Exhibit 4.1
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HDA PARTS SYSTEM, INC.
Issuer,
CITY TRUCK AND TRAILER PARTS OF ALABAMA, INC.
CITY TRUCK AND TRAILER PARTS OF ALABAMA, L.L.C.
CITY TRUCK AND TRAILER PARTS OF TENNESSEE, INC.
CITY FRICTION, INC.
Guarantors,
and
U.S. TRUST COMPANY, NATIONAL ASSOCIATION
Trustee
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INDENTURE
Dated as of July 31, 1998
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$100,000,000
12% Senior Subordinated Notes due 2005
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions............................................ 1
SECTION 1.2. Incorporation by Reference of TIA...................... 27
SECTION 1.3. Rules of Construction.................................. 27
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating........................................ 28
SECTION 2.2. Execution and Authentication........................... 29
SECTION 2.3. Registrar and Paying Agent............................. 30
SECTION 2.4. Paying Agent to Hold Assets in Trust................... 31
SECTION 2.5. Securityholder Lists................................... 31
SECTION 2.6. Transfer and Exchange.................................. 31
SECTION 2.7. Replacement Securities................................. 45
SECTION 2.8. Outstanding Securities................................. 46
SECTION 2.9. Treasury Securities.................................... 46
SECTION 2.10. Temporary Securities................................... 46
SECTION 2.11. Cancellation........................................... 47
SECTION 2.12. Defaulted Interest..................................... 47
SECTION 2.13. CUSIP Numbers.......................................... 48
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption.................................... 49
SECTION 3.2. Notices to Trustee..................................... 49
SECTION 3.3. Selection of Securities to Be Redeemed................. 50
SECTION 3.4. Notice of Redemption................................... 50
SECTION 3.5. Effect of Notice of Redemption......................... 51
SECTION 3.6. Deposit of Redemption Price............................ 52
SECTION 3.7. Securities Redeemed in Part............................ 52
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ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.................................. 52
SECTION 4.2. Maintenance of Office or Agency........................ 53
SECTION 4.3. Limitation on Restricted Payments...................... 53
SECTION 4.4. Corporate and Partnership Existence.................... 54
SECTION 4.5. Payment of Taxes and Other Claims...................... 55
SECTION 4.6. Maintenance of Properties and Insurance................ 55
SECTION 4.7. Compliance Certificate; Notice of Default.............. 56
SECTION 4.8. Reports................................................ 56
SECTION 4.9. Limitation on Status as Investment Company............. 57
SECTION 4.10. Limitation on Transactions with Affiliates............. 57
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness
and Disqualified Capital Stock........................ 57
SECTION 4.12. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries................................ 59
SECTION 4.13. Limitations on Layering Indebtedness................... 60
SECTION 4.14. Limitation on Sales of Assets and Subsidiary Stock..... 61
SECTION 4.15. Waiver of Stay, Extension or Usury Laws................ 65
SECTION 4.16. Limitation on Liens Securing Indebtedness.............. 65
SECTION 4.17. Rule 144A Information Requirement...................... 65
SECTION 4.18. Limitations on Lines of Business....................... 66
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation............ 66
SECTION 5.2. Successor Corporation Substituted...................... 66
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default...................................... 67
SECTION 6.2. Acceleration of Maturity Date; Rescission
and Annulment......................................... 69
SECTION 6.3. Collection of Indebtedness and Suits for
Enforcement by Trustee................................ 70
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SECTION 6.4. Trustee May File Proofs of Claim....................... 71
SECTION 6.5. Trustee May Enforce Claims Without
Possession of Securities.............................. 72
SECTION 6.6. Priorities............................................. 72
SECTION 6.7. Limitation on Suits.................................... 72
SECTION 6.8. Unconditional Right of Holders to Receive
Principal, Premium and Interest....................... 73
SECTION 6.9. Rights and Remedies Cumulative......................... 73
SECTION 6.10. Delay or Omission Not Waiver........................... 74
SECTION 6.11. Control by Holders..................................... 74
SECTION 6.12. Waiver of Existing or Past Default..................... 74
SECTION 6.13. Undertaking for Costs.................................. 75
SECTION 6.14. Restoration of Rights and Remedies..................... 75
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee...................................... 76
SECTION 7.2. Rights of Trustee...................................... 77
SECTION 7.3. Individual Rights of Trustee........................... 78
SECTION 7.4. Trustee's Disclaimer................................... 78
SECTION 7.5. Notice of Default...................................... 78
SECTION 7.6. Reports by Trustee to Holders.......................... 79
SECTION 7.7. Compensation and Indemnity............................. 79
SECTION 7.8. Replacement of Trustee................................. 80
SECTION 7.9. Successor Trustee by Merger, Etc....................... 81
SECTION 7.10. Eligibility; Disqualification.......................... 81
SECTION 7.11. Preferential Collection of Claims Against Company...... 81
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal
Defeasance or Covenant Defeasance..................... 82
SECTION 8.2. Legal Defeasance and Discharge......................... 83
SECTION 8.3. Covenant Defeasance.................................... 84
SECTION 8.4. Conditions to Legal or Covenant Defeasance............. 84
SECTION 8.5. Deposited Cash and U.S. Government
Obligations to be Held in Trust;
Other Miscellaneous Provisions........................ 85
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SECTION 8.6. Repayment to the Company............................... 86
SECTION 8.7. Reinstatement.......................................... 86
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders..... 87
SECTION 9.2. Amendments, Supplemental Indentures
and Waivers with Consent of Holders................... 88
SECTION 9.3. Compliance with TIA.................................... 89
SECTION 9.4. Revocation and Effect of Consents...................... 89
SECTION 9.5. Notation on or Exchange of Securities.................. 90
SECTION 9.6. Trustee to Sign Amendments, Etc........................ 90
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the
Holder Upon a Change of Control..................... 91
ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee............................................. 94
SECTION 11.2. Execution and Delivery of Guarantee................... 96
SECTION 11.3. Certain Bankruptcy Events............................. 96
SECTION 11.4. Limitation on Merger of Subsidiaries and
Release of Guarantors............................... 96
ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Debt................ 97
SECTION 12.2. No Payment on Securities in Certain Circumstances..... 97
SECTION 12.3. Securities Subordinated to Prior Payment of
All Senior Debt on Dissolution, Liquidation
or Reorganization................................... 99
SECTION 12.4. Securityholders to Be Subrogated to
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Rights of Holders of Senior Debt.................... 100
SECTION 12.5. Obligations of the Company and the
Guarantors Unconditional............................ 100
SECTION 12.6. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice..................... 101
SECTION 12.7. Application by Trustee of Assets Deposited with It.... 101
SECTION 12.8. Subordination Rights Not Impaired by Acts or
Omissions of the Company, the Guarantors or
Holders of Senior Debt.............................. 101
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities......................... 102
SECTION 12.10. Right of Trustee to Hold Senior Debt.................. 102
SECTION 12.11. Article XII Not to Prevent Events of Default.......... 103
SECTION 12.12. No Fiduciary Duty of Trustee to Holders
of Senior Debt...................................... 103
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA Controls.......................................... 103
SECTION 13.2. Notices............................................... 103
SECTION 13.3. Communications by Holders with Other Holders.......... 104
SECTION 13.4. Certificate and Opinion as to Conditions Precedent.... 105
SECTION 13.5. Statements Required in Certificate or Opinion......... 105
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar............. 105
SECTION 13.7. Legal Holidays........................................ 106
SECTION 13.8. Governing Law......................................... 106
SECTION 13.9. No Adverse Interpretation of Other Agreements......... 106
SECTION 13.10. No Recourse Against Others........................... 106
SECTION 13.11. Successors........................................... 106
SECTION 13.12. Duplicate Originals.................................. 106
SECTION 13.13. Severability......................................... 107
SECTION 13.14. Table of Contents, Headings, Etc..................... 107
SECTION 13.15. Qualification of Indenture........................... 107
SECTION 13.16. Registration Rights.................................. 107
EXHIBITS
EXHIBIT A FORM OF NOTE AND GUARANTEE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
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EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
EXHIBIT E FORM OF SUPPLEMENTAL INDENTURE EXHIBIT A
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1)............................................. 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 7.10
(b)................................................ 7.8;
7.10;
13.2
(c)................................................ N.A.
311(a)................................................ 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)................................................ 2.5
(b)................................................ 13.3
(c)................................................ 13.3
313(a)................................................ 7.6
(b)(1)............................................. 7.6
(b)(2)............................................. 7.6
(c)................................................ 7.6;
13.2
(d)................................................ 7.6
314(a)................................................ 4.7(a);
4.8;
(b)................................................ N.A.
(c)(1)............................................. 2.2;
7.2;
13.4
(c)(2)............................................. 7.2;
13.4
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 13.5
(f)................................................ N.A.
315(a)................................................ 7.1(b)
(b)................................................ 7.5;
7.6;
13.2
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TIA Indenture
Section Section
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(c)................................................ 7.1(a)
(d)................................................ 6.11;
7.1(b),
(c)
(e)................................................ 6.13
316(a)(last sentence)................................. 2.9
(a)(1)(A).......................................... 6.11
(a)(1)(B).......................................... 6.12
(a)(2)............................................. N.A.
(b)................................................ 6.12;
6.7;
6.8
317(a)(1)............................................. 6.3
(a)(2)............................................. 6.4
(b)................................................ 2.4
_____________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
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INDENTURE, dated as of July 31, 1998, by and between HDA Parts System,
Inc., an Alabama corporation (the "Company"), and U.S. Trust Company, National
Association, 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 Company's 12%
Series A Senior Subordinated Notes due 2005 and the class of 12% Series B Senior
Subordinated Notes due 2005 to be exchanged for the 12% Series A Senior
Subordinated Notes due 2005:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
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"Acquired Indebtedness" means Indebtedness or Disqualified Capital
Stock of any person existing at the time such person becomes a Subsidiary of the
Company, including by designation, or is merged or consolidated into or with the
Company or one of its Subsidiaries.
"Acquisition" means the purchase or other acquisition of any person or
all or substantially all the assets of any person by any other person, whether
by purchase, merger, consolidation, or other transfer, and whether or not for
consideration.
"Additional Securities" means additional Securities which may be
issued after the Issue Date pursuant to this Indenture (other than pursuant to
an Exchange Offer or otherwise in exchange for or in replacement of outstanding
Securities). All references herein to "Securities" shall be deemed to include
Additional Securities.
"Administrative Services Agreement" means that certain Corporate
Development and Administrative Services Agreement between the Company and
Brentwood dated as of May 29, 1998.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, provided, that, with respect to ownership interest in the Company
and its Subsidiaries, a Beneficial Owner of 10% or more of the total voting
power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
"Affiliate Transaction" shall have the meaning specified in Section
4.10.
"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.
"Approved Cost Savings" means with respect to cost savings associated
with any Acquisition (other than the Stone Acquisition and the City
Recapitalization), those cost savings that result from elimination of any of the
following items: (i) accounting policy-related charges, (ii) private company
expenses, (iii) excess officer or owner compensation, (iv) expenses not required
to operate the acquired business on an ongoing basis, and (v) business-related
charges; provided that, with respect to the Stone Acquisition and the City
Recapitalization the term "Approved Cost Savings" shall mean the pro forma
adjustments for non-recurring and private company expenses enumerated in
footnotes (1) and (3) of the Notes to the Unaudited Pro Forma Financial Data for
the twelve months ended March 31, 1998 included in the Offering Memorandum.
"Asset Sale" shall have the meaning specified in Section 4.14.
"Asset Sale Offer" shall have the meaning specified in Section 4.14.
"Asset Sale Offer Amount" shall have the meaning specified in Section
4.14.
"Asset Sale Offer Period" shall have the meaning specified in Section
4.14.
"Asset Sale Offer Price" shall have the meaning specified in Section
4.14.
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products (a) of the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" for purposes of the
definition of Change of Control and Affiliate has the meaning attributed to it
in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue
Date), whether or not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
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"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any committee of the board of directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Brentwood" means Brentwood Private Equity LLC and Brentwood
Associates Buyout Fund II, L.P. together with any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
Brentwood Private Equity LLC and Brentwood Associates Buyout Fund II, L.P.
"Broker-Dealer" means any broker-dealer that receives Exchange
Securities for its own account in the Exchange Offer in exchange for Securities
that were acquired by such broker-dealer as a result of market-making or other
trading activities.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"Capital Contribution" means any contribution to the equity of the
Company from a direct or indirect parent of the Company for which no
consideration other than the issuance of common stock with no redemption rights
and no special preferences, privileges or voting rights is given.
"Capitalized Lease Obligation" means, as to any person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not itself otherwise capital stock), warrants, options,
participations or other equivalents of, or interests (however designated) in,
stock issued by that corporation.
"Cash" or "cash" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public or private debts.
"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided, that, the full faith and credit of the United
States of America is pledged in support thereof) or (ii) time deposits and
certificates of deposit and commercial paper issued by the parent corporation of
any
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domestic commercial bank of recognized standing having capital and surplus in
excess of $500.0 million or (iii) commercial paper issued by others rated at
least A-2 or the equivalent thereof by Standard & Poor's Corporation or at least
P-2 or the equivalent thereof by Moody's Investors Service, Inc., and in the
case of each of (i), (ii), and (iii) maturing within one year after the date of
acquisition.
"Cedel" means Cedel Bank, S.A., or its successors.
"Change of Control" means (i) prior to consummation of an Initial
Public Equity Offering the Excluded Persons shall cease to own beneficially and
of record at least 51% of the ordinary Voting Power represented by the Equity
Interests of the Company unless a Parent is formed after the date hereof and the
Excluded Persons own beneficially and of record at least 51% of the ordinary
Voting Power of the Parent and the Parent beneficially and of record owns 100%
of the ordinary Voting Power of the Company or (ii) following the consummation
of an Initial Public Equity Offering, (A) any merger or consolidation of the
Company or Parent, as the case may be, with or into any person or any sale,
transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Company or Parent, as the case may be, on
a consolidated basis, in one transaction or a series of related transactions,
if, immediately after giving effect to such transaction(s), any "person" or
"group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act, whether or not applicable) (other than the Excluded Persons) is or
becomes the "beneficial owner," directly or indirectly, of more than 35% of the
total voting power in the aggregate normally entitled to vote in the election of
directors, managers, or trustees, as applicable, of the transferee(s) or
surviving entity or entities, (B) any "person" or "group" (as terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) (other than the Excluded Persons) is or becomes the "beneficial
owner," directly or indirectly, of more than 35% of the total voting power in
the aggregate of all classes of Capital Stock of the Company or Parent, as the
case may be, then outstanding normally entitled to vote in elections of
directors, or (C) during any period of 12 consecutive months after the Issue
Date, individuals who at the beginning of any such 12-month period constituted
the Board of Directors of the Company or Parent, as the case may be, (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company or Parent, as the
case may be, was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved including new
directors designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially all
of the assets of the Company or Parent, as the case may be, if such agreement
was approved by a vote of such majority of directors) cease for any reason to
constitute a majority of the Board of Directors of the Company or Parent, as the
case may be, then in office or (D) the Company or Parent, as the case may be,
adopts a plan of liquidation.
"Change of Control Offer" shall have the meaning specified in Section
10.1.
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"Change of Control Offer Period" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Date" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Price" shall have the meaning specified in
Section 10.1.
"City Recapitalization" means BABF City Corp.'s purchase of 80% of the
outstanding common stock of City Truck on June 1, 1998.
"City Truck" means City Truck and Trailer Parts, Inc., an Alabama
corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means such
successor.
"Consolidation" means, with respect to the Company, the consolidation
of the accounts of the Subsidiaries with those of the Company, all in accordance
with GAAP; provided, that, "consolidation" will not include consolidation of
the accounts of any Unrestricted Subsidiary with the accounts of the Company.
The term "consolidated" has a correlative meaning to the foregoing.
"Consolidated Coverage Ratio" of any person on any date of
determination (the "Transaction Date") means the ratio, on a pro forma basis,
of (a) the aggregate amount of Consolidated EBITDA of such person attributable
to continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, that, for purposes of
such calculation, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of the Reference Period, (ii)
transactions giving rise to the need to calculate the Consolidated Coverage
Ratio shall be assumed to have occurred on the first day of the Reference
Period, (iii) the incurrence of any Indebtedness or issuance of any Disqualified
Capital Stock during the Reference Period or subsequent to the Reference Period
and on or prior to the Transaction Date (and the application of the proceeds
therefrom to the extent used to refinance or retire other Indebtedness) shall be
assumed to have occurred on the first day of the Reference Period, and (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or
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dividend) rate shall be computed on a pro forma basis as if the
average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period, unless such
Person or any of its Subsidiaries is a party to an Interest Swap or Hedging
Obligation (which shall remain in effect for the 12-month period immediately
following the Transaction Date) that has the effect of fixing the interest rate
on the date of computation, in which case such rate (whether higher or lower)
shall be used.
"Consolidated EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Consolidated
income tax expense, (ii) Consolidated depreciation and amortization expense,
(iii) Consolidated Fixed Charges, and (iv) other non-recurring, non-cash charges
of such person and its consolidated subsidiaries, less the amount of all cash
payments made by such person or any of its Subsidiaries during such period to
the extent such payments relate to non-recurring, non-cash charges that were
added back in determining Consolidated EBITDA for such period or any prior
period, less any non-cash items increasing Consolidated Net Income for such
period.
"Consolidated Fixed Charges" of any person means, for any period,
the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations) of such person
and its Consolidated Subsidiaries during such period, including (i) original
issue discount and non-cash interest payments or accruals on any Indebtedness,
(ii) the interest portion of all deferred payment obligations, (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, and
(iv) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person or of any Restricted Subsidiary of such Person
(other than dividends paid in Qualified Capital Stock) paid, accrued or
scheduled to be paid or accrued during such period times (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local tax rate of such Person,
expressed as a decimal, and (b) the amount of dividends accrued or payable (or
guaranteed) by such person or any of its Consolidated Subsidiaries in respect of
Preferred Stock (other than by Subsidiaries of such person to such person or
such person's Wholly-Owned Subsidiaries). For purposes of this definition, (x)
interest on a Capitalized Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined in good faith by the Company to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP and (y) interest expense attributable to any Indebtedness represented by
the guaranty by such person or a Subsidiary of such person of an obligation of
another person shall be deemed to be the interest expense of such other person
attributable to the Indebtedness guaranteed.
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"Consolidated Net Income" means, with respect to any person for any
period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication): (a) all gains (but not losses)
which are either extraordinary (as determined in accordance with GAAP) or are
either unusual or nonrecurring (including any gain from the sale or other
disposition of assets outside the ordinary course of business or from the
issuance or sale of any capital stock), (b) the net income, if positive, of any
person, other than a Consolidated Subsidiary, in which such person or any of its
Consolidated Subsidiaries has an interest, except to the extent of the amount of
any dividends or distributions actually paid in cash to such person or a
Consolidated Subsidiary of such person during such period, but in any case not
in excess of such person's pro rata share of such person's net income for such
period, (c) the net income or loss of any person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition, and
(d) the net income, if positive, of any of such person's Consolidated
Subsidiaries to the extent that the declaration or payment of dividends or
similar distributions is not at the time permitted by operation of the terms of
its charter or bylaws or any other agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Consolidated
Subsidiary.
"Consolidated Net Worth" of any person at any date means the aggregate
consolidated stockholders' equity of such person (plus amounts of equity
attributable to preferred stock) and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such person prepared in accordance
with GAAP, adjusted to exclude (to the extent included in calculating such
equity), (a) the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such person and its Consolidated
Subsidiaries, (b) all write-ups in the book value of any asset of such person or
a Consolidated Subsidiary of such person subsequent to the Issue Date (other
than writeups resulting from foreign currency translations or of tangible assets
of a going concern business made within 12 months after the acquisition of such
business) and (c) all investments in Subsidiaries that are not Consolidated
Subsidiaries and in persons that are not Subsidiaries.
"Consolidated Subsidiary" means, for any person, each Subsidiary of
such person (whether now existing or hereafter created or acquired) the
financial statements of which are consolidated for financial statement reporting
purposes with the financial statements of such person in accordance with GAAP.
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Issue Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
"Corporate Trust Office" means the office of the Trustee in the
Borough of Manhattan, The City of New York.
7
"Credit Agreement" means the Revolving Credit Facility, including
any related notes, guarantees, collateral documents, instruments and agreements
executed by the Company or any of its Subsidiaries or other Affiliates in
connection therewith, as such credit agreement and/or related documents may be
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term ''Credit Agreement'' shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders party to the Credit Agreement and shall also include any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any Credit Agreement and all refundings, refinancings and
replacements of any Credit Agreement, including any agreement (i) extending the
maturity of any Indebtedness incurred thereunder or contemplated thereby, (ii)
adding or deleting borrowers or guarantors thereunder, so long as borrowers and
issuers include one or more of the Company and its Subsidiaries and their
respective successors and assigns, (iii) increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder, provided, that, on
the date such Indebtedness is incurred it would not be prohibited by the terms
in Section 4.11 hereof or (iv) otherwise altering the terms and conditions
thereof in a manner not prohibited by the terms of this Indenture.
"Covenant Defeasance" shall have the meaning specified in Section 8.3.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Definitive Securities" means Securities that are in the form of
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 3 and 8 thereof.
"Depository" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.3 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
8
"Designated Senior Debt" means (a) Senior Debt originating under the
Credit Agreement and (b) any other Senior Debt in an aggregate outstanding
principal amount in excess of $25 million which is designated as Designated
Senior Debt by the Board of Directors.
"Disqualified Capital Stock" means (a) except as set forth in (b),
with respect to any person, Equity Interests of such person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the Securities and (b) with respect to any
Subsidiary of such person (including with respect to any Subsidiary of the
Company), any Equity Interests other than any common equity with no preference,
privileges, or redemption or repayment provisions.
"Distribution Compliance Period" means the period as defined in
Regulation S.
"Equity Interest" of any Person means any shares, interests,
participation or other equivalents (however designated) in such Person's equity,
and shall in any event include any Capital Stock issued by, or partnership or
membership interests in, such Person.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor, as operator of the Euroclear system.
"Event of Default" shall have the meaning specified in Section 6.1.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Exchange Offer" means an offer that may be made by the Company
pursuant to the Registration Rights Agreement (or another similar agreement
entered into in connection with the issuance of Additional Securities) to
exchange Exchange Securities for Series A Notes.
"Exchange Securities" means the 12% Series B Senior Subordinated Notes
due 2005, as supplemented from time to time in accordance with the terms hereof,
to be issued pursuant to this Indenture in connection with the offer to exchange
Securities for the Initial Securities that may be made by the Company pursuant
to the Registration Rights Agreement that contains the information referred to
in footnotes 1, 2 and 8 to the form of Security attached hereto as Exhibit A.
9
"Excluded Persons" means Brentwood, Larry Clayton and James Stone
and (i) any controlling stockholder, general partner, majority owned Subsidiary,
or spouse or immediate family member (in the case of an individual) of such
Person or (ii) (a) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding
80% or more of the Voting Stock of which consist of such Person and/or such
other Persons referred to in the immediately preceding clause (i) or (b) any
partnership the sole general partner of which is such Person or one of the
Persons referred to in clause (i).
"Exempted Affiliate Transaction" means (a) customary employee
compensation arrangements approved by a majority of independent (as to such
transactions) members of the Board of Directors of the Company, (b) Restricted
Payments that are permitted by the provisions of this Indenture, (c)
transactions solely between the Company and any of its Wholly-Owned Consolidated
Subsidiaries or solely among Wholly-Owned Consolidated Subsidiaries of the
Company, (d) the Administrative Services Agreement, (e) leases entered into
concurrently with the closing of the acquisition by BABF City Corp. of 80% of
the outstanding common stock of City Truck and Trailer Parts, Inc. on June 1,
1998, (f) leases entered into concurrently with the closing of the acquisition
of substantially all of the assets of Stone Heavy Duty, Inc. on June 19, 1998,
(g) Permitted Investments and (h) Capital Contributions from Parent to the
Company or any Guarantor.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is incorporated in a jurisdiction other than the United States of America
and all or substantially all of the sales, earnings or assets of which are
located in, generated from or derived from operations located in jurisdictions
outside the United States of America.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
in the United States as in effect on the Issue Date.
"Global Security" means a Security that contains the information
referred to in footnotes 3 and 6 to the form of Security attached hereto as
Exhibit A.
"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" shall have the meaning provided in Section 11.1.
10
"Guarantors" means all existing and future Subsidiaries of the Company
other than Receivables Subsidiaries and Foreign Subsidiaries; provided that any
Foreign Subsidiary that guarantees the obligations of the Company under the
Securities and this Indenture pursuant to Section 11.1 hereof, shall be deemed
to be a Guarantor.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" or "incur" shall have the meaning specified in Section 4.11.
"Incurrence Date" shall have the meaning specified in Section 4.11.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such person, to the
extent such liabilities and obligations would appear as a liability upon the
consolidated balance sheet of such person in accordance with GAAP, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except (other than accounts payable or other obligations to trade creditors
which have remained unpaid for greater than 60 days past their original due
date) those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors; (b) all liabilities
and obligations, contingent or otherwise, of such person (i) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (ii)
relating to any Capitalized Lease Obligation, or (iii) evidenced by a letter of
credit or a reimbursement obligation of such person with respect to any letter
of credit; (c) all net obligations of such person under Interest Swap and
Hedging Obligations; (d) all liabilities and obligations of others of the kind
described in the preceding clause (a), (b) or (c) that such person has
guaranteed or that is otherwise its legal liability or which are secured by any
assets or property of such person; (e) any and all deferrals, renewals,
extensions, refinancing and refundings (whether direct or indirect) of, or
amendments, modifications or supplements to, any liability of the kind described
in any of the preceding clauses (a), (b), (c) or (d), or this clause (e),
whether or not between or among the same parties; and (f) all Disqualified
Capital Stock of such Person and its Subsidiaries (measured at the greater of
its voluntary or involuntary maximum fixed repurchase price plus accrued and
unpaid dividends). For purposes hereof, the "maximum fixed repurchase price"
of any Disqualified Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capital
Stock as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the Fair Market Value of such
Disqualified Capital Stock, such Fair Market Value to be determined in good
faith by the board of directors of the issuer (or managing general partner of
the issuer) of such Disqualified Capital Stock.
11
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Indirect Participant" means an entity that, with respect to DTC,
clears through or maintains a direct or indirect, custodial relationship with a
Participant.
"Initial Public Equity Offering" means an initial underwritten
offering of common stock of the Company or the Parent for cash pursuant to an
effective registration statement under the Securities Act following which the
common stock of the Company or the Parent is listed on a national securities
exchange or quoted on the national market system of the Nasdaq stock market.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation and BancAmerica Robertson Stephens, severally, and not jointly.
"Initial Securities" means the 12% Series A Senior Subordinated Notes
due 2005, as supplemented from time to time in accordance with the terms hereof,
issued under this Indenture that contains the information referred to in
footnotes 4, 5 and 7 to the form of Security attached hereto as Exhibit A.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
"Interest Swap and Hedging Obligation" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any person in any other person means (without
duplication) (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other person or any agreement to make any such acquisition; (b) the making
by such person of any deposit with, or advance, loan or other extension of
credit to, such other person (including
12
the purchase of property from another person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such other
person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable, endorsements for collection or deposits arising
in the ordinary course of business); (c) other than guarantees of Indebtedness
of the Company or any Guarantor to the extent permitted by Section 4.11, the
entering into by such person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of such
other person; (d) the making of any capital contribution by such person to such
other person; and (e) the designation by the Board of Directors of the Company
of any person to be an Unrestricted Subsidiary. The Company shall be deemed to
make an Investment in an amount equal to the fair market value of the net assets
of any subsidiary (or, if neither the Company nor any of its Subsidiaries has
theretofore made an Investment in such subsidiary, in an amount equal to the
Investments being made), at the time that such subsidiary is designated an
Unrestricted Subsidiary, and any property transferred to an Unrestricted
Subsidiary from the Company or a Subsidiary of the Company shall be deemed an
Investment valued at its fair market value at the time of such transfer.
"Issue Date" means the date of first issuance of the Notes under this
Indenture.
"Junior Securities" means any Qualified Capital Stock and any
Indebtedness of the Company or a Guarantor, as applicable, that is subordinated
in right of payment to Senior Debt at least to the same extent as the Notes or
the Guarantee, as applicable, and has no scheduled installment of principal due,
by redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Notes; provided, that, in the case of subordination in respect
of Senior Debt under the Credit Agreement, "Junior Security" shall mean any
Qualified Capital Stock and any Indebtedness of the Company or the Guarantor, as
applicable, that (i) is unsecured, (ii) is not entitled to the benefits of
covenants or defaults materially more beneficial to the holders of such Junior
Securities than those in effect with respect to the Notes on the date hereof (or
the Senior Debt under the Credit Agreement, including after giving effect to any
plan of reorganization or readjustment), (iii) shall not provide for
amortization (including sinking fund and mandatory prepayment or redemption
provisions) commencing prior to the date that is six months following the final
scheduled maturity date of the Senior Debt under the Credit Agreement (as
modified by any plan of reorganization or readjustment), and (iv) by their terms
or by law are subordinated to Senior Debt outstanding under the Credit Agreement
on the date of issuance of such Qualified Capital Stock or Indebtedness at least
to the same extent as the Notes or the Guarantee, as applicable; provided that
(x) if a new corporation or other entity results from any reorganization or
readjustment, such corporation or other entity assumes such Senior Debt and (y)
the rights of the holders of Senior Debt under the Credit Agreement are not,
without the consent of such holders, materially altered by any such
reorganization or readjustment, including without limitation, such rights being
materially impaired within the meaning of Section 1124 of Title 11 of the United
States Code or any material impairment of the right to receive interest accruing
during the pendency of a bankruptcy or insolvency proceeding, including
proceedings under Title 11 of the United States Code.
13
"Legal Defeasance" shall have the meaning specified in Section 8.2.
"Legal Holiday" shall have the meaning specified in Section 13.7.
"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 the Exchange Offer.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Liquidated Damages" shall have the meaning specified in the
Registration Rights Agreement.
"Maturity Date" means, when used with respect to any Security, the
date specified on such Security as the fixed date on which the final installment
of principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any Change of Control Offer or Asset Sale
Offer).
"Moody's" means Moody's Investors Services, Inc. and its successors.
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale or Capital
Contribution in respect of Qualified Capital Stock and by the Company and its
Subsidiaries in respect of an Asset Sale plus, in the case of an issuance of
Qualified Capital Stock upon any exercise, exchange or conversion of securities
(including options, warrants, rights and convertible or exchangeable debt) of
the Company that were issued for cash on or after the Issue Date, the amount of
cash originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt) less,
in each case, the sum of all payments, fees, commissions and (in the case of
Asset Sales, reasonable and customary) expenses (including, without limitation,
the fees and expenses of legal counsel and investment banking fees and expenses)
incurred in connection with such Asset Sale or sale or Capital Contribution in
respect of Qualified Capital Stock, and, in the case of an Asset Sale only, less
the amount (estimated reasonably and in good faith by the Company) of income,
franchise, sales and other applicable taxes required to be paid by the Company
or any of its respective Subsidiaries in connection with such Asset Sale in the
taxable year that such sale is consummated or in the immediately succeeding
taxable year, the computation of which shall take into account the reduction in
tax liability resulting from any available operating losses and net operating
loss carry-overs, tax credits and tax credit carry-forwards, and similar tax
attributes.
14
"Non-Recourse Indebtedness" means Indebtedness (a) as to which
neither the Company nor any of its Subsidiaries (i) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (ii) is directly or indirectly liable (as a guarantor
or otherwise), or (iii) constitutes the lender; and (b) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Notes" means, collectively, the Initial Securities and, when and if
issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"Obligation" means any principal, premium or interest payment, or
monetary penalty, or damages, due by the Company, the Parent or any Guarantor
under the terms of the Notes or this Indenture, including any liquidated damages
due pursuant to the terms of the Registration Rights Agreement.
"Offering Memorandum" means the final Offering Memorandum of the
Company dated July 28, 1998, relating to the offering of the Initial Securities
in a transaction exempt from the requirements of Section 5 of the Securities
Act.
"Officer" means, with respect to the Company or any Guarantor, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, the Secretary or the Assistant Secretary
of the Company or such Guarantor.
"Officers' Certificate" means, with respect to the Company or any
Guarantor, a certificate signed by two Officers or by an Officer and an
Assistant Secretary of the Company or such Guarantor and otherwise complying
with the requirements of Sections 13.4 and 13.5.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.4 and 13.5.
"Parent" means any Person, other than any Excluded Person, of which
the Company is a Subsidiary.
"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 Depository Trust Company, shall include
Euroclear and Cedel).
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Default" shall have the meaning specified in Section 12.2.
15
"Payment Notice" shall have the meaning specified in Section 12.2.
"Permitted Indebtedness" means that:
(a) the Company and the Guarantors may incur Indebtedness evidenced by the
Notes and the Guarantees and represented by this Indenture up to the $100.0
million issued on the Issue Date less any amounts refinanced, redeemed or
retired pursuant to clause (b) below;
(b) the Company and the Guarantors, as applicable, may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital Stock, as
applicable, described in clause (a) of this definition or incurred under the
Debt Incurrence Ratio test of Section 4.11, or which is outstanding on the Issue
Date (after giving effect to the repayment of indebtedness as described under
the heading "Use of Proceeds" in the Offering Memorandum), provided, that, in
each case such Refinancing Indebtedness is secured only by the assets, if any,
that secured the Indebtedness so refinanced;
(c) the Company and its Subsidiaries may incur Indebtedness solely in respect
of bankers acceptances, letters of credit and performance bonds (to the extent
that such incurrence does not result in the incurrence of any obligation to
repay any obligation relating to borrowed money of others), all in the ordinary
course of business in accordance with customary industry practices, in amounts
and for the purposes customary in the Company's industry in order to provide
security for workers' compensation, payment obligations in connection with self-
insurance or similar requirements in the ordinary course of business.
(d) the Company may incur Indebtedness to any Guarantor, and any Guarantor may
incur Indebtedness to any Guarantor or to the Company; provided, that, in the
case of Indebtedness of the Company, such obligations shall be unsecured and
subordinated in all respects to the Company's obligations pursuant to the Notes
and any event that causes such Guarantor which loaned such Indebtedness no
longer to be a Guarantor shall be deemed to be a new incurrence subject to
Section 4.11;
(e) any Guarantor may guaranty any Indebtedness of the Company or another
Guarantor that was permitted to be incurred pursuant to this Indenture,
substantially concurrently with such incurrence or at the time such person
becomes a Guarantor of the Notes;
(f) Indebtedness or other contractual requirements of a Receivables Subsidiary
in connection with a Qualified Receivables Transaction, provided, that, such
restrictions apply only to such Receivables Subsidiary;
(g) a Receivables Subsidiary may incur Indebtedness in a Qualified Receivables
Transaction that is without recourse to the Company or to any Subsidiary of the
Company or their assets (other than such Receivables Subsidiary and its assets),
and is not guaranteed by any such person and is not otherwise such person's
legal liability;
16
(h) Interest Swap and Hedging Obligations of the Company covering Indebtedness
of the Company or any of its Restricted Subsidiaries and Interest Swap and
Hedging Obligations of any Restricted Subsidiary of the Company covering
Indebtedness of such Restricted Subsidiary, provided, however, that such
Interest Swap and Hedging Obligations are entered into to protect the Company
and its Restricted Subsidiaries from fluctuations in interest rates on
Indebtedness incurred in accordance with the Indenture to the extent the
notional principal amount of such Interest Swap and Hedging Obligation does not
exceed the principal amount of the Indebtedness to which such Interest Swap and
Hedging Obligation relates; and
(i) Any Foreign Subsidiary may incur Indebtedness to any other Foreign
Subsidiary; provided, that, any event that causes the Foreign Subsidiary which
loaned such Indebtedness no longer to be a Subsidiary shall be deemed to be a
new incurrence subject to Section 4.11.
"Permitted Investment" means Investments in (a) any of the Notes and
the Guarantees; (b) Cash Equivalents; (c) intercompany notes to the extent
permitted under clauses (d) and (i) of the definition of "Permitted
Indebtedness" provided, however, that any event that causes the obligee on such
inter-company notes no longer to be a Subsidiary shall be deemed a new
Investment subject to Section 4.3; (d) Investment by the Company or any
Guarantor in a Person in a Related Business if as a result of such Investment
such Person immediately becomes a Wholly-Owned Subsidiary Guarantor or such
Person is immediately merged with or into the Company or a Wholly-Owned
Subsidiary Guarantor; (e) the acquisition by a Receivables Subsidiary in
connection with a Qualified Receivables Transaction of Equity Interests of a
trust or other person established by such Receivables Subsidiary to effect such
Qualified Receivables Transaction; (f) any Investment by the Company or any
Guarantor in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other person in connection with a Qualified Receivables
Transaction; provided, that, the foregoing Investment is in the form of a note
that the Receivables Subsidiary or other person is required to repay as soon as
practicable from available cash collections less amounts required to be
established as reserves pursuant to contractual arrangements with entities that
are not Affiliates entered into as part of a Qualified Receivables Transaction;
(g) loans and advances to employees and officers of the Company and its
Subsidiaries in the ordinary course of business for bona fide business purposes
not in excess of $1.5 million at any one time outstanding; (h) Currency
Agreements and Interest Swap and Hedging Obligations entered into in the
ordinary course of the Company's or its Subsidiaries' businesses and otherwise
in compliance with the Indenture; (i) Investments in securities of trade
creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (j) Investments made by the Company or its Subsidiaries as a result
of consideration received in connection with an Asset Sale made in compliance
with Section 4.14; (k) Investments by the Company or any Guarantor in a Foreign
Subsidiary in the aggregate not in excess of $5.0 million plus to the extent
that any Investment (other than an Investment which when made was not deducted
in this clause (k)) that was made after the Issue Date is sold for cash or Cash
Equivalents or otherwise liquidated or repaid for cash or Cash Equivalents, the
lesser of (A) the cash or Cash Equivalents return of capital with respect
17
to such Investment (less the cost of disposition, if any) and (B) the initial
amount of such Investment; and (l) any Investment in the Company or in a Wholly-
Owned Subsidiary Guarantor.
"Permitted Lien" means (a) Liens existing on the Issue Date; (b) Liens
imposed by governmental authorities for taxes, assessments or other charges not
yet subject to penalty or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP; (c) statutory
liens of carriers, warehousemen, mechanics, material men, landlords, repairmen
or other like Liens arising by operation of law in the ordinary course of
business provided, that, (i) the underlying obligations are not overdue for a
period of more than 30 days, or (ii) such Liens are being contested in good
faith and by appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of the Company in accordance with GAAP; (d) Liens
securing the performance of bids, trade contracts (other than borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, zoning, similar restrictions and other similar
encumbrances or title defects which, singly or in the aggregate, do not in any
case materially detract from the value of the property, subject thereto (as such
property is used by the Company or any of its Subsidiaries) or interfere with
the ordinary conduct of the business of the Company or any of its Subsidiaries;
(f) Liens arising by operation of law in connection with judgments, only to the
extent, for an amount and for a period not resulting in an Event of Default with
respect thereto; (g) pledges or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security legislation; (h) Liens securing the Notes; (i) Liens securing
Indebtedness of a Person existing at the time such Person becomes a Subsidiary
or is merged with or into the Company or a Subsidiary or Liens securing
Indebtedness incurred in connection with an Acquisition, provided, that, such
Liens were in existence prior to the date of such acquisition, merger or
consolidation, were not incurred in anticipation thereof, and do not extend to
any other assets; (j) Liens arising from Purchase Money Indebtedness permitted
to be incurred pursuant to clause (a) of Section 4.11 provided, such Liens
relate solely to the property which is subject to such Purchase Money
Indebtedness; (k) leases or subleases granted to other persons in the ordinary
course of business not materially interfering with the conduct of the business
of the Company or any of its Subsidiaries or materially detracting from the
value of the relative assets of the Company or any Subsidiary; (l) Liens arising
from precautionary Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Company or any of its Subsidiaries in the
ordinary course of business; (m) Liens securing Refinancing Indebtedness
incurred to refinance any Indebtedness that was previously so secured in a
manner no more adverse to the Holders of the Notes than the terms of the Liens
securing such refinanced Indebtedness, and provided, that, the Indebtedness
secured is not increased and the lien is not extended to any additional assets
or property that would not have been security for the Indebtedness refinanced;
(n) Liens securing Senior Debt incurred in accordance with the terms of this
Indenture; and (o) Liens on assets of a Receivables Subsidiary incurred in
connection with a Qualified Receivables Transaction.
18
"Permitted Payments to Parent" means without duplication as to amounts,
(a) payments to Parent in an amount sufficient to permit Parent to pay
reasonable and necessary accounting, legal and administrative expenses of the
Parent, not in excess of $350,000 in the aggregate during any consecutive 12-
month period and (b) payment to Parent to enable Parent to pay foreign, federal,
state or local tax liabilities ("Tax Payment"), not to exceed the amount of
any tax liabilities that would be otherwise payable by the Company and its
Subsidiaries and Unrestricted Subsidiaries to the appropriate taxing authorities
if each of the Company, such Subsidiaries and Unrestricted Subsidiaries filed a
separate tax return, to the extent that Parent has an obligation to pay such tax
liabilities relating to the operations, assets or capital of the Company or its
Subsidiaries and Unrestricted Subsidiaries; provided however, that (i),
notwithstanding the foregoing, in the case of determining the amount of a Tax
Payment that is permitted to be paid by Company and any of its United States
Subsidiaries in respect of their Federal income tax liability, such payment
shall be determined assuming that Company is the parent company of an affiliated
group (the "Company Affiliated Group") filing a consolidated Federal income
tax return and that Parent and each such United States subsidiary is a member of
the Company Affiliated Group and (ii) any Tax Payments shall either be used by
Parent to pay such tax liabilities within 90 days of Parent's receipt of such
payment or refunded to the payee.
"Person" or "person" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, limited liability
company, unincorporated association, governmental regulatory entity, country,
state or political subdivision thereof, trust, municipality or other entity.
"Preferred Stock" means an Equity Interest of any class or classes of a
Person (however designated) which is preferred as to payments of dividends, or
as to distributions upon any liquidation or dissolution, over Equity Interests
of any other class of such Person.
"principal" of any Indebtedness means the principal of such Indebtedness.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Securities issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"property" means any right or interest in or to property or assets of any
kind whatsoever, whether real, personal or mixed and whether tangible,
intangible, contingent, direct or indirect.
"Public Equity Offering" means an underwritten offering of common stock
of any Person for cash pursuant to an effective registration statement under the
Securities Act.
"Purchase Agreement" means the Purchase Agreement dated July 28, 1998 by
and between the Company and the Initial Purchasers, as such agreement may be
amended, modified or supplemented from time to time in accordance with the terms
thereof.
19
"Purchase Money Indebtedness" of any person means any Indebtedness of
such person to any seller or other person incurred solely to finance the
acquisition (including in the case of a Capitalized Lease Obligation, the lease)
of any after-acquired real or personal tangible property which, in the
reasonable good faith judgment of the Board of Directors of the Company, is
directly related to a Related Business of the Company and which is incurred
concurrently with such acquisition and is secured only by the assets so
financed.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Qualified Exchange" means any legal defeasance, redemption, retirement,
repurchase or other acquisition of Capital Stock or Indebtedness of the Company
on or after the Issue Date with the Net Cash Proceeds received by the Company
from the substantially concurrent sale of Qualified Capital Stock or a Capital
Contribution or any exchange of Qualified Capital Stock for any Capital Stock or
Indebtedness of the Company or Capital Stock of the Parent on or after the Issue
Date.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company, any Guarantor or any
Receivables Subsidiary pursuant to which the Company, any Guarantor or any
Receivables Subsidiary may sell, convey or otherwise transfer to, or grant a
security interest in for the benefit of, (a) a Receivables Subsidiary (in the
case of a transfer or encumbrancing by the Company or any Guarantor) and (b) any
other person (solely in the case of a transfer or encumbrancing by a Receivables
Subsidiary), solely accounts receivable (whether now existing or arising in the
future) of the Company or any Guarantor which arose in the ordinary course of
business of the Company or any Guarantor, and any assets related thereto,
including, without limitation, all collateral securing such accounts receivable,
all contracts and all guarantees or other obligations in respect of such
accounts receivable, proceeds of such accounts receivable and other assets which
are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Wholly-Owned Subsidiary of the Company
which engages in no activities other than in connection with the financing of
accounts receivable and which is designated by the Board of Directors of the
Company (as provided below) as a Receivables Subsidiary (a) no portion of any
Indebtedness or any other obligations (contingent or otherwise) of which,
directly or indirectly, contingently or otherwise, (i) is guaranteed by the
Company or any other Subsidiary of the Company (excluding guarantees of
obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and
20
indemnities entered into in the ordinary course of business in connection with a
Qualified Receivables Transaction, (b) with which neither the Company nor any
other Subsidiary of the Company has any material contract, agreement,
arrangement or understanding other than those customarily entered into in
connection with Qualified Receivables Transactions, and (c) with which neither
the Company nor any other Subsidiaries of the Company has any obligation,
directly or indirectly, contingently or otherwise, to maintain or preserve such
Subsidiary's financial condition or cause such Subsidiary to achieve certain
levels of operating results. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company giving
effect to such designation, an Officers' Certificate certifying that such
designation complied with the foregoing conditions and an Opinion of Counsel
satisfactory to the Trustee.
"Record Date" means a Record Date specified in the Securities whether or
not such Record Date is a Business Day, or, if applicable, as specified in
Section 2.12.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the form of Security attached hereto as Exhibit A.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraph 5
in the form of Security attached hereto as Exhibit A, which shall include,
without duplication, in each case, accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date.
"Reference Period" with regard to any Person means the four full fiscal
quarters (or such lesser period during which such Person has been in existence)
ended immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Securities or this Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital
Stock (a) issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing plus the amount of any premium paid in connection with such
Refinancing in accordance with the terms of the documents governing the
Indebtedness refinanced without giving effect to any modification thereof made
in connection with
21
or in contemplation of such refinancing) the lesser of (i) the principal amount
or, in the case of Disqualified Capital Stock, liquidation preference, of the
Indebtedness or Disqualified Capital Stock so Refinanced and (ii) if such
Indebtedness being Refinanced was issued with an original issue discount, the
accreted value thereof (as determined in accordance with GAAP) at the time of
such Refinancing; provided, that, (A) such Refinancing Indebtedness shall only
be used to Refinance outstanding Indebtedness or Disqualified Capital Stock of
such person issuing such Refinancing Indebtedness, (B) such Refinancing
Indebtedness shall (x) not have an Average Life shorter than the Indebtedness or
Disqualified Capital Stock to be so refinanced at the time of such Refinancing
and (y) in all respects, be no less subordinated or junior, if applicable, to
the rights of Holders of the Notes than was the Indebtedness or Disqualified
Capital Stock to be refinanced, (C) such Refinancing Indebtedness shall have a
final stated maturity or redemption date, as applicable, no earlier than the
final stated maturity or redemption date, as applicable, of the Indebtedness or
Disqualified Capital Stock to be so refinanced, and (D) such Refinancing
Indebtedness shall be secured (if secured) in a manner no more adverse to the
Holders of the Notes than the terms of the Liens (if any) securing such
refinanced Indebtedness, including, without limitation, the amount of
Indebtedness secured shall not be increased.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the date hereof by and between the Initial Purchasers and the
Company, as such agreement may be amended, modified or supplemented from time to
time in accordance with the terms thereof.
"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.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Related Business" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any and
all businesses that in the good faith judgment of the Board of Directors of the
Company are reasonably related businesses.
22
"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, in one or a series of related
transactions, any Investment, other than other Permitted Investments.
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Equity Interests of such person or any parent or Subsidiary of such person, (b)
any payment on account of the purchase, redemption or other acquisition or
retirement for value of Equity Interests of such person or any Subsidiary or
parent of such person, (c) other than with the proceeds from the substantially
concurrent sale of, or in exchange for, Refinancing Indebtedness any purchase,
redemption, or other acquisition or retirement for value of, any payment in
respect of any amendment of the terms of or any defeasance of, any Subordinated
Indebtedness, directly or indirectly, by such person or a parent or Subsidiary
of such person prior to the scheduled maturity, any scheduled repayment of
principal, or scheduled sinking fund payment, as the case may be, of such
Indebtedness and (d) any Restricted Investment by such person; provided,
however, that the term "Restricted Payment" does not include (i) any dividend,
distribution or other payment on or with respect to Equity Interests of an
issuer to the extent payable solely in shares of Qualified Capital Stock of such
issuer; (ii) any dividend, distribution or other payment to the Company, or to
any of its Subsidiary Guarantors, by the Company or any of its Subsidiaries; or
(iii) Permitted Investments.
"Restricted Security" means a Security, unless or until it has been (i)
effectively registered under the Securities Act and 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; provided, that in no case shall an Exchange Security issued in
accordance with this Indenture and the terms and provisions of the Registration
Rights Agreement be a Restricted Security.
"Revolving Credit Facility" means that certain Revolving Credit Facility
among the Company, the lenders parties thereto, Bank of America National Trust
and Savings Association, as administrative agent and syndication agent, and The
Industrial Bank of Japan, Limited, New York Branch, as documentation agent dated
June 1, 1998.
"Rule 144A" means Rule 144A promulgated under the Securities Act, as it
may be amended from time to time, and any successor provision thereto.
"S&P" means Standard & Poor's, a division of The McGraw Hill Companies,
and its successors.
23
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the Initial Securities and, when and if
issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Securityholder" or "Holder" means the Person in whose name a Security is
registered on the Registrar's books.
"Senior Debt" of the Parent, the Company or any Guarantor means (i)
Indebtedness (including any interest, whether or not allowable, accruing on
Indebtedness incurred pursuant to the Credit Agreement after the filing of a
petition initiating any proceeding under any bankruptcy, insolvency or similar
law) of the Parent, the Company or such Guarantor arising under the Credit
Agreement or that, by the terms of the instrument creating or evidencing such
Indebtedness, is not expressly designated Subordinated Indebtedness or pari
passu Indebtedness with the Notes and made subordinated or pari passu in right
of payment to the Notes or the applicable Guarantee and (ii) all other amounts
due on or in connection with such Indebtedness, including all interest,
premiums, reimbursement obligations, charges, fees, indemnities and expenses
(including fees and expenses of counsel); provided, that, in no event shall
Senior Debt include (a) Indebtedness to any Subsidiary of the Company or any
officer, director or employee of the Company or any Subsidiary of the Company,
(b) Indebtedness incurred in violation of the terms of this Indenture, (c)
Indebtedness to trade creditors, (d) Disqualified Capital Stock, (e) Capitalized
Lease Obligations and (f) any liability for taxes owed or owing by the Company
or such Guarantor.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" shall have the meaning provided under Regulation
S-X of the Securities Act, as in effect on the Issue Date.
"Special Record Date" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Note, means August 1,
2005.
"Stone" means Stone Heavy Duty, Inc., a North Carolina corporation.
24
"Stone Acquisition" means City Truck's acquisition of substantially all
of the assets of Stone on June 19, 1998.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment by its terms or the terms of
any document or instrument relating thereto to the Notes or such Guarantee, as
applicable, in any respect or has a stated maturity on (except for the Notes) or
after the Stated Maturity.
"Subsidiary," with respect to any Person, means (i) a corporation a
majority of whose Equity Interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries of such Person, or
such Person and one or more Subsidiaries of such Person, directly or indirectly,
at the date of determination thereof has at least majority ownership interest,
or (iii) a partnership in which such Person or a Subsidiary of such Person is,
at the time, a general partner and in which such Person, directly or indirectly,
at the date of determination thereof has at least a majority ownership interest.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a
Subsidiary of the Company or of any Subsidiary of the Company. Unless the
context requires otherwise, Subsidiary includes, without limitation, each direct
and indirect Subsidiary of the Company.
"Subsidiary Guarantee" means any Guarantee issued by a Subsidiary
pursuant to the terms of this Indenture.
"Subsidiary Guarantors" means any Subsidiary that executes a Subsidiary
Guarantee in accordance with the provisions of this Indenture, and their
respective successors and assigns.
"TIA" means the Trust Indenture Act of 1939, as amended, (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture, except as provided in Section 9.3.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.6.
"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.
"Trust Officer" means any officer within the corporate trust division (or
any successor group) of the Trustee or any other 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 of the Trustee to whom such
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
25
"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.
"Unrestricted Subsidiary" means any subsidiary of the Company that does
not own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); provided, that, such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Indebtedness; (b) is not party to any
agreement, contract, arrangement or understanding with the Company or any
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Subsidiaries. The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Subsidiary, provided, that, (i) no Default or
Event of Default is existing or will occur as a consequence thereof and (ii)
immediately after giving effect to such designation, on a pro forma basis, the
Company could incur at least $1.00 of Indebtedness pursuant to the Debt
Incurrence Ratio of Section 4.11. Each such designation shall be evidenced by
filing with the Trustee a certified copy of the resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"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 Notes sold in reliance on Rule 144A.
"U.S. Government Obligations" means direct non-callable obligations of,
or noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"Voting Power" with respect to any Person means the power of all classes
of Capital Stock of such Person then outstanding normally entitled to vote in
elections of directors.
26
"Wholly-Owned Subsidiary" means a Subsidiary at least 99% of the Equity
Interests of which are owned by the Company or one or more Wholly-Owned
Subsidiaries of the Company.
SECTION 1.2. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or 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, each Guarantor
and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3 Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
27
(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; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. The Company
shall approve the form of the Securities and any notation, legend or endorsement
on them. Any such notations, legends or endorsements not contained in the form
of Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
The Securities offered and sold to purchasers who are QIBs in
transactions exempt from registration under the Securities Act shall be issued
initially in the form of a U.S. Global Security. Securities resold to
Institutional Accredited Investors who are not QIBs in transactions exempt from
registration under the Securities Act not made in reliance on Regulation S shall
be issued initially in the form of Restricted Definitive Securities. Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of Security attached hereto as Exhibit A, which shall be deposited on
behalf of the purchasers of the Securities represented thereby with the Trustee,
at its New York office, as custodian for the Depositary, and registered in the
name of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Cedel, duly executed by the
Company and authenticated by the Trustee as hereinafter provided until the
expiration of the Distribution Compliance Period. The Distribution Compliance
Period shall be terminated upon the receipt by the Trustee of (i) a written
certificate from the Depositary or the Securities Custodian, together with
copies of certificates from Euroclear and Cedel certifying that they have
received certification of Non-United States beneficial ownership of 100% of the
aggregate principal amount of the Reg S Temporary Global Security, and (ii) an
Officers' Certificate from the Company to the effect set forth in Section
13.4(1) hereof. Following the termination of the Distribution Compliance
Period, beneficial interests in the Reg S Temporary Global Security shall be
exchanged for beneficial interests in Reg S Permanent Global Securities pursuant
to the Applicable Procedures. Simultaneously with the authentication of Reg S
Permanent Global Securities, the Trustee shall cancel the Reg S Temporary Global
Security.
28
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 2.6 hereof.
The terms and provisions contained in the forms of 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.
SECTION 2.2 Execution and Authentication.
----------------------------
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Security 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 and the
Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Initial Securities for original issue
in the aggregate principal amount of up to $100,000,000 and shall authenticate
Exchange Securities for original issue in the aggregate principal amount of up
to $100,000,000, in each case upon a written order of the Company in the form of
an Officers' Certificate; provided that such Exchange Securities shall be
issuable only upon the valid surrender for cancellation of Initial Securities of
a like aggregate principal amount in accordance with the Registration Rights
Agreement. The Officers' Certificate shall specify the amount of Securities to
be authenticated and the date on which the Securities are to be authenticated.
The aggregate principal amount of Securities outstanding at any time may not
exceed $150,000,000, except as provided in Section 2.7. Upon the written order
of the Company in the form of an Officers' Certificate, the Trustee shall
authenticate Securities in
29
substitution of Securities originally issued to reflect any name change of the
Company or issue Additional Securities.
The Trustee may appoint an authenticating agent 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, any Affiliate of the Company,
or any of their respective Subsidiaries.
Securities shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiples thereof.
SECTION 2.3. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("Registrar"), and an office or agency
where Securities may be presented for payment ("Paying Agent"), and where
notices and demands to or upon the Company in respect of the Securities may be
served. The Company may act as Registrar or Paying Agent, except that, for the
purposes of Articles III, VIII, X, and Section 4.14 hereof and as otherwise
specified in this Indenture, neither the Company nor any Affiliate of the
Company shall act as Paying Agent. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-Registrars and one or more additional Paying Agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
Paying Agent. The Company hereby initially appoints the Trustee as Registrar
and Paying Agent, and by its acknowledgment and acceptance on the signature page
hereto, the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent (including the Paying Agent) not a party to this Indenture, which
agreement shall implement the provisions of this Indenture that relate to such
Agent, and shall furnish a copy of each such agreement to the Trustee. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC"),
to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
30
Upon the occurrence of an Event of Default described in Section 6.1(v)
or (vi) hereof, the Trustee shall, or upon the occurrence of any other Event of
Default by notice to the Company, the Registrar and the Paying Agent, the
Trustee may assume the duties and obligations of the Registrar and the Paying
Agent hereunder.
SECTION 2.4 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, premium, if any, or interest (or Liquidated Damages, if any) on,
the Securities (whether such assets have been distributed to it by the Company
or any other obligor on the Securities), and shall notify the Trustee in writing
of any Default in making any such payment. If either of the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such assets
and hold them as a separate trust fund for the benefit of the Holders or the
Trustee. 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 or any
Event of Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent (if
other than the Company) shall have no further liability for such assets.
SECTION 2.5 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 and shall otherwise comply with TIA (S)312(a). If the Trustee or any
Paying Agent is not the Registrar, the Company shall furnish to the Trustee on
or before the third Business Day preceding each Interest Payment Date and at
such other times as the Trustee or any such Paying Agent may request in writing
a list in such form and as of such date as the Trustee or any such Paying Agent
reasonably may require of the names and addresses of Holders and the Company
shall otherwise comply with TIA (S)312(a).
SECTION 2.6. 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 90 days after the date of such
notice from the Depositary, (ii) the Company,
31
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 the Reg S Temporary Global
Security be exchanged by the Company for Definitive Securities prior to (x) the
expiration of the 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 Sections 2.7 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 2.6 or Section 2.7 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 2.6(a), however, beneficial interests in a Global
Security may be transferred and exchanged as provided in Section 2.6(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 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 Distribution Compliance Period, transfers of
beneficial interests in the 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 2.6(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 2.6(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
32
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 the Reg S Temporary Global Security prior to (x) the
expiration of the 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 and Rule 904 under the Securities Act. Upon
consummation of an Exchange Offer by the Company in accordance with Section
2.6(f) hereof, the requirements of this Section 2.6(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 2.6(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 2.6(b)(ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 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
(B) if the transferee will take delivery in the form of a
beneficial interest in the Reg S Temporary Global Security or the 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
33
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
2.6(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the 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 Exchange Securities or (3)
a Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
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 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 2.2 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.
34
(c) Transfer or Exchange of Beneficial Interests for
------------------------------------------------
Definitive Securities.
---------------------
(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,
35
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Security to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2, 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 2.6(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 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
2.6(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 the
Exchange Offer in accordance with the 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 Exchange Securities or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
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 (1)(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
36
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 2.6(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Unrestricted Global Security to be reduced accordingly
pursuant to Section 2.6(h) hereof, and the Company shall execute and, upon
receipt of an Authentication Order pursuant to Section 2.2, 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 2.6(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 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 2.6(c)(iii) shall
not bear the Private Placement Legend.
(iv) Notwithstanding Sections 2.6(c)(i)(A) and (C)
hereof, a beneficial interest in the Reg S Temporary Global Security may not be
(A) exchanged for a Definitive Security prior to (x) the expiration of the
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 conditions 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
37
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 clause (A)
above, the appropriate Restricted Global Security, in the case of clause (B)
above, the U.S. Global Security, and in the case of clause (C) above, the 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:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the 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 Exchange Securities or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
38
(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 2.6(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 Seurities. 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)
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 2.2 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 2.6(e), the
Registrar shall register the transfer or exchange of Definitive Securities.
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 satisfactory 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 2.6(e).
39
(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 the
Exchange Offer in accordance with the 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 Exchange 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 the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the 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
40
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 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 the Exchange
--------------
Offer in accordance with the Registration Rights Agreement, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.2 and an Opinion of Counsel for the Company as to certain matters discussed in
this Section 2.6(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 Exchange Securities and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the Exchange
Offer and (B) the principal amount of Definitive Securities exchanged or
transferred for beneficial interests in Unrestricted Global Securities in
connection with the Exchange Offer pursuant to Section 2.6(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
Exchange Offer (other than Definitive Securities described in clause (i)(B)
immediately above). Concurrently with the issuance of such Notes, 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 2.2, 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 state
that:
(i) the Series B Senior Notes have been duly authorized
and, when executed and authenticated in accordance with the provisions of
the Indenture and delivered in exchange for Series A Notes in accordance
with the Indenture and the Exchange Offer, will be entitled to the benefits
of the Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to customary
exceptions; and
41
(ii) when the Series B Notes are executed and
authenticated in accordance with the provisions of the Indenture and
delivered in exchange for Series A Notes in accordance with the Indenture
and the Exchange Offer, the Subsidiary Guarantees endorsed thereon will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Guarantors, enforceable in accordance with their terms,
subject to customary exceptions.
(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"), (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI")
OR (C) IT HAS ACQUIRED 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 THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM 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 RULE 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE
42
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, IF THE
COMPANY SO REQUESTS, THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, IF THE COMPANY SO
REQUESTS) OR (G) 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, any Global Security or
Definitive Security issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.6 (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 2.6
OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.6(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.
43
(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 SECURITY,
AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
DEFINITIVE SECURITIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE
CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS SECURITY. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT
INTEREST FROM ACCRUING ON THIS SECURITY.
(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.
(i) General Provisions Relating to Transfers and Exchange
-----------------------------------------------------
(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, 3.7, 4.14 and 10.1 hereof).
44
(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 3.3 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 a
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 2.2
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this Section
2.6 to effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.7. Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements are met. If
required by the Trustee or the Company, 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 or any Agent from any loss which
any of them may suffer if a Security is
45
replaced. The Company may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8. Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security, except as provided in Section
2.9 hereof.
If a Security is replaced pursuant to Section 2.7 hereof (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 2.7
hereof.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds cash sufficient to pay
all of the principal and interest and premium, if any, due on the Securities
payable on that date and payment of the Securities called for redemption is not
otherwise prohibited, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.9. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or Affiliates of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that a Trust Officer of the Trustee knows are
so owned shall be disregarded.
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 reasonably and in good faith consider
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall, upon receipt of a written order of the
Company in the form of an Officers' Certificate, authenticate Definitive
Securities in exchange for temporary
46
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as permanent Securities
authenticated and delivered hereunder.
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 registration, transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or an Affiliate of the Company), and no one
else, shall cancel and, without the written direction of the Company to the
contrary, shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.7 hereof, the Company may not
issue new Securities to replace Securities that have been paid or delivered to
the Trustee for cancellation. No Securities shall be authenticated in lieu of
or in exchange for any Securities cancelled as provided in this Section 2.11
hereof, except as expressly permitted in the form of Securities and as permitted
by this Indenture.
SECTION 2.12. Defaulted Interest.
------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more predecessor Securities) is registered
at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus any interest
payable on the defaulted interest at the rate and in the manner provided in
Section 4.1 hereof and the Security (herein called "Defaulted Interest"), shall
forthwith cease to be payable to the registered holder on the relevant Record
Date, or, as applicable, the Special Record Date (as defined below), and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee and the Paying Agent in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment,
and at the same time the Company shall deposit with the Paying Agent an
amount of cash equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to the
Paying Agent for such deposit prior to the date of the proposed payment,
such cash when deposited to be held in trust for the benefit of the persons
entitled to such Defaulted Interest as provided in this clause (1).
Thereupon the Paying Agent shall fix a special record date for the payment
of such Defaulted Interest
47
(a "Special Record Date"), which shall be not more than 15 days, and not
less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Paying Agent of the notice of the
proposed payment. The Paying Agent shall promptly notify the Company and
the Trustee of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in
the Security register not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names the
Securities (or their respective predecessor Securities) are registered on
such Special Record Date and shall no longer be payable pursuant to the
following clause (2) .
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee and the Paying Agent of the proposed payment
pursuant to this clause, such manner shall be deemed practicable by the
Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon the registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.13. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
48
ARTICLE 111
REDEMPTION
SECTION 3.1 Right of Redemption.
-------------------
Redemption of Securities, as permitted by the provisions of this
Indenture, shall be made in accordance with such provisions and this Article
III. The Company shall not have the right to redeem any Securities prior to
August 1, 2002, other than as provided in the following paragraph and Paragraph
5 of the Securities. On or after August 1, 2002, the Company shall have the
right to redeem all or any part of the Securities for cash at the Redemption
Prices specified in the form of Security attached as Exhibit A set forth therein
in Paragraph 5 thereof, in each case (subject to the right of Holders of record
on a Record Date to receive interest due on an Interest Payment Date that is on
or prior to such Redemption Date, and subject to the provisions set forth in
Section 3.5), including accrued and unpaid interest and Liquidated Damages, if
any, thereon to the Redemption Date.
Notwithstanding the foregoing, until August 1, 2001, upon one or more
Public Equity Offerings of common stock for cash of the Company (or of the
Parent, provided that Net Cash Proceeds sufficient to make such redemption are
contributed to the Company by the Parent as a Capital Contribution), up to 35%
of the aggregate principal amount of the Securities issued pursuant to this
Indenture may be redeemed at the option of the Company within 90 days of such
Public Equity Offering, on not less than 30 days, but not more than 60 days,
notice to each holder of the Securities to be redeemed, with cash from the Net
Cash Proceeds of such Public Equity Offering, at a redemption price equal to
112% of principal, (subject to the right of Holders of record on a Record Date
to receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date) together with accrued and unpaid interest and Liquidated
Damages, if any, to the date of redemption; provided, however, that at least 65%
of the aggregate principal amount of the Securities issued pursuant to this
Indenture (without giving effect to the cancellation of Initial Securities in
connection with the issuance of Exchange Securities) remain outstanding
immediately following such redemption.
Except as provided in this paragraph and Paragraph 5 of the
Securities, the Securities may not otherwise be redeemed at the option of the
Company.
SECTION 3.2. Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee and the Paying Agent in writing of
the Redemption Date and the principal amount of Securities to be redeemed and
whether it wants the Paying Agent to give notice of redemption to the Holders.
49
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee and
the Paying Agent for cancellation, it shall so notify the Trustee, in the form
of an Officers' Certificate, and the Paying Agent of the amount of the reduction
and deliver such Securities with such notice.
The Company shall give each notice to the Trustee and the Paying Agent
provided for in this Section 3.2 at least 40 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee and the Paying
Agent). Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.3 Selection of Securities to Be Redeemed.
--------------------------------------
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on a
pro rata basis or by lot.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
and the Paying Agent in writing of the Securities selected for redemption and,
in the case of any Security selected for partial redemption, the principal
amount thereof to be redeemed. Securities in denominations of $1,000 may be
redeemed only in whole. The Trustee may select for redemption portions (equal
to $1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.4. Notice of Redemption.
--------------------
At least 30 days, but not more than 60 days prior to the Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee, the Paying Agent and each Holder whose Securities are
to be redeemed. At the Company's request, the Paying Agent shall give the
notice of redemption in the Company's name and at the Company's expense. Each
notice for redemption shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price, including accrued and unpaid
interest and Liquidated Damages, if any, to be paid upon such redemption;
(3) the name and address of the Paying Agent;
50
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless (a) the Company defaults in its obligation
to deposit with the Paying Agent cash which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms
shall provide the amount to fund the Redemption Price in accordance with
Section 3.6 hereof or (b) such redemption payment is prohibited, interest
on Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price, including accrued
and unpaid interest (and Liquidated Damages, if any) to the Redemption
Date, upon surrender to the Paying Agent of the Securities called for
redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion
of the principal amount, equal to $1,000 or any integral multiple thereof,
of such Security to be redeemed and that, after the Redemption Date, and
upon surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof shall be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption ;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section
3.4 and pursuant to the optional redemption provisions of Paragraph 5 of
the Securities.
SECTION 3.5 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.4
hereof, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, including accrued and unpaid
interest (and Liquidated Damages, if any) to the Redemption Date. Upon
surrender to the Trustee or Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price, including interest and Liquidated
Damages, if any, accrued and unpaid to the Redemption Date; provided that if the
Redemption Date is after a regular Record Date and on or prior to the Interest
Payment Date, to which such Record Date relates, the accrued interest (and
Liquidated Damages, if any) shall be payable to the Holder of the redeemed
Securities registered on the relevant Record Date; and provided, further, that
if a Redemption Date is a Legal Holiday, payment shall be made on the next
succeeding Business Day and no interest shall accrue for the period from such
Redemption Date to such succeeding Business Day.
51
SECTION 3.6. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or an Affiliate of the Company) cash
sufficient to pay the Redemption Price of all Securities to be redeemed on such
Redemption Date (other than Securities or portions thereof called for redemption
on that date that have been delivered by the Company to the Trustee for
cancellation). The Paying Agent shall promptly return to the Company any cash
so deposited which is not required for that purpose upon the written request of
the Company.
If the Company complies with the preceding paragraph and payment of
the Securities called for redemption is not prohibited for any reason, interest
on the Securities to be redeemed shall cease to accrue on the applicable
Redemption Date, whether or not such Securities are presented for payment.
Notwithstanding anything herein to the contrary, if any Security surrendered for
redemption in the manner provided in the Securities shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall continue to accrue and be paid from the
Redemption Date until such payment is made on the unpaid principal, and, to the
extent lawful, on any interest not paid on such unpaid principal, in each case
at the rate and in the manner provided in Section 4.1 hereof and the Security.
SECTION 3.7 Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of and interest (and Liquidated
Damages, if any) on the Securities on the dates and in the manner provided
herein and in the Securities. An installment of principal of or interest (or
Liquidated Damages, if any) on the Securities shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds for the benefit of the Holders (on or before
10:00 a.m. New York City time to the extent necessary to provide the funds to
the Depository in accordance with the Depository's procedures) on that date cash
deposited and designated for and sufficient to pay the installment.
52
The Company shall pay interest on overdue principal and on overdue
installments of interest (and Liquidated Damages, if any) at the rate specified
in the Securities compounded semi-annually, to the extent lawful.
SECTION 4.2. Maintenance of Office or Agency.
-------------------------------
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Securities and this Indenture
may be served. The Company and the Guarantors shall give prompt written notice
to the Trustee and the Paying Agent of the location, and any change in the
location, of such office or agency. If at any time the Company and the
Guarantors shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee and the Paying Agent 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 13.2 hereof.
The Company and the Guarantors 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 and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company and the Guarantors shall give prompt written
notice to the Trustee and the Paying Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby initially designates the Corporate Trust Office of the Trustee as
such office.
SECTION 4.3. Limitation on Restricted Payments.
---------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their respective Subsidiaries to, directly or indirectly, make any Restricted
Payment if, after giving effect to such Restricted Payment on a pro forma basis,
(1) a Default or an Event of Default shall have occurred and be continuing, (2)
the Company is not permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio in Section 4.11 or (3) the aggregate
amount of all Restricted Payments made by the Company and its Subsidiaries,
including after giving effect to such proposed Restricted Payment, from and
after the Issue Date, would exceed, without duplication, the sum of (a) 50% of
the aggregate Consolidated Net Income of the Company for the period (taken as
one accounting period), commencing on the first day of the first full fiscal
quarter commencing after the Issue Date, to and including the last day of the
fiscal quarter ended immediately prior to the date of each such calculation (or,
in the event Consolidated Net Income for such period is a deficit, then minus
100% of such deficit), plus (b) the aggregate Net Cash Proceeds received by the
Company from the sale of its Qualified Capital Stock (other than (i) to a
Subsidiary of the Company and (ii) to the extent applied in connection with a
53
Qualified Exchange), after the Issue Date plus (c) to the extent not included in
Consolidated Net Income, 100% of any dividends or other distributions received
by the Company or a Subsidiary of the Company after the Issue Date from an
Unrestricted Subsidiary of the Company, plus (d) to the extent that any
Investment (other than a Permitted Investment and any other Investment which
when made was not deducted in this clause (3)) that was made after the Issue
Date is sold for cash or Cash Equivalents or otherwise liquidated or repaid for
cash or Cash Equivalents, the lesser of (A) the cash or Cash Equivalents return
of capital with respect to such Investment (less the cost of disposition, if
any) and (B) the initial amount of such Investment plus (e) 100% of the
aggregate net Cash Equivalent proceeds received by the Company (other than from
its Subsidiaries) from Capital Contributions after the Issue Date.
The foregoing clauses (2) and (3) of the immediately preceding paragraph,
however, shall not prohibit (v) to the extent such payments would constitute a
Restricted Payment, the payments of amounts to Brentwood in accordance with the
Administrative Services Agreement, and (w) repurchases of Capital Stock from
employees of the Company, a Parent or their Subsidiaries upon the death,
disability or termination of employment in an aggregate amount to all employees
not to exceed $1.0 million per year or $3.0 million in the aggregate on and
after the Issue Date, and the provisions of the immediately preceding paragraph
will not prohibit (x) any dividend, distribution or other payments by any
Subsidiary of the Company on its Equity Interests that is paid pro rata to all
holders of such Equity Interests, (y) a Qualified Exchange, (z) the payment of
any dividend on Qualified Capital Stock within 60 days after the date of its
declaration if such dividend could have been made on the date of such
declaration in compliance with the foregoing provisions or (aa) Permitted
Payments to Parent. The full amount of any Restricted Payment made pursuant to
the foregoing clauses (w), (x) and (z) (but not pursuant to clauses (v), (y) and
(aa)) of the immediately preceding sentence, however, shall be deducted in the
calculation of the aggregate amount of Restricted Payments available to be made
referred to in clause (3) of the immediately preceding paragraph.
For purposes of this covenant, the amount of any Restricted Payment, if
other than in cash, shall be the fair market value thereof, as determined in the
good faith reasonable judgment of the Board of Directors of the Company.
Additionally, within 5 days of each Restricted Payment in excess of $1.0
million, the Company shall deliver an Officers' Certificate to the Trustee
describing in reasonable detail the nature of such Restricted Payment, stating
the amount of such Restricted Payment, stating in reasonable detail the
provisions of this Indenture pursuant to which such Restricted Payment was made
and certifying that such Restricted Payment was made in compliance with this
Indenture.
SECTION 4.4. Corporate and Partnership Existence.
-----------------------------------
Except as otherwise permitted by Article V, Section 4.14 or Section
11.4, the Company and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their respective
corporate, partnership or other organizational existence,
54
as the case may be, and the corporate, partnership or other organizational
existence, as the case may be, of each of their Subsidiaries in accordance with
the respective organizational documents of each of them and the material rights
(charter and statutory) and material corporate franchises of the Company, the
Guarantors and each of their respective Subsidiaries; provided, however, that
neither the Company nor any Guarantor shall be required to preserve, with
respect to themselves, any right or franchise, and with respect to any of their
respective Subsidiaries, any such existence, right or franchise, if (a) the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and (b) the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.5. Payment of Taxes and Other Claims.
---------------------------------
The Company and the Guarantors shall, and shall cause each of their
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Guarantor or any
of their Subsidiaries or any of their respective properties and assets and (ii)
all lawful claims, whether for labor, materials, supplies or services, which
have become due and payable and which by law have or may become a Lien upon the
property and assets of the Company, any Guarantor or any of their Subsidiaries;
provided, however, that neither the Company nor any 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 disputed amounts adequate
reserves have been established in accordance with GAAP.
SECTION 4.6. Maintenance of Properties and Insurance.
---------------------------------------
The Company and the Guarantors shall cause all material properties
used or useful to the conduct of their business and the business of each of
their Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 4.6 shall prevent the Company or any Guarantor from
discontinuing any operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is (a)(i) in the
judgment of the Board of Directors of the Company, desirable in the conduct of
the business of the Company and (ii) not adverse in any material respect to the
Holders or (b) otherwise permitted under Section 4.14.
The Company and the Guarantors shall provide, or cause to be provided,
for themselves and each of their Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Board of Directors of the Company is adequate and
appropriate for the conduct of the business of the Company, the Guarantors and
such Subsidiaries in a prudent manner, with (except for self-insurance)
reputable
55
insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the reasonable, good faith opinion of
the Company and adequate and appropriate for the conduct of the business of the
Company, the Guarantors and such Subsidiaries in a prudent manner for entities
similarly situated in the industry.
SECTION 4.7. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee within 120
days after the end of its fiscal year an Officers' Certificate, one of the
signers of which shall be the principal executive, principal financial or
principal accounting officer of the Company, complying with Section 314(a)(4) of
the TIA and stating that a review of its activities and the activities of its
Subsidiaries, if any, during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture (without regard to notice requirements or grace periods) and further
stating, as to each such Officer signing such certificate, whether or not the
signer knows of any failure by the Company, any Guarantor or any Subsidiary of
the Company to comply with any conditions or covenants in this Indenture and, if
such signer does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
(b) The Company shall, so long as any of the Securities
are outstanding, deliver to the Trustee, promptly upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of any
Default or any Event of Default unless one of its Trust Officers receives
written notice thereof from the Company or any of the Holders.
SECTION 4.8 Reports.
-------
Whether or not the Parent or the Company are subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Parent and the
Company shall deliver to the Trustee and, to each Holder and to prospective
purchasers of Securities identified to the Company by an Initial Purchaser,
within 15 days after it is or would have been (if it were subject to such
reporting obligations) required to file such with the Commission, annual and
quarterly financial statements substantially equivalent to financial statements
that would have been included in reports filed with the Commission if the
Company or the Parent were subject to the requirements of Section 13 or 15(d) of
the Exchange Act, including, with respect to annual information only, a report
thereon by the Company's and the Parent's certified independent public
accountants as such would be required in such reports to the Commission, and, in
each case, together with a management's discussion and analysis of financial
condition and results of operations which would be so required and, unless the
Commission shall not accept such reports, file with the Commission
56
the annual, quarterly and other reports which it is or would have been required
to file with the Commission; provided that the foregoing shall not require the
Company or the Parent to furnish separate financial results of its Subsidiaries
unless otherwise required to do so by the Commission. Notwithstanding the
foregoing, the Company shall not be required to file a quarterly report for the
quarter ended June 30, 1998 until August 31, 1998.
SECTION 4.9. Limitation on Status as Investment Company.
------------------------------------------
The Company shall not and shall not permit any of its Subsidiaries to
become required to register as an "investment company" (as that term is defined
in the Investment Company Act of 1940, as amended), or from otherwise becoming
subject to regulation under the Investment Company Act.
SECTION 4.10 Limitation on Transactions with Affiliates.
------------------------------------------
Neither the Company nor any of its Subsidiaries shall be permitted on
or after the Issue Date to enter into or suffer to exist any contract,
agreement, arrangement or transaction with any Affiliate (an ''Affiliate
Transaction''), or any series of related Affiliate Transactions, (other than
Exempted Affiliate Transactions), (i) unless it is determined that the terms of
such Affiliate Transaction are fair and reasonable to the Company, and no less
favorable to the Company, than could have been obtained in an arm's length
transaction with a non-Affiliate, and (ii) if involving consideration to either
party in excess of $1.0 million, unless such Affiliate Transaction(s) is
evidenced by an Officers' Certificate addressed and delivered to the Trustee
certifying that such Affiliate Transaction (or Transactions) has been approved
by a majority of the members of the Board of Directors that are disinterested in
such transaction (if any) and (iii) if involving consideration to either party
in excess of $5.0 million, unless in addition the Company, prior to the
consummation thereof, obtains a written favorable opinion as to the fairness of
such transaction to the Company from a financial point of view from an
independent investment banking firm, independent investment adviser, accounting
firm or other qualified appraiser, including, in the case of a transaction
involving real estate, a real estate appraisal firm, in each case, of national
standing or with a national reputation.
SECTION 4.11 Limitation on Incurrence of Additional Indebtedness and
-------------------------------------------------------
Disqualified Capital Stock.
- --------------------------
Except as set forth in this covenant, the Company and the Guarantors
shall not, and shall not permit any of their respective Subsidiaries to,
directly or indirectly, issue, assume, guaranty, incur, become directly or
indirectly liable with respect to (including as a result of an Acquisition), or
otherwise become responsible for, contingently or otherwise (individually and
collectively, to ''incur'' or, as appropriate, an ''incurrence''), any
Indebtedness or any Disqualified Capital Stock (including Acquired
Indebtedness), other than Permitted Indebtedness. Notwithstanding the foregoing,
if (i) no Default or Event of Default shall have occurred and be continuing at
the time of, or would occur after giving effect on a pro forma basis to, such
incurrence of Indebtedness or Disqualified Capital Stock and (ii) on the date of
such incurrence (the "Incurrence Date"), the Consolidated Coverage Ratio of the
Company for the Reference Period immediately preceding the Incurrence Date,
after giving effect on a pro forma basis to, such
57
incurrence of such Indebtedness or Disqualified Capital Stock and, to the
extent set forth in the definition of Consolidated Coverage Ratio, the use of
proceeds thereof, would be at least 2 to l (the "Debt Incurrence Ratio"), then
the Company and the Guarantors may incur such Indebtedness or Disqualified
Capital Stock.
In addition, the foregoing limitations will not apply to:
(a) the incurrence by the Company or any of its Subsidiaries of
Purchase Money Indebtedness, provided that (i) the aggregate amount of such
Indebtedness incurred and outstanding at any time pursuant to this paragraph
(a) (plus any Indebtedness issued to retire, defease, refinance, replace or
refund such Indebtedness) shall not exceed $10.0 million, and (ii) in each
case, such Indebtedness shall not constitute more than 100% of the cost
(determined in accordance with GAAP) to the Company or such Subsidiary, as
applicable, of the property so purchased or leased;
(b) if no Event of Default shall be continuing after application of
the proceeds from such incurrence, the incurrence by the Company or any
Guarantor of Indebtedness in an aggregate amount incurred and outstanding at
any time pursuant to this paragraph (b) (plus any Indebtedness incurred to
retire, defease, refinance, replace or refund such Indebtedness) of up to
$10.0 million; and
(c) the incurrence by the Company or any Guarantor of Indebtedness
pursuant to the Credit Agreement in an aggregate amount incurred and
outstanding at any time pursuant to this paragraph (c) (plus any Indebtedness
incurred to retire, defease, refinance, replace or refund such Indebtedness)
of up to $75.0 million, minus the amount of any such Indebtedness (i) retired
with the Net Cash Proceeds from any Asset Sale applied to permanently reduce
the outstanding amounts or the commitments with respect to such Indebtedness
pursuant to clause (1)(b)(ii) of the first paragraph of Section 4.14 or (ii)
assumed by a transferee in an Asset Sale; provided, however, that neither the
Company nor any Guarantor may incur Indebtedness pursuant to this clause (c)
the proceeds of which are used to finance one or more Acquisitions (including
the repayment of any Acquired Indebtedness substantially concurrently with
such Acquisition) unless the Consolidated Coverage Ratio for the Reference
Period immediately preceding the Incurrence Date, after giving effect on a pro
forma basis to such incurrence of Indebtedness, would be greater than the
ratio set forth below opposite such period:
Consolidated
Coverage
Reference Period ending Ratio
- ----------------------- ----------------
Prior to June 30, 1999................................ 1.50 to 1.00
58
June 30, 1999-June 29, 2000........................... 1.75 to 1.00
June 30, 2000-June 29, 2001........................... 1.90 to 1.00
June 30, 2001-June 29, 2002........................... 2.00 to 1.00
June 30, 2002 and thereafter.......................... 2.25 to 1.00
For purposes of this clause (c) only, Consolidated EBITDA as used to
determine the Consolidated Coverage Ratio shall be calculated after giving
pro forma effect to (A) any Acquisition (including the Stone Acquisition
and the City Recapitalization) occurring during the Reference Period as if
such Acquisition occurred at the beginning of the Reference Period and (B)
any Approved Cost Savings anticipated to be realized over the next four
fiscal quarters in connection with an Acquisition (including the Stone
Acquisition and the City Recapitalization) occurring during the Reference
Period. For each full fiscal quarter completed after consummation of an
Acquisition occurring during the Reference Period, 25% of such Approved
Cost Savings associated with such Acquisition shall be excluded from the
calculation of Consolidated EBITDA (and comparable pro rata exclusions
shall be made for post-Acquisition periods of less than a full fiscal
quarter). Such aggregate Approved Cost Savings shall not exceed 25% of
Consolidated EBITDA for any Reference Period.
Indebtedness or Disqualified Capital Stock of any Person which is
outstanding at the time such Person becomes a Subsidiary of the Company
(including upon designation of any subsidiary or other person as a Subsidiary)
or is merged with or into or consolidated with the Company or a Subsidiary of
the Company shall be deemed to have been incurred at the time such Person
becomes such a Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Subsidiary of the Company, as applicable.
Upon each incurrence, the Company shall designate pursuant to which
provision of this covenant such Indebtedness or Disqualified Capital Stock is
being incurred and such Indebtedness or Disqualified Capital Stock shall not be
deemed to have been incurred or outstanding under any other provision of this
covenant, except as stated otherwise in any such provision or applicable
definition.
SECTION 4.12. Limitations on Dividends and Other Payment
------------------------------------------
Restrictions Affecting Subsidiaries.
- -----------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their respective Subsidiaries to, directly or indirectly, create, assume or
suffer to exist any consensual restriction on the ability of any Subsidiary of
the Company to pay dividends or make other distributions to or on behalf of, or
to pay any obligation to or on behalf of, or otherwise to transfer assets or
property to or on behalf of, or make or pay loans or advances to or on behalf
of, the Company or any Subsidiary of the Company, except (a) restrictions
imposed by the Notes or this Indenture or by other indebtedness of the Company
(which may also be guaranteed by the Guarantors) ranking senior or pari passu
with the Notes or the guarantees, as applicable,
59
provided, such restrictions taken as a whole are no more restrictive than those
imposed by this Indenture and the Notes, (b) restrictions imposed by applicable
law, (c) existing restrictions under Indebtedness outstanding on the Issue Date,
including pursuant to the Credit Agreement, (d) restrictions under any Acquired
Indebtedness not incurred in violation of this Indenture or any agreement
relating to any property, asset, or business acquired by the Company or any of
its Subsidiaries, which restrictions in each case existed at the time of
acquisition, were not put in place in connection with or in anticipation of such
acquisition and are not applicable to any person, other than the person
acquired, or to any property, asset or business, other than the property, assets
and business so acquired; (e) any such restriction or requirement imposed by
Indebtedness incurred under the Credit Agreement pursuant to clause (c) of
Section 4.11 provided, in each case, such restriction or requirement is no more
restrictive taken as a whole than that imposed by the Credit Agreement as of the
Issue Date, (f) restrictions with respect solely to a Subsidiary of the Company
imposed pursuant to a binding agreement which has been entered into for the sale
or disposition of all or substantially all of the Equity Interests or assets of
such Subsidiary, provided, such restrictions apply solely to the Equity
Interests or assets of such Subsidiary which are being sold (g) restrictions on
transfer contained in Purchase Money Indebtedness incurred pursuant to paragraph
(a) of Section 4.11, provided, such restrictions relate only to the transfer of
the property acquired with the proceeds of such Purchase Money Indebtedness, (h)
restrictions contained in Indebtedness or other contractual requirements of a
Receivables Subsidiary in connection with a Qualified Receivables Transaction,
provided, that, such restrictions apply only to such Receivables Subsidiary, and
(i) in connection with and pursuant to permitted Refinancings, replacements of
restrictions imposed pursuant to clauses (a), (c), (d) or (e) of this paragraph
that are not more restrictive taken as a whole than those being replaced and do
not apply to any other person or assets than those that would have been covered
by the restrictions in the Indebtedness so refinanced. Notwithstanding the
foregoing, (a) customary provisions restricting subletting or assignment of any
lease entered into in the ordinary course of business, consistent with industry
practice, shall in and of themselves not be considered a restriction on the
ability of the applicable Subsidiary to transfer such assets and (b) any asset
subject to a Lien which is not prohibited to exist with respect to such asset
pursuant to the terms of this Indenture may be subject to restrictions on the
transfer or disposition thereof in accordance with any such Liens.
SECTION 4.13. Limitations on Layering Indebtedness.
------------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their respective Subsidiaries to, directly or indirectly, incur, or suffer to
exist any Indebtedness that is subordinate in right of payment to any other
Indebtedness of the Company or a Guarantor unless, by its terms, such
Indebtedness is subordinate in right of payment to, or ranks pari passu with,
the Notes or the Guarantees, as applicable.
60
SECTION 4.14 Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their respective Subsidiaries to, in one or a series of related transactions,
convey, sell, transfer, assign or otherwise dispose of, directly or indirectly,
any of its property, business or assets, including by merger or consolidation
(in the case of a Subsidiary of the Company), and including any sale or other
transfer or issuance of any Equity Interests of any Subsidiary of the Company,
whether by the Company or a Subsidiary of either or through the issuance, sale
or transfer of Equity Interests by a Subsidiary of the Company, and including
any sale and leaseback transaction (any of the foregoing, an ''Asset Sale''),
unless (l)(a) the Net Cash Proceeds therefrom (the ''Asset Sale Offer Amount'')
are applied (i) within 330 days after the date of such Asset Sale to the
optional redemption of the Notes in accordance with the terms of this Indenture
and other Indebtedness of the Company ranking on a parity with the Notes and
with similar provisions requiring the Company to redeem such Indebtedness with
the proceeds for asset sales, pro rata in proportion to the respective principal
amounts (or accreted values in the case of Indebtedness issued with an original
issue discount) of the Notes and such other Indebtedness then outstanding or
(ii) within 360 days after the date of such Asset Sale to the repurchase of the
Notes and such other Indebtedness on a parity with the Notes and with similar
provisions requiring the Company to make an offer to purchase such Indebtedness
with the proceeds from asset sales pursuant to a cash offer (subject only to
conditions required by applicable law, if any) (pro rata in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other Indebtedness
then outstanding) (the ''Asset Sale Offer'') at a purchase price of 100% of
principal amount (or accreted value in the case of Indebtedness issued with an
original issue discount) (the ''Asset Sale Offer Price'') together with accrued
and unpaid interest and Liquidated Damages, if any, to the date of payment, made
within 330 days of such Asset Sale or (b) within 330 days following such Asset
Sale, the Asset Sale Offer Amount is (i) invested (or committed, pursuant to a
binding commitment subject only to reasonable, customary closing conditions, to
be invested, and in fact is so invested, within an additional 90 days) in assets
and property (except in connection with the acquisition of a Guarantor in a
Related Business, other than notes, bonds, obligations and securities) or other
Permitted Investments pursuant to clause (d) thereof, which in the good faith
reasonable judgment of the Board shall immediately constitute or be a part of a
Related Business of the Company or such Subsidiary (if it continues to be a
Subsidiary) immediately following such transaction or (ii) used to retire
Purchase Money Indebtedness or Senior Debt and to permanently reduce (in the
case of Senior Debt that is not Purchase Money Indebtedness) the amount of such
Indebtedness outstanding on the Issue Date or permitted pursuant to paragraph
(b) or (c) of Section 4.11 (including that in the case of a revolver or similar
arrangement that makes credit available, such commitment is so permanently
reduced by such amount), (2) at least 75% of the consideration for such Asset
Sale or series of related Asset Sales consists of cash or Cash Equivalents
received at the time of such Asset Sale, (3) no Default or Event of Default
shall have occurred and be continuing at the time of, or would occur after
giving effect, on a pro forma basis, to, such Asset Sale, and (4) the Board of
Directors of the Company determines in good faith that the Company or such
Subsidiary, as applicable, receives at least fair market value for such Asset
Sale.
61
An acquisition of Notes pursuant to an Asset Sale Offer may be
deferred until the accumulated Net Cash Proceeds from Asset Sales not applied to
the uses set forth in 1(a)(i) or 1(b) above (the ''Excess Proceeds'') exceeds
$5.0 million and that each Asset Sale Offer shall remain open for 20 Business
Days following its commencement (the ''Asset Sale Offer Period''). Upon
expiration of the Asset Sale Offer Period, the Company shall apply the Asset
Sale Offer Amount plus an amount equal to accrued and unpaid interest and
Liquidated Damages, if any, to the purchase of all Indebtedness properly
tendered (on a pro rata basis if the Asset Sale Offer Amount is insufficient to
purchase all Indebtedness so tendered) at the Asset Sale Offer Price (together
with accrued interest and Liquidated Damages, if any). To the extent that the
aggregate amount of Notes and such other pari passu Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Asset Sale Offer Amount, the
Company may use any remaining Net Cash Proceeds for general corporate purposes
as otherwise permitted by the Indenture and following each Asset Sale Offer the
Excess Proceeds amount shall be reset to zero. For purposes of (2) above,
consideration received means the total consideration received for such Asset
Sales minus the amount of, (a) Purchase Money Indebtedness secured solely by the
assets sold and assumed by a transferee and (b) property that within 30 days of
such Asset Sale is converted into cash or Cash Equivalents, provided, that, such
cash and Cash Equivalents shall be treated as Net Cash Proceeds attributable to
the original Asset Sale for which such property was received.
Notwithstanding, and without complying with, the provisions of this
covenant, (i) the Company and its Subsidiaries may, in the ordinary course of
business, (1) convey, sell, transfer, assign or otherwise dispose of inventory
and other assets acquired and held for resale in the ordinary course of business
and (2) liquidate Cash Equivalents; (ii) the Company and its Subsidiaries may
convey, sell, transfer, assign or otherwise dispose of assets pursuant to and in
accordance with Section 5.1; (iii) the Company and its Subsidiaries may sell or
dispose of damaged, worn out or other obsolete property in the ordinary course
of business so long as such property is no longer necessary for the proper
conduct of the business of the Company or such Subsidiary, as applicable; (iv)
the Company and the Guarantors may convey, sell, transfer, assign or otherwise
dispose of assets to the Company or any of the Guarantors; (v) the Company and
its Subsidiaries, in the ordinary course of business, may convey, sell transfer,
assign, or otherwise dispose of assets (or related assets in related
transactions) with a fair market value of less than $250,000; (vi) the Company
and each of its Subsidiaries may surrender or waive contract rights or settle,
release or surrender of contract, tort or other claims of any kind or grant
Liens not prohibited by this Indenture; and (vii) the Company may sell accounts
receivable and related assets of the type specified in the definition of
Qualified Receivables Transaction to a Receivables Subsidiary for the fair
market value thereof, but in any case including cash in an amount at least equal
to 75% of the book value thereof as determined in accordance with GAAP, and a
Receivables Subsidiary may transfer accounts receivable and related assets of
the type specified in the definition of Qualified Receivables Transaction (or a
fractional undivided interest therein) in a Qualified Receivables Transaction.
All Net Cash Proceeds from an Event of Loss relating to a Company
facility shall be invested, used for prepayment of Senior Debt or used to
repurchase Notes and pari passu debt
62
on a pro rata basis, all within the period and as otherwise provided above in
clauses 1(a) or 1(b) of the first paragraph of this covenant.
In addition to the foregoing and notwithstanding anything herein to
the contrary, the Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly make any Asset Sale of any of the Equity Interests of
any Subsidiary of the Company (other than to the Company or a Wholly-Owned
Subsidiary Guarantor) except pursuant to an Asset Sale of all the Equity
Interests of such Subsidiary.
Any Asset Sale Offer shall be made in compliance with all applicable
laws, rules, and regulations, including, if applicable, Regulation 14E of the
Exchange Act and the rules and regulations thereunder and all other applicable
Federal and state securities laws. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this paragraph,
compliance by the Company or any of its subsidiaries with such laws and
regulations shall not in and of itself cause a breach of its obligations under
such covenant.
If the payment date in connection with an Asset Sale Offer hereunder
is on or after an interest payment Record Date and on or before the associated
Interest Payment Date, any accrued and unpaid interest (and Liquidated Damages,
if any, due on such Interest Payment Date) will be paid to the person in whose
name a Note is registered at the close of business on such Record Date, and such
interest (or Liquidated Damages, if applicable) will not be payable to Holders
who tender Notes pursuant to such Asset Sale Offer.
Notice of an Asset Sale Offer shall be sent, on or prior to the
commencement of the Asset Sale Offer, by first-class mail, by the Company to
each Holder at its registered address, with a copy to the Trustee. The notice
to the Holders shall contain all information, instructions and materials
required by applicable law or otherwise material to such Holders' decision to
tender Securities pursuant to the Asset Sale Offer. The notice, which (to the
extent consistent with this Indenture) shall govern the terms of an Asset Sale
Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to such
notice and this Section 4.14;
(2) the Asset Sale Offer Amount, the Asset Sale Offer Price
(including the amount of accrued but unpaid interest (and Liquidated
Damages, if any)), and the date of purchase;
(3) that any Security or portion thereof not tendered or accepted
for payment will continue to accrue interest if interest is then accruing;
(4) that, unless the Company defaults in depositing cash with the
Paying Agent (which may not for purposes of this Section 4.14,
notwithstanding anything in this Indenture to the contrary, be the Company
or any Affiliate of the Company)
63
in accordance with the last paragraph of this Section 4.14 any Security, or
portion thereof, accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest after the Asset Sale Purchase Date;
(5) that Holders electing to have a Security, or portion thereof,
purchased pursuant to an Asset Sale Offer will be required to surrender
their Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent (which may
not for purposes of this Section 4.14, notwithstanding any other provision
of this Indenture, be the Company or any Affiliate of the Company) at the
address specified in the notice;
(6) that Holders will be entitled to withdraw their elections, in
whole or in part, if the Paying Agent receives, prior to the expiration of
the Asset Sale Offer, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Securities the Holder is
withdrawing and a statement containing a facsimile signature and stating
that such Holder is withdrawing his election to have such principal amount
of the Securities purchased;
(7) that if Indebtedness in a principal amount in excess of the
principal amount of Securities to be acquired pursuant to the Asset Sale
Offer are tendered and not withdrawn, the Company shall purchase
Indebtedness on a pro rata basis in proportion to the respective principal
amounts (or accreted values in the case of Indebtedness issued with an
original issue discount) thereof (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of
$1,000 or integral multiples of $1,000 shall be acquired);
(8) 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
(9) the circumstances and relevant facts regarding such Asset
Sales.
On or before the date of purchase, the Company shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the Asset
Sale Offer (on a pro rata basis if required pursuant to paragraph (7) above),
(ii) deposit with the Paying Agent cash sufficient to pay the Asset Sale Offer
Price for all Securities or portions thereof so accepted and (iii) deliver to
the Trustee Securities so accepted together with an Officers' Certificate
setting forth the Securities or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Asset Sale Offer Price for such
Securities, and the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security equal in principal amount to any unpurchased portion
of the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof.
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SECTION 4.15. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium of, or interest (or Liquidated Damages, if any) on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each of the Company and the Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.16 Limitation on Liens Securing Indebtedness.
-----------------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their respective Subsidiaries to, create, incur, assume or suffer to exist any
Lien of any kind, other than Permitted Liens, upon any of their respective
assets now owned or acquired on or after the date of this Indenture or upon any
income or profits therefrom securing any Indebtedness of the Company or any
Guarantor unless the Company provides, and causes its Subsidiaries to provide,
concurrently therewith, that the Notes (and the Guarantees, as applicable) are
equally and ratably so secured, provided, that, if such Indebtedness is
Subordinated Indebtedness, the Lien securing such Subordinated Indebtedness
shall be subordinate and junior to the Lien securing the Notes with the same
relative priority as such Subordinated Indebtedness shall have with respect to
the Notes.
SECTION 4 17. Rule 144A Information Requirement.
---------------------------------
The Company, the Guarantors and the Parent, if any, shall furnish to
the Holders of the Securities, securities analysts, and prospective purchasers
of Securities designated by the Holders of Transfer Restricted Securities, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act until such time as either the Company has
concluded an offer to exchange the Exchange Securities for the Initial
Securities or a registration statement relating to resales of the Securities has
become effective under the Securities Act. The Company, the Guarantors and the
Parent, if any, shall also furnish such information during the pendency of any
suspension of effectiveness of such resale registration statement.
65
SECTION 4.18. Limitations on Lines of Business.
--------------------------------
Neither the Company nor any of its Subsidiaries (other than
Receivables Subsidiaries) shall directly or indirectly engage to any substantial
extent in any line or lines of business activity other than that which, in the
reasonable good faith judgment of the Board of Directors of the Company, is a
Related Business.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.
-------------------------------------------
The Company shall not consolidate with or merge with or into another
person or, directly or indirectly, sell, lease, convey or transfer all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person or
group of affiliated Persons, unless (i) either (a) the Company is the continuing
entity or (b) the resulting, surviving or transferee entity is a corporation
organized under the laws of the United States, any state thereof or the District
of Columbia and expressly assumes by supplemental indenture all of the
obligations of the Company in connection with the Notes and this Indenture; (ii)
no Default or Event of Default shall exist or shall occur immediately after
giving effect on a pro forma basis to such transaction; and (iii) immediately
after giving effect to such transaction on a pro forma basis, the consolidated
resulting, surviving or transferee entity would immediately thereafter be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio set forth in Section 4.11.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to and (except in the
case of a lease) be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named therein as the Company, and (except in the case of a
lease) the Company shall be released from the obligations under the Notes and
this Indenture except with respect to any obligations that arise from, or are
related to, such transaction.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and assets of
one or more Subsidiaries, the Company's interest in which constitutes all or
substantially all of the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2. Successor Corporation Substituted.
---------------------------------
66
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made, or, in the case of a plan
of liquidation, the entity which receives the greatest value from such plan of
liquidation shall succeed to, and (except in the case of a lease) be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation had been named herein as
the Company, and (except in the case of a lease) when a successor corporation
duly assumes all of the obligations of the Company pursuant hereto and pursuant
to the Securities, the Company shall be released from such obligations (except
with respect to any obligations that arise from, or are related to, such
transaction).
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) failure by the Company to pay any installment of interest
(or Liquidated Damages, if any) upon the Securities as and when the same
becomes due and payable, and the continuance of any such failure for a
period of 30 days;
(ii) failure by the Company to pay all or any part of the
principal of or premium, if any, on the Securities when and as the same
becomes due and payable at maturity, redemption, by acceleration, or
otherwise, including, without limitation, payment of the Change of Control
Purchase Price or the Asset Sale Offer Price on Notes validly tendered
pursuant to a Change of Control Offer or Asset Sale Offer, as applicable,
or otherwise;
(iii) failure by the Company or any Subsidiary otherwise to
comply with the provisions of Article V;
(iv) failure by the Company or any Subsidiary to observe or
perform any other covenant or agreement contained in the Securities or this
Indenture (except as provided in clauses (i), (ii) or (iii) of this Section
6.1) and the continuance of such failure for a period of 30 days after
written notice is given to the Company by the Trustee or to the Company and
67
the Trustee by the Holders of at least 25% in aggregate principal amount of
the Securities outstanding;
(v) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its
Significant Subsidiaries under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a period
of 60 days; or a decree, judgment or order of a court of competent
jurisdiction appointing a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency for the Company, any of its Significant
Subsidiaries, or any substantial part of the property of any such Person,
or for the winding up or liquidation of the affairs of any such Person,
shall have been entered, and such decree, judgment, or order shall have
remained in force undischarged and unstayed for a period of 60 days;
(vi) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization under any bankruptcy
or similar law or similar statute, or shall consent to the filing of any
such petition, or shall consent to the appointment of a Custodian,
receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of
it or any substantial part of its assets or property, or shall make a
general assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, fail generally
to pay its debts as they become due, or take any corporate action in
furtherance of any of the foregoing;
(vii) the failure to pay at final stated maturity (giving
effect to any applicable grace periods) the principal amount of any
Indebtedness of the Company or any Subsidiary of the Company (other than a
Receivables Subsidiary) or the acceleration of the final stated maturity of
any Indebtedness if the aggregate principal amount of such Indebtedness,
together with the principal amount of any such Indebtedness in default for
failure to pay principal at final maturity or which has been accelerated,
aggregates $5 million or more at any time;
(viii) final unsatisfied judgments not covered by insurance for
the payment of money, or the issuance of any warrant of attachment against
any portion of the property or assets of the Company or any of its
Subsidiaries, aggregating in excess of $5 million, at any one time shall be
rendered against the Company or any of its Subsidiaries and not be stayed,
bonded or discharged for a period (during which execution shall not be
effectively stayed) of 60 days; and
(ix) any of the Guarantees ceases to be in full force and
effect or any of the Guarantees is declared to be null and void and
unenforceable or any of the Guarantees is
68
found to be invalid or any of the Guarantors or Parent denies its liability
under its Guarantee (other than by reason of release of a Guarantor in
accordance with the terms of this Indenture).
SECTION 6.2. Acceleration of Maturity Date; Rescission and
---------------------------------------------
Annulment.
- ---------
If an Event of Default occurs and is continuing (other than an Event
of Default specified in Section 6.1(v) or Section 6.1(vi) above relating to the
Company or any Significant Subsidiary), then, and in every such case, unless the
principal of all of the Securities shall have already become due and payable,
either the Trustee or the Holders of 25% in aggregate principal amount of then
outstanding Securities, by notice in writing to the Company (and to the Trustee
if given by Holders) (an "Acceleration Notice"), may declare all principal,
determined as set forth below, and accrued interest (and Liquidated Damages, if
any) thereon to be due and payable and the same (i) shall become immediately due
and payable or (ii) if there is any Senior Debt outstanding under the Credit
Agreement, such principal and interest shall become immediately due and payable
upon the first to occur of an acceleration under the Credit Agreement or five
business days after receipt by the Company and the Representative of the holders
of the Indebtedness under the Credit Agreement of the notice of such an
acceleration, but only if such Event of Default is then continuing. In the
event a declaration of acceleration resulting from an Event of Default described
in Section 6.1(vii) above has occurred and is continuing, such declaration of
acceleration shall be automatically annulled if such default is cured or waived
or the holders of the Indebtedness which is the subject of such default have
rescinded their declaration of acceleration in respect of such Indebtedness
within 15 days thereof and the Trustee has received written notice of such cure,
waiver or rescission and no other Event of Default described in Section 6.1(vii)
above has occurred that has not been cured or waived within 15 days of the
declaration of such acceleration in respect of such Indebtedness. If an Event
of Default specified in Section 6.1(v) or (vi) above relating to the Company
occurs, all principal and accrued interest (and Liquidated Damages, if any)
thereon will be immediately due and payable on all outstanding Securities
without any declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee cash sufficient
to pay:
(A) all overdue interest and Liquidated Damages, if any, on all
Securities,
69
(B) the principal of (and premium, if any, applicable to) any
Securities which would become due other than by reason of such declaration of
acceleration, and interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
(D) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee and its agents
and counsel, and all other amounts due the Trustee under Section 7.7 and
(2) all Events of Default, other than the non-payment of the principal
of, premium, if any, and interest on Securities which have become due solely by
such declaration of acceleration, have been cured or waived as provided in
Section 6.12.
Notwithstanding the previous sentence of this Section 6.2, no waiver
shall be effective against any Holder for any Event of Default or event which
with notice or lapse of time or both would be an Event of Default with respect
to (i) any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected thereby, unless all
such affected Holders agree, in writing, to waive such Event of Default or other
event and (ii) any provision requiring supermajority approval to amend, unless
such default has been waived by such a supermajority. No such waiver shall cure
or waive any subsequent default or impair any right consequent thereon.
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement
----------------------------------------------------
by Trustee.
- ----------
The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (i) or (ii) of Section 6.1
hereof occurs and is continuing, the Company shall, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal, premium (if any), and
interest (and Liquidated Damages, if any), and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any), and on any overdue interest (and Liquidated Damages, if
any), at the rate borne by the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee and its agents and counsel and all other amounts due the Trustee
under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner
70
provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any (and
Liquidated Damages, if any), or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise to take any and all actions under
the TIA, including
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest (and Liquidated Damages, if any) owing and unpaid
in respect of the Securities and to file such 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 and its agent and counsel and all other amounts due the Trustee
under Section 7.7) and of the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
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SECTION 6.5. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee and its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
SECTION 6.6. Priorities.
----------
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any), or interest (or Liquidated Damages, if any), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7 hereof;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), and interest (and Liquidated Damages, if
any) on, the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any), and interest (and Liquidated Damages, if any), respectively;
and
THIRD: To the Company, the Guarantors or such other Person as may be
lawfully entitled thereto, the remainder, if any, each as their respective
interests may appear.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. Limitation on Suits.
-------------------
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
72
(B) the Holders of not less than 25% in aggregate principal amount of
then outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be incurred
or reasonably probable to be incurred in compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(E) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), and interest (and
Liquidated Damages, if any) on, such Security on the Maturity Dates of such
payments as expressed in such Security (in the case of redemption, the
Redemption Price on the applicable Redemption Date, in the case of a Change of
Control, the Change of Control Purchase Price on the Change of Control Purchase
Date, and in the case of an Asset Sale, the Asset Sale Offer Price on the
relevant purchase date) and to institute suit for the enforcement of any such
payment after such respective dates, and such rights shall not be impaired
without the consent of such Holder.
SECTION 6.9. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7
hereof, no right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy
73
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.10. Delay or Omission Not Waiver.
----------------------------
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 6.11. Control by Holders.
------------------
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. Waiver of Existing or Past Default.
----------------------------------
Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, on
behalf of all Holders, waive any existing or past Default or Event of Default
hereunder and its consequences under this Indenture, except a default
(A) in the payment of the principal of, premium, if any, or interest
(or Liquidated Damages, if any) on, any Security as specified in clauses (i) and
(ii) of Section 6.1 hereof and not yet cured, or
(B) in respect of a covenant or provision hereof which, under Article
IX, cannot be modified or amended without the consent of the Holder of each
outstanding Security affected.
74
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
SECTION 6.13. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted to be taken by it
as Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 6.13 shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in aggregate principal amount of the outstanding Securities, or to
any suit instituted by any Holder for enforcement of the payment of principal
of, or premium (if any), or interest (or Liquidated Damages, if any) on, any
Security on or after the respective Maturity Date expressed in such Security
(including, in the case of redemption, on or after the Redemption Date).
SECTION 6.14 Restoration of Rights and Remedies .
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
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ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed, subject to
the terms hereof.
SECTION 7.1. Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no others, and no covenants or obligations shall
be implied in or read into this Indenture which are adverse to the Trustee,
and
(2) The Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, 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 the certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1,
(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 6.11 hereof.
(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 at the request, order
76
or direction of the Holders or in the exercise of any of its rights or powers if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this
Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company
(including without limitation to the extent the Trustee receives funds prior to
the interest payment date in order to comply with the provisions of Section
4.1). Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 hereof:
(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 such document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.4 and 13.5 hereof. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such certi ficate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it or its
agent takes or omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond, debenture
or other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee
77
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company or any
Guarantor shall be sufficient if signed by an Officer of the Company or such
Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's or any Guarantor's covenants in Article IV hereof
or as to the performance by any Agent of its duties hereunder. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of Default
except (i) any Event of Default occurring pursuant to Sections 6.1(i), 6.1(ii)
and 4.1 hereof, or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.
(i) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence herein is specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate.
SECTION 7.3. 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, the
Parent, any Guarantor, any of their Subsidiaries, or their respective Affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11 hereof.
SECTION 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and 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 in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds received
by a Paying Agent other than the Trustee.
SECTION 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any), of, or interest (or Liquidated
Damages, if any) on, any Security (including the payment of the Change of
Control Purchase Price on the Change of Control Payment Date, the payment of the
Redemption Price on
78
the Redemption Date and the payment of the Asset Sale Offer Price on the
relevant purchase date), the Trustee may withhold the notice if and so long as a
Trust Officer in good faith determines that withholding the notice is in the
interest of the Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each April 30 beginning with the April 30
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder a brief report dated as of such April 30 that
complies with TIA (S) 313(a). The Trustee also shall comply with TIA (S)(S)
313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
SECTION 7.7. Compensation and Indemnity.
--------------------------
The Company and the Guarantors jointly and severally agree to pay to
the Trustee from time to time reasonable compensation 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 Guarantors shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in accordance with this Indenture. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee (in its capacity as Trustee) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
claim, demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence or willful misconduct on the part of
the Trustee, arising out of or in connection with the administration of this
trust and its rights or duties hereunder, including the reasonable 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. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company and the Guarantors shall
defend the claim and the Trustee shall provide reasonable cooperation at the
Company's and the Guarantors' expense in the defense. The Trustee may have
separate counsel and the Company and the Guarantors shall pay the reasonable
fees and expenses of such counsel; provided, that the Company and the Guarantors
will not be required to pay such fees and expenses if they assume the Trustee's
defense and there is no conflict of interest between the Company and the
Guarantors and the Trustee in
79
connection with such defense. The Company and the Guarantors need not pay for
any settlement made without their written consent. The Company and the
Guarantors need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence or
willful misconduct.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities on all
assets held or collected by the Trustee, in its capacity as Trustee, except
assets held in trust to pay principal and premium, if any, of or interest on
particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(v) or (vi) of this Indenture occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section 7.7
and any lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Company's and the Guarantors' obligations pursuant
to Article VIII of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or 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. Immediately after that
and provided that all sums owing to
80
the retiring Trustee provided for in Section 7.7 hereof have been paid, the
retiring Trustee shall transfer all property held by it as trustee to the
successor Trustee, subject to the lien provided in Section 7.7 hereof, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, 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
7.8, the Company's and the Guarantors' obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger, Etc.
---------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
The Trustee shall at all times satisfy the requirements of TIA (S)
310(a)(1), (2) and (5). The Trustee (or in the case of a corporation included
in a bank holding company system, the related bank holding company) shall have
a combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
81
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal Defeasance or
-----------------------------------------------
Covenant Defeasance.
- -------------------
(a) This Indenture shall cease to be of further effect (except
that the Company's, the Parent's and the Guarantors' obligations under Section
7.7 and the Trustee's and the Paying Agent's obligations under Sections 8.6 and
8.7 shall survive) when all outstanding Securities theretofore authenticated and
issued have been delivered (other than destroyed, lost or stolen Securities that
have been replaced or paid) to the Trustee for cancellation and the Company or
the Guarantors have paid all sums payable hereunder, or if :
(i) pursuant to Article III, the Company shall have given
irrevocable and unconditional notice to the Trustee and mailed a notice of
redemption to each Holder of the redemption of all of the Securities under
arrangements reasonably satisfactory to the Trustee for the giving of such
notice;
(ii) the Company shall have irrevocably deposited with the
Trustee, in trust, for the benefit of the holders of the Securities, U.S.
legal tender, U.S. Government Obligations or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium,
if any, and interest on such Securities on the stated date for payment
thereof or on the redemption date of such principal or installment of
principal of, premium, if any, or interest on such Securities, as the case
may be;
(iii) the Company shall have paid all other sums payable by it
hereunder;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(v) such Discharge shall not result in a breach or violation
of, or constitute a default under any material agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(vi) the deposit was not made by the Company with the intent of
defeating, hindering, delaying or defrauding any other creditors of the
Company; and
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel reasonably acceptable to
the Trustee, each stating that the conditions precedent provided for, in
the case of the Officers' Certificate, clauses (i)
82
through (vii) and, in the case of the Opinion of Counsel, clause (vi), of
this Section 8.1(a) have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.3, 2.7, 2.10, 4.1, 4.2, 7.7, 7.8, 8.6, and 8.7in respect thereof
shall survive until the Securities are no longer outstanding. After the
Securities are no longer outstanding, the Company's obligations in Sections 7.7,
8.6 and 8.7 in respect thereof shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall promptly acknowledge in writing the discharge of the Company's obligations
under the Securities and this Indenture except for those surviving obligations
specified above.
(b) In addition, the Company may elect to have Section 8.2, at
the Company's option and at any time within one year of the Maturity Date of the
Securities, or Section 8.3, at the Company's option at any time, of this
Indenture applied to all outstanding Securities upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.2. Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 8.1(b) hereof of the option
applicable to this Section 8.2, the Company, the Parent and the Guarantors shall
be deemed to have been discharged from their respective obligations with respect
to all outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented and this Indenture shall cease to be of
further effect as to all outstanding Securities and Guarantees, except as to be
deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and the
Company, the Parent and the Guarantors shall be deemed to have satisfied all
other of their respective obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Securities to receive payments in respect of the
principal of, premium, if any, and interest (and Liquidated Damages, if any) on
such Securities when such payments are due from the trust described in Section
8.5, (b) the Company's obligations with respect to such Securities under
Sections 2.3, 2.4, 2.6, 2.7, 2.10, 4.2, 8.5, 8.6 and 8.7 hereof and (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's, the Parent's and the Guarantors' obligations in connection therewith.
Subject to compliance with this Article VIII, the Company may exercise its
option under this Section 8.2 notwithstanding the prior exercise of its option
under Section 8.3 hereof with respect to the Securities.
83
SECTION 8.3. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 8.1(b) hereof of the option
applicable to this Section 8.3, the Company, the Parent and the Guarantors shall
be released from their respective obligations under the covenants contained in
Sections 4.3, 4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17 and 4.18,
Article V and Article X hereof with respect to the outstanding Securities on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Securities shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, none of the Company, the Parent nor any Guarantor
need comply with and shall have any liability in respect of any term, condition
or limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document, but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.1(b) hereof of the option applicable to this Section
8.3, Sections 6.1(iii) through 6.1(ix) hereof shall not constitute Events of
Default with respect to the Securities.
SECTION 8.4. Conditions to Legal or Covenant Defeasance.
------------------------------------------
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Securities:
(a) (i) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 hereof who shall agree to comply with the provisions of this
Article VIII applicable to it), in trust, for the benefit of the Holders of the
Securities, cash, U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest (and Liquidated Damages, if any) on such outstanding Securities on the
stated date for payment thereof or on the redemption date of such principal or
installment of principal of, premium, if any, or interest on such Securities,
and the holders of Securities must have a valid, perfected, exclusive security
interest in such trust, (ii) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such opinion of counsel shall confirm that, the Holders of such
outstanding Securities will not recognize income, gain or loss for Federal
income tax purposes as a result of such Legal Defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
84
times as would have been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an opinion of counsel in the United States reasonably acceptable to
such Trustee confirming that the Holders of such outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a result of
such Covenant Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or insofar as
Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit; (v) such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under any material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound; (vi) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of such Securities over the
other creditors of the Company with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company; and (vii) the Company shall
have delivered to the Trustee an Officers' Certificate and an opinion of
counsel, each stating that the conditions precedent provided for, in the case of
the Officers' Certificate, clauses (i) through (vi) and, in the case of the
opinion of counsel, clauses (i), (with respect to the validity and perfection of
the security interest) (ii), (iii) and (v), of this paragraph have been complied
with and the Company shall have delivered to the Trustee an Officers'
Certificate, subject to such qualifications and exceptions as the Trustee deems
appropriate, to the effect that, assuming no Holder of the Securities is an
insider of the Company, the trust funds will not be subject to the effect of any
applicable Federal bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally.
If the funds deposited with the Trustee to effect Legal Defeasance or
Covenant Defeasance are insufficient to pay the principal of, premium, if any,
and interest (and Liquidated Damages, if any) on the Securities when due, then
the obligations of the Company and the Guarantors under this Indenture, the
Securities and the Guarantees will be revived and no such defeasance will be
deemed to have occurred.
SECTION 8.5. Deposited Cash and U.S. Government Obligations to be
----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
- ---------------------------------------------
Subject to Section 8.6 hereof, all cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Paying Agent") pursuant to Section 8.1 or 8.4 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Paying Agent,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any other 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, and interest
85
(and Liquidated Damages, if any), but such money need not be segregated from
other funds except to the extent required by law.
The Company 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 8.1 or 8.4 or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Securities.
SECTION 8.6. Repayment to the Company.
------------------------
(a) Anything in this Article VIII to the contrary
notwithstanding, the Trustee or the Paying Agent shall deliver or pay to the
Company from time to time upon the request of the Company any cash or U.S.
Government Obligations held by it as provided in Section 8.1 or 8.4 hereof which
in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Discharge, Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest (and Liquidated Damages, if any) on any Security and remaining
unclaimed for two years after such principal, and premium, if any, or interest
has become due and payable shall be paid to the Company on its request; and the
Holder of such Security shall thereafter look only to the Company for 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
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 8.7. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.1, 8.2 or 8.3 hereof, as the
case may be, of this Indenture by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.1, 8.2 or 8.3 hereof until such time
as the Trustee or Paying Agent is permitted to apply such money in accordance
with Sections 8.1, 8.2 and 8.3 hereof, as the case may be; provided, however,
that, if the Company makes any payment of
86
principal of, premium, if any, or interest (and Liquidated Damages, if any) on
any Security following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the cash or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or make any other
provisions with respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this Indenture, provided
such action pursuant to this clause (1) shall not adversely affect the interests
of any Holder in any respect;
(2) to add to the covenants of the Company or the Guarantors for the
benefit of the Holders, or to surrender any right or power herein conferred upon
the Company or the Guarantors or make any other change that does not adversely
affect the rights of any Holder;
(3) to provide for collateral for or additional Guarantors of the
Securities;
(4) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the obligations of the Company, herein
and in the Securities in accordance with Article V;
(5) to comply with the TIA;
(6) to evidence the succession of another corporation to any Guarantor
and assumption by any such successor of the Guarantee of such Guarantor (as set
forth in Section 11.4) in accordance with Article XI;
(7) to evidence the release of any Guarantor in accordance with
Article XI;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities;
87
(9) in any other case where a supplemental indenture is required or
permitted to be entered into pursuant to the provisions of this Indenture
without the consent of any Holder;
(10) to provide for the issuance and authorization of the Exchange
Securities;
(11) to provide for uncertificated Notes in addition to or in place of
certificated Notes; or
(12) to comply with the procedures of the Depositary or the Trustee
with respect to the provisions of the Indenture and the Notes relating to
transfers of Notes.
SECTION 9.2. Amendments, Supplemental Indentures and Waivers with
----------------------------------------------------
Consent of Holders.
- ------------------
Subject to Section 6.8 hereof, with the consent of the Holders of at
least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for such Securities), by written act of said Holders delivered to the Company
and the Trustee, the Company or any Guarantor, when authorized by Board
Resolutions, and the Trustee may amend or supplement this Indenture or the
Securities or enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or the Securities or of modifying in any
manner the rights of the Holders under this Indenture or the Securities;
provided that no such modification may, without the consent of holders of at
least 66% in aggregate principal amount of Securities at the time outstanding,
modify the provisions (including the defined terms therein) of Article X in a
manner adverse to the holders. Subject to Section 6.8, the Holder or Holders of
not less than a majority in aggregate principal amount of then outstanding
Securities may waive compliance by the Company or any Guarantor with any
provision of this Indenture or the Securities. Notwithstanding any of the
above, however, no such amendment, supplemental indenture or waiver shall,
without the consent of the Holder of each outstanding Security affected thereby:
(1) change the Maturity Date on any Security, or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest thereon
or any premium payable upon the redemption thereof, or change the place of
payment where, or the coin or currency in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Maturity Date thereof (or in the
case of redemption, on or after the Redemption Date), or reduce the Change of
Control Purchase Price or the Asset Sale Offer Price (after the occurrence of an
event giving rise to a Change of Control Offer or an Asset Sale Offer,
respectively) or alter the provisions (including the defined terms used herein)
of Article III of this Indenture or Paragraph 5 of the Securities regarding the
right of the Company to redeem the Securities in a manner adverse to the
Holders; or
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(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such amendment,
supplemental indenture or wavier provided for in this Indenture; or
(3) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.2 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 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 or waiver.
After an amendment, supplement or waiver under this Section 9.2 or
under Section 9.4 hereof becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by written notice to the
Company or the Person designated by the Company as the Person to whom consents
should be sent if such revocation is received by the Company or such Person
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.
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The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders 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
(1) through (3) of Section 9.2 hereof, in which case, the amendment, supplement
or waiver shall bind only 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; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest (and Liquidated Damages, if any) on a
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates.
SECTION 9.5. 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
or require the Holder to put an appropriate notation on the Security. 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. Any
failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment, supplement or waiver.
SECTION 9.6. Trustee to Sign Amendments, Etc.
--------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
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ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the Holder Upon
-----------------------------------------------------
a Change of Control.
- -------------------
(a) In the event that a Change of Control has occurred, each
holder of Securities shall have the right, at such holder's option, pursuant to
an irrevocable and unconditional offer by the Company (the "Change of Control
Offer"), to require the Company to repurchase all or any part of such holder's
Securities (provided, that the principal amount of such Securities must be
$1,000 or an integral multiple thereof) on a date (the "Change of Control
Purchase Date") that is no later than 45 Business Days after the occurrence of
such Change of Control, at a cash price equal to 101% of the principal amount
thereof (the "Change of Control Purchase Price"), together with accrued and
unpaid interest and Liquidated Damages, if any, to the Change of Control
Purchase Date.
Notwithstanding the foregoing, the Company will not be required to
make a Change of Control Offer upon a Change of Control if a Person with which
the Company or Parent, as the case may be, intends to merge, consolidate, or be
sold makes the Change of Control Offer in the manner, at the times and otherwise
in compliance with the requirements set forth in this Article X applicable to a
Change of Control Offer made by the Company, including any requirements to repay
in full the Revolving Credit Facility or obtain the consents of such lenders to
such Change of Control Offer as set forth in the following paragraph, and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
Notwithstanding anything in this Article X to the contrary, prior to
the commencement of a Change of Control Offer, but in any event within 20 days
following any Change of Control, the Company shall (i)(a) repay in full and
terminate all commitments under Indebtedness under the Credit Agreement or (b)
offer to repay in full and terminate all commitments under all Indebtedness
under the Credit Agreement and repay the Indebtedness owed to each lender which
has accepted such offer in full or (ii) obtain the requisite consents under the
Credit Agreement to permit the repurchase of the Securities as provided herein.
The Company's failure to comply with the preceding sentence shall constitute an
Event of Default described in Section 6.1(iv) and not in Section 6.1(ii).
(b) In the event that, pursuant to this Section 10.1, the
Company shall be required to commence a Change of Control Offer, the Company
shall follow the procedures set forth in this Section 10.1 as follows:
(i) the Change of Control Offer shall commence within 20
Business Days following the occurrence of a Change of Control;
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(ii) the Change of Control Offer shall remain open for at least
25 Business Days following its commencement (the "Change of Control Offer
Period");
(iii) upon the expiration of the Change of Control Offer Period,
the Company promptly shall purchase all of the tendered Securities at the
Change of Control Purchase Price;
(iv) if the Change of Control is on or after an interest payment
record date and on or before the related interest payment date, any accrued
interest (and Liquidated Damages, if any) will be paid to the Person in
whose name a Security is registered at the close of business on such record
date, and no additional interest will be payable to Securityholders who
tender Securities pursuant to the Change of Control Offer;
(v) the Company shall provide the Trustee and the Paying Agent
with written notice of the Change of Control Offer at least three Business
Days before the commencement of any Change of Control Offer; and
(vi) on or before the commencement of any Change of Control
Offer, the Company or the Trustee (upon the request and at the expense of
the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
(A) that the Change of Control Offer is being made
pursuant to this Section 10.1 and that all Securities, or portions
thereof, tendered will be accepted for payment;
(B) the Change of Control Purchase Price (including
the amount of accrued but unpaid interest (and Liquidated Damages, if
any)) and the Change of Control Purchase Date;
(C) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest;
(D) that, unless the Company defaults in depositing
cash with the Paying Agent in accordance with the last paragraph of this
Section 10.1, or such payment is prevented for any reason, any Security,
or portion thereof, accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Purchase Date;
(E) that Holders electing to have a Security, or
portion thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security completed, to
the Paying Agent (which
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may not for purposes of this Section 10.1, notwithstanding anything in
this Indenture to the contrary, be the Company or any Affiliate of the
Company) at the address specified in the notice prior to the expiration
of the Change of Control Offer;
(F) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent receives, prior to
the expiration of the Change of Control Offer, a facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Securities the Holder is withdrawing and a statement containing a
facsimile signature and stating that such Holder is withdrawing his
election to have such principal amount of Securities purchased;
(G) that Holders whose Securities are purchased only
in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(H) a brief description of the events resulting in
such Change of Control.
Any such Change of Control Offer shall comply with the requirements of
Regulation 14E under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable in
connection with the repurchase of the Securities pursuant to a Change of Control
Offer. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Indenture relating to a Change of Control, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under such provisions of
this Indenture by virtue thereof.
On or before the Change of Control Purchase Date, the Company shall
(i) accept for payment Securities or portions thereof properly tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent cash
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Securities so
tendered and (iii) deliver to the Trustee Securities so accepted together with
an Officers' Certificate listing the Securities or portions thereof being
purchased by the Company. The Paying Agent promptly will pay the Holders of
Securities so accepted an amount equal to the Change of Control Purchase Price
(together with accrued and unpaid interest and Liquidated Damages, if any), and
the Trustee promptly will authenticate and deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted will be delivered promptly by the
Company to the Holder thereof. The Company publicly will announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Purchase Date.
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ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee.
---------
(a) (i) All current and future Subsidiaries of the Company
(other than a Receivables Subsidiary or a Foreign Subsidiary), whether pursuant
to the acquisition by the Company or any Guarantor of Equity Interests of such
Person, or otherwise, (ii) each Foreign Subsidiary (A) which guarantees or
otherwise becomes liable for Indebtedness of the Company or any Guarantor or (B)
more than 65% of the capital stock of which becomes pledged to secure any
Indebtedness of the Company or any Guarantor (in each case, a "Guarantor") and
(iii) any Parent shall, to the fullest extent permitted by applicable law,
irrevocably and unconditionally guarantee (the "Guarantee") to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability against
the Company, the Parent and any Guarantors of this Indenture, the Securities or
the obligations of the Company under this Indenture or the Securities, that: (x)
the principal of and premium (if any), and interest (and Liquidated Damages, if
any) on the Securities will be paid in full when due, whether at the Maturity
Date or Interest Payment Date, by acceleration, call for redemption, upon a
Change of Control, an Asset Sale Offer or otherwise; (y) all other obligations
of the Company to the Holders or the Trustee under this Indenture or the
Securities will be promptly paid in full or performed, all in accordance with
the terms of this Indenture and the Securities; and (z) in case of any extension
of time of payment or renewal of any Securities or any of such other
obligations, they will be paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at maturity, by acceleration,
call for redemption, upon a Change of Control, an Asset Sale Offer or otherwise.
Failing payment when due of any amount so guaranteed for whatever reason, each
Guarantor shall be obligated to pay the same before failure so to pay becomes an
Event of Default. Each Guarantor shall, within five Business Days after becoming
obligated to execute a Guarantee pursuant to clauses (i), (ii) or (iii) above,
execute and deliver to the Trustee a supplemental indenture, which shall be in a
form satisfactory to the Trustee, making such Guarantor a party to this
Indenture.
If the Company, the Parent or a Guarantor defaults in the payment of
the principal of, premium, if any, or interest (or Liquidated Damages, if any)
on, the Securities when and as the same shall become due, whether upon maturity,
acceleration, call for redemption, upon a Change of Control Offer, upon an Asset
Sale Offer or otherwise, without the necessity of action by the Trustee or any
Holder, each Guarantor and the Parent shall be required, jointly and severally,
to promptly make such payment in full.
(b) Each Guarantor and the Parent hereby agree to the fullest
extent permitted by applicable law, that its obligations with regard to this
Guarantee shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this
94
Indenture, the absence of any action to enforce the same, any delays in
obtaining or realizing upon or failures to obtain or realize upon collateral,
the recovery of any judgment against the Company, any action to enforce the same
or any other circumstances that might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor and the Parent hereby waive
to the fullest extent permitted by applicable law 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 or right to require the prior disposition of the assets of the Company
to meet its obligations, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company, the Parent or any Guarantor, or any
Custodian or similar official acting in relation to either the Company, the
Parent or such Guarantor, any amount paid by either the Company, the Parent or
such Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor and the Parent agree that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor and the Parent further agree that, as between such Guarantor and the
Parent, on the one hand, and the Holders and the Trustee, on the other hand, (i)
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Section 6.2 hereof for the purposes of this Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration as to the
Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2
hereof, those obligations (whether or not due and payable) will forthwith become
due and payable by each of the Guarantors and the Parent for the purpose of this
Guarantee.
(d) It is the intention of each Guarantor, the Parent and the
Company that the obligations of each Guarantor and the Parent hereunder shall be
in, but not in excess of, the maximum amount permitted by applicable law.
Accordingly, if the obligations in respect of the Guarantee would be annulled,
avoided or subordinated to the creditors of any Guarantor or the Parent by a
court of competent jurisdiction in a proceeding actually pending before such
court as a result of a determination both that such Guarantee was made by such
Guarantor or the Parent without fair consideration and, immediately after giving
effect thereto, such Guarantor or the Parent was insolvent or unable to pay its
debts as they mature or left with an unreasonably small capital, then the
obligations of such Guarantor or the Parent under such Guarantee shall be
reduced by such court if and to the extent such reduction would result in the
avoidance of such annulment, avoidance or subordination; provided, however, that
any reduction pursuant to this paragraph shall be made in the smallest amount as
is strictly necessary to reach such result. For purposes of this paragraph,
"fair consideration", "insolvency", "unable to pay its debts as they mature",
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
95
SECTION 11.2. Execution and Delivery of Guarantee.
-----------------------------------
Each Guarantor and the Parent shall, by virtue of such Guarantor's or
the Parent's execution and delivery of an indenture supplement pursuant to
Section 11.1 hereof, be deemed to have signed on each Security issued hereunder
the notation of guarantee set forth on the form of the Securities attached
hereto as Exhibit A to the same extent as if the signature of such Guarantor or
the Parent appeared on such Security.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guarantee set forth in
Section 11.1 on behalf of each Guarantor and the Parent. The notation of a
guarantee set forth on any Security shall be null and void and of no further
effect with respect to the guarantee of any Guarantor or the Parent which,
pursuant to Section 11.4, is released from such Guarantee.
SECTION 11.3. Certain Bankruptcy Events.
-------------------------
Each Guarantor and the Parent hereby covenant and agree, to the
fullest extent that it may do so under applicable law, that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Guarantor and the Parent shall not file (or join in any filing
of), or otherwise seek to participate in the filing of, any motion or request
seeking to stay or to prohibit (even temporarily) execution on the Guarantee and
hereby waives and agrees not to take the benefit of any such stay of execution,
whether under Section 362 or 105 of the United States Bankruptcy Code or
otherwise.
SECTION 11.4. Limitation on Merger of Subsidiaries and Release of
---------------------------------------------------
Guarantors and the Parent.
- ----------
Neither any Guarantor nor the Parent shall consolidate or merge with
or into (whether or not such Guarantor or the Parent is the surviving person)
another person unless (i) subject to the provisions of the following paragraph
and certain other provisions of this Indenture, the person formed by or
surviving any such consolidation or merger (if other than such Guarantor or the
Parent) assumes all the obligations of such Guarantor or the Parent pursuant to
a supplemental indenture in form reasonably satisfactory to the Trustee,
pursuant to which such person shall unconditionally guarantee, on a senior
subordinated basis, all of such Guarantor's or the Parent's obligations under
such Guarantor's or the Parent's guarantee and this Indenture on the terms set
forth in this Indenture; and (ii) immediately before and immediately after
giving effect to such transaction on a pro forma basis, no Default or Event of
Default shall have occurred or be continuing.
Upon the sale or disposition (whether by merger, stock purchase, asset
sale or otherwise) of a Subsidiary Guarantor (or all of its assets) to an entity
which is not a Subsidiary Guarantor (including the designation of a Subsidiary
to become an Unrestricted Subsidiary), which transaction is otherwise in
compliance with this Indenture (including, without limitation, the
96
provisions of Section 4.14), such Subsidiary Guarantor will be deemed released
from its obligations under its Guarantee of the Securities; provided, however,
that any such termination shall occur only to the extent that all obligations of
such Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, any Indebtedness of
the Company or any other Subsidiary shall also terminate upon such release, sale
or transfer.
ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Debt.
--------------------------------------
The Company, the Parent and the Guarantors and each Holder, by its
acceptance of Securities, agree that (a) the payment of the principal of and
interest on the Securities and (b) any other payment in respect of the
Securities, including on account of the acquisition or redemption of the
Securities by the Company, the Parent and the Guarantors (including, without
limitation, pursuant to Section 4.14, Article X or Article XI) is subordinated,
to the extent and in the manner provided in this Article XII, to the prior
payment in full in cash or Cash Equivalents of all Senior Debt of the Company,
the Parent and the Guarantors and that these subordination provisions are for
the benefit of the holders of Senior Debt. References herein to payment in full
of Senior Debt shall in any event be construed to require cash collateralization
on terms satisfactory to the representative under the Credit Agreement of any
letters of credit outstanding thereunder or pursuant to such other arrangements
as are satisfactory to the representative under the Credit Agreement.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt and such holders are made obligees hereunder and any one or more of
them may enforce such provisions.
SECTION 12.2. No Payment on Securities in Certain Circumstances.
-------------------------------------------------
(a) No payment (by set-off or otherwise) shall be made by or
on behalf of the Company, the Parent or a Guarantor, as applicable, on account
of the principal of, premium, if any, or interest or Liquidated Damages on the
Securities (including any repurchases of Securities), or on account of any other
obligation for the payment of money due in respect of the Securities, or on
account of the redemption provisions of the Securities, for cash or property
(other than Junior Securities), (i) upon the maturity of any Senior Debt of the
Company, the Parent or such Guarantor by lapse of time, acceleration (unless
waived) or otherwise, unless and until all principal of, premium, if any, and
the interest on or other amounts owing in respect of such Senior Debt are first
paid in full in cash or Cash Equivalents (or, such payment is duly provided for
in accordance with the terms thereof) or otherwise to the extent holders accept
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satisfaction of amounts due by settlement in other than cash or Cash
Equivalents, or (ii) in the event of default in the payment of any principal of,
premium, if any, or interest on Senior Debt of the Company, the Parent or such
Guarantor when it becomes due and payable, whether at maturity, a scheduled
payment date, or at a date fixed for prepayment or by declaration of
acceleration or otherwise (a "Payment Default"), unless and until such Payment
Default has been cured or waived or otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default other than a
Payment Default that permits the holders of Senior Debt or any representative
thereof to declare such Senior Debt to be due and payable and (ii) written
notice of such event of default given to the Company and the Trustee by the
Representative under the Credit Agreement or the holders of any other Designated
Senior Debt or their representative (a "Payment Notice"), then, unless and until
such event of default has been cured or waived or otherwise has ceased to exist,
no payment (by set-off or otherwise) may be made by or on behalf of the Company,
the Parent or any Guarantor, as applicable, which is an obligor under such
Senior Debt on account of any Obligation in respect of the Securities, including
the principal of, premium, if any, or interest on the Securities (including any
repurchases of any of the Securities), or on account of the redemption
provisions of the Securities (or liquidated damages pursuant to the Registration
Rights Agreement), in any such case, other than payments made with Junior
Securities. Notwithstanding the foregoing, unless the Senior Debt in respect of
which such event of default exists has been declared due and payable in its
entirety within 179 days after the Payment Notice is delivered as set forth
above (the "Payment Blockage Period") (and such declaration has not been
rescinded or waived), at the end of the Payment Blockage Period, the Company,
the Parent and the Guarantors shall be required to pay all sums not paid to the
Holders of the Securities during the Payment Blockage Period due to the
foregoing prohibitions and to resume all other payments as and when due on the
Securities, subject to the provisions of Section 12.2(a) above. Any number of
Payment Notices may be given; provided, however, that (i) not more than one
Payment Notice shall be given within a period of any 360 consecutive days, and
(ii) no default that existed upon the date of such Payment Notice or the
commencement of such Payment Blockage Period (whether or not such event of
default is on the same issue of Senior Debt) shall be made the basis for the
commencement of any other Payment Blockage Period unless such default shall have
been cured or waived for a period of not less than 90 days (it being
acknowledged that any subsequent action, or any subsequent breach of any
financial covenant after the expiration of such Payment Blockage Period that, in
either case, would give rise to a new event of default, even though it is an
event that would also have constituted a breach pursuant to any provision under
which a prior event of default previously existed, shall constitute a new event
of default for this purpose).
(c) In furtherance of the provisions of Section 12.1, in the event
that, notwithstanding the foregoing provisions of this Section 12.2, any payment
or distribution of assets of the Company, the Parent or any Guarantor, whether
in cash, property or securities (other than Junior Securities) shall be received
by the Trustee or the Holders at a time when such payment or distribution is
prohibited by the foregoing provisions of this Section 12.2, such payment or
distribution shall be held in trust for the benefit of the holders of such
Senior Debt,
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and shall be paid or delivered by the Trustee or such Holders, as the case may
be, to the holders of such Senior Debt remaining unpaid or unprovided for or to
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior Debt
may have been issued, ratably according to the aggregate principal amounts
remaining unpaid on account of such Senior Debt held or represented by each, for
application to the payment of all such Senior Debt remaining unpaid, to the
extent necessary to pay or to provide for the payment of all such Senior Debt in
full in cash or Cash Equivalents or otherwise to the extent holders accept
satisfaction of amounts by settlement in other than cash or Cash Equivalents
after giving effect to any concurrent payment or distribution to the holders of
such Senior Debt.
SECTION 12.3. Securities Subordinated to Prior Payment of All Senior
------------------------------------------------------
Debt on Dissolution, Liquidation or Reorganization.
- --------------------------------------------------
Upon any distribution of assets of the Company, the Parent or any
Guarantor upon any dissolution, winding up, total or partial liquidation or
reorganization of the Company, the Parent or a Guarantor, whether voluntary or
involuntary, in bankruptcy, insolvency, receivership or a similar proceeding or
upon assignment for the benefit of creditors or any marshalling of assets or
liabilities:
(a) the holders of all Senior Debt of the Company, the Parent
or such Guarantor, as applicable, will first be entitled to receive payment in
full in cash or Cash Equivalents (or have such payment duly provided for in
accordance with the terms thereof) or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash Equivalents
before the Holders are entitled to receive any payment on account of any
Obligation in respect of the Securities, including the principal of, premium, if
any, and interest on the Securities (or liquidated damages pursuant to the
Registration Rights Agreement) (other than Junior Securities); and
(b) any payment or distribution of assets of the Company, the
Parent or such Guarantor of any kind or character from any source, whether in
cash, property or securities (other than Junior Securities) to which the Holders
or the Trustee on behalf of the Holders would be entitled (by set-off or
otherwise), except for the subordination provisions contained in this Indenture,
will be paid by the liquidating trustee or agent or other person making such a
payment or distribution directly to the holders of such Senior Debt or their
representative to the extent necessary to make payment in full (or have such
payment duly provided for) on all such Senior Debt remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Debt.
99
SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders
-----------------------------------------------------
of Senior Debt.
- --------------
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt of the Company, the Parent or any Guarantor as provided herein, the
Holders of Securities shall be subrogated to the rights of the holders of such
Senior Debt to receive payments or distributions of assets of the Company
applicable to the Senior Debt until all amounts owing on the Securities shall be
paid in full, and for the purpose of such subrogation no such payments or
distributions to the holders of such Senior Debt by or on behalf of the Company,
the Parent or any Guarantor, or by or on behalf of the Holders by virtue of this
Article XII, which otherwise would have been made to the Holders shall, as
between the Company, the Parent or any Guarantor and the Holders, be deemed to
be payment by the Company, the Parent or any Guarantor or on account of such
Senior Debt, it being understood that the provisions of this Article XII are and
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of such Senior Debt, on the other
hand.
SECTION 12.5. Obligations of the Company, the Parent and the
----------------------------------------------
Guarantors Unconditional.
- ------------------------
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, the
Parent and any Guarantors and the Holders, the obligation of each such Person,
which is absolute and unconditional, to pay to the Holders the principal of,
premium, if any, and interest on (or, if applicable, Liquidated Damages) 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 and creditors of the Company, the Parent and the Guarantors other than
the holders of the Senior Debt, nor shall anything herein or therein prevent the
Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article XII, of the holders of Senior Debt, including, without
limitation, their right to receive any cash, property or securities of the
Company, the Parent and the Guarantors received upon the exercise of any such
remedy. Notwithstanding anything to the contrary in this Article XII or
elsewhere in this Indenture or in the Securities, upon any distribution of
assets of the Company, the Parent and the Guarantors referred to in this Article
XII, the Trustee, subject to the provisions of Sections 7.1 and 7.2, and the
Holders shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
Trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt and other Indebtedness of
the Company, the Parent or any 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 XII so long as such court has been apprised of the
provisions of, or the order, decree or certificate makes reference to, the
provisions of this Article XII. Nothing in this Section 12.5 shall apply to the
claims of, or payments to, the Trustee under or pursuant to Section 7.7.
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SECTION 12.6. Trustee Entitled to Assume Payments Not Prohibited in
-----------------------------------------------------
Absence of Notice.
- -----------------
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment
written notice thereof from the Company or from one or more holders of Senior
Debt or from any representative therefor and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Sections 7.1 and 7.2,
shall be entitled in all respects conclusively to assume that no such fact
exists.
SECTION 12.7. Application by Trustee of Assets Deposited with It.
--------------------------------------------------
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Securityholders
and, to the extent (i) the making of such deposit by the Company shall not be in
contravention of any term or provision of the Credit Agreement or other
Designated Senior Debt and (ii) allocated for the payment of Securities, shall
not be subject to the subordination provisions of this Article XII. Otherwise,
any deposit of assets with the Trustee or the Agent (whether or not in trust)
for the payment of principal of or interest on any Securities shall be subject
to the provisions of Sections 12.1, 12.2, 12.3 and 12.4; provided that, if prior
to one Business Day preceding the date on which by the terms of this Indenture
any such assets may become distributable for any purpose (including without
limitation, the payment of either principal of or interest on any Security) the
Trustee or such Paying Agent shall not have received with respect to such assets
the written notice provided for in Section 12.6, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets 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 date.
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions
------------------------------------------------------
of the Company, the Parent, the Guarantors or Holders of Senior Debt.
- --------------------------------------------------------------------
No right of any present or future holders of any Senior Debt to
enforce subordination provisions contained in this Article XII shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company, the Parent or any Guarantor or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company, the
Parent or any Guarantor with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or be otherwise charged with.
The holders of Senior Debt may extend, renew, modify or amend the terms of the
Senior Debt or any security therefor and release, sell or exchange such security
and otherwise deal freely with the Company, the Parent and the Guarantors, all
without affecting the liabilities and obligations of the parties to this
Indenture or the Holders. The subordination provisions contained in this
Indenture are for the benefit of the holders from time to time of Senior Debt
and may not be rescinded, cancelled, amended or modified in any way other than
any amendment or modification that would not
101
adversely affect the rights of any holder of Senior Debt or any amendment or
modification that is consented to by each holder of Senior Debt that would be
adversely affected thereby. The subordination provisions hereof shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Senior Debt is rescinded or must otherwise be returned by any
holder of the Senior Debt upon the insolvency, bankruptcy, or reorganization of
the Company, the Parent or any Guarantor, or otherwise, all as though such
payment has not been made.
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
-----------------------------------------------
Subordination of Securities.
- ---------------------------
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company, the Parent or any Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or any other marshalling of assets and liabilities of the
Company, the Parent or any Guarantor), the immediate filing of a claim for the
unpaid balance of his Securities in the form required in said proceedings and
cause said claim to be approved. In the event of any liquidation or
reorganization of the Company, the Parent or any Guarantor in bankruptcy,
insolvency, receivership or similar proceeding, if the Holders of the Securities
(or the Trustee on their behalf) have not filed any claim, proof of claim, or
other instrument of similar character necessary to enforce the obligations of
the Company, the Parent or any Guarantor in respect of the Securities at least
thirty (30) days before the expiration of the time to file the same, then in
such event, but only in such event, the holders of the Designated Senior Debt or
a representative on their behalf may, as an attorney-in-fact for such Holders,
file any claim, proof of claim, or other instrument of similar character on
behalf of such Holders. Nothing herein contained shall be deemed to authorize
the Trustee or the holders of Senior Debt or their representative to authorize
or consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Senior Debt or their representative to vote in respect of the claim of any
Securityholder in any such proceeding. As a condition to taking any action by
the Trustee pursuant to this Section 12.9, the Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred thereby.
SECTION 12.10. Right of Trustee to Hold Senior Debt.
------------------------------------
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
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SECTION 12.11. Article XII Not to Prevent Events of Default.
--------------------------------------------
The failure to make a payment on account of principal of, premium, if
any, or interest (or Liquidated Damages, if any) on the Securities by reason of
any provision of this Article XII shall not be construed as preventing the
occurrence of a Default or an Event of Default under Section 6.1 or in any way
limit the rights of the Trustee or any Holder to pursue any other rights or
remedies with respect to the Securities.
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Senior
-------------------------------------------------
Debt.
- ----
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Securities or the Company, the Parent,
any Guarantor or any other Person, cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article XII or
otherwise. Nothing in this Section 12.12 shall affect the obligation of any
other such Person to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Debt or their representative. In the
event of any conflict between the fiduciary duty of the Trustee to the Holders
of Securities and to the holders of Senior Debt, the Trustee is expressly
authorized to resolve such conflict in favor of the Holders.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 13.2. Notices.
-------
Any notices or other communications to the Company, the Parent or any
Guarantor or the Trustee required or permitted hereunder shall be in writing,
and shall be sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company, the Parent or any Guarantor:
HDA Parts System, Inc.
2912 3rd Avenue North
103
Birmingham, Alabama 35202
Attention: John J. Greisch
Telecopy: (800) 292-6509
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: Randy Bassett, Esq.
Telecopy: (213) 891-8763
if to the Trustee:
U.S. Trust Company, National Association
515 South Flower Street, Suite 2700
Los Angeles, California 90071
Attention: Corporate Trust Department
Telecopy: (213) 488-1370
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 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 (S) 312(c).
104
SECTION 13.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company, the Parent or any
Guarantor to the Trustee to take any action under this Indenture, such Person
shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
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 met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel,
all such conditions precedent have been met.
SECTION 13.5. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been met; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been met; 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 13.6. 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.
105
SECTION 13.7. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 13.8. Governing Law.
-------------
THIS INDENTURE, THE GUARANTEES AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b).
SECTION 13.9. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company, the Parent or any Guarantor or any of their
respective Subsidiaries. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
--------------------------
No partner, incorporator, direct or indirect stockholder, director,
officer or employee, as such, past, present or future, of the Company, the
Parent or any Guarantor, or any successor entity, shall have any personal
liability in respect of the obligations of the Company, the Parent and the
Guarantors under the Securities, this Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation by reason of his,
her or its status as such partner, incorporator, stockholder, director, officer
or employee. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
SECTION 13.11. Successors.
----------
All agreements of the Company, the Parent and the Guarantors in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 13.12. Duplicate Originals.
-------------------
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
106
SECTION 13.13. Severability.
------------
In case any one or more of the provisions in this Indenture or in the
Securities or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14. Table of Contents, Headings, Etc.
---------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.15. Qualification of Indenture.
--------------------------
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive
from the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.16. Registration Rights.
-------------------
Certain Holders of the Securities may be entitled to certain
registration rights with respect to such Securities pursuant to, and subject to
the terms of, the Registration Rights Agreement.
107
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
HDA PARTS SYSTEM, INC.,
an Alabama corporation
By: /s/ John J. Greisch
-----------------------------
Name:
Title:
CITY TRUCK AND TRAILER PARTS OF
ALABAMA, INC.,
an Alabama corporation
By: /s/ John J. Greisch
-----------------------------
Name:
Title:
CITY TRUCK AND TRAILER PARTS OF
ALABAMA, L.L.C.,
an Alabama limited liability company
By: /s/ John J. Greisch
-----------------------------
Name:
Title:
CITY TRUCK AND TRAILER PARTS OF
TENNESSEE, INC.,
a Tennessee corporation
By: /s/ John J. Greisch
-----------------------------
Name:
Title:
CITY FRICTION, INC.,
an Alabama corporation
By: /s/ John J. Greisch
-----------------------------
Name:
Title:
U.S. TRUST COMPANY,
NATIONAL ASSOCIATION
as Trustee
By: /s/ Sandee Parks
-----------------------------
Name: Sandee Parks
Title: Vice President
108