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EXHIBIT 4.2
EXECUTION COPY
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PRISON REALTY TRUST, INC.
12% SENIOR NOTES DUE 2006
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FIRST SUPPLEMENTAL INDENTURE
Dated as of June 11, 1999
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STATE STREET BANK AND TRUST COMPANY
Trustee
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.....................................................................................1
Section 1.02. Other Definitions..............................................................................16
Section 1.03. Incorporation by Reference of Trust Indenture Act..............................................16
Section 1.04. Rules of Construction..........................................................................17
ARTICLE 2
REDEMPTION
Section 2.01. Selection of Securities to Be Redeemed.........................................................17
Section 2.02. Optional Redemption............................................................................18
Section 2.03. Offer to Purchase by Application of Excess Proceeds............................................18
ARTICLE 3
COVENANTS
Section 3.01. Reports........................................................................................21
Section 3.02. Taxes..........................................................................................21
Section 3.03. Stay, Extension and Usury Laws.................................................................21
Section 3.04. Restricted Payments............................................................................22
Section 3.05. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries......................25
Section 3.06. Incurrence of Indebtedness and Issuance of Disqualified Stock or Subsidiary Preferred Stock....26
Section 3.07. Asset Sales....................................................................................29
Section 3.08. Transactions with Affiliates...................................................................30
Section 3.09. Liens..........................................................................................31
Section 3.10. Offer to Repurchase Upon Change of Control.....................................................31
Section 3.11. Business Activities............................................................................32
Section 3.12. Subsidiary Guarantees..........................................................................32
Section 3.13. Designation of Restricted and Unrestricted Subsidiaries........................................32
Section 3.14. Transactions with CCA Entities.................................................................33
Section 3.15. Changes in Covenants when Securities Rated Investment Grade....................................34
ARTICLE 4
SUCCESSORS
Section 4.01. Merger, Consolidation, or Sale of Assets.......................................................34
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.01. Events of Default..............................................................................35
Section 5.02. Acceleration...................................................................................36
Section 5.03. Compliance Certificate; Notices of Default.....................................................37
ARTICLE 6
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 6.01. Option to Effect Legal Defeasance or Covenant Defeasance.......................................37
Section 6.02. Legal Defeasance and Discharge.................................................................37
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Section 6.03. Covenant Defeasance............................................................................38
Section 6.04. Conditions to Legal or Covenant Defeasance.....................................................38
ARTICLE 7
SATISFACTION AND DISCHARGE
Section 7.01. Satisfaction and Discharge of Indenture........................................................39
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
Section 8.01. Without Consent of Holders of Securities.......................................................40
Section 8.02. With Consent of Holders of Securities..........................................................40
Section 8.03. Revocation and Effect of Consents..............................................................42
Section 8.04. Notation on or Exchange of Securities..........................................................42
Section 8.05. Payments for Consent...........................................................................42
ARTICLE 9
SUBSIDIARY GUARANTEES
Section 9.01. Subsidiary Guarantee...........................................................................42
Section 9.02. Limitation on Guarantor Liability..............................................................43
Section 9.03. Execution and Delivery of Subsidiary Guarantee.................................................44
Section 9.04. Guarantors May Consolidate, etc., on Certain Terms.............................................44
Section 9.05. Releases Following Sale of Assets..............................................................45
ARTICLE 10
MISCELLANEOUS
Section 10.01. No Personal Liability of Directors, Officers, Employees and Stockholders.......................45
Section 10.02. Priority of Supplemental Indenture.............................................................45
Section 10.03. Governing Law..................................................................................46
Section 10.04. Appointment of Paying Agent, Etc...............................................................46
Section 10.05. Execution of the Notes.........................................................................46
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF SUBSIDIARY GUARANTEE
Exhibit C FORM OF SUPPLEMENTAL INDENTURE
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FIRST SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as
of June 11, 1999 between Prison Realty Trust, Inc., a Maryland corporation (the
"Company"), and State Street Bank and Trust Company, as trustee (the "Trustee"),
to the INDENTURE (the "Original Indenture"), dated as of June 10, 1999, between
the Company and the Trustee. Pursuant to Section 3.01 of the Original Indenture,
the Company desires to set forth the terms of a new series of securities.
Therefore, the Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of 12% Senior Notes
due 2006 (the "Securities").
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. Definitions.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Original Indenture.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
"Additional Securities" means up to $50.0 million in aggregate
principal amount of Securities (other than the Initial Securities) issued under
this Supplemental Indenture in accordance with Section 3.03 of the Original
Indenture and Section 3.06 hereof.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by," and "under common control
with" shall have correlative meanings.
"API" means Agecroft Properties, Inc.
"APM" means Agecroft Prison Management Limited.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights, other than sales of inventory consisting of
personal property in the ordinary course of business; provided that the sale,
conveyance or other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will be governed by
Section 3.10 and/or Article 4 hereof and not by Sections 2.03 and 3.07 hereof
and (ii) the issuance of Equity Interests by any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries by the Company or any such Restricted Subsidiaries.
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Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales: (i) any single transaction or series of related
transactions that involves assets having a Fair Market Value of less than $5.0
million; (ii) a transfer of assets between or among the Company and its
Restricted Subsidiaries; (iii) an issuance of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary; (iv) the sale or
lease of equipment, inventory, accounts receivable or other assets in the
ordinary course of business; (v) the sale or other disposition of cash or Cash
Equivalents; (vi) the sale of any of the Designated Assets pursuant to the terms
of the related lease; (vii) the sale of Cash Equivalents in the ordinary course
of business; (viii) the issuance of Equity Interests by the Company; (ix)
dispositions of any assets to a lender in connection with a foreclosure or in
lieu of a foreclosure so long as such lender has a Permitted Lien on any such
assets and, to the extent such Permitted Lien constituted Indebtedness, it was
permitted to be incurred by Section 3.06 hereof; and (x) a Restricted Payment or
Permitted Investment that is permitted by Section 3.04 hereof.
"Bank Credit Facility" means that certain Credit Agreement, dated as
of January 1, 1999, by and among the Company, Lehman Commercial Paper Inc., as
Documentation Agent, NationsBank, N.A., as Administrative Agent, The Bank of
Nova Scotia, as Syndication Agent, and the other parties thereto, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, restated, amended
and restated, modified, renewed, refunded, replaced or refinanced from time to
time (including, without limitation, any amendment, restatement, amendment and
restatement, modification, renewal, refunding, replacement or refinancing that
increases the maximum principal amount of loans made or to be made thereunder).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"Board of Directors" means (i) with respect to a corporation, the
board of directors of the corporation, (ii) with respect to a partnership, the
board of directors of the general partner of the partnership and (iii) with
respect to any other Person, the board or committee of such Person serving a
similar function.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
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"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition, (iii)
certificates of deposit, time deposits and eurodollar time deposits with
maturities of twelve months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding twelve months and overnight bank
deposits, in each case, with any lender party to the Bank Credit Facility or
with any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Services and in each case
maturing within six months after the date of acquisition and (vi) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (i) through (v) of this definition.
"CCA Entities" means each of Corrections Corporation of America,
Prison Management Services, Inc. and Juvenile and Jail Facility Management
Services, Inc., any successor to each of the foregoing and any of their
respective Subsidiaries.
"Change of Control" means the occurrence of any of the following:
(i) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially all
of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole or of the Operating Company to any
"person" (as that term is used in Section 13(d)(3) of the Exchange
Act) other than the Principals and their Related Parties;
(ii) greater than 50% of the Company's aggregate amount of
facilities, measured by aggregate number of beds, are managed by any
one person or group of Persons other than the Operating Company or
any successor to the Operating Company (and where no Change of
Control otherwise occurs) or any affiliate of the Operating Company
or any company managed by substantially the same people as the
Operating Company or any governmental entity in the jurisdiction
where such facility is located;
(iii) the adoption of a plan relating to the liquidation
or dissolution of the Company or of the Operating Company;
(iv) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above), other than the Principals
and their Related Parties, becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of the Company or of
the Operating Company, measured by voting power rather than number of
shares; or
(v) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of the Company or of the Operating Company (together
with any new directors whose election by either such Board of
Directors or whose nomination for election by the stockholders of the
Company or the shareholders of Operating Company, as applicable, was
approved by a vote of at least a majority of the directors of the
Company or the Operating Company, as applicable, then still in office
who were either
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directors at the beginning of such period or whose election or
nomination for election was previously so approved or is a designee
of the Principals and their Related Parties or was nominated or
elected by such Principals and their Related Parties or any of their
designees) cease for any reason to constitute a majority of the Board
of Directors of the Company or the Operating Company, as applicable,
then in office.
"Commission" means the Securities and Exchange Commission.
"Consolidated Adjusted Total Assets" means, with respect to the
Company as of any date, the sum of (i) Consolidated Undepreciated Real Estate
Assets on such date, (ii) the book value, determined under GAAP, of all other
tangible assets on such date of the Company and its Restricted Subsidiaries on a
consolidated basis and (iii) 50% of the book value, determined under GAAP, of
all intangible assets on such date of the Company and its Restricted
Subsidiaries on a consolidated basis; it being understood that for purposes of
this definition "intangible" and "tangible" will be defined by a responsible
officer of the Company in good faith.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus
(i) an amount equal to any extraordinary loss plus any net loss realized by such
Person or any of its Restricted Subsidiaries in connection with an Asset Sale,
to the extent such losses were deducted in computing such Consolidated Net
Income, plus (ii) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income
regardless of whether such taxes or payments are required to be remitted to any
governmental authority; plus (iii) Fixed Charges to the extent Fixed Charges
were deducted in calculating Consolidated Net Income, plus (iv) Consolidated
Depreciation and Amortization Expense to the extent deducted in computing
Consolidated Net Income, minus (v) non-cash items increasing such Consolidated
Net Income for such period, other than the accrual of revenue in the ordinary
course of business, in each case, on a consolidated basis and determined in
accordance with GAAP.
"Consolidated Debt" means, with respect to the Company at any date,
the aggregate principal amount of Indebtedness plus the aggregate liquidation
preference of Disqualified Stock and Subsidiary Preferred Stock outstanding on
such date of the Company and its Restricted Subsidiaries on a consolidated basis
determined in accordance with GAAP.
"Consolidated Depreciation and Amortization Expense" means, with
respect to any specified Person for any period, depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash charges (including any write-off of deferred tax assets, but
excluding any such non-cash expense to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary shall be
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excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
shareholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, and (iv) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Undepreciated Real Estate Assets" means, as of any
date, the cost (being the original cost to the Company or any of its Restricted
Subsidiaries, plus capital improvements) of real estate assets of the Company
and its Restricted Subsidiaries on such date, before depreciation and
amortization of such real estate assets, determined on a consolidated basis in
conformity with GAAP.
"Covenant Amendment Date" means the first date on which the covenants
in the Bank Credit Facility are amended so that the prohibition on Liens
contained in the first paragraph of Section 3.09 hereof does not result in an
Event of Default under the Bank Credit Facility.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Assets" means (i) Coffee Correctional Facility, Nicholls,
Georgia, (ii) Wheeler Correctional Facility, Alamo, Georgia, (iii) D.C.
Correctional Treatment Facility, Washington, D.C., (iv) Huerfano County
Correctional Center, Walsenburg, Colorado, (v) New Mexico Women's Correctional
Facility, Grants, New Mexico, (vi) Maurice H. Sigler Detention Center,
Frostproof, Florida, (vii) Shelby Training Center, Memphis, Tennessee, (viii)
Cimmaron Correctional Facility, Cushing, Oklahoma and (ix) Davis Correctional
Facility, Holdenville, Oklahoma.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the notes mature; provided that only the portion of Capital Stock
which is so convertible or exchangeable or is so redeemable at the option of the
holder thereof or which so matures or is mandatorily redeemable prior to such
date will be deemed to be Disqualified Stock. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
shall not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions prior to the Company's compliance with Section 3.04
hereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"Equity Offering" means any (i) underwritten public offering of
common stock (other than Disqualified Stock) of the Company, pursuant to an
effective registration statement filed with the Commission in accordance with
the Securities Act or (ii) private placement of at least $25.0 million of common
stock (other than Disqualified Stock) of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Agreements" means (i) Development Agreement, dated July 6,
1998, between API and APM, (ii) Construction Contract, dated July 6, 1998,
between API and Tilbury Douglas Construction Limited, (iii) Construction Direct
Agreement, dated July 6, 1998, among API, APM, Tilbury Douglas Construction
Limited and Tilbury Douglas PLC, (vi) Refinancing Agreement, dated July 6, 1998,
among API, APM, Old CCA and CCA Prison Realty Trust, (v) Sublease, to be
executed following completion of construction of Agecroft Prison, between API
and APM, (vi) Access Agreement, to be executed following completion of
construction of Agecroft Prison, between API and APM, (vii) Direct Agreement,
dated July 6, 1998, among API, APM, Old CCA, CCA Prison Realty Trust and H M
Principal Secretary of State for the Home Department and (viii) Step-In and
Collateral Agreement, dated July 6, 1998, between Old CCA, APM, H M Principal
Secretary of State for the Home Department and UK Detention Services.
"Existing CCA Entity Agreements" means agreements of the CCA Entities
in existence on the Issue Date and in the form in effect on the Issue Date.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Bank Credit Facility) in
existence on the Issue Date, until such amounts are repaid.
"Fair Market Value" means the fair market value as determined by an
officer of the Company for any Acquired Debt, Investment or Asset Sale of less
than $5.0 million and as determined by the Board of Directors of the Company for
any Acquired Debt, Investment or Asset Sale equal to or in excess of $5.0
million.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other than
ordinary working capital borrowings) or issues, repurchases or redeems preferred
stock subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated and on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(i) acquisitions of assets and Investments in Restricted
Subsidiaries of the Company that have been made by the specified
Person or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing
transactions, during the reference period or subsequent to such
reference period and on or prior to the
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Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the reference period and Consolidated
Cash Flow for such reference period shall be calculated on a pro
forma basis, but without giving effect to clause (iii) of the proviso
set forth in the definition of Consolidated Net Income;
(ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date,
shall be excluded;
(iii) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to
such Fixed Charges will not be obligations of the specified Person or
any of its Restricted Subsidiaries following the Calculation Date;
and
(iv) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with
or into the Company or any Restricted Subsidiary since the beginning
of such period) will have made any Asset Sale or any Investment or
acquisition of assets that would have required an adjustment pursuant
to clause (i) above if made by the Company or a Restricted Subsidiary
during such period, Consolidated Cash Flow and Fixed Charges for such
period will be calculated after giving pro forma effect thereto as if
such Asset Sale or Investment or acquisition of assets occurred on
the first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given to an Investment or an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Fixed Charges associated with any
Indebtedness Incurred in connection therewith, or any other calculation under
this definition, the pro forma calculations will be determined in good faith by
a responsible financial or accounting officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness will be calculated as if the
rate in effect of the date of determination had been the applicable rate for the
entire period (taking into account any Hedging Obligation applicable to such
Indebtedness if such Hedging Obligation has a remaining term in excess of 12
months).
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect
of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging
Obligations; plus
(ii) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
(iii) any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person
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or one of its Restricted Subsidiaries, whether or not such Guarantee
or Lien is called upon; plus
(iv) the product of (A) all dividends, whether paid or
accrued and whether or not in cash, on any series of Disqualified
Stock of such Person, on any series of preferred stock of such Person
or any of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other
than Disqualified Stock) or to the Company or a Restricted Subsidiary
of the Company, times (B) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"Funds From Operations After Preferred Stock Dividends" means, with
respect to the Company for any period, Consolidated Net Income for such period
plus (i) an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing Consolidated Net Income), plus (ii) Consolidated Depreciation and
Amortization Expense for such period to the extent such expenses were deducted
in computing Consolidated Net Income, plus (iii) amortization of debt issuance
costs and deferred financing fees of the Company and its Restricted Subsidiaries
on a consolidated basis to the extent deducted in computing Consolidated Net
Income, minus (iv) non-cash items increasing such Consolidated Net Income for
such period, in each case, on a combined basis for the Company and its
Restricted Subsidiaries and determined in accordance with GAAP, minus (v) the
amount of any preferred stock dividends paid by the Company or any of its
Restricted Subsidiaries in respect of such period other than preferred stock
dividends paid in the form of Equity Interests that do not constitute
Disqualified Stock, only to the extent that such preferred stock dividends were
not deducted in computing Consolidated Net Income and plus (vi) the allocable
portion, based upon the ownership percentage, of funds from operations of
unconsolidated investments to the extent not otherwise included in Consolidated
Net Income.
"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 have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.
"Government Securities" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such Government
Security or a specific payment of principal of or interest on any such
Government Security held by such custodian for the account of the holder of such
depository receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Security or the specific payment of principal of or interest on
the Government Security evidenced by such depository receipt.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without
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limitation, through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each subsidiary of the Company that executes and
delivers a Subsidiary Guarantee in accordance with the provisions of the
Indenture and its respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements and foreign exchange
hedging agreements and (ii) other agreements or arrangements entered into in the
ordinary course of business designed to protect such Person against fluctuations
in interest rates and foreign exchange rates.
"Holder" means a registered holder of the Securities.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of (i)
borrowed money, (ii) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect thereof
except to the extent that such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of Incurrence), (iii)
banker's acceptances, (iv) representing Capital Lease Obligations, (v) the
balance deferred and unpaid of the purchase price of any property, except any
such balance that constitutes an accrued expense or trade payable or (vi) net
Obligations under Hedging Obligations (the amount of any such Hedging
Obligations to be equal at any time to the termination value of such agreement
or arrangement giving rise to such Hedging Obligation that would be payable by
such Person at such time), if and to the extent any of the preceding items
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of the specified Person prepared in accordance
with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of
others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any indebtedness of
any other Person; provided, however, that the amount of such Indebtedness will
be the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness of such other Person.
Indebtedness shall not include the principal of, premium, if any, or interest on
any bonds, notes or other instruments to the extent that any such obligations
have been irrevocably and properly defeased by depositary cash, Cash Equivalents
or U.S. Government Securities into a trust for the benefit of the holders of
such obligations in accordance with Article 6 hereof (or any substantially
similar provision contained in the instruments governing such obligations).
The amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means the Original Indenture, as amended or supplemented
by this Supplemental Indenture and as it may from time to time be supplemented
or amended hereafter.
"Initial Securities" means $100.0 million in aggregate principal
amount of Securities issued under this Supplemental Indenture on the date
hereof.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans
(including Guarantees or other obligations), direct or
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indirect advances or capital contributions (excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP; provided that (i) Hedging Obligations entered into in the ordinary course
of business and in compliance with the Indenture, (ii) endorsements of
negotiable instruments and documents in the ordinary course of business; and
(iii) an acquisition of assets, Equity Interests or other securities by the
Company for consideration consisting exclusively of common equity securities of
the Company, shall in each case not be deemed to be an Investment.
If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 3.04(c) hereof.
"Issue Date" means June 11, 1999.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however (i) any
gain or loss, together with any related provision or benefit for taxes on such
gain or loss, realized in connection with (A) any Asset Sale or (B) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries, (ii) any extraordinary gain or loss, together with
any related provision or benefit for taxes on such extraordinary gain or loss
and (iii) special charges and write-offs incurred in connection with the
issuance of the Securities or the Bank Credit Facility.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale) or in
respect of the disposition of any Designated Assets, net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, or amounts required to be distributed by the Company
in order to maintain its status as a REIT under the Code that result from the
gain from such Asset Sale and amounts required to be applied to the repayment of
Indebtedness, other than Indebtedness under the Bank Credit Facility, secured by
a Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established by the Company in good faith (provided that after all post-closing
adjustments have been made the amount by which such reserve exceeds such
adjustments shall be Net Proceeds).
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"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (A) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (B) is directly or indirectly liable as a guarantor or
otherwise or (C) constitutes the lender, (ii) 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
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity
and (iii) the explicit terms of which provide, or as to which the lenders have
been notified in writing that, they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the sale by the Company of its 12% Senior Notes
due 2006.
"Officers' Certificate" means a certificate signed on behalf of the
Company or a Guarantor, as the case may be, by two officers of the Company or a
Guarantor, one of whom must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of the
Company or a Guarantor, that meets the requirements set forth herein.
"Old CCA" means Corrections Corporation of America, as such entity
existed on and before December 31, 1998.
"Operating Company" means Corrections Corporation of America
(formerly Correctional Management Services Corporation).
"Permitted Business" means the business conducted by the Company and
its Restricted Subsidiaries on the Issue Date and businesses reasonably related
thereto or ancillary or incidental thereto or a reasonable extension thereof,
including the privatization of governmental services.
"Permitted Investments" means:
(i) any Investment in the Company or in a Restricted
Subsidiary of the Company;
(ii) any Investment in cash or Cash Equivalents;
(iii) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such
Investment:
(A) such Person becomes a Restricted Subsidiary
of the Company; or
(B) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company;
(iv) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Sections 2.03 and 3.07 hereof;
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(v) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(vi) Hedging Obligations;
(vii) other Investments in any Person having an aggregate
fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause
(vii) that are at the time outstanding, not to exceed $25.0 million;
(viii) receivables owing to the Company or any Restricted
Subsidiary of the Company created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include
such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;
(ix) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(x) loans or advances to employees made in the ordinary
course of business of the Company or any Restricted Subsidiary of the
Company not to exceed $3.0 million outstanding at any one time for
all loans or advances under this clause (x);
(xi) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and
owing to the Company or any Restricted Subsidiary of the Company or
in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or
insolvency of a debtor;
(xii) Investments in existence on the Issue Date; and
(xiii) Guarantees issued in accordance with Section 3.06
hereof.
"Permitted Liens" means:
(i) Liens on assets of the Company and any Guarantor
securing Indebtedness and other Obligations under the Bank Credit
Facility to the extent that such Indebtedness or other Obligations
were not prohibited by the terms of the Indenture to be incurred;
(ii) Liens in favor of the Company or any of its
Restricted Subsidiaries;
(iii) Liens on property of a Person existing at the time
such Person is merged with or into or consolidated with the Company
or any Restricted Subsidiary of the Company; provided that such Liens
were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Company or the Restricted
Subsidiary;
(iv) Liens on property existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation
of such acquisition;
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(v) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance, proposal or
completion bonds or other obligations of a like nature incurred in
the ordinary course of business;
(vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of Section 3.06(b) hereof
covering only the assets acquired with such Indebtedness;
(vii) Liens existing on the Issue Date;
(viii) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or
other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor;
(ix) Liens of the Company or any Subsidiary of the Company
with respect to obligations that do not exceed $10.0 million at any
one time outstanding;
(x) Liens to secure Indebtedness permitted to be incurred
under the Indenture and permitted to be secured by clause (iii) of
Section 3.06(a) hereof;
(xi) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits or cash or United
States government bonds to secure surety or appeal bonds to which
such Person is a party, or deposits as security for contested taxes
or import or customs duties or for the payment of rent, in each case
incurred in the ordinary course of business;
(xii) Liens imposed by law, including carriers',
warehousemen's and mechanics' Liens, in each case for sums not yet
due or being contested in good faith by appropriate proceedings if a
reserve or other appropriate provisions, if any, as shall be required
by GAAP shall have been made in respect thereof;
(xiii) encumbrances, easements or reservations of, or
rights of others for, licenses, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real properties or
liens incidental to the conduct of the business of such Person or to
the ownership of its properties which do not in the aggregate
materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such
Person;
(xiv) Liens securing Hedging Obligations so long as the
related Indebtedness is, and is permitted to be under the Indenture,
secured by a Lien on the same property securing such Hedging
Obligations;
(xv) leases and subleases of real property which do not
materially interfere with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries;
(xvi) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgment
secured shall, within 30 days after the entry thereof,
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have been discharged or execution thereof stayed pending appeal, or
shall have been discharged within 30 days after the expiration of
such stay; and
(xvii) normal customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions.
"Permitted Refinancing Indebtedness" means (a) any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness) and (b) any Disqualified Stock of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Disqualified Stock of the Company or any of its Restricted
Subsidiaries; provided that:
(i) the principal amount (or liquidation preference or
accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value,
if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest or
dividends thereon and the amount of all expenses and premiums
incurred in connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;
(iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of
payment to the Securities, such Permitted Refinancing Indebtedness is
subordinated in right of payment to, the Securities on terms at least
as favorable to the holders of Securities as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and
(iv) such Indebtedness is incurred either (A) by the
Company or (B) by the Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded.
"Permitted REIT Distributions" means a declaration or payment of any
dividend or the making of any distribution to the Company that is necessary to
maintain the Company's status as a REIT under the Code or to satisfy the
distributions required to be made by reason of the Company's making of the
election provided for in Notice 88-19 (or Treasury regulations issued pursuant
thereto).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Principals" means Doctor R. Crants.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Stock and, when used in the definition of "Disqualified
Stock," also includes any Capital Stock of a Restricted Subsidiary of the
Company that is not Disqualified Stock.
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"Related Party" with respect to any Principal means (i) any
controlling stockholder, 60% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (ii) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding a 60% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (i).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Secured Indebtedness" means any Indebtedness secured by a Lien upon
the property or assets of the Company or any of its Restricted Subsidiaries.
"Securities" means the 12% Senior Notes due 2006 of the Company,
substantially in the form of Exhibit A hereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Special REIT Dividends" means the special dividends of up to an
aggregate amount of $225.0 million to be paid to holders of common stock of the
Company during 1999, which represent the accumulated tax earnings and profits of
Old CCA.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (A) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (B) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee by any Guarantor with
respect to the Company's obligations under the Indenture and the notes pursuant
to a supplemental indenture substantially in the form of Exhibit C hereto.
"Subsidiary Preferred Stock" means any preferred stock issued by a
Restricted Subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939, as amended.
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"Total Unencumbered Assets" as of any date means the sum of (i) those
Consolidated Undepreciated Real Estate Assets not securing any portion of
Indebtedness that is subject to any Lien and (ii) all other assets (but
excluding intangibles and accounts receivable) of the Company and its Restricted
Subsidiaries not securing any portion of the Indebtedness that is subject to any
Lien, determined on a combined, consolidated basis in accordance with GAAP.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary has no
Indebtedness other than Non-Recourse Debt.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
Section 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction".............................. 3.08
"Asset Sale Offer"................................... 2.03
"CCA Entity Transaction"............................. 3.14
"Change of Control Offer"............................ 3.10
"Change of Control Payment".......................... 3.10
"Change of Control Payment Date"..................... 3.10
"Covenant Defeasance"................................ 6.03
"Event of Default"................................... 5.01
"Excess Proceeds".................................... 3.07
"incur".............................................. 3.06
"Legal Defeasance"................................... 6.02
"Offer Amount"....................................... 2.03
"Offer Period"....................................... 2.03
"Payment Default".................................... 5.01
"Permitted Debt"..................................... 3.06
"Purchase Date"...................................... 2.03
"Rating Event Date".................................. 3.15
"Restricted Payments"................................ 3.04
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Supplemental Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of the
Indenture. The defined terms in the Original Indenture are incorporated herein
by reference but notwithstanding the foregoing, in the event of a conflict
between the defined terms set forth herein and the defined terms set forth in
the Original Indenture, the defined terms set forth herein shall control.
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The following TIA terms used in this Supplemental Indenture have the
following meanings:
"indenture securities" means the Securities;
"indenture security Holder" means a Holder of a Security;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Company and any successor
obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular; and
(e) provisions apply to successive events and transactions.
ARTICLE 2
REDEMPTION
Section 2.01. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed or, if the Securities are not so
listed, on a pro rata basis, by lot or such other method as the Trustee shall
deem fair and appropriate (and in such manner as complies with applicable legal
requirements), provided that no Securities of less than $1,000 shall be redeemed
in part.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 2.02 hereof, it shall furnish to the Trustee,
at least 35 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Supplemental
Indenture or the Securities pursuant to which the redemption shall occur, (ii)
the redemption date, (iii) the principal amount of Securities to be redeemed,
(iv) the redemption price and (v) a statement to the effect that such redemption
will comply with the conditions contained herein.
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Notices of redemption shall be mailed by first class mail, postage
prepaid, at least 30 but not more than 60 days before the redemption date to
each Holder of Securities to be redeemed at such Holder's registered address.
Notices of redemption may not be conditional. If any Security is to be redeemed
in part only, any notice of redemption that relates to such Security shall state
the portion of the principal amount thereof that has been or is to be redeemed.
A new Security in principal amount equal to the unredeemed portion of
any Security redeemed in part will be issued in the name of the Holder thereof
upon cancellation of the original Security. Securities called for redemption
become due on the date fixed for redemption. On and after the redemption date,
interest shall cease to accrue on the Securities or portions thereof called for
redemption.
Section 2.02. Optional Redemption.
(a) At any time prior to June 1, 2002, the Company may, at its
option, on any one or more occasions redeem up to 35% of the aggregate principal
amount of Securities originally offered in the Offering at a redemption price
equal to 112.00% of the principal amount thereof, plus accrued and unpaid
interest to the redemption date, with the net cash proceeds of one or more
Equity Offerings; provided that:
(i) at least 65% of the original aggregate principal amount of
Securities remains outstanding immediately after the occurrence of such
redemption (excluding Securities held by the Company and its Restricted
Subsidiaries); and
(ii) the redemption shall occur within 45 days of the date of
the closing of such Equity Offering.
(b) Except pursuant to Section 2.02(a) hereof, the Securities will
not be redeemable at the Company's option.
Section 2.03. Offer to Purchase by Application of Excess Proceeds.
If at any time the aggregate amount of Excess Proceeds that have not
been applied in accordance with Section 3.07 hereof exceeds $10.0 million, the
Company shall make an offer to all Holders of Securities and all holders of
other Indebtedness that is pari passu with the Securities containing provisions
similar to those set forth in this Supplemental Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets, to the extent
required by the terms thereof (an "Asset Sale Offer") to purchase the maximum
principal amount of Securities and such other pari passu Indebtedness that may
be purchased out of such Excess Proceeds, at an offer price in cash in an amount
equal to 100% of principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase, in accordance with the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the maximum principal amount of Securities
and such other pari passu Indebtedness that may be purchased with such Excess
Proceeds (or such pro rata portion) (which maximum principal amount of
Securities shall be the "Offer Amount") or, if less than the Offer Amount has
been tendered, all Securities and such other pari passu Indebtedness tendered in
response to the Asset Sale Offer, subject to the provisions of Section 3.07
hereof.
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If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued interest shall be paid to
the Person in whose name a Security or such other pari passu Indebtedness is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Securities or such other pari
passu Indebtedness pursuant to the Asset Sale Offer on the portion of the
tendered Securities and such other pari passu Indebtedness purchased pursuant to
the Asset Sale Offer.
Upon the commencement of any Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders of
the Securities and such other pari passu Indebtedness, with a copy to the
Trustee. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Securities and such other pari passu Indebtedness
pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all
Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall
state:
(a) that the Asset Sale Offer is being made pursuant to this Section
2.03 and Section 3.07 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount (including the amount of accrued interest, if
any), the purchase price and the Purchase Date;
(c) that any Security and such other pari passu Indebtedness not
tendered or accepted for payment shall continue to accrue interest in accordance
with the terms thereof;
(d) that any Security and such other pari passu Indebtedness or
portion thereof accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Security or such other pari passu
Indebtedness or portion thereof purchased pursuant to any Asset Sale Offer shall
be required to surrender the Security and/or such other pari passu Indebtedness,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security or such other pari passu Indebtedness completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three Business Days before the Purchase Date
and must complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the fourth Business Day before the Purchase Date, a telegram,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security or such other pari passu Indebtedness or
portion thereof the Holder delivered for purchase, the Security or and such
other pari passu Indebtedness certificate number and a statement that such
Holder is withdrawing his election to have the Security or such other pari passu
Indebtedness or portion thereof purchased;
(g) that, if the aggregate principal amount of Securities and such
other pari passu Indebtedness surrendered by Holders exceeds the Offer Amount,
the Company shall select the Securities and such other pari passu Indebtedness
to be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Securities and such other pari passu
Indebtedness in denominations of $1,000, or integral multiples thereof, shall be
purchased); and
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(h) that Holders whose Securities or such other pari passu
Indebtedness were purchased only in part shall be issued new Securities or such
other pari passu Indebtedness equal in principal amount to the unpurchased
portion of the Securities or such other pari passu Indebtedness surrendered; and
(i) the instructions that Holders must follow to tender their
Securities and such other pari passu Indebtedness.
On or before 10:00 a.m. on the Purchase Date, the Company shall, to
the extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Securities and such other pari passu Indebtedness
or portions thereof tendered pursuant to the Asset Sale Offer, or if less than
the Offer Amount has been tendered, all Securities and such other pari passu
Indebtedness or portions thereof tendered, and shall deliver to the Trustee an
Officers' Certificate stating that such Securities and such other pari passu
Indebtedness or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 2.03 and providing payment
instructions therefor (with a copy to the Paying Agent if applicable). The
Company, depositary or the Paying Agent, as the case may be, shall promptly (but
in any case not later than five days after the Purchase Date) mail or deliver to
each tendering Holder an amount equal to the purchase price of the Securities or
such other pari passu Indebtedness or portion thereof tendered by such Holder
and accepted by the Company for purchase, and the Company shall promptly issue a
new Security or such other pari passu Indebtedness, and the Trustee shall
authenticate and mail or deliver such new Security or any other series of Debt
Securities issued pursuant to the Original Indenture to such Holder equal in
principal amount equal to any unpurchased portion of the Security or such other
series of Debt Securities issued pursuant to the Original Indenture surrendered.
Any Security or such other pari passu Indebtedness not so accepted shall be
promptly mailed or delivered by the Company or at the Company's written
instruction to the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer on the second Business Day following the
Purchase Date. In the event that the aggregate amount of Excess Proceeds exceeds
the aggregate principal amount of Securities and such other pari passu
Indebtedness or portion thereof surrendered by Holders thereof pursuant to an
Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not
otherwise prohibited by this Supplemental Indenture. If the aggregate principal
amount of Securities and such other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select
the Securities and such other pari passu Indebtedness to be purchased on a pro
rata basis based on the principal amount of Securities and such other pari passu
Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
The Company shall comply, to the extent applicable, with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder in connection with each repurchase of Securities
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the Asset Sales provisions of this
Section 2.03, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 2.03 or Article XIII of the Original Indenture by virtue thereof. The
Trustee shall have no duty or obligation to monitor or ensure compliance with
any such rules, laws or regulations.
The provisions set forth in Article XIII of the Original Indenture
shall not apply to Asset Sale Offers.
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ARTICLE 3
COVENANTS
Section 3.01. Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any Securities are outstanding, the Company shall furnish
and shall cause the Operating Company to furnish to the Holders of Securities,
within the time periods specified in the Commission's rules and regulations, (i)
all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
and the Operating Company were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for the Company only that describes the financial condition and
results of operations of the Company and its Subsidiaries and, with respect to
the annual information only, a report on the annual financial statements by the
Company's and the Operating Company's certified independent accountants and (ii)
all current reports that would be required to be filed with the Commission on
Form 8-K if the Company and the Operating Company were required to file such
reports. If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company. In
addition, whether or not required by the Commission, the Company shall file and
shall cause the Operating Company to file a copy of all the information and
reports referred to in clauses (i) and (ii) above with the Commission for public
availability within the time periods specified in the Commission's rules and
regulations (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall also comply with the provisions of TIA ss. 314(a).
Section 3.02. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Securities.
Section 3.03. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Supplemental Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
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 has been enacted.
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Section 3.04. Restricted Payments.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary of the Company); (ii) purchase, redeem or otherwise
acquire or retire for value (including without limitation, in connection with
any merger or consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company; (iii) make any payment
on or with respect to, or purchase, redeem, defease or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Securities, except
a payment of interest or principal at the Stated Maturity thereof; or (iv) make
any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(A) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(B) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 3.06(a)
hereof; and
(C) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (including all Restricted Payments
permitted by Section 3.04(b) hereof other than clauses (ii), (iii), (iv),
(vi), (viii), (ix), (x) and (xi)), is less than the sum, without
duplication, of:
(1) (x) for so long as the Company is a REIT under the
Code for Federal income tax purposes, 95% of the aggregate amount of
the Funds From Operations After Preferred Stock Dividends (or, if the
Funds from Operations After Preferred Stock Dividends is a loss,
minus 100% of the amount of such loss) accrued on a cumulative basis
during the period (taken as one accounting period) beginning on the
first day of the fiscal quarter in which the Issue Date occurs and
ending on the last day of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment or (y) for so long as the Company is
not a REIT under the Code for Federal income tax purposes, 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the date the Company first ceased to be a
REIT under the Code to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment calculated as though the
Company had been a C-Corporation for Federal income tax purposes for
the entire period (or if, such Consolidated Net Income for such
period is a deficit, less 100% of such deficit);
(2) (x) 100% of the aggregate net cash proceeds received
by the Company since the Issue Date as a contribution to its common
equity capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or (y) 100% of the aggregate
net cash
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proceeds originally received by the Company from the issue or sale
of Disqualified Stock or debt securities of the Company that have
been converted or exchanged since the Issue Date into such Equity
Interests (other than Equity Interests (or Disqualified Stock
or convertible debt securities) sold to a Subsidiary of the Company);
(3) an amount equal to the net reduction in Investments
(other than Permitted Investments) in any Person other than a
Restricted Subsidiary after the Issue Date resulting from payments of
interest on Indebtedness, dividends, repayments of loans or advances,
or other transfers of assets, in each case to the Company or any of
its Restricted Subsidiaries or from the net cash proceeds from the
sale of any such Investment (except, in each case, to the extent any
such payment or proceeds are included in the calculation of Funds
From Operations After Preferred Stock Dividends), or Consolidated Net
Income, as applicable;
(4) the Fair Market Value of non-cash tangible assets or
Capital Stock (other than that of the Company) representing at least
the majority of Equity Interests in any Person acquired after the
Issue Date in exchange for an issuance of Capital Stock that is not
Disqualified Stock; and
(5) to the extent that any Unrestricted Subsidiary of the
Company is redesignated as a Restricted Subsidiary after the Issue
Date and to the extent not otherwise included in clauses (1) though
(4) above, the lesser of (x) the fair market value of the Company's
Investment in such Subsidiary as of the date of such redesignation or
(y) such fair market value as of the date on which such Subsidiary
was originally designated as an Unrestricted Subsidiary.
(b) The foregoing provisions in Section 3.04(a) hereof will not
prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Supplemental Indenture;
(ii) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness or Equity Interests of
the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(C)(2) of Section 3.04(a) hereof;
(iii) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness with the net cash proceeds from
an incurrence or exchange of Permitted Refinancing Indebtedness;
(iv) the payment of any dividend or distribution by a
Restricted Subsidiary of the Company to the holders of its common Equity
Interests on a pro rata basis;
(v) the Company from making Permitted REIT Distributions so
long as no Default or Event of Default shall have occurred and be
continuing immediately after any such distribution;
(vi) the Special REIT Dividends;
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(vii) so long as no Default or Event of Default has occurred
and is continuing,
(A) the purchase, redemption or other acquisition,
cancellation or retirement for value of Capital Stock, or options,
warrants, equity appreciation rights or other rights to purchase or
acquire Capital Stock of the Company or any Restricted Subsidiary of
the Company or any parent of the Company held by any existing or
former employees of the Company or any Subsidiary of the Company or
their assigns, estates or heirs, in each case in connection with the
repurchase provisions under employee stock option or stock purchase
agreements or other agreements to compensate management employees;
provided that such redemptions or repurchases pursuant to this clause
will not exceed $1.0 million in the aggregate during any calendar
year and $5.0 million in the aggregate for all such redemptions and
repurchases; provided further that such amount in any calendar year
may be increased by an amount not to exceed (1) the cash proceeds
from the sale of Capital Stock of the Company to existing or former
employees of the Company or any Subsidiary of the Company after the
Issue Date (to the extent the cash proceeds from the sale of such
Capital Stock have not otherwise been applied to the payment of
Restricted Payments by virtue of clause (C)(2) of Section 3.04(a)
hereof) plus (2) the cash proceeds of key man life insurance policies
received by the Company and its Subsidiaries after the Issue Date
less (3) the amount of any Restricted Payments previously made
pursuant to clause (1) and (2) of this clause (vii)(A); and
(B) loans or advances to employees or directors of the
Company or any Subsidiary of the Company the proceeds of which are
used to purchase Capital Stock of the Company, in an aggregate amount
not in excess of $10.0 million at any one time outstanding;
(viii) so long as no Default or Event of Default has occurred
and is continuing, the declaration and payment of dividends to holders of
any class or series of Preferred Stock of the Company issued in accordance
with the terms of the Indenture to the extent such dividends are included
in the definition of "Fixed Charges;"
(ix) repurchases of Equity Interests of the Company deemed to
occur upon the exercise of stock options if such Equity Interests
represent a portion of the exercise price thereof;
(x) the purchase, redemption, acquisition or retirement for
value of any Indebtedness that is subordinated to the Securities with
Excess Net Proceeds if required by the terms thereof; and
(xi) Restricted Payments not otherwise permitted in an amount
not to exceed $20.0 million.
(c) The amount of all Restricted Payments (other than cash) shall be
the Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
Not later than 10 days following the end of the fiscal quarter in which such
Restricted Payment was made, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
3.04 were computed, together with a copy of any fairness opinion or appraisal to
the extent required by this Supplemental Indenture.
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Section 3.05. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company
or any of its Restricted Subsidiaries.
(b) However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
(i) Existing Indebtedness and Existing Agreements as in effect
on the Issue Date and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
are no more restrictive, taken as a whole, with respect to such dividend
and other payment restrictions than those contained in such Existing
Indebtedness and Existing Agreements, as applicable, as in effect on the
Issue Date;
(ii) the Bank Credit Facility as in effect on the Issue Date
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Bank Credit Facility, as
in effect on the Issue Date;
(iii) the Indenture and the Securities;
(iv) applicable law, regulation or order;
(v) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person
and its Subsidiaries, or the property or assets of the Person and its
Subsidiaries, so acquired, provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of the Indenture to be
incurred;
(vi) customary non-assignment provisions in leases entered into
in the ordinary course of business;
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(vii) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in clause (iii) of Section 3.05(a)
hereof;
(viii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(ix) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(x) Liens securing Indebtedness that limit the right of the
debtor to dispose of the assets subject to such Lien;
(xi) provisions with respect to the disposition or distribution
of assets or property in joint venture agreements, assets sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(xii) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course
of business; and
(xiii) in the case of clause (iii) of Section 3.05(a) hereof,
any encumbrance or restriction, pursuant to customary provisions
restricting dispositions of real property interests set forth in any
reciprocal easement agreements of the Company or any of its Restricted
Subsidiaries.
Section 3.06. Incurrence of Indebtedness and Issuance of Disqualified
Stock or Subsidiary Preferred Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), or issue any Disqualified Stock or Subsidiary Preferred Stock; provided,
however, that the Company or a Restricted Subsidiary may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock or Subsidiary Preferred
Stock, if:
(i) the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters (or, if such calculation is made
on or before March 31, 2000, for as many full fiscal quarters completed
that began on or after January 1, 1999) for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or
Subsidiary Preferred Stock is issued would have been at least 2.5 to 1.0,
determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom), as if the additional Indebtedness had been
incurred or the Disqualified Stock or Subsidiary Preferred Stock had been
issued, as the case may be, at the beginning of such four-quarter period;
(ii) Consolidated Debt is no greater than 65% of Consolidated
Adjusted Total Assets, determined on a pro forma basis after giving effect
to such incurrence; and
(iii) the aggregate principal amount of all Indebtedness of the
Company that is secured by any Lien on any property of the Company or any
of its Restricted Subsidiaries, excluding (A) Guarantees of Indebtedness
already included in secured Indebtedness and (B) any such Indebtedness
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that is owed to or held by the Company or any of its Restricted
Subsidiaries, does not exceed 45% of Consolidated Adjusted Total Assets,
determined on a pro forma basis after giving effect to such incurrence.
(b) Section 3.06(a) hereof shall not prohibit the incurrence of any
of the following items of Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Company or any Restricted Subsidiary
of Indebtedness under the Bank Credit Facility and any Guarantees thereof
in an aggregate principal amount not to exceed at any one time $1,000.0
million;
(ii) the incurrence by the Company or any Restricted Subsidiary
of the Existing Indebtedness;
(iii) the incurrence by the Company or any Restricted
Subsidiary of Indebtedness represented by the Securities issued on the
Issue Date and the incurrence by any Guarantors of Indebtedness
represented by their Subsidiary Guarantees;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (iv), not to exceed $10.0 million at any time
outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace
Indebtedness or Disqualified Stock (other than intercompany Indebtedness)
that was permitted by the Indenture to be incurred under Section 3.06(a)
hereof or clauses (ii), (iii), (iv), (v), or (x) of this Section 3.06(b);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company is the obligor on such Indebtedness,
such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Securities and
the Indenture; and
(B) (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary thereof and
(2) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary thereof
shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to
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any floating rate Indebtedness that is permitted by the terms of the
Indenture to be outstanding or for the purpose of hedging foreign currency
exchange risk;
(viii) the guarantee by the Company or any Restricted
Subsidiary of Indebtedness of the Company or any Guarantor that was
permitted to be incurred by another provision of this Section 3.06;
(ix) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this
covenant; provided, in each such case, that the amount thereof is included
in Fixed Charges of the Company as accrued interest;
(x) Indebtedness of a Restricted Subsidiary of the Company
incurred and outstanding on the date on which such Restricted Subsidiary
was acquired by the Company (other than Indebtedness incurred (A) to
provide all or any portion of the funds utilized to consummate the
transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was otherwise
acquired by the Company or (B) otherwise in connection with, or in
contemplation of, such acquisition) and as to which the Company and its
other Restricted Subsidiaries were not obligated to become liable for such
Indebtedness;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness incurred in respect of workers' compensation
claims, self-insurance obligations, performance, proposal, completion,
surety and similar bonds and completion guarantees provided by the Company
or a Restricted Subsidiary of the Company in the ordinary course of
business; provided that the underlying obligation to perform is that of
the Company and its Restricted Subsidiaries and not that of the Company's
Unrestricted Subsidiaries;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price or similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or Equity Interests of a Restricted Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Equity Interests of a Restricted
Subsidiary for the purpose of financing such acquisition; provided that
the maximum assumable liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds actually received by the Company and
its Restricted Subsidiaries in connection with such disposition;
(xiii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument (except in
the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business, provided, however, that such Indebtedness is
extinguished within five business days of incurrence; and
(xiv) the incurrence by the Company or any Guarantors of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xiv), not to exceed $100.0
million.
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In addition, the Company shall not permit any of its Unrestricted
Subsidiaries to incur any Indebtedness (including Acquired Debt) or issue any
shares of Disqualified Stock, other than Non-Recourse Indebtedness. If at any
time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under this Section 3.06, the Company
shall be in Default of this Section 3.06).
The Company shall not incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also contractually
subordinated in right of payment to the Securities on substantially identical
terms; provided, however, that no Indebtedness of the Company shall be deemed to
be contractually subordinated in right of payment to any other Indebtedness of
the Company solely by virtue of being unsecured.
For purposes of determining compliance with this Section 3.06, (A) in
the event that an item of proposed Indebtedness meets the criteria of more than
one of the categories of Permitted Debt described in clauses (i) through (xiv)
above, or is entitled to be incurred pursuant to the first paragraph of this
Section 3.06, the Company will be permitted to classify or later reclassify such
item of Indebtedness in any manner that complies with this Section 3.06;
provided that Indebtedness under the Bank Credit Facility or any refinancing
thereof substantially concurrent therewith outstanding on the date on which the
Securities are first issued and authenticated under the Indenture shall be
deemed to have been incurred on such date in reliance on the exception provided
by clause (i) of the definition of "Permitted Debt;" and (B) the amount of
Indebtedness issued at a price less than the principal amount thereof will be
equal to the amount of the liability in respect thereof determined in accordance
with GAAP. Accrual of interest, accrual of dividends, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness shall
not be deemed to be an incurrence of Indebtedness for purposes of this Section
3.06. The Trustee shall have no duty or obligation to determine compliance with
this Section 3.06.
Section 3.07. Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents. For purposes of this provision, each of
the following shall be deemed to be cash:
(A) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company or
any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Securities or
any Subsidiary Guarantee) that are assumed by the transferee of any
such assets (1) pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary from further
liability or (2) for which the Company and its Restricted
Subsidiaries are not directly liable; and
(B) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such transferee
that are contemporaneously (subject to ordinary
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settlement periods) converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received in that
conversion).
(b) Within 360 days after the receipt of any Net Proceeds from an
Asset Sale or the Net Proceeds from a disposition of Designated Assets pursuant
to the terms of its related lease, the Company may apply such Net Proceeds: (i)
to repay Indebtedness under the Bank Credit Facility, and if the Indebtedness
repaid is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto; (ii) to acquire all or substantially all of the assets of,
or a majority of the Voting Stock of, another Permitted Business; (iii) to make
a capital expenditure in a Permitted Business; or (iv) to acquire other
long-term assets that are used or useful in a Permitted Business. Pending the
final application of any such Net Proceeds, the Company may temporarily reduce
revolving credit borrowings or otherwise invest such Net Proceeds in any manner
that is not prohibited by the Indenture. Any such Net Proceeds that are not
applied or invested as provided in Section 3.07(a) hereof will constitute
"Excess Proceeds."
Section 3.08. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with any Affiliate (each,
an "Affiliate Transaction"), unless:
(a) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person; and
(b) the Company delivers to the Trustee (i) with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0 million, a resolution
of the Board of Directors set forth in an Officers' Certificate certifying
that such Affiliate Transaction complies with this Section 3.08 and that
such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (ii) with respect to
any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $15.0 million, an opinion
as to the fairness to the Company of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(i) any employment or indemnity agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary; (ii)
transactions between or among the Company and/or its Restricted Subsidiaries;
(iii) transactions with a Person that is an Affiliate of the Company solely
because the Company owns an Equity Interest in such Person; (iv) payment of
reasonable directors fees to Persons who are not otherwise Affiliates of the
Company; (v) issuances or sales of Equity Interests (other than Disqualified
Stock) to Affiliates of the Company; (vi) Restricted Payments that are permitted
by Section 3.04 hereof and the definition of "Permitted Investments;" and (vii)
any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans and other reasonable fees, compensation,
benefits and indemnities paid or entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business to or with officers,
directors or employees of the Company and its Restricted Subsidiaries.
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Section 3.09. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under the Indenture and the Securities are secured on an equal and ratable
basis with the obligations so secured until such time as such obligations are no
longer secured by a Lien.
The limitations on Liens set forth in the preceding paragraph shall
not be effective until the Covenant Amendment Date. Prior to the Covenant
Amendment Date, the limitations on the incurrence of Secured Indebtedness set
forth in the following paragraph shall be effective. On the Covenant Amendment
Date, the limitations on the incurrence of Secured Indebtedness set forth in the
following paragraph shall cease to be effective.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to incur any Secured Indebtedness other than (a) Indebtedness
permitted by clause (i) of Section 3.06(b) hereof, (b) any portion of Existing
Indebtedness that constitutes Secured Indebtedness and (c) additional Secured
Indebtedness in an aggregate amount not to exceed $50.0 million at any one time
outstanding.
Section 3.10. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (a "Change of Control Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Securities at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase ( the "Change of Control Payment"). Within 10 days following any Change
of Control, the Company shall mail a notice to each Holder stating: (i) that the
Change of Control Offer is being made pursuant to this Section 3.10 and that all
Securities tendered will be accepted for payment; (ii) the purchase price and
the purchase date, which shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "Change of Control Payment Date");
(iii) that any Security not tendered will continue to accrue interest; (iv)
that, unless the Company defaults in the payment of the Change of Control
Payment, all Securities accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control Payment Date;
(v) that Holders electing to have any Securities purchased pursuant to a Change
of Control Offer will be required to surrender the Securities, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Securities
completed, to the Paying Agent specified in the notice at the address specified
in the notice prior to the close of business on the third Business Day preceding
the Change of Control Payment Date; (vi) that Holders will be entitled to
withdraw their tendered Securities and their election to require the Company to
purchase such Securities, provided, that the Paying Agent receives, not later
than the close of business on the last day of the offer period, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Securities tendered for purchase, the Security
certificate number and a statement that such Holder is withdrawing his tendered
Securities and his election to have the Securities purchased; and (vii) that
Holders whose Securities are being purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Securities as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with this Section 3.10, the Company shall comply with the
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applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 3.10 by virtue of such conflict. The
Trustee shall have no duty or obligation to monitor or determine compliance with
any such rule, law or regulation.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Securities or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate stating the aggregate principal amount of Securities or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
each Holder of Securities so tendered the Change of Control Payment for such
Securities, and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered by such Holder,
if any; provided, that each such new Security shall be in a principal amount of
$1,000 or an integral multiple thereof. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 3.10,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 3.10 and Section 2.03 hereof and all other provisions of the
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
Section 3.11. Business Activities.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
Section 3.12. Subsidiary Guarantees.
The Company shall not permit any of its Restricted Subsidiaries after
the Issue Date, directly or indirectly, to Guarantee or pledge any assets to
secure the payment of any other Indebtedness of the Company unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to the Indenture providing for the Guarantee of the payment of the
Securities by such Restricted Subsidiary, which Guarantee shall not be expressly
subordinated to such other Indebtedness.
Notwithstanding the preceding paragraph, any such Guarantee by a
Restricted Subsidiary of the Securities shall provide by its terms that it shall
be automatically and unconditionally released and discharged upon any sale,
exchange or transfer, to any Person not an Affiliate of the Company, of all of
the Company's stock in, or all or substantially all the assets of, such
Restricted Subsidiary, which sale, exchange or transfer is made in compliance
with the applicable provisions of the Indenture. The form of such supplemental
indenture is attached as Exhibit C hereto.
Section 3.13. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by the Company and its Restricted
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Subsidiaries in the Subsidiary so designated shall be deemed to be an Investment
made as of the time of such designation and shall reduce the amount available
for Restricted Payments under clause (C)(2) of Section 3.04(a) hereof or the
definition of "Permitted Investments," as applicable. All such outstanding
Investments shall be valued at their fair market value at the time of such
designation. That designation shall only be permitted if such Restricted Payment
would be permitted at that time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.
The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under Section 3.06 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence following
such designation. Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 3.04 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 3.06 hereof, the Company shall be in
default of such Section.
Section 3.14. Transactions with CCA Entities.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with any CCA Entity (each,
a "CCA Entity Transaction"), unless (i) such CCA Entity Transaction is on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person and (ii) the
Company delivers to the Trustee (A) with respect to any CCA Entity Transaction
or series of related CCA Entity Transactions involving aggregate consideration
in excess of $5.0 million in any twelve-month period, a resolution of the Board
of Directors set forth in an Officers' Certificate certifying that such CCA
Entity Transaction complies with this Section 3.14 and that such CCA Entity
Transaction has been approved by a majority of the disinterested members of the
Board of Directors and (B) with respect to any CCA Entity Transaction or series
of related CCA Entity Transactions involving aggregate consideration in excess
of $15.0 million in any twelve-month period, an opinion as to the fairness to
the Company of such CCA Entity Transaction from a financial point of view issued
by an accounting, appraisal, consulting or investment banking firm of national
standing.
(b) The following items shall not be deemed to be CCA Entity
Transactions and, therefore, shall not be subject to the provisions of Section
3.14(a) hereof: (i) any new arrangement with respect to properties not under
lease with any of the CCA Entities as of the Issue Date entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business, which is fair to the Company and its Restricted Subsidiaries in the
reasonable opinion of a majority of the disinterested members of the Board of
Directors of the Company; (ii) amendments to lease agreements or management
contracts that
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do not materially alter the rent provisions or economic terms of such
agreements; and (iii) payments or transactions pursuant to the Existing CCA
Entity Agreements.
Section 3.15. Changes in Covenants when Securities Rated Investment Grade.
As monitored by the Company and reported to the Trustee in an
Officers' Certificate, following the first date upon which the Securities are
rated Baa3 or better by Moody's Investors Service, Inc. and BBB-- or better by
Standard & Poor's Ratings Service (or, in either case, if such person ceases to
rate the Securities for reasons outside of the control of the Company, the
equivalent investment grade credit rating from any other "nationally recognized
statistical rating organization" (within the meaning of Rule 15c3-1(c)(2)(vi)(F)
under the Exchange Act) selected by the Company as a replacement agency) (the
"Rating Event Date") (and provided no Event of Default or event that with notice
or the passage of time would constitute an Event of Default shall exist on the
Rating Event Date), Sections 3.04, 3.05, 3.07, 3.08, 3.09, 3.11, 3.12 and 3.13
hereof will no longer be applicable to the Securities. Following the Rating
Event Date, all Unrestricted Subsidiaries shall become Restricted Subsidiaries.
The Sections that cease to be applicable to the Securities after the
Rating Event Date shall not subsequently be reinstated.
ARTICLE 4
SUCCESSORS
Section 4.01. Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly, (a) consolidate or
merge with or into another Person (whether or not the Company is the surviving
corporation), or (b) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries, taken as a whole, in one or more related transactions to, another
Person unless (i) either (A) the Company is the surviving corporation or (B) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia,
(ii) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment, transfer,
conveyance or other disposition shall have been made assumes all the obligations
of the Company under the Securities and the Indenture pursuant to agreements
reasonably satisfactory to the Trustee, (iii) immediately after such
transaction, no Default or Event of Default exists and (iv) the Company or the
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made shall, on the date of such transaction after
giving pro forma effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 3.06(a) hereof.
The provisions of this Section 4.01 shall not be applicable to a
sale, assignment, transfer, conveyance or other disposition of assets, or merger
or consolidation, between or among the Company and any of its Restricted
Subsidiaries.
Section 10.01 of the Original Indenture shall not apply to the
Securities and Section 12.05 of the Original Indenture shall be subject to the
provisions of this Section 4.01.
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ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on the
Securities and such default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Securities when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company fails to comply for 10 days after written notice from
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities with any of its obligations under Sections 2.03, 3.01,
3.04, 3.05, 3.06, 3.08, 3.09, 3.10, 3.11, 3.12, 3.13, 3.14 or 8.05 hereof or any
of the provisions of Article 4 hereof (in each case, other than a failure to
purchase Securities which will constitute an Event of Default under clause (b)
above);
(d) the Company or any of its Restricted Subsidiaries fails to
observe or perform any other covenant, representation, warranty or other
agreement in the Indenture or the Securities for 60 days after written notice to
the Company by the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Securities;
(e) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there is secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the Issue Date, which default (i) is caused by a failure is
caused by a failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express maturity, and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$25.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Subsidiaries and such judgment or judgments remain undischarged for a
period (during which execution shall not be effectively stayed) of 60 days,
provided that the aggregate of all such undischarged judgments exceeds $25.0
million;
(g) the Company or any of its Significant Subsidiaries or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
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(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
(j) except as permitted by the Indenture, any Subsidiary Guarantee
is held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under
such Subsidiary Guarantee.
The Events of Default in this Section 5.01 replace and supersede in
full the Events of Default set forth in Section 5.01 of the Original Indenture.
Section 5.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 5.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Significant Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities may declare all the Securities to be due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (g) or (h) of Section 5.01 hereof occurs with respect to the Company, any
of its Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary, all outstanding Securities
shall be due and payable immediately without further action or notice. The
provisions set forth in the first paragraph of Section 5.02 of the Original
Indenture shall not apply to the Securities.
In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Securities
pursuant
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to the optional redemption provisions of the Indenture, an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Securities.
Section 5.03. Compliance Certificate; Notices of Default.
The Company shall deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company shall deliver to the Trustee a statement
specifying such Default or Event of Default. The Trustee may withhold from
Holders of the Securities notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
ARTICLE 6
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 6.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 6.02 or 6.03 hereof be applied to all outstanding Securities upon
compliance with the conditions set forth below in this Article 6. Sections 15.01
and 15.02 of the Original Indenture shall not apply to the Securities.
Section 6.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 6.01 hereof of the option
applicable to this Section 6.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 6.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 15.03 of the Original Indenture and the other
Sections of the Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and the Indenture and
cured all then existing Events of Default (and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Securities to receive, solely from the trust fund described in Section 6.04
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, or interest or premium, if any, on such Securities when such
payments are due solely out of the trust created pursuant to the Indenture, (b)
the Company's obligations with respect to such Securities concerning issuing
temporary Securities, registration of such Securities, mutilated, destroyed,
lost or stolen Securities and the maintenance of an office or agency for payment
and money for security payments held in trust, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article 6. Subject to compliance with this
Article 6, the Company may exercise its option under this Section 6.02
notwithstanding the prior exercise of its option under Section 6.03 hereof.
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Section 6.03. Covenant Defeasance.
Upon the Company's exercise under Section 6.01 hereof of the option
applicable to this Section 6.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 6.04 hereof, be released from its
obligations under the covenants contained in Sections 3.04, 3.05, 3.06, 3.07,
3.08, 3.09, 3.10, 3.11, 3.12, 3.13, 3.14 and 8.05 hereof with respect to the
outstanding Securities on and after the date the conditions set forth in Section
6.04 hereof are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Securities, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Sections
5.01(c) through 5.01(f) hereof, but, except as specified above, the remainder of
the Indenture and such Securities shall be unaffected thereby. In addition, upon
the Company's exercise under Section 6.01 hereof of the option applicable to
this Section 6.03 hereof, subject to the satisfaction of the conditions set
forth in Section 6.04 hereof, Sections 5.01(c) through 5.01(f) hereof shall not
constitute Events of Default.
Section 6.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 6.02 or 6.03 hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Securities, cash in United States dollars,
non-callable Government Securities, 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, or interest and
premium, if any, on the outstanding Securities on the Stated Maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Securities are being defeased to maturity or to a particular
redemption date;
(b) in the case of an election under Section 6.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel with customary or
reasonable assumptions 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 Issue Date, there has been a change in
the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the
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 times
as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 6.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel with customary or
reasonable assumptions reasonably acceptable to
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the Trustee confirming that the Holders of the 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;
(d) no Default or Event of Default shall have occurred and be
continuing either (A) on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such deposit)
or (B) insofar as Sections 5.01(g) or 5.01(h) hereof is concerned, at any time
in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than the Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) 91 days shall have passed between the date of deposit and no
intervening bankruptcy of the Company shall have occurred under applicable
bankruptcy law;
(g) 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 defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel with customary or reasonable assumptions,
each stating that all conditions precedent relating to the Legal Defeasance or
the Covenant Defeasance have been complied with.
ARTICLE 7
SATISFACTION AND DISCHARGE
Section 7.01. Satisfaction and Discharge of Indenture.
The Indenture shall be discharged and shall cease to be of further
effect as to all Securities issued thereunder, when: (a) either (i) all
Securities that have been authenticated (except lost, stolen or destroyed notes
that have been replaced or paid and Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company) have
been delivered to the Trustee for cancellation or (ii) all Securities that have
not been delivered to the Trustee for cancellation have become due and payable
by reason of the making of a notice of redemption or otherwise or will become
due and payable within one year and the Company has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on the notes not delivered to the trustee for cancellation
for principal, premium, if any, and accrued interest to the date of maturity or
redemption; (b) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company is a party
or by which the Company is bound; (c) the Company has paid or caused to be paid
all sums payable by it under the Indenture; and (d) the Company has delivered
irrevocable instructions to the trustee under the Indenture to apply the
deposited money toward the payment of the notes at maturity or the redemption
date, as the case may be. In addition, the Company must deliver an Officers'
Certificate and
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an Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied. The provisions of Section 4.01
of the Original Indenture, except for the last paragraph thereof, shall not
apply to the Securities.
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
Section 8.01. Without Consent of Holders of Securities.
Notwithstanding Section 8.02 hereof, the Company, or any Guarantor,
with respect to its Subsidiary Guarantee or the Indenture, and the Trustee may
amend or supplement the Indenture or the Securities or any Subsidiary Guarantee
without the consent of any Holder of Securities:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Securities in the case of a merger or consolidation or sale of
all or substantially all of the Company's assets;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Securities, including providing for additional
Subsidiary Guarantees, or that does not adversely affect the legal rights under
the Indenture of any such Holder; or
(e) to comply with requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
11.03 of the Original Indenture, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of the Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under the Indenture or otherwise. Section 11.01
of the Original Indenture shall not apply to the Securities.
Section 8.02. With Consent of Holders of Securities.
Except as provided below in this Section 8.02, the Company and the
Trustee may amend or supplement the Indenture and the Securities with the
consent of the Holders of at least a majority in principal amount of the
Securities (including Additional Securities, if any) then outstanding voting as
a single class (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Securities), and any
existing Default or compliance with any provision of the Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including Additional
Securities, if any) voting as a single class (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, the Securities).
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Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Securities as aforesaid, and upon
receipt by the Trustee of the documents described in Section 11.03 of the
Original Indenture, the Trustee shall join with the Company in the execution of
such amended or supplemental Indenture unless such amended or supplemental
Indenture directly affects the Trustee's own rights, duties or immunities under
the Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Securities under this Section 8.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section 8.02
becomes effective, the Company shall mail to the Holders of Securities 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 amended or
supplemental Indenture or waiver. Subject to Sections 5.08 and 5.13 of the
Original Indenture, the Holders of a majority in aggregate principal amount of
the Securities (including Additional Securities, if any) then outstanding voting
as a single class may waive compliance in a particular instance by the Company
with any provision of the Indenture or the Securities. However, without the
consent of each Holder affected, an amendment or waiver under this Section 8.02
may not (with respect to any Securities held by a non-consenting Holder):
(a) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Security or alter or the provisions with respect to the redemption of the
Securities (other than Sections 2.03, 3.07 and 3.10 hereof);
(c) reduce the rate of or change the time for payment of interest on
any Security;
(d) waive a Default or Event of Default in the payment of principal
of, or interest or premium, if any, on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities (including
Additional Securities, if any) and a waiver of the payment default that resulted
from such acceleration);
(e) make any Security payable in money other than that stated in the
Securities;
(f) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of Securities to receive
payments of principal of, or interest or premium, if any, on the Securities;
(g) waive a redemption payment with respect to any Security (other
than a payment required by Sections 2.03, 3.07 and 3.10 hereof); or
(h) make any change in the foregoing amendment and waiver provisions.
Section 11.02 and Article XIV of the Original Indenture shall not
apply to the Securities.
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Section 8.03. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Security is a continuing consent by the Holder of a
Security 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 of a Security
or subsequent Holder of a Security may revoke the consent as to its Security if
the Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every Holder
of a Security.
The Company may fix a record date for determining which Holders of
the Securities must consent to such amendment, supplement or waiver. If the
Company fixes a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or (ii) such other date
as the Company shall designate.
Section 8.04. Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Security thereafter authenticated. The Company in
exchange for all Securities may issue and the Trustee shall authenticate new
Securities that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 8.05. Payments for Consent.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any Holder of Securities for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the Indenture or the
Securities unless such consideration is offered to be paid and is paid to all
Holders of the Securities that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
ARTICLE 9
SUBSIDIARY GUARANTEES
Section 9.01. Subsidiary Guarantee.
Subject to this Article 9, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees 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 of the Indenture, the Securities
or the obligations of the Company hereunder or thereunder, that: (a) the
principal of and interest on the Securities will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Securities, if any, if lawful,
and all other obligations of the Company to the Holders or the Trustee hereunder
or thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, that same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so
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guaranteed or any performance so guaranteed for whatever reason, the Guarantors
shall be jointly and severally obligated to pay the same immediately. Each
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor, other than the defense
of payment. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenant that this Subsidiary
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Securities and the Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor agrees that it shall 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 further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 5 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 5 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee.
Section 9.02. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Securities, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 9, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
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Section 9.03. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 9.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit B shall be endorsed by an Officer
of such Guarantor on each Security authenticated and delivered by the Trustee
and that the Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents and attested to by an Officer and
delivered to the Trustee.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth
in Section 9.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Subsidiary Guarantee.
If an Officer whose signature is on the Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in the Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by Section
3.15 hereof, the Company shall cause such Subsidiaries to execute supplemental
indentures to this Indenture and Subsidiary Guarantees in accordance with
Section 3.15 hereof and this Article 9, to the extent applicable.
Section 9.04. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 9.05, no Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:
(a) subject to Section 9.05 hereof, the Person formed by or surviving
any such consolidation or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Securities, the Indenture and the Subsidiary Guarantee on the
terms set forth herein or therein; and
(b) immediately after giving effect to such transaction, no Default
or Event of Default exists.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Securities and the due and punctual
performance of all of the covenants and conditions of the Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. All the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and benefit under the
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.
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Except as set forth in Articles 3 and 4 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in the Indenture or in any of the
Securities shall prevent any consolidation or merger of a Guarantor with or into
the Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 9.05. Releases Following Sale of Assets.
In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all to the capital stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transactions) a
Restricted Subsidiary of the Company, then such Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or otherwise, of all
of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; provided that the Net Proceeds of
such sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 3.07 hereof.
Upon delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of this Indenture, including
without limitation Section 3.07 hereof, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Securities and for the other obligations of any Guarantor under the
Indenture as provided in this Article 9.
ARTICLE 10
MISCELLANEOUS
Section 10.01. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities, the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of Securities by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities.
Section 10.02. Priority of Supplemental Indenture.
In the event any conflict arises between the terms of the Original
Indenture and the terms of this Supplemental Indenture, the terms of this
Supplemental Indenture shall be controlling and superseded such conflicting
terms of the Original Indenture; provided that, in all circumstances, Section
1.06 of the Original Indenture shall control. Unless otherwise specifically
modified or amended hereby, the terms of the Original Indenture shall remain in
full force and effect with respect to the Securities.
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Section 10.03. Governing Law.
This Supplemental Indenture shall be deemed to be a contract made and
to be performed entirely in the State of New York, and for all purposes shall be
governed by and construed in accordance with the internal laws of said State
without regard to the conflicts of law rules of said State.
Section 10.04. Appointment of Paying Agent, Etc.
The Company hereby appoints State Street Bank and Trust Company to be
Paying Agent, an Authenticating Agent and a Security Registrar with respect to
the Securities, pursuant to Section 3.01(25) of the Original Indenture and
agrees to pay the reasonable fees and expenses of State Street Bank and Trust
Company in connection with its duties as Paying Agent, Authenticating Agent and
Security Registrar.
Section 10.05. Execution of the Notes.
The Notes shall be executed on behalf of the Company by its Chairman,
a Vice Chairman, its President, one of its Vice Presidents or its Treasurer,
under its corporate seal and attested by any one of such officers.
[Signatures on following page]
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SIGNATURES
Dated as of June 11, 1999
PRISON REALTY TRUST, INC.
By: /s/ Michael W. Devlin
--------------------------------
Name: Michael W. Devlin
Title: Chief Operating Officer
Attest:
By: /s/ Vida H. Carroll
-------------------------------
Name: Vida H. Carroll
Title: Chief Financial Officer,
Secretary and Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Robert J. Dunn
---------------------------------
Name: Robert J. Dunn
Title: Vice President
Attest:
By: /s/ Yvette Malavet
-------------------------------
Authorized Signatory
Title: Notary Public
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EXHIBIT A
[Face of Note]
- - --------------------------------------------------------------------------------
CUSIP 74264 NAB1
12% Senior Note due 2006
No. ___ $100,000,000.00
PRISON REALTY TRUST, INC.
promises to pay to Cede & Co., or registered assigns, the principal sum of One
Hundred Million Dollars ($100,000,000.00) on June 1, 2006.
Interest Payment Dates: June 1 and December 1, commencing on December 1, 1999
Record Dates: May 15 and November 15
PRISON REALTY TRUST, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
(SEAL)
This is one of the Securities referred to
in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------------------
Authorized Signatory
Dated: June 11, 1999
- - --------------------------------------------------------------------------------
A-1
52
[Back of Note]
12% Senior Note due 2006
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and registered to and registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Global Security is exchangeable for Securities registered in
the name of a Person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this
Security (other than a transfer of this Security as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary or another nominee
of the Depositary) may be registered except in such limited circumstances.
Unless this Security is presented by an authorized representative of
the Depositary (55 Water Street, New York, New York) to the Company or its agent
for registration of transfer, exchange or payment, and any Security issued upon
registration or transfer of, or in exchange for, or in lieu of, this Security is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Prison Realty Trust, Inc., a Maryland corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate and the manner specified below. Interest will accrue at 12% per annum
and will be payable semi-annually in cash on each June 1 and December 1,
commencing December 1, 1999, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date") to Holders of
record of the Securities at the close of business on the immediately preceding
May 15 and November 15, whether or not a Business Day. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from June 11, 1999. To the extent lawful, the
Company shall pay interest on overdue principal at the rate the then applicable
interest on the Securities; it shall pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the same rate to
the extent lawful.
2. METHOD OF PAYMENT. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are canceled after such record
date and on or before such Interest Payment Date. The Holder thereof must
surrender this Security to a Paying Agent to collect principal payments. The
Company will pay principal and interest in the money of the United States that
at the time of payment is legal tender for payment of public and private debts.
The Security will be payable as to principal, premium, if any, and interest at
the office or agency of the Company maintained for such purpose or, at the
option of the Company, payment of interest may be made by wire transfer to the
Holders of Securities at their respective addresses set forth in the register of
Holders of Securities. Unless otherwise designated by the Company, the Company's
office or agency will be the office of State Street Bank and Trust Company
maintained for such purpose.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any
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Paying Agent or Registrar without notice to any Holder of a Security. The
Company may act in any such capacity.
4. INDENTURE. The Company issued the Securities as Registered
Securities under an Indenture, dated as of June 10, 1999, as amended and
supplemented by the First Supplemental Indenture, dated as of June 11, 1999
(collectively, the "Indenture") between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code ss.ss. 77aaa-77bbbb), as in effect on the date of the Indenture. The
Securities are subject to all such terms, and Holders of Securities are referred
to the Indenture and such Act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the
Securities. The Securities are unsecured obligations of the Company limited to
$150,000,000 million in aggregate principal amount, of which $100,000,000 were
issued on June 11, 1999.
5. OPTIONAL REDEMPTION.
At any time prior to June 1, 2002, the Company may, at its option,
on any one or more occasions redeem up to 35% of the aggregate principal amount
Securities originally offered in the Offering at a redemption price equal to
112.00% of the principal amount thereof, plus accrued and unpaid interest to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that at least 65% in aggregate principal amount of the Securities
originally issued remain outstanding immediately after the occurrence of such
redemption and that such redemption occurs within 45 days of the date of the
closing of such Equity Offering.
Except pursuant to the preceding paragraph, the Securities will not
be redeemable at the Company's option.
6. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's
Securities at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase (the "Change of Control Payment"). Within 10 days following any Change
of Control, the Company shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
Holders of Securities may elect to have such Securities purchased by completing
the form entitled "Option of Holder to Elect Purchase" appearing below.
(b) When the aggregate amount of Excess Proceeds from Asset Sales
exceeds $10.0 million, the Company shall make an offer to all Holders of
Securities and all Holders of other Indebtedness that is pari passu with the
Securities (as "Asset Sale Offer") to purchase the maximum principal amount of
Securities and such other pari passu Indebtedness that may be purchased out of
the Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date fixed for the closing of such offer. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, the Company may use such Excess
Proceeds for any purpose not otherwise prohibited by the Indenture. If the
aggregate principal amount of Securities and such other pari passu Indebtedness
tendered pursuant to such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Securities and such other pari passu
Indebtedness to be purchased on a pro rata basis, based on the principal amount
of Securities and such other pari passu Indebtedness
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tendered. Holders of Securities that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company prior to any related purchase
date and may elect to have such Securities purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Securities.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Securities are to be redeemed at its registered address. Securities may be
redeemed in part but only in whole multiples of $1,000, unless all of the
Securities held by a Holder are to be redeemed. On and after the redemption
date, interest ceases to accrue on Securities or portions thereof called for
redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Security Registrar and the
Trustee may require a Holder of a Security, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder of Securities to pay any taxes and fees required by law or permitted by
the Indenture. The Company need not exchange or register the transfer of any
Security or portion of a Security selected for redemption, except for the
unredeemed portion of any Security being redeemed in part. Also, it need not
exchange or register the transfer of any Securities for a period of 15 days
before a selection of Securities to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
9. PERSONS DEEMED OWNERS. Prior to due presentment to the Security
Registrar for registration of the transfer of this Security, the Trustee, any
Paying Agent, the Security Registrar and the Company may deem and treat the
Person in whose name this Security is registered as its absolute owner for the
purpose of receiving payment of principal of, premium, if any, and interest on
this Security for all other purposes whatsoever, whether or not this Security is
overdue, and neither the Trustee, any Paying Agent, the Security Registrar nor
the Company shall be affected by notice to the contrary. The registered Holder
of a Security shall be treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Securities may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Securities (and Additional Securities, if any) voting as a single
class, and any existing default or compliance with any provision of the
Indenture or the Securities may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Securities (and Additional
Securities, if any) voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for Securities). Without the
consent of any Holder of a Security, the Indenture, the Securities or the
Subsidiary Guarantees may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Securities in addition to
or in place of certificated Securities, to provide for the assumption of the
Company's obligations to Holders of the Securities in case of a merger or
consolidation or sale of all or substantially all of the Company's assets, to
make any change that would provide any additional rights or benefits to the
Holders of the Securities or that does not adversely affect the legal rights
under the Indenture of any such Holder or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
11. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on the Securities; (ii) default in
payment when due of principal of or premium, if any, on the Securities, (iii)
failure by the Company to comply for 10 days after notice from
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the Trustee or the Holders of at least 25% in principal amount of the Securities
then outstanding with Sections 2.03, 3.01, 3.04, 3.05, 3.06, 3.08, 3.09, 3.10,
3.11, 3.12, 3.13, 3.14 or 8.05 or Article 4 of the Indenture; (iv) failure by
the Company for 60 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Securities
to comply with any other agreements in the Indenture; (v) default under certain
other agreements relating to Indebtedness of the Company which default is caused
by a Payment Default or results in the acceleration of such Indebtedness prior
to its express maturity; (vi) certain final judgments for the payment of money
that remain undischarged for a period of 60 days; (vii) except as permitted by
the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor or any Person acting on its behalf shall deny or
disaffirm its obligations under such Guarantor's Subsidiary Guarantee; and
(viii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Significant Subsidiaries. If any Event of Default occurs (other than
by reason of bankruptcy or insolvency) and is continuing under the Indenture,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities may declare all the Securities to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that,
taken together, would constitute a Significant Subsidiary, all outstanding
Securities will become due and payable without further action or notice. Holders
of the Securities may not enforce the Indenture or the Securities except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of the
Securities notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest) if
it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Securities then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Securities
waive any existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Securities. In the case of any Event of
Default occurring by reason of any willful action or inaction taken or not taken
by or on behalf of the Company with the intention of avoiding payment of the
premium that the Company would have had to pay if the Company then had elected
to redeem the Securities pursuant to the optional redemption provisions of the
Indenture, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the acceleration of the Securities.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not the Trustee.
13. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES,
INCORPORATORS AND STOCKHOLDERS. No director, officer, employee, incorporator or
stockholder, of the Company, as such, shall have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Securities 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.
14. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
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15. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder of a Security or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Holders of
Securities. No representation is made as to the accuracy of such numbers either
as printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
Prison Realty Trust, Inc.
10 Burton Hills Boulevard, Suite 100
Nashville, Tennessee 37215
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to:
-------------------------------
(Insert assignee's legal name)
- - --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date:
-------------------
Your Signature:
---------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:
--------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.07 or 3.10 of the Supplemental Indenture, check the
appropriate box below:
[ ] ERROR! SWITCH ARGUMENT NOT SPECIFIED. Section 3.07
[ ] ERROR! SWITCH ARGUMENT NOT SPECIFIED. Section 3.10
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 2.03 or Section 3.10 of the Supplemental
Indenture, state the amount you elect to have purchased:
$
--------------
Date:
---------------
Your Signature:
---------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:
------------------------------------
Signature Guarantee*:
---------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
The undersigned hereby unconditionally guarantees (a) the due and
punctual payment of the principal of, premium, if any, and interest on the
Securities (as defined in the First Supplemental Indenture, dated as of June 11,
1999 (the "First Supplemental Indenture") to the Indenture of even date
therewith between Prison Realty Trust, Inc. (the "Company") and State Street
Bank and Trust Company, as Trustee (as amended by the First Supplemental
Indenture, the "Indenture")), whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal of and
interest, if any, on the Securities, to the extent lawful, and the due and
punctual performance of all other obligations of the Company to the Holders (as
defined in the Indenture) or the Trustee all in accordance with the terms hereof
and as set forth in Article 9 of the First Supplemental Indenture, (b) in case
of any extension of time of payment or renewal of any Securities or any of such
other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise and (c) has agreed to pay any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under this Subsidiary Guarantee.
Capitalized terms used herein have the meanings assigned to them in the First
Supplemental Indenture unless otherwise indicated.
No stockholder, officer, director or incorporator, as such, past,
present or future, of any Guarantor shall have any personal liability under this
Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
This Subsidiary Guarantee shall be binding upon each Guarantor and
its successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This Subsidiary Guarantee may be released in accordance with the provisions set
forth in Article 9 of the First Supplemental Indenture to the Indenture.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Security with respect to
which this Subsidiary Guarantee relates shall have been executed by the Trustee
or an Authenticating Agent under the Indenture by the manual signature of one of
its authorized officers.
[NAME OF GUARANTOR]
By:
------------------------------------
Name:
Title:
Attest:
By:
-------------------------------
Name:
Title:
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EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Prison Realty Trust, Inc. (or its permitted successor), a Maryland
corporation (the "Company"), the Company and State Street Bank and Trust
Company, as trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture, dated as of June 10, 1999 (the "Original Indenture"), as
amended and supplemented by the First Supplemental Indenture, dated as of June
11, 1999 (the "First Supplemental Indenture" and together with the Original
Indenture, the "Indenture") providing for the issuance of an aggregate principal
amount of up to $150,000,000 of 12% Senior Notes due 2006 (the "Securities");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Securities and the
Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 8.01 of the First Supplemental
Indenture, the Trustee is authorized to execute and deliver this Supplemental
Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Securities as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees
as follows:
(a) To jointly and severally Guarantee to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, the Securities or the obligations of the
Company hereunder or thereunder, that:
(i) the principal of and interest on the Securities will
be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Securities, if any, if lawful, and
all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that same
will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed or any
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performance so guaranteed for whatever reason, the Guarantors shall
be jointly and severally obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the
Securities or the Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Securities with respect
to any provisions hereof or thereof, the recovery of any judgment against
the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense
of a guarantor, other than the defense of payment.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities and
the Indenture, and the Guaranteeing Subsidiary accepts all obligations of
a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either
the Company or the Guarantors, any amount paid by either to the Trustee or
such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall 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.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 5 of the
Indenture for the purposes of this Subsidiary Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article 5
of the Indenture, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Guarantee.
(i) Pursuant to Section 9.02 of the First Supplemental
Indenture, after giving effect to any maximum amount and any other
contingent and fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such
other Guarantor under Article 9 of the First Supplemental Indenture, this
new Subsidiary Guarantee shall be limited to the maximum amount
permissible such that the obligations of such Guarantor under this
Subsidiary Guarantee will not constitute a fraudulent transfer or
conveyance.
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3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that
the Subsidiary Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of such Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) Except as otherwise provided in Section 9.05 of the First
Supplemental Indenture, the Guaranteeing Subsidiary may not consolidate with or
merge with or into (whether or not such Guarantor is the surviving Person)
another corporation, Person or entity whether or not affiliated with such
Guarantor unless:
(i) subject to Section 9.04 of the First Supplemental
Indenture, the Person formed by or surviving any such consolidation or
merger (if other than a Guarantor or the Company) unconditionally assumes
all the obligations of such Guarantor, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee,
under the Securities, the Indenture and the Subsidiary Guarantee on the
terms set forth herein or therein; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Subsidiary Guarantee endorsed upon the Securities and the due and
punctual performance of all of the covenants and conditions of the Indenture to
be performed by the Guarantor, such successor corporation shall succeed to and
be substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. All the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and benefit under the
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.
(c) Except as set forth in Articles 3 and 4 and Section 9.05 of
Article 9 of the First Supplemental Indenture, and notwithstanding clauses (a)
and (b) above, nothing contained in the Indenture or in any of the Securities
shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the assets
of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all to the capital stock of any Guarantor, in each case to
a Person that is not (either before or after giving effect to such transaction)
a Restricted Subsidiary of the Company, then such Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or otherwise, of all
of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; provided that the Net Proceeds of
such sale or other disposition are applied in accordance
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with the applicable provisions of the Indenture, including without limitation
Section 3.07 of the First Supplemental Indenture. Upon delivery by the Company
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in accordance
with the provisions of the Indenture, including without limitation Section 3.07
of the First Supplemental Indenture, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Securities and for the other obligations of any Guarantor under
the Indenture as provided in Article 9 of the First Supplemental Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Securities, any Subsidiary Guarantees,
the Indenture or this Supplemental Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
the Securities by accepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the
Securities. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ,
------------- ------
[GUARANTEEING SUBSIDIARY]
By:
Name:
Title:
PRISON REALTY TRUST, INC.
By:
----------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
---------------------------------
Authorized Signatory
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