to the
benefits of this Indenture and will be valid and binding obligations of
the Guarantor, enforceable in accordance with their terms except as (x)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
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(g) Legends. The following legends shall appear on the face of all
Global Securities and Definitive Securities issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Security and each Definitive Security (and all Securities issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB")
OR (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO FEDDERS NORTH AMERICA, INC. OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO FEDDERS NORTH AMERICA, INC. OR
SUBJECT TO SUCH OTHER PROVISIONS SET FORTH IN THE INDENTURE RELATED
TO THIS NOTE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING."
(B) Notwithstanding the foregoing, (x) any Global Security or
Definitive Security issued pursuant to subparagraph (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of
this Section 2.06 and (y) Additional Securities issued in the form
of Series B Securities
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in a transaction registered under the Securities Act (and all
Securities issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(ii) Global Security Legend. To the extent required by the
Depositary, each Global Security shall bear a legend in substantially the
following form:
"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
2.06 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Reg S Temporary Global Security Legend. To the extent required
by the Depositary, each Reg S Temporary Global Security shall bear a
legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE,
AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH
PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS
NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST
FROM ACCRUING ON THIS NOTE."
(h) Cancellation and/or Adjustment of Global Securities. At such
time as all beneficial interests in a particular Global Security have been
exchanged for Definitive Securities or a particular Global Security has been
redeemed, repurchased or cancelled in whole and not in part, each such Global
Security shall be returned to or retained and cancelled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for or transferred to
a Person who will take delivery thereof in the form of a beneficial interest in
another Global Security or for Definitive Securities, the principal amount of
Securities represented by such Global Security shall be reduced accordingly and
an endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
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(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Securities and
Definitive Securities upon receipt of an Authentication Order.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Security or to a Holder of a Definitive Security for
any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.05 and 4.14 hereof).
(iii) The Registrar shall not be required to register the transfer
of or exchange any Security selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
(iv) All Global Securities and Definitive Securities issued upon any
registration of transfer or exchange of Global Securities or Definitive
Securities shall be the valid obligations of the Company, evidencing the
same indebtedness, and entitled to the same benefits under this Indenture,
as the Global Securities or Definitive Securities surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Securities during a period beginning at the
opening of business 15 days before the day of any selection of Securities
for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part or
(C) to register the transfer of or to exchange a Security between an
Interest Record Date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Security, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Security is registered as the absolute owner
of such Security for the purpose of receiving payment of principal of and
interest on such Securities and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Securities and
Definitive Securities in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Notwithstanding anything herein to the contrary, as to any
certifications and certificates delivered to the Trustee or the Registrar
pursuant to this Section 2.06, the Trustee's duties and the Registrar's duties,
as applicable, shall be limited to confirming that any such certifications and
certificates delivered to it are in the form of Exhibits B, C and D attached
hereto. Neither the Trustee nor the Registrar shall be responsible for
confirming the truth or accuracy of representations made in any such
certifications or certificates; and
39
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notwithstanding anything contained in this Indenture to the contrary, neither
the Trustee nor the Registrar shall be responsible or liable for determining
compliance with applicable federal or state securities laws (including, without
limitation, the Securities Act, or any particular rule or regulation promulgated
thereunder); provided, however, that if a specified transfer certificate or
opinion is required by the express terms of this Section 2.06 to be delivered to
the Trustee or Registrar prior to the registration of a proposed transfer, the
Trustee or Registrar, as applicable, shall be under a duty to receive such
certificate or opinion of counsel prior to registration of such transfer and to
examine the same to determine whether it conforms on its face to the
requirements hereof (and the Trustee or Registrar, as the case may be, shall
promptly notify the party delivering the same if it determines that such
certificate or opinion does not conform to such requirements).
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Company's and the Trustee's requirements for
replacement of Securities are met. 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 and evidence to their satisfaction of
the apparent loss, destruction or theft of such Security. The Company may charge
such Holder for its reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those 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 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, 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, the 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.
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The Trustee may require an Officers' Certificate listing Securities
owned by the Company, the Guarantor or, to the knowledge of the Officers signing
such Officers' Certificate, their respective Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate upon receipt of a Company Order 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 all Securities surrendered for transfer, exchange,
payment or cancellation and deliver to the Company such canceled Securities for
disposal. 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 the 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.
If the Company defaults in a payment of principal of or interest on
the Securities, it shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the rate per annum borne by the Securities, to the
extent lawful.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number, and
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment
Date, Redemption Date 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 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 or Final Maturity Date, as the case may be.
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SECTION 2.15. Issuance of Additional Securities.
The Company shall be entitled to issue Additional Securities under
this indenture which shall have identical terms as the Securities issued on
August 24, 1999, other than with respect to the date of issuance, issue price
and amount of interest payable on the first payment date applicable thereto
(and, if such Additional Securities shall be issued in the form of Series B
Securities, other than with respect to transfer restrictions); provided, that
such issuance is not prohibited by Section 4.04.
With respect to any Additional Securities, the Company shall set
forth in a resolution of the Board of Directors and in an Officers' Certificate,
a copy of each of which shall be delivered to the Trustee, the following
information:
(A) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture;
(B) the issue price, the issue date and the CUSIP number of such
Additional Securities and the amount of interest payable on the first
payment date applicable thereto; provided, however, that no Additional
Securities may be issued at a price that would cause such Additional
Securities to have "original issue discount" within the meaning of Section
1273 of the Internal Revenue Code of 1986, as amended, different than the
"original issue discount" applicable to the Series A Securities issued on
August 24, 1999; and
(C) whether such Additional Securities shall be transfer restricted
securities and issued in the form of Series A Securities or shall be
registered securities issued in the form of Series B Securities.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 6 or
7 of the Securities at the applicable redemption price set forth therein, it
shall notify the Trustee in writing of the Redemption Date and the principal
amount of Securities to be redeemed. The Company shall give such notice to the
Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be agreed to by the Trustee in writing), together with an Officers'
Certificate stating that such redemption will comply with the conditions
contained herein.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 6 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or by any other method as the Trustee shall deem fair and appropriate. Selection
of the Securities to be redeemed pursuant to paragraph 7 of the Securities shall
be made
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by the Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of the Depositary) based on the aggregate
principal amount of Securities held by each Holder. The Trustee shall make the
selection from the Securities then outstanding, subject to redemption and not
previously called for redemption.
The Trustee may select for redemption pursuant to paragraph 6 or 7
of the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. 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
at such Holder's registered address whose Securities are to be redeemed.
Each notice of redemption shall identify the Securities to be
redeemed (including, but subject to the provisions of Section 2.13, the CUSIP
number thereon) and shall state:
(i) the Redemption Date;
(ii) the redemption price;
(iii) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(iv) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(v) 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
(vi) 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.
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 specified in such notice. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest thereon,
if any, to
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the Redemption Date, but interest installments whose maturity is on or prior
to such Redemption Date shall be payable to the Holders of record at the
close of business on the relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the Redemption Date, the Company
shall deposit with the Paying Agent (or if the Company is its own 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 and Liquidated
Damages, if any, on all Securities to be redeemed on that date other than
Securities or portions thereof called for redemption on that date which have
been delivered by the Company to the Trustee for cancellation.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure of
the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if any,
thereon shall, until paid or duly provided for, bear interest as provided in
Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate 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 premium, if any, and
interest and Liquidated Damages, if any, on the Securities in the manner
provided in the Securities and the Registration Rights Agreement. An installment
of principal, premium, interest or Liquidated Damages shall be considered paid
on the date due if the Trustee or Paying Agent (other than the Company, a
Subsidiary or an Affiliate of the Company) 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 Trustee shall not be responsible for knowing the amount of
Liquidated Damages due unless the Trustee shall have been notified by the
Company thereof.
The Company shall pay interest on overdue principal at the same rate
per annum borne by the Securities. The Company shall pay interest on overdue
installments of interest at the same rate per annum borne by the Securities, to
the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee, Registrar
or co-registrar) where Securities may be surrendered for payment or for
registration of transfer or exchange and where notices and demands to or upon
the
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Company in respect of the Securities and this Indenture may be presented (the
"New York Presenting Agent"). The Company may also from time to time designate
one or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of 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
13.02 hereof. The Company hereby initially designates State Street Bank and
Trust Company, N.A., at its address at 61 Broadway, 15th Floor, New York, New
York 10006, as its office or agency in The Borough of Manhattan, The City of New
York, for such purposes.
SECTION 4.03. Transactions with Affiliates.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, make any loan, advance,
guarantee or capital contribution to, or for the benefit of, or sell, lease,
transfer or dispose of any properties or assets to, or for the benefit of, or
purchase or lease any property or assets from, or enter into or amend any
contract, agreement or understanding with, or for the benefit of, an Affiliate
(each such transaction or series of related transactions that are part of a
common plan are referred to as an "Affiliate Transaction"), except in good faith
and on terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction on an arm's length basis from an unrelated person.
(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Affiliate Transaction involving aggregate payments
or other transfers by the Company and its Restricted Subsidiaries in excess of
$3,500,000 (including cash and non-cash payments and benefits valued at their
fair market value by the Board of Directors in good faith) unless the Company
delivers to the Trustee:
(i) a resolution of the Board of Directors stating that the Board of
Directors (including a majority of the disinterested directors, if any)
has, in good faith, determined that such Affiliate Transaction complies
with the provisions of the Indenture, and
(ii) (A) with respect to any Affiliate Transaction involving the
incurrence of Indebtedness, a written opinion of a nationally recognized
investment banking or accounting firm experienced in the review of similar
types of transactions, (B) with respect to any Affiliate Transaction
involving the transfer of real property, fixed assets or equipment, either
directly or by a transfer of 50% or more of the Capital Stock of a
Restricted Subsidiary which holds any such real property, fixed assets or
equipment, a written appraisal from a nationally recognized appraiser,
experienced in the review of similar types of transactions or (C) with
respect to any Affiliate Transaction not otherwise described in (A) and
(B) above, a written certification from a nationally recognized
professional or firm experienced in evaluating similar types of
transactions, in each case, stating that the terms of such transaction are
fair to the Company or such Restricted Subsidiary, as the case may be,
from a financial point of view.
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.03,
this Section 4.03 shall not apply to: (i) transactions between the Company and
any wholly owned Restricted Subsidiary or between wholly owned Restricted
Subsidiaries; (ii) transactions permitted by Section 4.06; (iii) compensation
paid to
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officers, employees or consultants of the Company or any subsidiary as
determined in good faith by the Board of Directors or executives; or (iv)
transactions between the Company and the Guarantor or between the Company and a
Subsidiary of the Guarantor in the ordinary course of business on terms
substantially consistent with past practice.
SECTION 4.04. Limitation on Incurrence of Indebtedness.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, issue any Indebtedness (other
than the Indebtedness represented by the Series A Securities issued on August
24, 1999 or the Series B Securities issued pursuant to an Exchange Offer in
exchange therefor, in an aggregate principal amount not to exceed $50,000,000)
unless the Company's Cash Flow Coverage Ratio for its four full fiscal quarters
next preceding the date such additional Indebtedness is issued would have been
at least 2.0 to 1 on or prior to August 31, 1999 and at least 2.25 to 1
thereafter determined on a Pro Forma Basis (including, for this purpose, any
other Indebtedness incurred since the end of the applicable four-quarter period)
as if such additional Indebtedness and any other Indebtedness issued since the
end of such four-quarter period had been issued at the beginning of such
four-quarter period.
(b) The foregoing limitations will not apply to the issuance of:
(i) Indebtedness of the Company and/or its Restricted Subsidiaries
under the Credit Agreement as measured on such date of issuance in an
aggregate principal amount outstanding on any such date of issuance not
exceeding the greater of (x) the sum of (A) 75% of the book value of the
accounts receivable of the Company and its Restricted Subsidiaries on a
consolidated basis and (B) 60% of the book value of the inventory of the
Company and its Restricted Subsidiaries on a consolidated basis or (y)
$50,000,000;
(ii) Indebtedness of the Company and its Restricted Subsidiaries in
connection with capital leases, purchase money obligations, capital
expenditures or similar financing transactions relating to their
properties, assets and rights up to $10,000,000 in aggregate principal
amount;
(iii) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount of up to $10,000,000; and
(iv) Other Permitted Indebtedness.
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.04, no
Restricted Subsidiary shall under any circumstances issue a guarantee of any
Indebtedness of the Company except for guarantees issued by Restricted
Subsidiaries pursuant to Section 4.20; provided, however, that the foregoing
will not limit or restrict guarantees issued by Restricted Subsidiaries in
respect of Indebtedness of other Restricted Subsidiaries.
SECTION 4.05. Limitation on Certain Asset Sales.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, consummate an Asset Sale
(including the sale of any of the Capital Stock of any Restricted Subsidiary)
providing for Net Proceeds in excess of $5,000,000 unless the Net Proceeds from
such Asset Sale are applied (in any manner otherwise permitted by this
Indenture) to one or more of the following purposes in such combination as the
Company shall elect: (i) an investment in another asset or business in the same
line of
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business as, or a line of business similar to that of, the line of business of
the Company and its Restricted Subsidiaries at the time of the Asset Sale;
provided that such investment occurs on or prior to the 365th day following the
date of such Asset Sale (the "Asset Sale Disposition Date"), (ii) to reimburse
the Company or its Subsidiaries for expenditures made, and costs incurred, to
repair, rebuild, replace or restore property lost, damaged or taken to the
extent that the Net Proceeds consist of insurance proceeds received on account
of such loss, damage or taking, (iii) the purchase, redemption or other
prepayment or repayment of outstanding Senior Indebtedness or Indebtedness of
the Company's Restricted Subsidiaries or the 1997 Notes on or prior to the 365th
day following the Asset Sale Disposition Date or (iv) an Asset Sale Offer
expiring on or prior to the Asset Sale Purchase Date. The Company shall not, and
shall not cause or permit any Restricted Subsidiary to, directly or indirectly,
consummate an Asset Sale unless at least 70% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash,
cash equivalents or marketable securities; provided that, solely for purposes of
calculating such 70% of the consideration, the amount of (x) any liabilities (as
shown on the Company's or such Restricted Subsidiary's most recent balance sheet
or in the notes thereto, excluding contingent liabilities and trade payables) of
the Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Securities) that are assumed by the transferee
of any such assets and (y) any notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
promptly, but in no event more than 30 days after receipt, converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash and cash equivalents for purposes of this
provision. Any Net Proceeds from any Asset Sale that are not applied or invested
as provided in the first sentence of this paragraph shall constitute "Excess
Proceeds."
(b) When the aggregate amount of Excess Proceeds exceeds $6,500,000
(such date being an "Asset Sale Trigger Date"), the Company shall make an Offer
(an "Asset Sale Offer") to all holders of Securities to purchase the maximum
principal amount of the Securities then outstanding that may be purchased out of
Excess Proceeds, at an offer price in cash in an amount equal to 100% of
principal amount thereof plus any accrued and unpaid interest and liquidated
damages, if any, to the date (the "Asset Sale Purchase Date") the Securities
tendered are purchased and paid for in accordance with this Section 4.05. Within
30 days following any Asset Sale Trigger Date, the Company shall mail a notice
to each holder of Securities at such holder's registered address stating:
(i) that an Asset Sale Offer is being made pursuant to an Asset Sale
Trigger Date, the length of time the Asset Sale Offer shall remain open
and the maximum principal amount of Securities that will be accepted for
payment pursuant to such Asset Sale Offer;
(ii) the purchase price, the amount of accrued and unpaid interest
as of the Asset Sale Purchase Date and the Asset Sale Purchase Date (which
shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed);
(iii) that any Security or portion thereof not tendered or accepted
for payment will continue to accrue interest;
(iv) that any Security accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest on and after the Asset Sale
Purchase Date;
(v) that Holders electing to have a Security purchased pursuant to
the Asset Sale 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 a Paying Agent at the address specified in the
notice at least three Business Days before the Asset Sale Purchase Date;
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(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day before the Asset Sale Purchase Date, a facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Security the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have the Security purchased;
(vii) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Excess Proceeds, the Trustee shall
select the Securities to be purchased on a pro rata basis, by lot or by
any other method that the Trustee considers fair and appropriate and, if
the Securities are listed on any securities exchange, by a method that
complies with the requirements of such exchange; provided that, if less
than all of a holder's Securities are to be redeemed or accepted for
payment, only principal amounts of $1,000 or integral multiples thereof
may be selected for redemption or accepted for payment;
(viii) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and
(ix) a brief description of the circumstances and relevant facts
regarding such Asset Sale.
On the Asset Sale Purchase Date, the Company will, to the extent
required by this Indenture and the Asset Sale Offer, (1) accept for payment the
maximum principal amount of Securities or portions thereof tendered pursuant to
the Asset Sale Offer that can be purchased out of Excess Proceeds, (2) deposit
with the Paying Agent the aggregate purchase price of all Securities or portions
thereof accepted for payment and any accrued and unpaid interest and liquidated
damages, if any, on such Securities as of the Asset Sale Purchase Date, and (3)
deliver or cause to be delivered to the Trustee all Securities tendered pursuant
to the Asset Sale Offer. The Paying Agent shall promptly mail to each holder of
Securities or portions thereof accepted for payment an amount equal to the
purchase price for such Securities plus any accrued and unpaid interest thereon
and liquidated damages, if any, and the Trustee shall promptly authenticate and
mail (or cause to be transferred by book-entry) to such holder of Securities
accepted for payment in part a new Security equal in principal amount to any
unpurchased portion of the Securities and any Security not accepted for payment
in whole or in part shall be promptly returned to the holder thereof. The
Company will publicly announce the results of the Asset Sale Offer on or as soon
as practicable after the Asset Sale Purchase Date.
The Company will comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-l, in connection
with an Asset Sale offer. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Indenture, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Indenture by virtue
thereof.
Notwithstanding the foregoing, to the extent that any or all of the
Net Proceeds of an Asset Sale are prohibited or delayed by applicable local law
from being repatriated to the United States, the portion of such Net Proceeds so
affected will not be required to be applied as described in this Section 4.05,
but may be retained for so long, but only for so long, as the applicable local
law prohibits repatriation to the United States.
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To the extent that any Excess Proceeds remain after completion of an
Asset Sale Offer, the Company may use such remaining amount for general
corporate purposes. Upon completion of an Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
SECTION 4.06. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on account of the Company's or such Restricted Subsidiary's
Capital Stock or other Equity Interests (other than dividends or distributions
payable in Capital Stock or other Equity Interests (other than Disqualified
Stock) of the Company and dividends or distributions payable by a Restricted
Subsidiary to a Restricted Subsidiary or to the Company); (ii) purchase, redeem
or otherwise acquire or retire for value any Capital Stock or other Equity
Interests of the Company or any of its Restricted Subsidiaries; (iii) 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; or (iv)
make any Restricted Investment (all such dividends, distributions, purchases,
redemptions, acquisitions, retirements, prepayments and Restricted Investments
being collectively referred to as "Restricted Payments"), if, at the time of
such Restricted Payment:
(a) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; or
(b) immediately after such Restricted Payment and after giving pro
forma effect thereto, the Company shall not be able to issue $1.00 of
additional Indebtedness pursuant to paragraph (a) of Section 4.04; or
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made after August 18, 1997, without duplication,
exceeds the sum of (1) 50% of the aggregate Consolidated Net Income
(including, for this purpose, gains or losses from Asset Sales) of the
Company (or, in case such aggregate is a loss, 100% of such loss) for the
period (taken as one accounting period) from the beginning of the fiscal
quarter commencing March 1, 1997 and ended as of the Company's most
recently ended fiscal quarter at the time of such Restricted Payment; plus
(2) 100% of the aggregate net cash proceeds and the fair market value of
any property or securities (as determined by the Board of Directors in
good faith) received by the Company from the issue or sale of Capital
Stock or other Equity Interests of the Company subsequent to August 18,
1997 (other than (x) Capital Stock or other Equity Interests issued or
sold to a Restricted Subsidiary and (y) the issuance or sale of
Disqualified Stock); plus (3) the amount by which the principal amount of
and any accrued interest on either (A) Indebtedness of the Company or (B)
any Indebtedness of any Restricted Subsidiary is reduced on the Company's
consolidated balance sheet upon the conversion or exchange other than by a
Restricted Subsidiary subsequent to August 18, 1997 of any Indebtedness of
the Company or any Restricted Subsidiary (not held by the Company or any
Restricted Subsidiary) for Capital Stock or other Equity Interests (other
than Disqualified Stock) of the Company (less the amount of any cash, or
the fair market value of any other property or securities (as determined
by the Board of Directors in good faith), distributed by the Company or
any Restricted Subsidiary (to Persons other than the Company or any other
Restricted Subsidiary) upon such conversion or exchange); plus (4) if any
Non-Restricted Subsidiary is redesignated as a Restricted Subsidiary, the
value of the Restricted Payment that would result if such Subsidiary were
redesignated as a Non-Restricted Subsidiary at such time, as determined in
accordance with Section 4.17(b).
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Notwithstanding the foregoing, paragraphs (b)and (c) shall not
prohibit as Restricted Payments:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration, such payment would
comply with all covenants of this Indenture (including, but not limited
to, this Section 4.06); provided that payments made pursuant to this
paragraph shall count as a Restricted Payment for purposes of the
calculation in paragraph (c) of this Section 4.06;
(ii) payments to the Guarantor in an amount equal to the amount of
income tax that the Company would have paid had it filed consolidated tax
returns on a separate company basis in any given tax year; provided that
payments made pursuant to this paragraph (ii) shall not count as a
Restricted Payment for purposes of the calculation in paragraph (c) of
this Section 4.06;
(iii) cash dividends or loans from the Company to the Guarantor
pursuant to the Services Agreement but in no event exceeding 4% of the
revenues of the Company and its Restricted Subsidiaries for the
immediately preceding four fiscal quarters; provided, that payments made
pursuant to this paragraph (iii) shall not count as a Restricted Payment
for purposes of the calculation paragraph (c) of this Section 4.06;
(iv) the redemption, repurchase, retirement or other acquisition of
any Capital Stock or other Equity Interests of the Company or any
Restricted Subsidiary in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Company)
of other Capital Stock or other Equity Interests of the Company (other
than any Disqualified Stock) or the redemption, repurchase, retirement or
other acquisition of any Capital Stock or other Equity Interests of any
Restricted Subsidiary in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to the Company or a Subsidiary
of the Company) of other Capital Stock or other Equity Interests of such
Restricted Subsidiary; provided that, in each case, any net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition, and any Net Income resulting therefrom, shall be excluded
from paragraph (c) of this Section 4.06;
(v) Restricted Investments made or received in connection with the
sale, transfer or disposition of any business, properties or assets of the
Company or any Restricted Subsidiary; provided that, if such sale,
transfer or disposition constitutes an Asset Sale, the Company complies
with the provisions of the Section 4.05, and such Restricted Investments
shall not count as a Restricted Payment for purposes of the calculation in
paragraph (c) of this Section 4.06;
(vi) the payment of a dividend to the Guarantor in order to allow
the Guarantor to pay its regular quarterly dividend in respect of the
Guarantor's Convertible Preferred Stock, Common Stock, Class A Stock and
Class B Stock; provided that payments made pursuant to this paragraph (vi)
shall count as a Restricted Payment for purposes of the calculation in
paragraph (c) of this Section 4.06; and
(vii) $3,000,000; provided that payments made pursuant to this
paragraph (vii) shall count as a Restricted Payment for purposes of the
calculation in paragraph (c) of this Section 4.06.
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SECTION 4.07. Corporate Existence.
Subject to Article Five, the Company and the Guarantor shall do or
shall cause to be done all things necessary to preserve and keep in full force
and effect their respective corporate existence and the corporate, partnership
or other existence of each Restricted Subsidiary in accordance with the
respective organizational documents of each of them (as the same may be amended
from time to time) and the rights (charter and statutory) and material
franchises of the Company, the Guarantor and the Restricted Subsidiaries;
provided, however, that the Company and the Guarantor shall not be required to
preserve any such right or franchise, or the corporate existence of any
Restricted Subsidiary, if the Board of Directors or the board of directors of
the Guarantor shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company, the Guarantor and the
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.
SECTION 4.08. Payment of Taxes and Other Claims.
The Company and the Guarantor 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,
the Guarantor or any Restricted Subsidiary or upon the income, profits or
property of the Company, the Guarantor 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, the Guarantor or any Restricted Subsidiary; provided, however, that
neither the Company nor the Guarantor shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made.
SECTION 4.09. Notice of Defaults.
(a) In the event that any Indebtedness of the Company, the Guarantor
or any of their Subsidiaries is declared due and payable before its maturity
because of the occurrence of any default (or any event which, with notice or
lapse of time, or both, would constitute such a default) under such
Indebtedness, the Company or the Guarantor shall promptly give written notice to
the Trustee of such declaration, the status of such default or event and what
action the Company or the Guarantor is taking or proposes to take with respect
thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company or the Guarantor shall promptly deliver an Officers' Certificate to the
Trustee specifying the Default or Event of Default.
SECTION 4.10. Maintenance of Properties and Insurance.
(a) The Company and the Guarantor shall cause all material
properties owned by or leased to either of them or any Restricted Subsidiary and
used or useful in the conduct of their business or the business of any
Restricted Subsidiary to be maintained and kept in normal condition, repair and
working order and supplied with all necessary equipment and shall cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company or the Guarantor 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, the Guarantor 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 Di-
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rectors or of the board of directors of the Guarantor or Restricted Subsidiary
concerned, or of an officer (or other agent employed by the Company, the
Guarantor or any Restricted Subsidiary) of the Company, the Guarantor or such
Restricted Subsidiary having managerial responsibility for any such property,
desirable in the conduct of the business of the Company, the Guarantor or any
Restricted Subsidiary, and if such discontinuance or disposal is not adverse in
any material respect to the Holders.
(b) The Company and the Guarantor 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 are customarily carried by
similar businesses of similar size, including property and casualty loss, and
workers' compensation insurance.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 90 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
year. If they do know of such a Default or Event of Default, the certificate
shall describe all such Defaults or Events of Default, their status and the
action the Company is taking or proposes to take with respect thereto.
SECTION 4.12. Provision of Financial Information.
For so long as the Securities are outstanding, whether or not the
Guarantor or any successor thereto is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Guarantor shall submit for filing
with the Commission the annual reports, quarterly reports and other documents
relating to the Guarantor and its Subsidiaries that the Guarantor would have
been required to file with the Commission pursuant to Section 13 or 15(d) if the
Guarantor were subject to such reporting requirements. The Guarantor will also
provide to all holders of Securities and file with the Trustee copies of such
annual reports, quarterly reports and other documents required to be furnished
to stockholders generally under the Exchange Act.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of the Trustee of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
The Company and the Guarantor covenants (to the extent that they may
lawfully do so) that they 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
performance of this Indenture; and (to the extent that they may lawfully do so)
each of the Company and the Guarantor hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
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SECTION 4.14. Change of Control.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Trigger Date"), the Company shall notify
the Holders of the Securities of such occurrence in the manner prescribed by
this Indenture and shall, within 30 days after the Change of Control Trigger
Date, make an offer (the "Change of Control Offer") to purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date (the "Change of Control Purchase Date") the
Securities tendered are purchased and paid for in accordance with this Section
4.14. The Company shall furnish to the Trustee, at least 14 days before notice
of a Change of Control Offer is mailed to all holders of Securities, notice that
the Change of Control Offer is being made. Within 30 days following any Change
of Control Trigger Date, the Company shall mail a notice to each Holder of
Securities at such Holder's registered address stating:
(i) that a Change of Control Offer is being made pursuant to a
Change of Control Trigger Date, the length of time the Change of Control
Offer shall remain open and that all Securities tendered for payment will
be accepted for payment, and otherwise subject to the terms and conditions
set forth therein;
(ii) the purchase price, the amount of accrued and unpaid interest
as of the Change of Control Purchase Date, and the Change of Control
Purchase Date (which shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed);
(iii) that any Security not tendered will continue to accrue
interest;
(iv) that any Security accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest on and after the Change of
Control Purchase Date;
(v) that Holders accepting the Change of Control Offer will be
required to surrender the Securities to the Paying Agent specified in the
notice prior to the close of business on the third Business Day preceding
the Change of Control Purchase Date;
(vi) that Holders will be entitled to withdraw their acceptance if
the Paying Agent receives, not later than the close of business on the
third Business Day preceding the Change of Control Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Securities delivered for purchase and a statement
that such Holder is withdrawing his election to have such Securities
purchased;
(vii) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered;
(viii) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(ix) the name and address of the Paying Agent.
On the Change of Control Purchase Date, the Company will, to the
extent required by this Indenture and the Change of Control Offer, (1) accept
for payment all Securities or portions thereof (subject to the requirement that
any portion of a Security tendered must be tendered in any integral multiple
$1,000
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principal amount) tendered pursuant to the Change of Control Offer; (2) deposit
with the Paying Agent the aggregate purchase price of all Securities or portions
thereof accepted for payment and any accrued and unpaid interest and Liquidated
Damages, if any, on such Securities as of the Change of Control Purchase Date,
and (3) deliver or cause to be delivered to the Trustee all Securities tendered
pursuant to the Change of Control Offer. The Paying Agent shall promptly mail to
each holder of Securities or portions thereof accepted for payment an amount
equal to the purchase price for such Securities plus any accrued and unpaid
interest and Liquidated Damages, if any, thereon, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book-entry) to such holder
of Securities accepted for payment in part a new Security equal in principal
amount to any unpurchased portion of the Securities and any Security not
accepted for payment in whole or in part shall be promptly returned to the
holder thereof. The Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date.
The Company will comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Indenture, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Indenture by
virtue thereof.
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.
The Company shall not, directly or indirectly, incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Securities and expressly rank subordinate in right of payment to any
Senior Indebtedness.
SECTION 4.16. Limitations on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective, any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock or any other interest or participation in, or measured by, its
profits, owned by the Company or any Restricted Subsidiary, or pay any
Indebtedness owed to, the Company or any Restricted Subsidiary, (b) make loans
or advances to the Company, or (c) transfer any of its properties or assets to
the Company, except for such encumbrances or restrictions existing under or by
reason of:
(i) applicable law;
(ii) Indebtedness permitted (A) under paragraph (a) of Section 4.04,
(B) under clauses (i) or (iii) of paragraph (b) of Section 4.04 or clauses
(i), (v), (vi) or (viii) of the definition of Other Permitted
Indebtedness, or (C) by agreements and transactions permitted under
Section 4.06;
(iii) customary provisions restricting subletting or assignment of
any lease or license of the Company or any Restricted Subsidiary;
(iv) any instrument governing Indebtedness or any other encumbrance
or restriction of a Person acquired by the Company or any Restricted
Subsidiary at the time of such acquisition, which encumbrance or
restriction is not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or assets of the
Person, so acquired;
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(v) the Credit Agreement;
(vi) any Refinancing Indebtedness permitted under Section 4.04 or
clauses (i), (v) or (viii) of the definition of Other Permitted
Indebtedness; provided that the encumbrances and restrictions created in
connection with such Refinancing Indebtedness are no more restrictive in
any material respect with regard to the interests of the Holders of
Securities than the encumbrances and restrictions in the refinanced
Indebtedness;
(vii) the terms of purchase money obligations, but only to the
extent such purchase money obligations restrict or prohibit the transfer
of the property so acquired; or
(viii) the 1997 Notes.
Nothing contained in this Section 4.16 shall prevent the Company
from entering into any agreement or instrument providing for the incurrence of
Permitted Liens or restricting the sale or other disposition of property or
assets of the Company or any of its Restricted Subsidiaries that are subject to
Permitted Liens.
SECTION 4.17. Designation of Restricted and Non-Restricted Subsidiaries.
(a) As of the date of this Indenture, all Subsidiaries of the
Company shall be Restricted Subsidiaries. Subject to the exceptions described
below, from and after August 18, 1997, the Company may designate any existing or
newly formed or acquired Subsidiary as a Non-Restricted Subsidiary; provided
that either (i) the Subsidiary to be so designated has total assets of
$1,000,000 or less or (ii) immediately before and after giving effect to such
designation: (I) the Company could incur $1.00 of additional Indebtedness
pursuant to paragraph (a) of Section 4.04 determined on a Pro Forma Basis; (II)
no Default or Event of Default shall have occurred and be continuing; (III) all
Investments made by the Company or by a Restricted Subsidiary of the Company in
such Restricted Subsidiary which is being designated a Non-Restricted Subsidiary
prior to or on the date such Restricted Subsidiary is being designated a
Non-Restricted Subsidiary shall have been permitted pursuant to Section 4.06 as
if all of such Restricted Payments had been made on the day such Restricted
Subsidiary is designated a Non-Restricted Subsidiary (to the extent not
previously included as a Restricted Payment) in the amount of the greater of (A)
the fair market value (as determined by the Board of Directors in good faith) of
the Equity Interests of such Subsidiary held by the Company and its Restricted
Subsidiaries on such date or (B) the amount of the Investments determined in
accordance with GAAP made by the Company and any of its Restricted Subsidiaries
in such Restricted Subsidiary; and (IV) all transactions between the Subsidiary
to be so designated and its Affiliates remaining in effect are permitted
pursuant to Section 4.03.
(b) The Company may redesignate any Non-Restricted Subsidiary as a
Restricted Subsidiary. The Company may not, and may not permit any Restricted
Subsidiary to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition, the redesignation of a Non-Restricted
Subsidiary or otherwise, but not including through the creation of a new
Restricted Subsidiary) unless, immediately before and after giving effect to
such action, transaction or series of transactions, (i) the Company could incur
at least $1.00 of additional Indebtedness pursuant to paragraph (a) of Section
4.04 on a Pro Forma Basis and (ii) no Default or Event of Default shall have
occurred and be continuing.
(c) The designation of a Subsidiary as a Restricted Subsidiary or
the removal of such designation shall be made by a resolution adopted by a
majority of the Board of Directors stating that the Board of
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Directors has made such designation in accordance with this Indenture, and the
Company shall deliver to the Trustee such resolution together with an Officers'
Certificate certifying that the designation complies with this Indenture. Such
designation will be effective as of the date specified in the applicable
resolution which may not be before the date the applicable Officers' Certificate
is delivered to the Trustee.
SECTION 4.18. Limitation on Liens.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien (other than Permitted Liens) upon any property or asset now owned or
hereafter acquired by them, or any income or profits therefrom, or assign or
convey any right to receive income therefrom; provided, however, that in
addition to creating Permitted Liens on its properties or assets, the Company
and any of its Restricted Subsidiaries may create any Lien upon any of their
properties or assets (including, but not limited to, any Capital Stock of its
Subsidiaries) if the Securities are equally and ratably secured.
SECTION 4.19. Limitation on Sale and Leaseback Transactions.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided that the Company may enter into a sale and leaseback transaction if (i)
the Company could have incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
the Company's Cash Flow Coverage Ratio test set forth in paragraph (a) of
Section 4.04, (ii) the net cash proceeds of such sale and leaseback transaction
are at least equal to the fair market value (as determined in good faith by the
Board of Directors and set forth in an Officers' Certificate delivered to the
Trustee) of the property that is the subject of such sale and leaseback
transaction and (iii) the transfer of assets in such sale and leaseback
transaction is permitted by, and the proceeds of such transaction are applied in
compliance with, Section 4.05.
SECTION 4.20. Limitation on Guarantees of Company Indebtedness by Restricted
Subsidiaries.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to guarantee any Indebtedness of the Company other than the
Securities (the "Other Company Indebtedness") unless (A) such Restricted
Subsidiary contemporaneously executes and delivers a supplemental indenture to
this Indenture providing for a guarantee of payment of the Securities then
outstanding by such Restricted Subsidiary to the same extent as the guarantee of
payment (the "Other Company Indebtedness Guarantee") of the Other Company
Indebtedness (including waiver of subrogation, if any) and (B) if the Other
Company Indebtedness guaranteed by such Restricted Subsidiary is Senior
Indebtedness, the guarantee for the Securities shall be subordinated in right of
payment with the Other Company Indebtedness Guarantee; provided, however, that
the provisions of this Section 4.20 do not apply to guarantees by any Restricted
Subsidiary of the Company's Indebtedness under the Credit Agreement as in effect
on August 18, 1997.
Each guarantee of the Securities created by a Restricted Subsidiary
pursuant to the provisions described in the foregoing paragraph shall be in form
and substance satisfactory to the Trustee and shall provide, among other things,
that it will be automatically and unconditionally released and discharged upon
(i) any sale, exchange or transfer permitted by this Indenture of (a) all of the
Company's Capital Stock in such Restricted Subsidiary or (b) the sale of all or
substantially all of the assets of the Restricted Subsidiary and upon the
application of the Net Proceeds from such sale in accordance with the
requirements of Section 4.05 or (ii) the release or discharge of the Other
Company Indebtedness Guarantee that resulted in the creation of such guarantee
of the Securities.
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ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidation and Sale of Assets.
(a) Each of the Company and the Guarantor shall not consolidate or
merge with or into, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets to, any Person (any such consolidation, merger
or sale being a "Disposition") unless: (i) the successor corporation of such
Disposition or the corporation to which such Disposition shall have been made is
a corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the successor corporation of
such Disposition or the corporation to which such Disposition shall have been
made expressly assumes the Obligations of the Company or the Guarantor, as the
case may be, pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee, under this Indenture and the Securities; (iii)
immediately after such Disposition, no Default or Event of Default shall exist;
and (iv) the corporation formed by or surviving any such Disposition, or the
corporation to which such Disposition shall have been made, shall (I) have
Consolidated Net Worth (immediately after the Disposition but prior to giving
any pro forma effect to purchase accounting adjustments resulting from the
Disposition) equal to or greater than the Consolidated Net Worth of the Company
or the Guarantor, as the case may be, immediately preceding the Disposition, and
(II) be permitted immediately after the Disposition by the terms of the
Indenture to issue at least $1.00 of additional Indebtedness pursuant to
paragraph (a) of Section 4.04 determined on a Pro Forma Basis. The limitations
in this Indenture on the Company's ability to make a Disposition described in
this paragraph (a) do not restrict the Company's ability to sell less than all
or substantially all of its assets, such sales being governed by Section 4.05.
(b) Prior to the consummation of any proposed Disposition, the
Company shall deliver to the Trustee an Officers' Certificate to the foregoing
effect and an Opinion of Counsel stating that the proposed Disposition and such
supplemental indenture comply with this Indenture.
SECTION 5.02. Successor Corporation Substituted.
(a) In the event of any Disposition of the Company or the Guarantor
in accordance with Section 5.01, the successor corporation formed by such
consolidation or into which the Company or the Guarantor is merged or to which
such Disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or the Guarantor under this
Indenture with the same effect as if such successor corporation had been named
as the Company or the Guarantor herein, and thereafter the predecessor
corporation shall be relieved of all Obligations and covenants under this
Indenture and the Securities.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
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(i) a default for 30 days in payment of interest or Liquidated
Damages, if any, on the Securities;
(ii) a default in payment when due of principal or premium, if any,
with respect to the Securities;
(iii) failure by the Company to comply with the provisions of
Section 4.04, 4.06, 4.14 or 5.01;
(iv) the failure of the Company to comply with any of its other
agreements or covenants in, or provisions of, this Indenture or the
Securities, which failure is not cured within thirty days after notice and
demand for cure sent to the Company by the Trustee or Holders of at least
25% of principal amount of the Securities then outstanding;
(v) a default by the Company, the Guarantor or any Restricted
Subsidiary under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any Restricted
Subsidiary (or the payment of which is guaranteed by the Company or any
Restricted Subsidiary), whether such Indebtedness or guarantee now exists
or shall be created hereafter, if (I) either (A) such default results from
the failure to pay principal of or interest on any such Indebtedness
(after giving effect to any extensions thereof) or (B) as a result of such
default the maturity of such Indebtedness has been accelerated prior to
its expressed maturity, and (II) the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal or interest thereon,
or, because of the acceleration of the maturity thereof, aggregates in
excess of $2,500,000;
(vi) a failure by the Company or any Restricted Subsidiary to pay
final judgments (not covered by insurance) aggregating in excess of
$2,500,000 which judgments a court of competent jurisdiction does not
rescind, annul or stay within 45 days after their entry;
(vii) the Company, the Guarantor or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law: (I) commences a
voluntary case, (II) consents to the entry of an order for relief against
it in an involuntary case, (III) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (IV)
makes a general assignment for the benefit of its creditors, or (V)
generally is not paying its debts as they become due; and
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (I) is for relief against the Company, the
Guarantor or any Significant Subsidiary in an involuntary case, (II)
appoints a Custodian of the Company, the Guarantor or any Significant
Subsidiary or for all or substantially all of the property of the Company,
the Guarantor or any Significant Subsidiary, or (III) orders the
liquidation of the Company, the Guarantor or any Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
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In the case of any Event of Default pursuant to paragraph (i) or
(ii) above occurring by reason of any willful action (or inactions) taken (or
not taken) by or on behalf of the Company with the intention of avoiding payment
of the premium that the Company would have to pay pursuant to a redemption of
Securities as described under Article Three, an equivalent premium shall also
become and be immediately, due and payable to the extent permitted by law.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the outstanding Securities may declare the unpaid principal of and
accrued interest and Liquidated Damages, if any, to the date of acceleration on
all outstanding Securities to be due and payable immediately by notice in
writing to the Company (and to the Trustee if given by the Holders) specifying
the respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice") and, upon any such declaration, such principal amount and
accrued interest and Liquidated Damages, if any, notwithstanding anything
contained in this Indenture or the Securities to the contrary, shall become
immediately due and payable.
A Default or Event of Default under paragraph (vii) or (viii) will
result in the Securities automatically becoming due and payable without further
action or notice.
After a declaration of acceleration, but before a judgment or decree
of the money due in respect of the Securities has been obtained, the Holders of
not less than a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default (other than the nonpayment of
principal of and interest and Liquidated Damages, if any, on the Securities
which has become due solely by virtue of such acceleration) have been cured or
waived and if the rescission would not conflict with any judgment or decree. 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 and Liquidated Damages, if any, on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the declaration
of acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a continuing Default in the payment of principal of or
premium, if any, or interest or Liquidated Damages, if any, on any Security or a
Default in respect of any term or provision of this Indenture that may not be
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amended or modified without the consent of each Holder affected as provided in
Section 10.02 (and except for any failure to pay any amount owing to the
Trustee, or waiver of any covenant or other provision for the personal
protection of the Trustee, without the Trustee's consent). The Company shall
deliver to the Trustee an Officers' Certificate stating that the requisite
percentage of Holders have consented to such waiver and attaching copies of such
consents. In case of any such waiver, the Company, the Trustee and the Holders
shall be restored to their former positions and rights hereunder and under the
Securities, respectively. This paragraph of this Section 6.04 shall be in lieu
of ss. 316(a)(1)(B) of the TIA and such ss. 316(a)(1)(B) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder, 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 ss. 316(a)(l)(A) of the TIA, and such ss. 316(a)(1)(A)
of the TIA is hereby expressly excluded from this Indenture and the Securities,
as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Securityholder 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.
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A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of or interest or Liquidated Damages, if
any, on a Security, on or after the respective due dates expressed in the
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or premium, if any, or
interest or Liquidated Damages, if any, specified in Section 6.0 1(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 the Guarantor or any other
obligor on the Securities for the whole amount of principal and premium, if any,
and accrued interest remaining unpaid, and Liquidated Damages, if any, 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 Securityholders
allowed in any judicial proceedings relative to the Company or the Guarantor (or
any other obligor upon the Securities), any of their respective creditors or any
of their respective property and shall be entitled and empowered to collect and
receive any monies or other 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 Securityholder 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 Securityholders, 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 Securityholder
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 Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, subject to the proisions of Articles Eight and Twelve, 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, premium, if any, or Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind,
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according to the amounts due and payable in the Securities for principal
and interest, respectively; and
Third: to the Company or, to the extent the Trustee collects any
amount from the Guarantor, to the Guarantor.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders 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 of or interest or premium or
Liquidated Damages, if any, 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 his 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:
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(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
(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
Officers Certificate or Opinion of Counsel.
(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 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.
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(f) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
request or direction of the Guarantor mentioned herein shall be
sufficiently evidenced if signed by an officer of the Guarantor.
(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 Securityholders pursuant to this Indenture, unless
such Securityholders 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, security, 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 or the Guarantor, 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.
(j) Permissive rights or powers available to the Trustee hereunder
shall not be assumed to be mandatory duties or obligations.
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 or the Guarantor 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.
The Company shall deliver to the Trustee annually a statement
regarding compliance with this Indenture and, upon an Officer of the Company
becoming aware of any Default or Event of Default, a statement specifying such
Default or Event of Default. If a Default or an Event of Default occurs and is
continuing and the Trustee knows of such Default or Event of Default, the
Trustee shall mail to each Securityholder notice of the Default or Event of
Default within 90 days after the occurrence thereof. Except in the case
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of a Default or an Event of Default in payment of principal of or premium, if
any, or interest or Liquidated Damages, if any, on any Security or a Default or
Event of Default in complying with Section 5.01 hereof, 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 Securityholders.
This Section 7.05 shall be in lieu of the proviso to ss 315(b) of the TIA and
such proviso to ss 315(b) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA ss 313(a), within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Securityholder a report dated as of such May 15 that complies
with TIA ss 313(a). The Trustee also shall comply with TIA ss 313(b), (c) and
(d).
A copy of each such report at the time of its mailing to
Securityholders shall be filed with the Commission and each stock exchange, if
any, on which the Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company and the Guarantor jointly and severally 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 and the Guarantor 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 and the Guarantor jointly and severally 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 or the Guarantor
of their respective obligations hereunder. The Company and the Guarantor shall
defend the claim and the Trustee shall cooperate in the defense (and may employ
its own counsel) at the Company's and the Guarantor's expense; provided,
however, that the Company's and the Guarantor'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 and the Guarantor need not pay for any settlement made
without their written consent, which consent shall not be unreasonably withheld.
The Company and the Guarantor need not reim-
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burse any expense or indemnify against any loss or liability incurred by the
Trustee as a result of the violation of this Indenture by the Trustee.
To secure the Company's and the Guarantor'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 premium,
if any, or interest or Liquidated Damages, if any, on particular Securities or
the purchase price or redemption price of any Securities to be purchased
pursuant to an Asset Sale Offer or Change of Control Offer or redeemed.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01 (vii) or (viii) 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 and the Guarantor'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 and the Guarantor'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:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy Law;
(3) a custodian or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the 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 Securityholder.
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 out-
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standing 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 Securityholder
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 and the Guarantor's obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible
to act as Trustee under TIA ss.ss. 310(a)(1) and 310(a)(2). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of TIA ss. 310(b), the
Trustee and the Company shall comply with the provisions of TIA ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
3l0(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 Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
The Company and the Guarantor covenant and agree, and the Trustee
and each Holder of the Securities by his acceptance thereof likewise covenant
and agree, that all Securities shall be 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 and Liquidated Damages, if any, on the
Securities by the Company or the Guarantor 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
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in full in cash of all amounts payable under Senior Indebtedness, whether
outstanding on the date of the Indenture or thereafter incurred.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment by or on behalf of the Company of
principal of or interest and Liquidated Damages, if any, on the Securities,
whether pursuant to the terms of the Securities, upon acceleration, pursuant to
an Asset Sale Offer or Change of Control Offer or otherwise, shall be made to
the Holders of Securities and instead shall be made to the Holders of Senior
Indebtedness (except that Holders of Securities may receive payments made from
the defeasance trust described under Section 9.04) if (i) a default in the
payment of the principal of or premium, if any, or interest on Senior
Indebtedness occurs and is continuing beyond any applicable period of grace or
(ii) any other default occurs and is continuing with respect to Designated
Senior Indebtedness that permits holders of the Designated Senior Indebtedness
as to which such default relates to accelerate its maturity and the Trustee
receives a written notice (with a copy to the Company) of such other default (a
"Payment Blockage Notice") from the Company or the holders of any Designated
Senior Indebtedness until all Obligations with respect to Senior indebtedness
are paid in full; payments on the Securities shall be resumed (a) in the case of
a payment default, upon the date on which such default is cured or waived and
(b) in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received by the Trustee (such period being
referred to herein as the "Payment Brokerage Period"), unless the maturity of
any Designated Senior Indebtedness has been accelerated (and written notice of
such acceleration has been received by the Trustee). No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice (it being understood that any subsequent action, or any breach of any
covenant for a period commencing after the date of receipt by the Trustee of
such Payment Blockage Notice, that, in either case, would give rise to such a
default pursuant to any provisions under which a default previously existed or
was continuing shall constitute a new default for this purpose).
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Payment Blockage Period extend beyond 179 days
from the date the Payment Blockage Notice in respect thereof was given, (y)
there shall be a period of at least 181 consecutive days in each 360-day period
when no Payment Blockage Period is in effect and (z) not more than one Payment
Blockage Period may be commenced with respect to the Securities during any
period of 360 consecutive days. No event of default that existed or was
continuing on the date of commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment Blockage
Period (to the extent the holder of Designated Senior Indebtedness, or trustee
or agent, giving notice commencing such Payment Blockage Period had knowledge of
such existing or continuing event of default) may be, or be made, the basis for
the commencement of any other Payment Blockage Period by the holder or holders
of such Designated Senior Indebtedness or the trustee or agent acting on behalf
of the holders of such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such event of default has been cured or
waived for a period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 8.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Designated Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Designated Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that, upon notice from the Trustee to the holders of Designated Senior
indebtedness that such prohibited
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payment has been made, the holders of the Designated Senior Indebtedness (or
their representative or representatives or a trustee) notify the Trustee in
writing of the amounts then due and owing on the Designated Senior Indebtedness,
if any, and only the amounts specified in such notice to the Trustee shall be
paid to the holders of Designated Senior Indebtedness.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, upon
any dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other similar proceedings, an assignment for the benefit of creditors or any
marshaling of the Company's assets, the holders of Senior Indebtedness shall be
entitled to receive payment in full in cash of all Obligations due in respect of
such Senior Indebtedness (including interest after the commencement of any
proceeding at the rate specified in the applicable Senior Indebtedness) before
the Holders of the Securities or the Trustee on behalf of such Holders shall be
entitled to receive any payment by the Company of the principal of or interest
or Liquidated Damages, if any, on the Securities, or any payment by the Company
to acquire any of the Securities for cash, property or securities, or any
distribution with respect to the Securities of any cash, property or securities.
Before any payment may be made by, or on behalf of, the Company of the principal
of or interest or Liquidated Damages, if any, on the Securities upon any such
dissolution or winding-up or 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, 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, liquidating trustee, agent or other Person making such
payment or distribution, directly to the holders of the Senior Indebtedness (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 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 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, 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 are paid in full in
cash, or payment provided for, 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 (pro rata to such holders on the basis of the
respective amounts of 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 Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
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 pur-
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poses 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 of all Senior Indebtedness, or
provision for payment, the Holders of the Securities shall be subrogated to the
rights of the holders of 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 and Liquidated Damages, if any,
on the Securities shall be paid in full in cash; and, for the purposes of such
subrogation, no payments or distributions to the holders of the 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 Eight, and no payment over pursuant to the provisions
of this Article Eight to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee on their behalf shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness. 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, 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, or provision for payment, of such
Senior Indebtedness.
SECTION 8.05. Obligations of Company Unconditional.
Nothing contained in this Article Eight or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between 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 and Liquidated Damages, if any, 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, 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 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 then due
and payable shall first be paid in full before the Holders of the Securities or
the Trustee are entitled to receive any direct or indirect payment from the
Company of principal of or interest or Liquidated Damages, if any, on the
Securities.
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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. The Trustee shall not be charged with knowledge of the existence
of any event of default with respect to any Senior Indebtedness 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 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 or Liquidated Damages, if any, 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. Nothing contained in this Section 8.06 shall limit the right of
the holders of Senior Indebtedness to recover payments as contemplated by
Section 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 (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 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 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 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
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 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, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
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With respect to the holders of Senior Indebtedness, 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 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 (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 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
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.
SECTION 8.10. Securityholders Authorize Trustee to Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on its or 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 its or his
attorney-in-fact for such purposes, including, in the event of any dissolution,
winding-up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the filing of a claim for
the unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 8.11. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of or interest
or Liquidated Damages, if any, 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 clause (i) or (ii) 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 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 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, do any one or more of the following: (a) change the manner,
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place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding or secured; (b) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (c) release any Person liable in any manner for the
collection of 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 Collateral Held in
Trust for Securityholders; Payments May Be Paid Prior to
Dissolution.
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.
Nothing contained in this Article Eight or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions described
in Section 8.02, from making payments of principal of and interest and
Liquidated Damages, if any, on the Securities, or from depositing with the
Trustee any moneys for such payments or from effecting a termination of the
Company's and the Guarantor's obligations under the Securities and this
Indenture as provided in Article Nine, or (ii) the application by the Trustee of
any moneys deposited with it for the purpose of making such payments of
principal of and interest and Liquidated Damages, if any, on the Securities, to
the Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 8.02(b) or in Section 8.06. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 8.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of the Senior Indebtedness of
the acceleration.
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Discharge of Indenture.
The Company and the Guarantor may terminate their Obligations under
the Securities, the Guarantee and this Indenture, except the obligations
referred to in the last paragraph of this Section 9.01, if there shall have been
cancelled by the Trustee or delivered to the Trustee for cancellation all
Securities theretofore authenticated and delivered (other than any Securities
that are asserted to have been destroyed, lost or stolen and that shall have
been replaced as provided in Section 2.07) and the Company has paid all sums
payable by it hereunder or deposited all required sums with the Trustee.
After such delivery the Trustee upon request shall acknowledge in
writing the discharge of the Company's and the Guarantor's Obligations under the
Securities, the Guarantee and this Indenture except for those surviving
obligations specified below.
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Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company and the Guarantor in Sections 7.07, 9.05 and 9.06
hereof shall survive.
SECTION 9.02. Legal Defeasance.
The Company may at its option, by resolution of the Board of
Directors, be discharged from its Obligations with respect to the Securities and
the Guarantor discharged from its Obligations under the Guarantee on the date
the conditions set forth in Section 9.04 below are satisfied (hereinafter, the
"Legal Defeasance Option"). For this purpose, exercise of such Legal Defeasance
Option means that the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the Securities and to have satisfied all its
other Obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company, shall,
subject to Section 9.06 hereof, execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of outstanding Securities to
receive solely from the trust funds described in Section 9.04 hereof and as more
fully set forth in such Section, payments in respect of the principal of and
premium, if any, and interest and Liquidated Damages, if any, on such Securities
when such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 2.03, 2.04 and 2.07, (C) the rights, powers, trusts,
duties, and immunities of the Trustee hereunder (including claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof) and (D) this
Article Nine. Subject to compliance with this Article Nine, the Company may
exercise its Legal Defeasance Option under this Section 9.02 with respect to the
Securities notwithstanding the prior exercise of its option under Section 9.03
below with respect to the Securities. If the Company exercises its Legal
Defeasance Option, payment of the Securities may not be accelerated because of
an Event of Default with respect thereto.
SECTION 9.03. Covenant Defeasance.
At the option of the Company, pursuant to a resolution of the Board
of Directors, the Company and the Guarantor shall be released from their
respective Obligations under Sections 4.03 through 4.06 and Sections 4.14
through 4.20, clauses (iii) and (iv) of paragraph (a) of Section 5.01, and
paragraphs (iii), (iv), (v) and (vi) of Section 6.01, with respect to the
outstanding Securities on and after the date the conditions set forth in Section
9.04 hereof are satisfied (hereinafter, "Covenant Defeasance Option"). For this
purpose, exercise of such Covenant Defeasance Option means that the Company and
the Guarantor may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section or
portion thereof, whether directly or indirectly by reason of any reference
elsewhere herein to any such specified Section or portion thereof or by reason
of any reference in any such specified Section or portion thereof to any other
provision herein or in any other document, but the remainder of this Indenture
and the Securities shall be unaffected thereby. If the Company exercises the
Covenant Defeasance Option, payment of the Securities shall not be accelerated
because of an Event of Default specified in paragraphs (iii), (iv), (v) or (vi)
of Section 6.01 or because of the Company's failure to comply with clauses (iii)
and (iv) under paragraph (a) of Section 5.01.
SECTION 9.04. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 9.02
or Section 9.03 hereof to the outstanding Securities:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with
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the provisions of this Article Nine applicable to it) as funds in trust
(the "defeasance trust") for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of the Securities, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will
provide, not later than the due date of any payment, money in an amount,
or (C) a combination thereof, sufficient, in the opinion of a
nationally-recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of and premium, if any, and
accrued interest and Liquidated Damages, if any, on the outstanding
Securities on the Final Maturity Date of such principal of or premium, if
any, or interest, and Liquidated Damages, if any, or on dates for payment
and redemption of such principal and premium, if any, and interest and
Liquidated Damages, if any, selected in accordance with the terms of this
Indenture and of the Securities;
(2) no Event of Default or Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit, or
shall have occurred and be continuing at any time during the period ending
on the 91st day after the date of such deposit or, if longer, ending on
the day following the expiration of the longest preference period under
any Bankruptcy Law applicable to the Company in respect of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period);
(3) such Legal Defeasance Option or Covenant Defeasance Option shall
not cause the Trustee to have a conflicting interest for purposes of the
TIA with respect to any securities of the Company;
(4) such Legal Defeasance Option or Covenant Defeasance Option shall
not result in a breach or violation of, or constitute default under any
other agreement, including without limitation the Credit Agreement, or
instrument to which the Company is a party or by which it is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that, as a result of such Legal Defeasance Option or
Covenant Defeasance Option, neither the trust nor the Trustee will be
required to register as an investment company under the Investment Company
Act of 1940, as amended;
(6) in the case of an election under Section 9.02 above, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling to the effect that or (ii) there has
been a change in any applicable federal income tax law with the effect
that, and such opinion shall confirm that, the Holders of the outstanding
Securities or Persons in their positions will not recognize income, gain
or loss for federal income tax purposes solely as a result of such deposit
in the defeasance trust or the exercise of the Legal Defeasance Option and
will be subject to federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such deposit
in the defeasance trust or the exercise of the Legal Defeasance Option had
not occurred;
(7) in the case of an election under Section 9.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Securities or Persons in their
positions will not recognize income, gain or loss for federal income tax
purposes solely as a result of such deposit in the defeasance trust or the
exercise of the Covenant Defeasance
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Option and will be subject to federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit in the defeasance trust or the exercise of the Covenant Defeasance
Option had not occurred;
(8) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance Option
under Section 9.02 or the Covenant Defeasance Option under Section 9.03
(as the case may be) have been complied with;
(9) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit under clause (1) was not made by the
Company with the intent of defeating, hindering, delaying or defrauding
any creditors of the Company or others; and
(10) the Company shall have paid or duly provided for payment under
terms mutually satisfactory to the Company and the Trustee all amounts
then due to the Trustee pursuant to Section 7.07 hereof.
SECTION 9.05. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 9.04 hereof in respect
of the outstanding Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal, premium, if any, accrued interest and
Liquidated Damages, if any, but such money need not be segregated from other
funds except to the extent required by law.
The Company and the Guarantor shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 9.04 hereof or the
principal, premium, if any, 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 Company
Request any money or U.S. Government Obligations held by it as provided in
Section 9.04 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 which would then
be required to be deposited to effect an equivalent Legal Defeasance Option or
Covenant Defeasance Option.
SECTION 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.01, 9.02 or 9.03 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 and the Guarantor's Obligations under this Indenture,
the Securities and the Guarantee 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 money or U.S. Government
Obligations in
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accordance with Section 9.01; provided, however, that if the Company or the
Guarantor has made any payment of principal of, premium, if any, accrued
interest or Liquidated Damages, if any, on any Securities because of the
reinstatement of their Obligations, the Company or the Guarantor, as the case
may be, shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
SECTION 9.07. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee, or if sufficient
moneys have been deposited pursuant to Section 9.01 hereof, to the Company (or,
if such moneys had been deposited by the Guarantor, to such Guarantor), and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
SECTION 9.08. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or then
held by the Company or the Guarantor in trust for the payment of the principal
of, or premium, if any, interest or Liquidated Damages, if any, on any Security
that are not applied but remain unclaimed by the Holder of such Security for two
years after the date upon which the principal of, or premium, if any, interest
or Liquidated Damages, if any, on such Security shall have respectively become
due and payable shall be repaid to the Company (or, if appropriate, the
Guarantor) upon Company Request, or if such moneys are then held by the Company
or the Guarantor in trust, such moneys shall be released from such trust; and
the Holder of such Security entitled to receive such payment shall thereafter,
as an unsecured general creditor, look only to the Company and the Guarantor for
the payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Trustee or any such Paying Agent, before being required to make any such
repayment, may, at the expense of the Company and the Guarantor, either mail to
each Securityholder affected, at the address shown in the Register, or cause to
be published once a week for two successive weeks, in a newspaper published in
the English language, customarily published each Business Day and of general
circulation in The City of New York, New York, a notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such mailing or publication, any unclaimed balance of
such moneys then remaining will be repaid to the Company or the Guarantor. After
payment to the Company or the Guarantor or the release of any money held in
trust by the Company or the Guarantor, as the case may be, Securityholders
entitled to the money must look only to the Company and the Guarantor for
payment as general creditors unless applicable abandoned property law designates
another Person.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantor, when authorized by a resolution of
the Board of Directors and the board of directors of the Guarantor, and the
Trustee may amend or supplement this Indenture or the Securities without notice
to or consent of any Securityholder:
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(i) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(ii) to provide for uncertificated Securities in addition to or in
place of Certificated Securities;
(iii) to provide for the assumption by a successor Person of the
obligations of the Company or the Guarantor to the Holders of Securities
under the Securities, this Indenture and the Registration Rights Agreement
in connection with any transaction complying with Article Five of this
Indenture;
(iv) to provide for a guarantee of payment of the Securities by any
Restricted Subsidiary pursuant to Section 4.20;
(v) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA; or
(vi) to make any change that does not materially adversely affect
the legal rights of any Holder under this Indenture;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantor, when
authorized by a resolution of the Boards of Directors and the board of directors
of the Guarantor, and the Trustee may amend or supplement this Indenture or the
Securities with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities. Subject to Section 6.07, the
Holders of a majority in principal amount of the outstanding Securities may
waive compliance by the Company or the Guarantor with any provision of this
Indenture or the Securities. However, without the consent of each Securityholder
affected, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:
(i) reduce the principal amount of any Securities whose Holders must
consent to an amendment to this Indenture or a waiver under this
Indenture;
(ii) reduce the rate on or change the interest payment time on any
Security or alter the redemption provisions with respect thereto (other
than the provisions relating to Section 4.05 and 4.14) or the price at
which the Company is required to offer to purchase the Securities;
(iii) reduce the principal of or change the fixed maturity of any
Security;
(iv) change currency of payment of the principal of or interest on
any Security;
(v) modify any provisions of Section 6.01 or 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07; and
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(vi) waive any default in the payment of the principal of, premium,
if any, or unpaid interest on, and Liquidated Damages, if any, with
respect to the Securities.
An amendment under this Section 10.02 may not make any change under
Article Eight, Article Nine, Article Eleven or Article Twelve hereof that
adversely affects in any material respect the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any representative thereof authorized to give a consent) shall have consented to
such change.
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 supplemental indenture.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(i) through (vi) 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 determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or 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
the 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.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
The Guarantor hereby irrevocably and 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 premium, if any, interest
or Liquidated Damages, if any, on the Securities will be promptly paid in full
when due, subject to any applicable grace period, whether on the Final Maturity
Date, by acceleration, call for redemption, upon a Change of Control Offer, upon
an Asset Sale Offer or otherwise, and interest on the overdue principal and
interest on any overdue interest on the Securities and expenses, indemnification
or otherwise, and all other obligations of the Company (all such obligations
guaranteed by the Guarantor being called herein the "Guaranteed Obligations"),
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. The Guarantor
hereby agrees that its obligations hereunder shall be unconditional and
continuing, 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 the Guarantor and shall (a) remain in
full force and effect until payment in full of all the Guaranteed Obligations,
(b) be binding upon the Guarantor and its successors, transferees and assigns
and (c) inure to the benefit of and be enforceable by the Trustee, the Holders
of the Securities and their successors, transferees and assigns. The Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that the Guarantee will
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not be discharged except by complete performance of the Guaranteed Obligations,
and this Guarantee. If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantor, or any Custodian, trustee,
liquidator or other similar official acting in relation to the Company or the
Guarantor, any amount paid by the Company or the Guarantor to the Trustee or
such Holder, the Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. The Guarantor further agrees that, as
between the Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the Guaranteed Obligations hereby may be
accelerated as provided in Article Six for the purpose of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations, and (y) in the event of
any acceleration of the Guaranteed obligations as provided in Article Six, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantor for the purpose of this Guarantee.
SECTION 11.02. Severability.
In case any provision of this Guarantee 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.
The Guarantor and, by its acceptance of a Security issued hereunder,
each Holder and the Trustee hereby confirm that it is the intention of all such
parties that the guarantee by the Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy
Law, 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, the Holders and the Guarantor hereby irrevocably agree that
the obligations of the Guarantor under the Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of the Guarantor, result in the obligations of the Guarantor under
the Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 11.04. Subordination of Subrogation and Other Rights.
The Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of the 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 the Guarantor shall be made before,
the payment in full in cash of all outstanding Securities in accordance with the
provisions provided therefor in this Indenture.
SECTION 11.05. Delivery of Guarantee.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in Section 11.01 on behalf of the Guarantor.
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness.
The Guarantor covenants and agrees, and the Trustee and each Holder
of the Securities by its or his acceptance thereof likewise covenants and
agrees, 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 premium, if any, interest and Liquidated
Damages, if any, 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 of all amounts payable under Guarantor Senior
Indebtedness of the Guarantor.
SECTION 12.02. No Payment on Guarantee in Certain Circumstances.
(a) No direct or indirect payment by or on behalf of the Guarantor
of principal of or premium, if any, or interest or Liquidated Damages, if any,
on the Securities, whether pursuant to the Guaranteed Obligations, whether
pursuant to the terms of the Securities, upon acceleration, pursuant to an Asset
Sale Offer or Change of Control Offer or otherwise, shall be made to the holders
of Securities and instead shall be made to the holders of Guarantor Senior
Indebtedness (except that holders of Securities may receive payments made from
the defeasance trust described under Section 9.04) if (i) a default in the
payment of the principal of or premium, if any, or interest on Guarantor Senior
Indebtedness occurs and is continuing beyond any applicable period of grace or
(ii) any other default occurs and is continuing with respect to Designated
Guarantor Senior Indebtedness that permits holders of the Designated Guarantor
Senior Indebtedness as to which such default relates to accelerate its maturity
and the Trustee receives a written notice (with a copy to the Guarantor) of such
other default (a "Guarantor Payment Blockage Notice") from the Guarantor or the
holders of any Designated Guarantor Senior Indebtedness until all Obligations
with respect to such Designated Guarantor Senior Indebtedness are paid in full;
payments on the Securities shall be resumed (a) in the case of a payment
default, upon the date on which such default is cured or waived and (b) in case
of a nonpayment default, the earlier of the date on which such nonpayment
default is cured or waived or 179 days after the date on which the applicable
Guarantor Payment Blockage Notice is received by the Trustee (such period being
referred to herein as the "Guarantor Payment Blockage Period"), unless the
maturity of any Designated Guarantor Senior Indebtedness has been accelerated
(and written notice of such acceleration has been received by the Trustee). No
nonpayment default that existed or was continuing on the date of delivery of any
Guarantor Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Guarantor Payment Blockage Notice (it being understood that any
subsequent action, or any breach of any covenant for a period commencing after
the date of receipt by the Trustee of such Guarantor Payment Blockage Notice,
that, in either case, would give rise to such a default pursuant to any
provisions under which a default previously existed or was continuing shall
constitute a new default for this purpose).
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Guarantor Payment Blockage Period extend
beyond 179 days from the date the Guarantor Payment Blockage Notice in respect
thereof was given, (y) there shall be a period of at least 181 consecutive days
in each 360-day period when no Guarantor Payment Blockage Period is in effect
and (z) not more than one Guarantor Payment Blockage Period may be commenced
with respect to the Guarantor during any period of 360 con-
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secutive days. No event of default that existed or was continuing on the date of
commencement of any other Guarantor Payment Blockage Period with respect to the
Designated Guarantor Senior Indebtedness initiating such Guarantor Payment
Blockage Period (to the extent the holder of Designated Guarantor Senior
Indebtedness, or trustee or agent, giving notice commencing such Guarantor
Payment Blockage Period had knowledge of such existing or continuing event of
default) may be, or be made, the basis for the commencement of any other
Guarantor Payment Blockage Period by the holder or holders of such Designated
Guarantor Senior Indebtedness or the trustee or agent acting on behalf of such
Designated Guarantor Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such event of default has been cured or waived for a
period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 12.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of such Designated Guarantor
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Designated Guarantor
Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that, upon notice from the Trustee to the holders
of such Designated Guarantor Senior Indebtedness that such prohibited payment
has been made, the holders of such Designated Guarantor Senior Indebtedness (or
their representative or representatives or a trustee) notify the Trustee in
writing of the amounts then due and owing on such Designated Guarantor Senior
Indebtedness, if any, and only the amounts specified in such notice to the
Trustee shall be paid to the holders of such Designated Guarantor Senior
Indebtedness.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of the
Guarantor of any kind or character, whether in cash, property or securities,
upon any dissolution or winding-up or liquidation or reorganization of the
Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other similar proceedings, the holders of Guarantor Senior
Indebtedness shall be entitled to receive payment in full in cash of all
Obligations due in respect of such Guarantor Senior Indebtedness before the
Holders of the Securities or the Trustee on behalf of such Holders shall be
entitled to receive any payment by the Guarantor of the principal of or premium,
if any, and interest or Liquidated Damages, if any, on the Securities pursuant
to the Guarantee, or any payment to acquire any of the Securities for cash,
property or securities, or any distribution with respect to the Securities of
any cash, property or securities. Before any payment may be made by, or on
behalf of, the Guarantor of the principal of or premium, if any, and interest or
Liquidated Damages, if any, on the Securities upon any such dissolution or
winding-up or 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, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of the Guarantor Senior Indebtedness (pro
rata to such holders on the basis of the respective amounts of Guarantor Senior
Indebtedness held by such holders) or their representatives or to the trustee or
trustees or agent or agents under any agreement or indenture pursuant to which
any Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all the Guarantor Senior
Indebtedness in full in cash after giving effect to any prior or concurrent
payment, distribution or provision therefor to or for the holders of 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,
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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 12.03(a) and before all Obligations in respect of the Guarantor
Senior Indebtedness are paid in full in cash, or payment provided for, 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 the Guarantor Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
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 Guarantor Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of the Guarantor Senior Indebtedness remaining unpaid until all Guarantor Senior
Indebtedness has been paid in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
Guarantor Senior Indebtedness; provided that the Trustee shall be entitled to
receive from the holders of Guarantor Senior Indebtedness written notice of the
amounts owing on the Guarantor Senior Indebtedness.
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 12.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 12.04. Subrogation.
Upon the payment in full in cash of all Guarantor Senior
Indebtedness of the Guarantor, or provision for payment, the Holders of the
Securities shall be subrogated to the rights of the holders of Guarantor Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Guarantor made on Guarantor Senior Indebtedness until the
principal of and premium, if any, and interest and Liquidated Damages, if any,
on the Securities shall be paid in full in cash; and, for the purposes of such
subrogation, no payments or distributions to the holders of 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 the Guarantor Senior
Indebtedness by Holders of the Securities or the Trustee on their behalf shall,
as between the Guarantor, its creditors other than holders of the Guarantor
Senior Indebtedness, and the Holders of the Securities, be deemed to be a
payment by the Guarantor to or on account of the 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,
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, 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, or
provision for payment, of such Guarantor Senior Indebtedness.
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SECTION 12.05. Obligations of Guarantor Unconditional.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Securities or the Guarantee is intended to or shall impair,
as between the Guarantor and the Holders of the Securities, the obligation of
the Guarantor, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of and premium, if any, or interest and Liquidated
Damages, if any, 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 Holders of the Securities and creditors
of the Guarantor other than the holders of Guarantor Senior Indebtedness, 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 the 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 the Guarantor then due and payable shall first be paid in full before the
Holders of the Securities or the Trustee are entitled to receive any direct or
indirect payment from such Guarantor of principal of or premium, if any, or
interest or Liquidated Damages, if any, on the Securities pursuant to such
Guarantor's Guarantee.
SECTION 12.06. Notice to Trustee.
The Company and the Guarantor shall give prompt written notice to
the Trustee of any fact known to the Company or the Guarantor 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. The Trustee shall
not be charged with knowledge of the existence of any event of default with
respect to any Guarantor Senior Indebtedness 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 the Guarantor, or by a holder
of Guarantor 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 that if the Trustee
shall not have received the notice provided for in this Section 12.06 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 premium, if any, or interest or Liquidated
Damages, if any, 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. Nothing contained in this Section
12.06 shall limit the right of the holders of Guarantor Senior Indebtedness to
recover payments as contemplated by Section 12.03. 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 Guarantor Senior Indebtedness (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of 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 to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the
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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 12.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of the
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, 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
and other Indebtedness of the 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 12.08. Trustee's Relation to Guarantor Senior Indebtedness.
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 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 Guarantor Senior
Indebtedness, 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, 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 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 (except as provided in Section 12.03(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 Guarantor Senior
Indebtedness shall be entitled by virtue of this Article Twelve or otherwise.
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of the
Guarantor or Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness 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 Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the 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.
SECTION 12.10. Securityholders Authorize Trustee to Effectuate Subordination of
Guarantee.
Each Holder of Securities by its or his acceptance of such
Securities authorizes and expressly directs the trustee on its or his behalf to
take such action as may be necessary or appropriate to effectuate the
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subordination provided in this Article Twelve, and appoints the Trustee its or
his attorney-in-fact for such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the 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 such Guarantor, the filing of a claim
for the unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 12.11. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of or premium,
if any, or interest or Liquidated Damages, if any, 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 specified in clauses (i) or (ii) of Section
6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 12.13. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.09, the
holders of Guarantor Senior Indebtedness 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
Twelve or the obligations hereunder of the Holders of the Securities to the
holders of Guarantor Senior Indebtedness, 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, Guarantor Senior Indebtedness or any instrument
evidencing the same or any agreement under which Guarantor Senior Indebtedness
is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Guarantor Senior Indebtedness; and (d) exercise or refrain from exercising any
rights against the Guarantor and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) the Guarantor, except under the conditions described
in Section 12.02, from making payments of principal of and premium, if any, and
interest and Liquidated Damages, if any, on the Securities, or from depositing
with the Trustee any moneys for such payments, or (ii) the application by the
Trustee of any moneys deposited with it for the purpose of making such payments
of principal of and premium, if any, and interest and Liquidated Damages, if
any, on the Securities, to the Holders entitled thereto unless at least two
Business Days prior to the date upon which such payment becomes due and payable,
the Trustee shall have received the written notice provided for in Section
12.02(b) or in Section 12.06. The Guarantor shall give prompt written notice to
the Trustee of any dissolution, winding-up, liquidation or reorganization of the
Guarantor.
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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 this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provision of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA ss.ss. 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company or to the Guarantor:
Fedders Corporation
Westgate Corporate Center
505 Martinsville Road
P.O. Box 813
Liberty Corner, New Jersey 07938
Attention: Robert N. Edwards
Vice President and General Counsel
Facsimile: (908) 604-9317
Telephone: (908) 604-8686
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Mark C. Smith
Facsimile: (212) 735-2000
Telephone: (212) 735-3330
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if to the Trustee:
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
Attention: Corporate Trust Department
Facsimile: (617) 664-5374
Telephone: (617) 662-1726
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to
a Holder including any notice delivered in connection with TIA ss. 310(b), TIA
ss. 313(c), TIA ss. 314(a) and TIA ss. 315(b), shall be mailed to it or him at
its or his address as set forth in the Register and shall be sufficiently given
to it or him if so mailed within the time prescribed. To the extent required by
the TIA, any notice or communication shall also be mailed to any Person
described in TIA ss. 313(c).
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. 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.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or the Guarantor to
the Trustee to take or refrain from taking any action under this Indenture, the
Company or the Guarantor 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.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
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(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 Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.07. Governing Law.
The laws of the State of New York shall govern this Indenture, the
Securities and the Guarantee without regard to principles of conflicts of law.
SECTION 13.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or the Guarantor shall not have any liability for any Obligations of the
Company or the Guarantor under the Securities, the Guarantee or this Indenture
or for any claim based on, in respect of or by reason of such Obligations or
their creation. Each Securityholder by accepting a Security waives and releases
all such liability and such waiver and release is part of the consideration for
issuance of the Securities.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Guarantor in this Indenture and
the Guarantee shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in the
Guarantee 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.
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SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company, the Guarantor or a Subsidiary. 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.
FEDDERS NORTH AMERICA, INC.
By: /s/ Robert L. Laurent, Jr.
----------------------------------------
Name: Robert L. Laurent, Jr.
Title: Executive Vice President
FEDDERS CORPORATION,
as Guarantor
By: /s/ Robert L. Laurent, Jr.
----------------------------------------
Name: Robert L. Laurent, Jr.
Title: Executive Vice President
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Robert J Dunn
----------------------------------------
Name: Robert J Dunn
Title: Vice President
92
EXHIBIT A
[FORM OF FACE OF SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
2.06 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY. (1)
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF
INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE.
NOTHING IN THIS LEG-
- ----------
(1) The preceding two paragraphs should be included only for the Global
Securities.
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END SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS
NOTE.(2)
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB")
OR (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO FEDDERS NORTH AMERICA, INC. OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO FEDDERS NORTH AMERICA, INC. OR
SUBJECT TO SUCH OTHER PROVISIONS SET FORTH IN THE INDENTURE RELATED
TO THIS NOTE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.(3)
[FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, (1) THE
ISSUE PRICE IS $953.04; (2) THE AMOUNT OF THE ORIGINAL
- ----------
(2) This paragraph should be included only for the Reg S Temporary Global
Securities.
(3) This paragraph should be included only for the Transfer Restricted
Securities.
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ISSUE DISCOUNT IS $46.96; (3) THE ISSUE DATE IS AUGUST 24, 1999; AND
(4) THE YIELD TO MATURITY IS 10.25% (COMPOUNDED SEMI-ANNUALLY).](4)
- ----------
(4) This paragraph should be included in the Series A Securities issued on
August 24, 1999 and any Securities issued in substitution or exchange
therefor. A similar paragraph, with such changes as are necessary, should
be included in any Additional Securities issued after August 24, 1999 and
any Securities issued in substitution or exchange therefor.
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FEDDERS NORTH AMERICA, INC.
9 3/8% Senior Subordinated Note
due August 15, 2007, [Series A][Series B]
CUSIP No:
No.[ ] $[ ]
FEDDERS NORTH AMERICA, INC., a Delaware corporation (the "Company",
which term includes any successor corporation), for value received promises to
pay to [ ] or registered assigns, the principal sum of [ ] Dollars,
on August 15, 2007.
Interest Payment Dates: February 15 and August 15, commencing on
[ ]
Interest Record Dates: February 1 and August 1.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
FEDDERS NORTH AMERICA, INC.
By: ____________________________________
Name:
Title:
Attest: ________________________________
Name:
Title:
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 3/8% Senior Subordinated Notes due 2007,
[Series A], [Series B], described in the within-mentioned Indenture.
Dated:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:___________________________________
Authorized Signatory
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(REVERSE OF SECURITY)
FEDDERS NORTH AMERICA, INC.
9 3/8% Senior Subordinated Note
due August 15, 2007, [Series A][Series B]
1. Interest.
FEDDERS NORTH AMERICA, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. Cash interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from [ ]. The Company will pay interest semi-annually in arrears on each
Interest Payment Date, commencing [ ]. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to
time on demand at the rate borne by the Securities and on overdue installments
of interest (without regard to any applicable grace periods) to the extent
lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
premium, if any, and interest and Liquidated Damages, if any, in money of the
United States that at the time of payment is legal tender for payment of public
and private debts ("U.S. Legal Tender"). However, the Company may pay principal
and premium, if any, and interest and Liquidated Damages, if any, by wire
transfer of Federal funds (provided that the Paying Agent shall have received
wire instructions on or prior to the relevant Interest Record Date), or interest
by check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, State Street Bank and Trust Company (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company or any of its Subsidiaries
may, subject to certain exceptions, act as Registrar.
4. Indenture and Guarantees.
[This Security in one of a duly authorized issue of [Series A]
[Series B] Securities of the Company designated as its 9 3/8% Senior
Subordinated Notes due 2007.] The Company shall be entitled to issue Additional
Securities pursuant to Section 2.15 of the Indenture; provided that such
issuance is not prohibited by Section 4.04 of the Indenture. The Series A
Securities issued on August 24, 1999, any Additional Securities, and any Series
B Securities issued pursuant to the Indenture, are treated as a single class of
securities under the Indenture.
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The Company issued the Securities under an Indenture, dated as of
August 24, 1999 (the "Indenture"), among the Company, Fedders Corporation, a
Delaware corporation and the sole stockholder of the Company (the "Guarantor"),
and the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are general obligations of the Company limited in aggregate principal
amount to $100,000,000, [of which only $50,000,000 are being initially issued on
August 24, 1999 in the form of Series A Securities].
5. [Registration Rights.
Pursuant to a Registration Rights Agreement among the Company, the
Guarantor and the Initial Purchaser of the Series A Securities, the Company and
the Guarantor will be obligated to consummate an exchange offer pursuant to
which the Holder of this Security shall have the right to exchange this Security
for 9 3/8% Senior Subordinated Notes due 2007, Series B, of the Company (the
"Series B Securities"), which have been registered under the Securities Act, in
like principal amount and having identical terms as the Series A Securities. The
Holders of Series A Securities shall be entitled to receive certain additional
payments in the event such exchange offer is not consummated and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement. The Series A Securities and the Series B
Securities are together referred to herein as the "Securities."](5)
[Exchange Offer.
The Series B Securities were issued pursuant to an Exchange Offer
pursuant to which 9 3/8% Senior Subordinated Notes due 2007, Series A, of the
Company (the "Series A Securities"), in like principal amount and having
substantially identical terms as the Series B Securities, were exchanged for the
Series B Securities. The Series A Securities and the Series B Securities are
together referred to herein as the "Securities."](6)
6. Optional Redemption.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time or from time to time, on or after August 15, 2002
at the redemption prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the Redemption Date if redeemed during the twelve-month period
commencing on August 15 of the years set forth below:
- ----------
(5) This paragraph should only be included in Series A Securities.
(6) This paragraph should only be included in Series B Securities issued in
exchange for Series A Securities in an Exchange Offer.
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Year Percentage
---- ----------
2002 104.688%
2003 103.125%
2004 101.563%
2005 and thereafter 100.000%
7. Optional Redemption upon Certain Equity Issuances.
At any time, or from time to time, prior to August 15, 2000, the
Company may redeem up to 30% of the originally issued principal amount of
Securities (including the aggregate principal amount of any Additional
Securities) at a redemption price equal to 109.375% of the principal amount of
the Securities so redeemed, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the Redemption Date, with the net proceeds of one or
more Equity Offerings; provided, however, that at least 70% of the originally
issued principal amount of Securities (including the aggregate principal amount
of any Additional Securities) remains outstanding immediately after giving
effect to any such redemption and provided, further, that such redemption will
occur within 60 days of the date of the Closing of such Equity Offering.
8. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture.
9. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all outstanding Securities at a purchase price
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the Change of Control
Purchase Date.
10. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to make an
offer to purchase Securities at a purchase price equal to 100% of the aggregate
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the Asset Sale Purchase Date.
11. Subordination.
The Indebtedness evidenced by the Securities is, to the extent and
in the manner provided in the Indenture, subordinated and subject in right
payment to the prior payment in full in cash of all Senior Indebtedness as
defined in the Indenture, and this Security is issued subject to such
provisions. Each Holder of this Security, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and
A-8
100
directs the Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such
purpose.
12. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer or exchange of Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Securities or portions thereof selected for redemption, except
the unredeemed portion of any security being redeemed in part. Also, it need not
exchange or register any transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between an Interest
Record Date and the corresponding Interest Payment Date.
13. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
14. Unclaimed Funds.
If funds for the payment of principal or premium, if any, or
interest or Liquidated Damages if any, remain unclaimed for two years, the
Trustee and the Paying Agent will repay the funds to the Company at its written
request. After that, all liability of the Trustee and such Paying Agent with
respect to such funds shall cease.
15. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantor may be discharged from their
obligations under the Indenture, the Securities and the Guarantee except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guarantee, in each case upon satisfaction of certain conditions specified in the
Indenture.
16. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and the
Guarantee may be amended or supplemented with the written consent of the Holders
of at least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with an
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without notice to
or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Securities and the Guarantee to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of Certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
17. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
Restricted Payments, to incur Indebtedness, to create Liens.
A-9
101
to sell assets, to permit restrictions on dividends and other payments by
Restricted Subsidiaries to the Company, to consolidate, merge or sell all or
substantially all of its assets or to engage in transactions with Affiliates.
The limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance with
such limitations.
18. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantee except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantee unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
19. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
20. No Recourse Against Others.
No stockholder, director, officer or employee of the Company shall
have any liability for any Obligation of the Company under the Securities or the
Indenture, or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
21. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
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24. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and the Guarantee without regard to principles of conflicts of laws.
A-11
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[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Fedders Corporation (the "Guarantor") has unconditionally and
irrevocably guaranteed on a senior subordinated basis (such guarantee being
referred to herein as the "Guarantee") (i) the due and punctual payment of the
principal of and interest or premium or Liquidated Damages, if any, on the
Securities; whether on the Final Maturity Date, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise, the due and punctual payment of interest on the overdue principal and
interest, if any, on the Securities and expenses, indemnification or otherwise,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Eleven and Article Twelve of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Securities or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth and are
expressly subordinated and subject in right of payment to the prior payment in
full of all Guarantor Senior Indebtedness of the Guarantor, to the extent and in
the manner provided, in Article Eleven and Article Twelve of the Indenture, and
reference is hereby made to such Indenture for the precise terms of the
Guarantee therein made.
No director, officer, employee or stockholder, as such, of the
Guarantor shall have any liability under the Guarantee by reason of such
person's status as director, officer, employee or stockholder. Each holder of a
Security by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Guarantee Indebtedness.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
FEDDERS CORPORATION
By: _____________________________________
Name:
Title:
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ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint_________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:______________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: __________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.05 or Section 4.14 of the Indenture, check the appropriate
box:
Section 4.05 [ ]
Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state the
amount: $_____________
Dated:____________________ Your Signature:____________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
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SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITY(7)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Principal Amount Signature of
decrease in Amount of increase of this Global Security authorized officer
Principal Amount in Principal Amount following such of Trustee or Security
Date of Exchange of this Global Security of this Global Security decrease (or increase) Custodian
- ---------------- ----------------------- ----------------------- ---------------------- ---------
- ----------
(7) This should be included only if the Security is issued in global form.
A-15
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Fedders North America, Inc.
Westgate Corporate Center
505 Martinsville Road
P.O. Box 813
Liberty Corner, NJ 07938
Attention: General Counsel
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
Attention: Corporate Trust Department
Re: 9 3/8 % Senior Subordinated Notes due 2007
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of August 24,
1999 (the "Indenture"), among Fedders North America, Inc., as issuer (the
"Company"), the Guarantor party thereto and State Street Bank and Trust Company,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture. ______________, (the "Transferor") owns
and proposes to transfer the Security[s] or interest in such Security[s]
specified in Annex A hereto, in the principal amount of $___________ in such
Security[s] or interests (the "Transfer"), to ___________ (the "Transferee"), as
further specified in Annex A hereto. In connection with the Transfer, the
Transferor hereby certifies that:
CHECK ALL THAT APPLY
1. |_| Check if Transferee will take delivery of (i) a beneficial interest in
the U.S. Global Security or (ii) a Definitive Security pursuant to Rule 144A.
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Security is being transferred to a Person that
the Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Security for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the U.S. Global Security
and/or the Definitive Security and in the Indenture and the Securities Act.
2. |_| Check if Transferee will take delivery of (i) a beneficial interest in a
Reg S Global Security or (ii) a Definitive Security pursuant to Regulation S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies
B-1
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that (i) the Transfer is not being made to a person in the United States and (x)
at the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the applicable Distribution
Compliance Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser) and the
interest transferred will be held immediately thereafter through Euroclear or
Cedel. Upon consummation of the proposed transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Security
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Reg S Global Security and/or the Definitive
Security and in the Indenture and the Securities Act.
3. |_| Check and complete if Transferee will take delivery of a beneficial
interest in a Definitive Security pursuant to any provision of the Securities
Act other than Rule 144A or Regulation S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Securities and Restricted Definitive Securities and pursuant
to and in accordance with the Securities Act and any applicable blue sky
securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) |_| Such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act; or
(b) |_| Such Transfer is being effected to the Company or a subsidiary
thereof; or
(c) |_| Such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act; or
(d) |_| Such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Security or
Restricted Definitive Securities and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed
by the Transferee in a form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Securities at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached
to this certification and provided to the Company, which has confirmed
its acceptability), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the Definitive Security will
be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Definitive Securities and in the
Indenture and the Securities Act.
4. |_| Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Security or of an Unrestricted Definitive Security.
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109
(a) |_| Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained
in the indenture and any applicable blue sky securities laws of any state
of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Security will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Securities, on
Restricted Definitive Securities and in the indenture and the Securities
Act.
(b) |_| Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security
will no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Securities
on Restricted Definitive Securities and in the Indenture and the
Securities Act.
(c) |_| Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other
than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Security will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Securities or Restricted Definitive Securities and in
the Indenture.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company and the Guarantor.
_____________________________________ Dated:_______________________________
[Insert Name of Transferor]
By: _________________________________
Name:
Title:
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110
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) |_| a beneficial interest in the:
(i) |_| U.S. Global Security (CUSIP 313139AD9), or
(ii) |_| Reg S Global Security (CUSIP U31334AB8), or
(b) |_| a Restricted Definitive Security.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) |_| a beneficial interest in the:
(i) |_| U.S. Global Security (CUSIP 313139AD9), or
(ii) |_| Reg S Global Security (CUSIP U31334AB8), or
(iii) |_| Unrestricted Global Security (CUSIP 313139AE7); or
(b) |_| a Restricted Definitive Security; or
(c) |_| an Unrestricted Definitive Security,
in accordance with the terms of the Indenture.
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111
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Fedders North America, Inc.
Westgate Corporate Center
505 Martinsville Road
P.O. Box 813
Liberty Corner, NJ 07938
Attention: General Counsel
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
Attention: Corporate Trust Department
Re: 9 3/8% Senior Subordinated Notes due 2007
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of August 24,
1999 (the "Indenture"), among Fedders North America, Inc., as issuer (the
"Company"), the Guarantor party thereto and State Street Bank and Trust Company,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
_________________, (the "Owner") owns and proposes to exchange the
Security[s] or interest in such Security[s] specified herein, in the principal
amount of $____________ in such Security[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Securities or Beneficial Interests in a
Restricted Global Security for Unrestricted Definitive Securities or Beneficial
Interests in an Unrestricted Global Security
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Security to beneficial interest in an Unrestricted Global Security.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Security for a beneficial interest in an Unrestricted
Global Security in an equal principal amount, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with
the transfer restrictions applicable to the Global Securities and pursuant
to and in accordance with the United States Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv)
the beneficial interest in an Unrestricted Global Security is being
acquired in compliance with any applicable blue sky securities laws of any
State of the United States.
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112
(b) |_| Check if Exchange is from beneficial interest in a Restricted
Global Security to Unrestricted Definitive Security. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global
Security for an Unrestricted Definitive Security, the Owner hereby
certifies (i) the Definitive Security is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Securities and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Definitive Security is being acquired
in compliance with any applicable blue sky securities laws of any state of
the United States.
(c) |_| Check if Exchange is from Restricted Definitive Security to
beneficial interest in an Unrestricted Global Security. In connection with
the Owner's Exchange of a Restricted Definitive Security for a beneficial
interest in an Unrestricted Global Security the Owner hereby certifies (i)
the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with
the transfer restrictions applicable to Restricted Definitive Securities
and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in
compliance with any applicable blue sky securities laws of any state of
the United States.
(d) |_| Check if Exchange is from Restricted Definitive Security to
Unrestricted Definitive Security. In connection with the Owner's Exchange
of a Restricted Definitive Security for an Unrestricted Definitive
Security, the Owner hereby certifies (i) the Unrestricted Definitive
Security is being acquired for the Owner's own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Securities and pursuant
to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act and
(iv) the Unrestricted Definitive Security is being acquired in compliance
with any applicable blue sky securities laws of any state of the United
States.
2. Exchange of Restricted Definitive Securities or Beneficial Interests in
Restricted Global Securities for Restricted Definitive Securities or Beneficial
Interests in Restricted Global Securities
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Security to Restricted Definitive Security. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global
Security for a Restricted Definitive Security with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Security
is being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Security issued will continue to be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Security and in the
Indenture and the Securities Act.
(b) |_| Check if Exchange is from Restricted Definitive Security to
beneficial interest in a Restricted Global Security. In connection with
the Exchange of the Owner's Restricted Definitive Secu-
C-2
113
rity for a beneficial interest in a: [CHECK ONE] |_| U.S. Global Security
or |_| Reg S Global Security with an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Securities and pursuant to and in accordance with the
Securities Act, and in compliance with any applicable blue sky securities
laws of any State of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the relevant Restricted Global
Security and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Guarantor.
___________________________________
[Insert Name of Owner]
By:________________________________
Name:
Title:
Date:______________________________
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114
EXHIBIT D
FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
Fedders North America, Inc.
Westgate Corporate Center
505 Martinsville Road
P.O. Box 813
Liberty Corner, NJ 07938
Attention: General Counsel
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
Attention: Corporate Trust Department
Re: 9 3/8% Senior Subordinated Notes due 2007
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of August 24,
1999 (the "Indenture"), among Fedders North America, Inc., as issuer (the
"Company"), the Guarantor party thereto and State Street Bank and Trust Company,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
In connection with our proposed purchase of $__________ aggregate
principal amount of: (a) a beneficial interest in a Global Security, or (b) a
Definitive Security, we confirm that:
1. We understand that any subsequent transfer of the Securities or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Securities or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Securities or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) outside the United
States in accordance with Rule 903 or Rule 904 of Regulation S under the
Securities Act, (D) pursuant to the provisions of Rule 144 under the Securities
Act, (E) in accordance with another exemption from the registration requirements
of the Securities Act (and based upon an Opinion of Counsel acceptable to the
Company or subject to such other provisions set forth in the Indenture related
to the Securities) or (F) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person purchasing the
Definitive Security from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
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115
3. We understand that, on any proposed resale of the Securities or
beneficial interest therein, we will be required to furnish to you such
certifications, legal opinions and other information as you may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Securities or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
D-2
116
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
___________________________________ Dated: _________________________, ______
[Insert Name of Accredited Investor]
By:________________________________
Name:
Title:
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