EXHIBIT 4.1
PG&E CORPORATION,
As Issuer
$600,000,000
6-7/8% SENIOR SECURED NOTES DUE 2008
INDENTURE
Dated as of July 2, 2003
Bank One, N.A.,
As Trustee
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
SECTION 1.01 DEFINITIONS.................................................................................1
SECTION 1.02 OTHER DEFINITIONS..........................................................................25
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT..........................................25
SECTION 1.04 RULES OF CONSTRUCTION......................................................................26
ARTICLE 2. THE NOTES.............................................................................................26
SECTION 2.01 FORM AND DATING,...........................................................................26
SECTION 2.02 EXECUTION AND AUTHENTICATION...............................................................27
SECTION 2.03 REGISTRAR AND PAYING AGENT.................................................................28
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST........................................................28
SECTION 2.05 HOLDER LISTS...............................................................................29
SECTION 2.06 TRANSFER AND EXCHANGE......................................................................29
SECTION 2.07 REPLACEMENT NOTES..........................................................................42
SECTION 2.08 OUTSTANDING NOTES..........................................................................43
SECTION 2.09 TREASURY NOTES.............................................................................43
SECTION 2.10 TEMPORARY NOTES............................................................................43
SECTION 2.11 CANCELLATION...............................................................................43
SECTION 2.12 DEFAULTED INTEREST.........................................................................44
SECTION 2.13 CUSIP NUMBERS..............................................................................44
SECTION 2.14 ISSUANCE OF ADDITIONAL NOTES...............................................................44
ARTICLE 3. REDEMPTION AND PREPAYMENT.............................................................................45
SECTION 3.01 NOTICES TO TRUSTEE.........................................................................45
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED OR PURCHASED.............................................45
SECTION 3.03 NOTICE OF REDEMPTION.......................................................................45
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.............................................................46
SECTION 3.05 DEPOSIT OF REDEMPTION OR PURCHASE PRICE....................................................46
SECTION 3.06 NOTES REDEEMED OR PURCHASED IN PART........................................................47
SECTION 3.07 OPTIONAL REDEMPTION........................................................................47
SECTION 3.08 MANDATORY REDEMPTION.......................................................................48
SECTION 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS........................................48
ARTICLE 4. COVENANTS.............................................................................................50
SECTION 4.01 PAYMENT OF NOTES...........................................................................50
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY............................................................50
SECTION 4.03 REPORTS....................................................................................51
SECTION 4.04 COMPLIANCE CERTIFICATE.....................................................................51
SECTION 4.05 TAXES......................................................................................52
SECTION 4.06 STAY, EXTENSION AND USURY LAWS.............................................................52
SECTION 4.07 RESTRICTED PAYMENTS........................................................................52
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SECTION 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.............................56
SECTION 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.................................57
SECTION 4.10 ASSET SALES................................................................................60
SECTION 4.11 TRANSACTIONS WITH AFFILIATES...............................................................62
SECTION 4.12 LIENS......................................................................................64
SECTION 4.13 BUSINESS ACTIVITIES........................................................................64
SECTION 4.14 CORPORATE EXISTENCE........................................................................64
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL, SPIN-OFF OR REORGANIZATION EVENT...............64
SECTION 4.16 PAYMENTS FOR CONSENT.......................................................................66
SECTION 4.17 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES....................................66
SECTION 4.18 COVENANT TERMINATION.......................................................................66
ARTICLE 5. SUCCESSORS............................................................................................67
SECTION 5.01 MERGER, CONSOLIDATION OR SALE OF ASSETS....................................................67
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED..........................................................68
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................68
SECTION 6.01 EVENTS OF DEFAULT..........................................................................68
SECTION 6.02 ACCELERATION...............................................................................70
SECTION 6.03 OTHER REMEDIES.............................................................................70
SECTION 6.04 WAIVER OF PAST DEFAULTS....................................................................70
SECTION 6.05 CONTROL BY MAJORITY........................................................................71
SECTION 6.06 LIMITATION ON SUITS........................................................................71
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT..............................................71
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.................................................................71
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM...........................................................72
SECTION 6.10 PRIORITIES.................................................................................72
SECTION 6.11 UNDERTAKING FOR COSTS......................................................................73
ARTICLE 7. TRUSTEE...............................................................................................73
SECTION 7.01 DUTIES OF TRUSTEE..........................................................................73
SECTION 7.02 RIGHTS OF TRUSTEE..........................................................................74
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE...............................................................75
SECTION 7.04 TRUSTEE'S DISCLAIMERS......................................................................75
SECTION 7.05 NOTICE OF DEFAULTS.........................................................................75
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.................................................75
SECTION 7.07 COMPENSATION AND INDEMNITY.................................................................76
SECTION 7.08 REPLACEMENT OF TRUSTEE.....................................................................77
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC...........................................................77
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION..............................................................78
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..........................................78
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ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..............................................................78
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...................................78
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE.............................................................78
SECTION 8.03 COVENANT DEFEASANCE........................................................................79
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.................................................79
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS
PROVISIONS .............................................................................80
SECTION 8.06 REPAYMENT TO COMPANY.......................................................................81
SECTION 8.07 REINSTATEMENT..............................................................................81
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER......................................................................82
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES........................................................82
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES...........................................................83
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT........................................................84
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS..........................................................84
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES...........................................................85
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC............................................................85
ARTICLE 10. SATISFACTION AND DISCHARGE...........................................................................85
SECTION 10.01 SATISFACTION AND DISCHARGE.................................................................85
SECTION 10.02 APPLICATION OF TRUST MONEY.................................................................86
ARTICLE 11. COLLATERAL...........................................................................................87
SECTION 11.01 PLEDGE AGREEMENTS..........................................................................87
SECTION 11.02 OPINIONS...................................................................................87
SECTION 11.03 RELEASE OF THE COLLATERAL..................................................................88
SECTION 11.04 CERTIFICATES OF THE COMPANY................................................................88
SECTION 11.05 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE PLEDGE AGREEMENTS............88
SECTION 11.06 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE PLEDGE AGREEMENTS...............89
SECTION 11.07 RELEASE UPON TERMINATION OF THE COMPANY'S OBLIGATIONS......................................89
ARTICLE 12. MISCELLANEOUS........................................................................................89
SECTION 12.01 TRUST INDENTURE ACT CONTROLS...............................................................89
SECTION 12.02 NOTICES....................................................................................90
SECTION 12.03 COMMUNICATIONS BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.............................91
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.........................................91
SECTION 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..............................................91
SECTION 12.06 RULE BY TRUSTEE AND AGENTS.................................................................92
SECTION 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS...................92
SECTION 12.08 GOVERNING LAW..............................................................................92
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..............................................92
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SECTION 12.10 SUCCESSORS.................................................................................92
SECTION 12.11 SEVERABILITY...............................................................................92
SECTION 12.12 COUNTERPART ORIGINALS......................................................................92
SECTION 12.13 TABLE OF CONTENTS, HEADINGS, ETC...........................................................92
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EXHIBITS
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EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
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Cross-Reference Table*
Trust Indenture Indenture
Act Section Section
- ----------- -------
310 (a)(1)............................................................................. 7.10
(a)(2)............................................................................. 7.10
(a)(3)............................................................................. N.A.
(a)(4)............................................................................. N.A.
(a)(5)............................................................................. 7.10
(b)................................................................................ 7.10
(c)................................................................................ N.A.
311 (a)................................................................................ 7.11
(b)................................................................................ 7.11
(c)................................................................................ N.A.
312 (a)................................................................................ 2.05
(b)................................................................................ 12.03
(c)................................................................................ 12.03
313 (a)................................................................................ 7.06
(b)(1)............................................................................. 11.03
(b)(2)............................................................................. 7.06; 7.07
(c)................................................................................ 7.06;12.02
(d)................................................................................ 7.06
314 (a)................................................................................ 4.03;12.02
(b)................................................................................ N.A.
(c)(1)............................................................................. 12.04
(c)(2)............................................................................. 12.04
(c)(3)............................................................................. N.A.
(d)................................................................................ 11.03;11.04
(e)................................................................................ 12.05
(f)................................................................................ N.A.
315 (a)................................................................................ 7.01
(b)................................................................................ 7.05, 12.02
(c)................................................................................ 7.01
(d)................................................................................ 7.01
(e)................................................................................ 6.11
316 (a)(last sentence)................................................................. 2.09
(a)(1)(A).......................................................................... 6.05
(a)(1)(B).......................................................................... 6.04
(a)(2)............................................................................. N.A.
(b)................................................................................ 6.07
(c)................................................................................ 2.12
317 (a)(1)............................................................................. 6.08
(a)(2)............................................................................. 6.09
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* This Cross-Reference Table is not part of the Indenture.
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(b)................................................................................ 2.04
318 (a)................................................................................ 12.01
(b)................................................................................ N.A.
(c)................................................................................ 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
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This INDENTURE dated as of July 2, 2003, between PG&E Corporation, a
California corporation (the "Company"), and Bank One, N.A., as trustee (the
"Trustee").
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 the 6-7/8% Senior
Secured Notes due 2008 (the "Initial Notes") and the 6-7/8% Senior Secured Notes
due 2008 issued in the Exchange Offer, as defined herein, pursuant to this
Indenture (the "Exchange Notes" and, together with the Additional Notes, as
defined herein, and the Initial Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person:
(1) 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
(2) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"Additional Assets" means:
(1) any property or assets, other than Capital Stock, Indebtedness
or rights to receive payments over a period greater than 180
days, that are used by or useful to the Company or any of its
Restricted Subsidiaries in a Permitted Business; or
(2) the Capital Stock of an entity that either is already at the
time a Restricted Subsidiary or becomes a Restricted
Subsidiary as a result of the acquisition of that Capital
Stock by the Company or another of its Restricted
Subsidiaries.
"Additional Interest" means all Additional Interest, if any, owing
at the time of determination pursuant to Section 5 of the Registration Rights
Agreement.
"Additional Notes" means any notes (other than the Initial Notes),
if any, issued under this Indenture in accordance with Sections 2.02, 2.14 and
4.09 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, means 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" have correlative
meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets
or rights, including by means of a merger, consolidation or
similar transaction; provided that the sale, lease, 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 the covenant contained in Section
4.15 of this Indenture and/or the covenant contained in
Section 5.01 of this Indenture and not by the covenant
contained in Section 4.10 of this Indenture; and
(2) the issuance of Equity Interests in any Restricted Subsidiary
or the sale by the Company or a Restricted Subsidiary of their
Equity Interests in any Subsidiary of the Company (other than
directors' qualifying shares).
Notwithstanding the preceding, none of the following items shall be
deemed to be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $10.0
million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable
or other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted
by Section 4.07;
(7) any sale of Capital Stock of the Company by a Restricted
Subsidiary;
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(8) any sale of Capital Stock of NEG by the Company or any
Restricted Subsidiary required by or provided for in a
confirmed plan of reorganization in a bankruptcy proceeding of
NEG or otherwise necessary to comply with such a plan or in
connection with a court-approved judgment or settlement of
litigation related to NEG's bankruptcy proceeding; provided
that the Net Proceeds from any such sale is applied in
accordance with Section 4.10 of this Indenture; and
(9) dispositions in connection with Permitted Liens.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Base Pledge Agreement" means the Utility Stock Base Pledge
Agreement, dated as of the Issue Date, among the Company, as pledgor, the
Trustee and the Collateral Agent, as pledgee for the benefit of the Holders of
the Notes and the holders of any additional Indebtedness that become a party
thereto pursuant to the terms thereof, as amended, amended and restated or
otherwise modified from time to time.
"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
Sections 13(d) and 14(d) of the Exchange Act), such "person" will 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" have
correlative meanings.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means each day that is not a Saturday, Sunday or
other day on which banking institutions in New York, New York are authorized or
required by law to close.
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"Capital Lease Obligation" means, at the time any determination 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:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited); and
(4) 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.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or
instrumentality of the United States government (provided that
the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more
than one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year
and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $200.0
million;
(4) repurchase obligations for underlying securities of the types
described in clauses (2) and (3) above entered into with any
financial institution meeting the qualifications specified in
clause (3) above;
(5) commercial paper having the highest rating obtainable from
Standard & Poor's or Moody's and in each case maturing within
one year after the date of acquisition;
(6) securities issued by any state of the United States of America
or any political subdivision of any such state or any public
instrumentality thereof maturing within one year of the date
of acquisition thereof and, at the time of acquisition, having
a rating of at least AAA from Standard & Poor's or at least
Aaa from Moody's; and
4
(7) money market funds substantially all of whose assets
constitute securities of the kinds described in clauses (1)
through (6) of this definition or that have a rating of at
least AAA from Standard & Poor's or at least Aaa from Moody's.
"Change of Control" means the occurrence of any of the following:
(1) 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 to any
"person" (as that term is used in Sections 13(d) and 14(d) of
the Exchange Act);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which
is that any "person" (as that term is used in Sections 13(d)
and 14(d) of the Exchange Act) becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the voting power
of the Voting Stock of the Company;
(4) the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors;
(5) the first day on which the Company and its Subsidiaries shall
cease to be the Beneficial Owner, directly or indirectly, of
at least 80% of the common stock or 70% of the Voting Stock of
the Utility;
(6) a Change of Control as defined in the Company's Indenture
dated June 25, 2002 governing the Company's 9.50% convertible
subordinated notes due 2010, as amended, modified or
supplemented from time to time; or
(7) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction
in which any of the outstanding Voting Stock of the Company or
such other Person is converted into or exchanged for cash,
securities or other property, other than any such transaction
where the Voting Stock of the Company outstanding immediately
prior to such transaction is converted into or exchanged for
Voting Stock (other than Disqualified Stock) of the surviving
Person constituting a majority of the outstanding shares of
such Voting Stock of such surviving Person (immediately after
giving effect to such transaction).
"Clearstream" means Clearstream Banking, S.A., or any successor
securities clearing agency.
"Collateral" means all of the property from time to time in which Liens
are purported to be granted to secure the Notes pursuant to the Pledge
Agreements.
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"Collateral Agent" shall have the meaning given to it in the Pledge
Agreements.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Subsidiaries in
connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person
and its Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) Fixed Charges of such Person and its Restricted Subsidiaries
for such period, to the extent that any such Fixed Charges
were deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash
expenses (including impairment charges recorded in connection
with the application of Financial Accounting Standard No. 142
"Goodwill and Other Intangibles" 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 Subsidiaries for such
period to the extent that such depreciation, amortization and
other non-cash expenses were deducted in computing such
Consolidated Net Income; plus
(5) unrealized non-cash losses resulting from foreign currency
balance sheet adjustments required by GAAP to the extent such
losses were deducted in computing such Consolidated Net
Income, minus
(6) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary
course of business and any items that represent the reversal
of any accrual or reserve, taken in any prior period for
anticipated cash expenses,
in each case, as determined in accordance with GAAP.
"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:
(1) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount
of dividends or distributions paid in cash to the specified
Person or a Restricted Subsidiary of the Person; provided
that, for the
6
avoidance of doubt, the Consolidated Net Income of the Company
shall not include any net loss of NEG;
(2) the Net Income of any Restricted Subsidiary will be excluded
to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that
Net Income is not at the date of determination permitted
without any prior governmental approval (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 stockholders;
and
(3) the cumulative effect of a change in accounting principles
will be excluded.
"Consolidated Tangible Assets" means the total consolidated assets,
less goodwill and intangibles, of the Company and its Subsidiaries, as shown on
the most recent balance sheet of the Company.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the Issue Date; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the
time of such nomination or election.
"Corporate Trust Office of the Trustee" will be at the principal
address of the Trustee specified in Section 12.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"CPUC" means the California Public Utilities Commission or its
successor.
"Credit Facilities" means one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time (and whether or not with the original lender or
lenders or another lender or lenders and whether provided under the original
Credit Facility or any other credit or other agreement or indenture).
"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.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Article 2 hereof, substantially
in the form of Exhibit A hereto,
7
except that such Note will not bear the Global Note Legend and will not have the
"Schedule of Exchanges of Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"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 of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control, spin-off or an asset sale will 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 compliance by
the Company with the covenants contained in Section 4.10 and Section 4.15 and
unless such repurchase or redemption complies with Section 4.07 of this
Indenture.
"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).
"Equity Offering" means any public sale of Capital Stock (other than
Disqualified Stock) made for cash on a primary basis by the Company after the
Issue Date.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system, or any successor securities clearing agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the notes issued in the Exchange Offer pursuant
to this Indenture.
"Exchange Offer" has the meaning given to it in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning given to it in
the Registration Rights Agreement.
"Existing Indebtedness" means any Indebtedness of the Company and its
Restricted Subsidiaries (other than any other Permitted Debt) in existence on
the Issue Date, until such amounts are repaid.
"FERC" means the Federal Energy Regulatory Commission or its successor.
8
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) 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, imputed interest with respect
to Attributable Debt, 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
incurred with respect to Indebtedness; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense actually paid by the Company or a
Restricted Subsidiary 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 or
one of its Restricted Subsidiaries; plus
(4) 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 or such Disqualified Stock or preferred stock of
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) (i) in the
case of dividends that are not deductible for income tax
purposes, 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, or (ii) one, in the case of dividends
that are deductible for income tax purposes,
in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to any specified
Person for any four-quarter reference 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 any Disqualified Stock or preferred stock subsequent to
the commencement of the applicable four-quarter reference period and on or prior
to the date on which the event for which the calculation of the Fixed Charge
Coverage Ratio is made occurs (the "Calculation Date"), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of
9
Disqualified Stock or preferred stock, and the use of the proceeds therefrom as
if the same had occurred at the beginning of such period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions 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, subsequent to the commencement of the applicable
four-quarter reference period and on or prior to the
Calculation Date will be given pro forma effect as if they had
occurred on the first day of such period including any pro
forma expense and cost reductions that have occurred or are
reasonably expected to occur, in the reasonable judgment of
the chief financial officer of the Company (regardless of
whether those cost savings or operating improvements could
then be reflected in pro forma financial statements in
accordance with Regulation S-X promulgated under the
Securities Act or any other regulation or policy of the SEC
related thereto);
(2) 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, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will 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.
"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.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Article 2 hereof.
"Global Note Legend" means the legend set forth in Section 2.06(d)(i)
to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, of all or any part of
10
any Indebtedness in any manner including, without limitation, by way of a pledge
of assets or through letters of credit or reimbursement agreements in respect
thereof.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person incurred under:
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements;
(2) foreign exchange contracts and currency protection agreements;
(3) any commodity futures contract, commodity option or other
similar agreement or arrangement; and
(4) other similar agreements or arrangements.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments;
(3) in respect of banker's acceptances or letters of credit (or
reimbursement agreements in respect thereof) or similar
instruments;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that
constitutes an accrued expense or trade payable;
(6) representing the net obligations of such Person under any
Hedging Obligations (the amount of any such obligations to be
equal at any time to the termination value of the agreement or
arrangement giving rise to such obligation that would be
payable by such Person at such time); or
(7) the principal component or liquidation preference of all
obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or,
with respect to any Restricted Subsidiary, any preferred
stock;
if and to the extent any of the preceding items (other than letters of credit,
Hedging Obligations, Disqualified Stock or, with respect to any Restricted
Subsidiary, preferred stock) 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 to the extent secured by a
Lien on any
11
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.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past
due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means $600.0 million in aggregate principal amount of
6-7/8% Senior Secured Notes due 2008 issued under this Indenture on the Issue
Date.
"Investment Grade Date" means the first date upon which the Notes are
rated BBB- or better by Standard & Poor's and Baa3 or better by Moody's (or, if
either such entity ceases to rate the Notes 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 Company as a
replacement agency) and no Material Default has occurred and is continuing under
this Indenture.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding (x) commission, travel and similar advances to officers
and employees made in the ordinary course of business and (y) advances to
customers in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of the lender), 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. If the Company or any Subsidiary
of the Company sells or otherwise disposes of any Equity Interests of any direct
or indirect Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary of the Company, the
Company will be deemed to have made an Investment on the date of any such sale
or disposition in an amount equal to the fair market value of the Equity
Interests of and other Investments in such Subsidiary not sold or disposed of in
an amount determined as provided in Section 4.07(c) of this Indenture.
"Issue Date" means July 2, 2003.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
12
"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 such asset.
"Make-Whole Amount" means, with respect to a Note, an amount equal to
the greater of (1) 1.0% of the principal amount of the Note or (2) the excess,
if any, of (a) the present value of (i) all required interest payments due on
such Note through July 15, 2006 (excluding any portion of such payments of
interest accrued as of the redemption date) plus (ii) the redemption price of
such Note at July 15, 2006 (such redemption price being set forth in Section
3.07), computed using a discount rate equal to the Treasury Rate plus 50 basis
points, over (b) the outstanding principal amount of such Note. "Treasury Rate"
is defined as the yield to maturity (calculated on a semi-annual bond-equivalent
basis) at the time of the computation of United States Treasury securities with
a constant maturity (as compiled by and published in the most recent Federal
Reserve Statistical Release H.15 (510), which has become publicly available at
least two business days prior to the date of the redemption notice or, if such
Statistical Release is no longer published, any publicly available source of
similar market data) most nearly equal to the then remaining maturity of the
Notes; provided that if the Make-Whole Average Life of such Note is not equal to
the constant maturity of the United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the Make-Whole Average Life of such Note is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Make-Whole Average Life" means the number of years (calculated to the nearest
one-twelfth) between the date of redemption and the Stated Maturity of the
Notes.
"Make-Whole Price" means the sum of the outstanding principal amount of
the Notes to be redeemed plus the Make-Whole Amount of those Notes.
"Material Default" means (i) any Default; provided that with respect to
a Default of the type contemplated under clause (4) of Section 6.01, if the
Company has not received a notice of default from the Holders within 45 days
after it provided notice of such Default to the Trustee, then such Default shall
no longer be deemed to be a Material Default until such time, if any, as the
Company receives a notice of default in respect of such Default or (ii) an Event
of Default, unless, in either case, such Default or Event of Default has been
cured or waived.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
"NEG" means PG&E National Energy Group, LLC, a Delaware limited
liability company and each of its Subsidiaries.
"Net Cash Proceeds" means the proceeds in the form of cash or Cash
Equivalents, including payments in respect of deferred payment obligations to
the extent corresponding to the principal, but not interest, component thereof
when received in the form of cash or Cash Equivalents, net of attorneys' fees,
accountants' fees, underwriters' or placements agents' fees, discounts or
13
commissions and brokerage, consultant and other fees incurred in connection
therewith and net of taxes paid or payable as a result thereof.
"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 of such specified person,
excluding, however:
(1) any gains and losses, together with any related provision for
taxes on such gains and losses, realized in connection with:
(a) any Asset Sale; or (b) the disposition of any securities
by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of
its Subsidiaries;
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss; and
(3) any non-cash impairment loss determined in accordance with
GAAP related to the carrying value of goodwill.
"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), 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 of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, any
amounts required to be applied to the repayment of Senior Debt 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
in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) 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) is the lender;
(2) no default with respect to which (including any rights that
the holders of the Indebtedness 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 (other than the Notes) of the Company or any of
its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity; and
(3) 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.
14
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" has the meaning given to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes.
"Obligations" means any principal, premium and Additional Interest, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization, whether or not a claim for
post-filing interest is allowed in such proceeding), penalties, fees, charges,
expenses, indemnifications, reimbursement obligations, damages, guarantees, and
other liabilities or amounts payable under the documentation governing any
Indebtedness or in respect thereof.
"Officer" means, with respect to any Person, the chairman of the Board
of Directors, the chief executive officer, the president, the chief financial
officer, the treasurer, any assistant treasurer, the controller, the secretary,
any assistant secretary or any vice-president of such Person.
"Officer's Certificate" means a certificate signed on behalf of the
Company by an Officer of the Company that meets the requirements of Section
12.05 hereof.
"Opinion of Counsel" means an opinion meeting the requirements of
Section 12.05 hereof from legal counsel who is reasonably acceptable to the
Trustee. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Clearstream, a
Person who has an account with DTC, Euroclear or Clearstream, respectively (and,
with respect to DTC, shall include Euroclear and Clearstream).
"Payment Default" has the meaning given to it in Section 6.01 of this
Indenture.
"Paying Agent" has the meaning given to it in Section 2.03 of this
Indenture.
"Permitted Business" means the lines of business conducted by the
Company and its Subsidiaries on the date hereof and any business incidental or
reasonably related thereto or which is a reasonable extension thereof as
determined in good faith by the Company's chief financial officer and set forth
in an Officer's Certificate delivered to the Trustee.
"Permitted Debt" has the meaning given to it in Section 4.09 of this
Indenture.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in Cash Equivalents;
15
(3) 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;
(4) 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 Section 4.10 of this Indenture;
(5) any acquisition of assets solely in exchange for the issuance
of Equity Interests (other than Disqualified Stock) of the
Company;
(6) any Investments received (a) in satisfaction of judgments or
in compromise of obligations of trade creditors or customers
that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade
creditor or customer or (b) as a result of a foreclosure by
the Company or any of its Restricted Subsidiaries with respect
to any secured Investment in default;
(7) guarantees by the Company or any of its Restricted
Subsidiaries of Indebtedness permitted under Section 4.09 of
this Indenture;
(8) Hedging Obligations permitted to be incurred under Section
4.09 of this Indenture;
(9) payroll, travel and similar advances to officers, directors or
employees of the Company and any of its Subsidiaries 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;
(10) loans or advances to employees made in the ordinary course of
business of the Company or such Restricted Subsidiary;
(11) Investments in the Utility if the Company reasonably
determines that such Investments are required to comply with
the conditions set forth by the CPUC in Decision 96-11-017 or
Decision 99-04-068 and any decision of the CPUC which imposes
a requirement or condition on the Company affecting the
Company's relationship with the Utility or are otherwise
required by law or any court-approved settlement;
(12) Investments in the Utility required by or provided for in, or
otherwise necessary to satisfy the conditions to effectiveness
of, the Utility's Plan of Reorganization;
16
(13) Investments in Unrestricted Subsidiaries by the Company or a
Restricted Subsidiary pursuant to agreements in effect on the
Issue Date, as such agreements may be modified or amended;
provided that no such amendment or modification may materially
increase the investment obligations of the Company or
applicable Restricted Subsidiary thereunder;
(14) 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 (14) that are at the time outstanding,
not to exceed $50.0 million;
(15) any Investment in prepaid expenses, negotiable instruments
held for collection and lease, utility and workers'
compensation, performance and other similar deposits;
(16) any Investment or payment required by an investment contract,
in each case as in effect on the Issue Date, and any
amendment, modification, extension or renewal thereof to the
extent such amendment, modification, extension or renewal does
not require the Company or any of its Restricted Subsidiaries
to make any additional Investment or payment in connection
therewith; and
(17) any payments to NEG by the Company or a Restricted Subsidiary
required by or provided for in a confirmed plan of
reorganization in a bankruptcy proceeding of NEG or otherwise
necessary to comply with such a plan or in connection with a
court-approved judgment or settlement related to an NEG
bankruptcy proceeding.
"Permitted Liens" means:
(1) Liens on assets (other than assets that constitute Collateral)
securing Indebtedness incurred pursuant to clauses (b)(i) or
(b)(xiii) of Section 4.09 of this Indenture;
(2) Liens securing the Notes;
(3) Liens existing on the Issue Date;
(4) Liens in favor of the Company;
(5) Liens to secure Indebtedness of any Restricted Subsidiaries;
provided that the Indebtedness is permitted by the terms of
this Indenture to be incurred;
(6) 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 or otherwise becomes a
Restricted Subsidiary of the Company; provided that such Liens
were in existence prior to the contemplation of such
17
merger or consolidation or such Person becoming a Restricted
Subsidiary of the Company and do not extend to any assets
other than those of such Person;
(7) Liens on property existing at the time of acquisition of the
property by the Company or any Restricted Subsidiary of the
Company; provided that such Liens were not incurred in
connection with such acquisition;
(8) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (b)(iv) of Section 4.09 of
this Indenture;
(9) Liens securing Permitted Refinancing Indebtedness incurred to
refinance Indebtedness that was previously so secured;
provided that any such Lien is limited to all or part of the
same property or assets (plus improvements, accessions,
proceeds or distributions in respect thereof) that secured or,
under the written arrangements under which the original Lien
arose, could secure the Indebtedness being refinanced;
(10) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under this Indenture,
secured by a Lien on the same property securing such Hedging
Obligation;
(11) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations
of a like nature incurred in the ordinary course of business;
(12) 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 conducted; provided that any reserve or other
appropriate provision as is required in conformity with GAAP
has been made therefor;
(13) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws and other types
of social security 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 of 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;
(14) Liens imposed by law, including carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet delinquent or
that are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted;
provided that any reserve or other appropriate provision as is
required in conformity with GAAP has been made therefor;
18
(15) Liens arising solely by virtue of any statutory or common law
provisions relating to banker's Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other
funds maintained with a depositary institution; provided that
(a) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by
the Company in excess of those set forth by regulations
promulgated by the Federal Reserve Board and (b) such deposit
account is not intended by the Company or any Restricted
Subsidiary to provide collateral to the depositary
institution;
(16) easements, rights-of-way, minor survey exceptions, zoning and
similar restrictions and other similar encumbrances or title
defects incurred or imposed, which do not materially interfere
with the ordinary conduct of the Company's business or the
business of its Subsidiaries;
(17) judgment Liens not giving rise to an Event of Default so long
as such Liens are adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review
of such judgment have not been finally terminated or the
period within which such proceedings may be initiated has not
expired;
(18) Liens incurred or deposits made in the ordinary course of
business of the Company or any Restricted Subsidiary of the
Company with respect to obligations that do not exceed $10.0
million at any one time outstanding;
(19) Liens consisting of any interest or title of a licensor in the
property subject to a license;
(20) Liens arising from sales or other transfers of accounts
receivable in the ordinary course of business; and
(21) any extensions, substitutions, replacements or renewals of the
foregoing.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its 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 Subsidiaries (other than intercompany
Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable), the
principal component or liquidation preference, as the case may
be, of such Permitted Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable), the
principal component or liquidation preference, as the case may
be, of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest on
the Indebtedness and the amount of all expenses and premiums
incurred in connection therewith);
(2) 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
19
to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness
is subordinated in right of payment to, the Notes on terms at
least as favorable to the Holders of Notes as those contained
in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;
and
(4) such Permitted Refinancing Indebtedness is incurred either by
(i) the Company or (ii) by the Subsidiary that is the obligor
on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Pledge Agreements" means, collectively, the Base Pledge Agreement and
the Protective Pledge Agreement.
"Protective Pledge Agreement" means the Utility Stock Protective Pledge
Agreement, dated as of the Issue Date, among the Company, as pledgor, the
Trustee and the Collateral Agent, as pledgee for the benefit of the Holders of
the Notes and the holders of any additional Indebtedness that become a party
thereto pursuant to the terms thereof, as amended, amended and restated or
otherwise modified from time to time.
"Private Placement Legend" means the legend set forth in Section
2.06(d)(i) to be placed on all Notes issued under this Indenture except as
otherwise permitted by the provisions of this Indenture.
"Purchase Agreement" means (i) with respect to the Initial Notes, the
Purchase Agreement, dated as of June 27, 2003, among the Company, Lehman
Brothers Inc., Banc One Capital Markets, Inc., Citigroup Global Markets Inc.,
Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated and (ii) with respect
to each issuance of Additional Notes, if any, the purchase agreement or
underwriting agreement among the Company and the Persons purchasing such
Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements among the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to, among other things, rights given by
the Company to the purchasers of Additional Notes to register the exchange or
resale of such Additional Notes under the Securities Act.
20
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means Global Notes bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of the
Depositary and registered in the name of the Depositary or its nominee, issued
in a denomination equal, in the aggregate, to the outstanding principal amount
of the Notes initially sold in reliance on Rule 903 of Regulation S.
"Reorganization Event" means a merger of the Company into an Affiliate
of the Company as a result of which the Collateral is released under the terms
of the Pledge Agreements; provided that either (1) the Notes are secured on an
equal and ratable basis with any senior secured Indebtedness of such Affiliate
at any time outstanding or (2) the Notes are rated Baa3 or better by Moody's and
BBB - or better by Standard & Poor's immediately after the consummation of such
transaction.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Notes" means the Rule 144A Global Note and the
Regulation S Global Note, each of which shall bear the Private Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary of the Company that is not
an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means one or more global notes in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal, in the aggregate, to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
21
"Senior Debt" means:
(1) all Indebtedness of the Company or any Restricted Subsidiary
outstanding under Credit Facilities and all Hedging
Obligations with respect thereto;
(2) any other Indebtedness of the Company or any Restricted
Subsidiary permitted to be incurred under the terms of this
Indenture, unless the instrument under which such Indebtedness
is incurred expressly provides that it is subordinated in
right of payment to the Notes; and
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding sentence,
Senior Debt will not include:
(a) any liability for federal, state, local or other
taxes owed or owing by the Company;
(b) any intercompany Indebtedness of the Company or any
of its Subsidiaries to the Company or any of its
Affiliates;
(c) any trade payables; or
(d) any Indebtedness that is incurred in violation of
this Indenture.
"Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Notes or
Exchange Notes pursuant to a Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02(w) of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect
on the date hereof; provided that only the Company and its Restricted
Subsidiaries, including without limitation their Investments in Unrestricted
Subsidiaries, will be used for purposes of calculations under Rule 1-02(w) of
Regulation S-X.
"Spin-Off" means the distribution of any business or businesses of the
Utility to the shareholders of the Company, pursuant to a confirmed plan of
reorganization under Chapter 11 of Title 11 of the United States Code.
"Standard & Poor's" means Standard & Poor's Rating Services, a division
of McGraw Hill Inc., a New York corporation, or any successor rating agency.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will 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.
22
"Subsidiary" means, with respect to any specified Person:
(1) 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 of the corporation, association or other business
entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) 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 that
Person or one or more Subsidiaries of that Person (or any
combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under TIA.
"Transaction Documents" means this Indenture, the Notes, the Purchase
Agreement, the Pledge Agreements and the Registration Rights Agreement.
"Transfer Restricted Securities" means securities that bear or are
required to bear the Private Placement Legend set forth in Section 2.06(d)(i)
hereof.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means one or more Global Notes,
substantially in the form of Exhibit A attached hereto, that bear the Global
Note Legend, that do not and are not required to bear the Private Placement
Legend and are deposited with or on behalf of and registered in the name of the
Depositary or its nominee.
"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:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of
the Company;
23
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified levels of
operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or
any of its Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that is
not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries.
Notwithstanding the foregoing, each of the Utility and NEG, and each of
their respective direct and indirect Subsidiaries shall be deemed to be
Unrestricted Subsidiaries, unless the Company designates one or more of them as
Restricted Subsidiaries in accordance with the terms set forth in this
Indenture.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors of the Company giving
effect to such designation and an Officer's Certificate certifying that such
designation complied with the preceding conditions and was permitted pursuant to
Sections 4.07 and 4.17 of this Indenture. If, at any time, any Unrestricted
Subsidiary, other than the Utility or NEG, and each of their respective direct
and indirect Subsidiaries, would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this 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 4.09 of this Indenture, the Company will
be in default of such covenant. The Board of Directors of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation will 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 will only be
permitted if (1) such Indebtedness is permitted under Section 4.09 of this
Indenture, 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 would
be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"Utility" means Pacific Gas and Electric Company, a California
corporation.
"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 or Disqualified Stock at any date, the number of years obtained by
dividing:
24
(1) 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 of the Indebtedness or
redemption or similar payment in respect of the Disqualified
Stock 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
(2) the then outstanding principal amount of such Indebtedness or
principal component or liquidation preference of Disqualified
Stock, as the case may be.
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"........................................ 4.11
"Asset Sale Offer"............................................. 3.09
"Asset Sale Offer Amount"...................................... 3.09
"Asset Sale Offer Period"...................................... 3.09
"Asset Sale Payment Date" ..................................... 3.09
"Authentication Order" ........................................ 2.02
"Change of Control Offer"...................................... 4.15
"Change of Control Payment".................................... 4.15
"Change of Control Payment Date"............................... 4.15
"Covenant Defeasance".......................................... 8.03
"DTC".......................................................... 2.03
"Event of Default"............................................. 6.01
"Excess Proceeds".............................................. 4.10
"incur"........................................................ 4.09
"Initial Notes"................................................ preamble
"Legal Defeasance"............................................. 8.02
"Refinancings" ................................................ 4.08
"Registrar".................................................... 2.03
"Restricted Payment"........................................... 4.07
"Utility's Plan of Reorganization"............................. 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
25
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor obligor on
the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the plural
include the singular;
(v) provisions apply to successive events and transactions; and
(vi) references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating, (a) General. The Notes and the Trustee's
certificate of authentication will be substantially in the form of Exhibit A
hereto. The Notes may be issued in the form of Definitive Notes or Global Notes,
as specified by the Company. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note will be
dated the date of its authentication. The Notes will be in denominations of
$1,000 and integral multiples thereof.
Notes issued in global form will be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend and the "Schedule of
Exchanges in the Global Note" attached thereto). Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note will represent such of the
outstanding Notes as will be specified therein and each will provide that it
represents the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or
26
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Notes represented thereby will be made
by the Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture will govern and be controlling.
(b) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.
(c) Book-Entry Provisions. This Section 2.01(c) will apply only to a
Global Note deposited with or on behalf of the Depositary.
The Company will execute and the Trustee will, in accordance with this
Section 2.01(c), authenticate and deliver initially one or more Global Notes
that (a) will be registered in the name of the Depositary for such Global Note
or Global Notes or the nominee of such Depositary and (b) will be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instructions or
held by the Trustee as custodian for the Depositary.
Participants in the Depositary will have no rights under this Indenture
with respect to any Global Note held on their behalf by the Depositary or by the
Trustee as the custodian of the Depositary or under such Global Note, and the
Company, the Trustee and any agent of the Company or the Trustee will be
entitled to treat the Depositary as the absolute owner of such Global Note for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein will
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary governing
the exercise of the rights of a Holder of a beneficial interest in any Global
Note.
(d) Certificated Notes. Except as provided in this Section 2.01 or
Section 2.06, owners of beneficial interests in Global Notes shall not be
entitled to receive physical delivery of Definitive Notes.
Section 2.02. Execution and Authentication. Two Officers will sign the
Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
27
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will authenticate and deliver: (i) on the Issue Date, an
aggregate principal amount of $600.0 million 6-7/8% Senior Secured Notes Due
2008, (ii) Additional Notes for an original issue in an aggregate principal
amount specified in the written order of the Company pursuant to this Section
2.02 and (iii) Exchange Notes for issue only in an Exchange Offer pursuant to a
Registration Rights Agreement, for a like principal amount of Initial Notes or
Additional Notes, in each case upon a written order of the Company signed by an
Officer of the Company (an "Authentication Order"). Such Authentication Order
will specify the amount of the Notes to be authenticated and the date on which
the original issue of the Notes is to be authenticated.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent for service of notices and
demands.
Section 2.03. Registrar and Paying Agent.The Company will maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar will keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company will notify the Trustee in writing of the name
and address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
will act as such. The Company or any of its Subsidiaries may act as Paying Agent
or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.The Company will
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium or
Additional Interest, if any, or interest on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Trustee, the Company or a Subsidiary) will have
no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee will serve as
Paying Agent for the Notes.
28
Section 2.05. Holder Lists.The Trustee will preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and will otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar, the Company will furnish to the
Trustee, at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company will otherwise comply with TIA Section
312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered
under the Exchange Act and, in either case, a successor Depositary
is not appointed by the Company within 120 days after the date of
such notice from the Depositary; or
(2) the Company in its sole discretion determines that
the Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee.
Upon the occurrence of either of the preceding events in (1) or (2)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same
29
Restricted Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend. Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(ii) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be transferred or
exchanged; and
(ii) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon consummation of an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(2) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global Note.
A beneficial interest in any Restricted Global Note may be transferred
to a Person who takes delivery thereof in the form of a beneficial
interest in another
30
Restricted Global Note if the transfer complies with the requirements
of Section 2.06(b)(2) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the Rule 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by
any holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the exchange
or transfer complies with the requirements of Section 2.06(b)(2) above
and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
31
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of
the following documentation (all of which may be submitted by
facsimile):
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration
requirements of the Securities Act in accordance with
Rule 144, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
32
(F) if such beneficial interest is being transferred
pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount.
Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination
or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and
the Participant or Indirect Participant. The Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c)(1) shall bear the Private Placement Legend and shall
be subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted
Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration
Rights Agreement and the holder of such beneficial
interest, in the case of an exchange, or the transferee,
in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or
33
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial
interest in an Unrestricted Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then, upon satisfaction of the conditions
set forth in Section 2.06(b)(2) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company will execute and the Trustee will authenticate and deliver
to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section
2.06(c)(3) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest requests through instructions to the Registrar
from or through the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(3) will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt
by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest
in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
34
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Note is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the Rule 144A Global Note, in the case of
clause (C) above, or the Regulation S Global Note, as applicable.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration
Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that
it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes
or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the
Registration Rights Agreement;
35
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note at any time. Upon receipt of
a request for such an exchange or transfer, the Trustee will cancel
the applicable Unrestricted Definitive Note and increase or cause to
be increased the aggregate principal amount of one of the
Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or (3)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company will issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer
36
in form satisfactory to the Registrar duly executed by such Holder or by its
attorney, duly authorized in writing. In addition, the requesting Holder must
provide any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the
Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including
the certifications required by item (3) thereof, if
applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration
Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that
it is not (i) a broker-dealer, (ii) a Person
participating in the distribution of the Exchange Notes
or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note,
a certificate from such
37
Holder in the form of Exhibit C hereto, including the certifications
in item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a
transfer, the Registrar shall register the Unrestricted Definitive
Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Notes tendered into
the Exchange Offer by Persons that certify in the applicable Letters
of Transmittal that (A) they are not Broker-Dealers, (B) they are
not participating in a distribution of the Exchange Notes and (z)
they are not affiliates (as defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legend.
(i) Except as permitted by the following paragraphs
(ii), (iii) and (iv), each Note certificate evidencing the Global
Notes (and all Notes issued in exchange therefor or in substitution
thereof) will bear the Private Placement Legend in substantially the
following form:
38
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT, OR OTHER
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE
IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION HEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR
OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAW, REFERRED TO AS THE RESALE RESTRICTION TERMINATION DATE,
OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED
STATES, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT
IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN
39
THE FORM REQUIRED BY THE INDENTURE IS COMPLETED AND DELIVERED BY THIS
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Each Global Note will also bear the Global Note Legend in substantially the
following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(c) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
Each Definitive Note will also bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144, the Registrar will permit the
transferee thereof to exchange such Transfer Restricted Security for a
certificated Note that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer Restricted
Security, if the transferor thereof certifies in writing to the
Registrar that such sale or transfer was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the
Note).
(iii) After a transfer of any Initial Notes pursuant to and
during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Notes, all requirements
pertaining to legends relating to the restrictions on transfer relating
to the Securities Act on such Initial Note will cease to apply, the
requirements requiring that any such Initial Note issued to certain
Holders be issued in global form will cease to apply, and a
certificated Initial Note or an Initial Note in global form, in each
case without restrictive transfer legends, will be available to the
transferee of the Holder of
40
such Initial Notes upon exchange of such transferring Holder's
certificated Initial Note or appropriate directions to transfer such
Holder's interest in the Global Note, as applicable.
(iv) Upon the consummation of an Exchange Offer with respect
to the Initial Notes, all requirements pertaining to such Initial Notes
that Initial Notes issued to certain Holders be issued in global form
will still apply with respect to Holders of such Initial Notes that do
not exchange their Initial Notes, and Exchange Notes in certificated or
global form, in each case without the restrictive securities legend
relating to the restrictions on transfer relating to the Securities Act
set forth in Exhibit A hereto will be available to Holders that
exchange such Initial Notes in such Exchange Offer.
(h) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for Definitive
Notes, redeemed, purchased or canceled, such Global Note will be returned to the
Depositary for cancellation or retained and canceled by the Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for certificated Notes, redeemed, purchased or canceled, the principal
amount of Notes represented by such Global Note will be reduced and an
adjustment will be made on the books and records of the Trustee (if it is then
the Notes Custodian for such Global Note) with respect to such Global Note, by
the Trustee or the Notes Custodian, to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee will authenticate Definitive
Notes and Global Notes at the Registrar's or co-registrar's request.
(ii) No service charge will be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.15 and
9.05 of this Indenture).
(iii) The Registrar or co-registrar will not be required to
register the transfer of or exchange of (a) any Definitive Note
selected for redemption in whole or in part pursuant to Article 3 of
this Indenture, except the unredeemed portion of any Definitive Note
being redeemed in part, or (b) any Note for a period beginning 15
Business Days before the mailing of a notice of an offer to repurchase
or redeem Notes or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Note, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose
name a Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Note
and for all other purposes whatsoever, whether or not such Note is
overdue, and none of the
41
Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar will be affected by notice to the contrary.
(v) All Notes issued upon any transfer or exchange pursuant to
the terms of this Indenture will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Notes
surrendered upon such transfer or exchange.
(j) No Obligation of the Trustee.
(i) The Trustee will have no responsibility or obligation to
any beneficial owner of a Global Note, a Participant in the Depositary
or other Person with respect to the accuracy of the records of the
Depositary or its nominee or of any Participant, with respect to any
ownership interest in the Notes or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Notes. All notices
and communications to be given to the Holders and all payments to be
made to Holders under the Notes will be given or made only to or upon
the order of the registered Holders (which will be the Depositary or
its nominee in the case of a Global Note). The rights of beneficial
owners in any Global Note will be exercised only through the Depositary
subject to the applicable rules and procedures of the Depositary. The
Trustee may rely and will be fully protected in relying upon
information furnished by the Depositary with respect to its
Participants and any beneficial owners.
(ii) The Trustee will have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Note (including any transfers
between or among Participants or beneficial owners in any Global Note)
other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
Section 2.07 Replacement Notes. If any mutilated Note is surrendered
to the Trustee or the Company and the Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, the Company will
issue and the Trustee, upon the written order of the Company signed by an
Officer of the Company, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company and the Trustee may charge for their expenses in replacing
a Note.
Every replacement Note is an additional obligation of the Company
and will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
42
Section 2.08 Outstanding Notes.The Notes outstanding at any time are
all the Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay all principal, premium, if any, and interest payable on that
date with respect to the Notes, then on and after that date such Notes will be
deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that a Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may
prepare and the Trustee will authenticate temporary Notes upon a written order
of the Company signed by an Officer of the Company. Temporary Notes will be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and that are reasonably
acceptable to the Trustee. Without unreasonable delay, the Company will prepare
and the Trustee will authenticate Definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11 Cancellation.The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and Paying Agent will forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
will destroy canceled Notes (subject to the record retention requirement of the
Exchange Act). Certification of the destruction of all canceled Notes will be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has redeemed, paid or delivered to the Trustee for cancellation.
43
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
will pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
will be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of defaulted
interest to be paid.
Section 2.13 CUSIP Numbers.
The Company in issuing the Notes may use CUSIP numbers (if then
generally in use), and, if so, the Trustee will use CUSIP numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption will not be affected by any defect in or omission
of such numbers. The Company will promptly notify the Trustee of any change in
the CUSIP numbers.
Section 2.14 Issuance of Additional Notes.
The Company will be entitled, from time to time, subject to its
compliance with Section 4.09 hereof, without consent of the Holders, to issue
Additional Notes under this Indenture with identical terms as the Initial Notes
issued on the Issue Date other than with respect to (i) the date of issuance,
(ii) the issue price, (iii) the amount of interest payable on the first interest
payment date and (iv) any adjustments in order to conform to and ensure
compliance with the Securities Act (or other applicable securities laws). The
Initial Notes issued on the Issue Date, any Additional Notes and all Exchange
Notes issued in exchange therefor will be treated as a single class for all
purposes under this Indenture.
With respect to any Additional Notes, the Company will set forth in
an Officer's Certificate pursuant to a resolution of the Board of Directors of
the Company, copies of which will be delivered to the Trustee, the following
information:
(i) the aggregate principal amount of such Additional Notes to
be authenticated and delivered pursuant to this Indenture;
(ii) the issue price, the issue date and the CUSIP number of
such Additional Notes; provided, however, that no Additional Notes may
be issued at a price that would cause such Additional Notes to have
"original issue discount" within the meaning of Section 1273 of the
Internal Revenue Code of 1986, as amended; and
44
(iii) whether such Additional Notes will be Transfer
Restricted Securities or will be issued in the form of Exchange Notes.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it will furnish to the Trustee, at
least 45 days before a redemption date, an Officer's Certificate setting forth
(i) the clause of this Indenture pursuant to which the redemption will occur,
(ii) the redemption date, (iii) the principal amount of Notes to be redeemed and
(iv) the redemption prices.
Section 3.02 Selection of Notes to be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities exchange
on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange, on
a pro rata basis, by lot or by such method as the Trustee deems fair and
appropriate;
provided, in each case, that no Notes of $1,000 or less shall be redeemed in
part. Notices of redemption will be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address, except that redemption notices may be mailed
more than 60 days prior to a redemption date if the notice is issued in
connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture. Notices of redemption may not be conditional. If any Note is to
be redeemed in part only, the notice of redemption that relates to such Note
will state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the Holder thereof upon cancellation of the original Note. Notes
called for redemption become due on the date fixed for redemption. On and after
the redemption date, interest ceases to accrue on Notes or portions of them
called for redemption.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, will be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
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Subject to the provisions of Section 3.09 hereof, notices of
redemption will be mailed by first class mail at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at its
registered address, except that redemption notices may be mailed more than 60
days prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of this Indenture
pursuant to Article 8 or 10 hereof. Notices of redemption may not be
conditional.
The notice will identify the Notes to be redeemed (including CUSIP
Numbers, if any) and will state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(vii) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officer's Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
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Prior to 10:00 a.m. on the Business Day prior to the redemption
date, the Company will deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption or purchase price of and accrued interest on
all Notes to be redeemed or purchased on that date. The Trustee or the Paying
Agent will promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest on, all Notes to be
redeemed or purchased.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest will cease to
accrue on the Notes or the portions of Notes called for redemption or purchase.
If a Note is redeemed or purchased on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid interest
will be paid to the Person in whose name such Note was registered at the close
of business on such record date. If any Note called for redemption or purchase
is not so paid upon surrender for redemption or purchase because of the failure
of the Company to comply with the preceding paragraph, interest will be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part. Upon surrender of
a Note that is redeemed or purchased in part, the Company will issue and, upon
the Company's written request, the Trustee will authenticate for the Holder at
the expense of the Company a new Note equal in principal amount to the
unredeemed or unpurchased portion of the Note surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to July 15, 2006, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 106.875% of the principal
amount, plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings by
the Company; provided that:
(i) at least 65% of the aggregate principal amount of Notes issued
under this Indenture remains outstanding immediately after the occurrence
of each such redemption (excluding Notes held by the Company and its
Subsidiaries); and
(ii) any such redemption occurs within 120 days of the date of the
closing of such Equity Offering.
(b) At any time and from time to time prior to July 15, 2006, the
Company may, at its option, redeem all or a portion of the Notes at the
Make-Whole Price plus accrued and unpaid interest to the redemption date.
(c) On and after July 15, 2006, the Company may redeem all or a
part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Additional Interest, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15th of the years indicated below:
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Year Percentage
2006.................................... 103.438%
2007.................................... 101.719%
(d) Any redemption pursuant to this Section 3.07 will be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make any mandatory redemption or
sinking fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.
The Asset Sale Offer will be made to all Holders and all holders of
other secured Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets. The Asset Sale Offer
will remain open for a period of at least 20 Business Days following its
commencement and not more than 30 Business Days, except to the extent that a
longer period is required by applicable law (the "Asset Sale Offer Period"). No
later than five Business Days after the termination of the Asset Sale Offer
Period (the "Asset Sale Payment Date"), the Company will apply all Excess
Proceeds (the "Asset Sale Offer Amount") to the purchase of Notes and the other
secured pari passu Indebtedness to be purchased (on a pro rata basis, if
applicable) or, if Notes and such other secured pari passu Indebtedness in an
aggregate principal amount less than the Excess Proceeds has been tendered, all
Notes and other secured pari passu Indebtedness tendered in response to the
Asset Sale Offer. Payment for any Notes so purchased will be made in the same
manner as interest payments are made.
If the Asset Sale Payment Date is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid
interest and Additional Interest, if any, will be paid to the Person in whose
name a Note is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Notes pursuant to the
Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company will send,
by first class mail, a notice to the Trustee and each of the Holders. The notice
will contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer will be made
to all Holders. The notice, which will govern the terms of the Asset Sale Offer,
will state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer will remain open;
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(ii) the Asset Sale Offer Amount, the purchase price and the
Asset Sale Payment Date;
(iii) that any Note not tendered or accepted for payment will
continue to accrue interest;
(iv) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to
accrue interest after the Asset Sale Payment Date;
(v) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples
of $1,000 only;
(vi) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least five days before the Asset Sale Payment
Date;
(vii) that Holders will 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 expiration of the Offer Period, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that
such Holder is withdrawing its election to have such Note purchased;
(viii) that, if the aggregate principal amount of Notes and other
pari passu Indebtedness surrendered by Holders exceeds the Asset Sale
Offer Amount, the Company will select the Notes and other secured pari
passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or integral
multiples thereof, will be purchased); and
(ix) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Asset Sale Payment Date, the Company will, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Asset Sale Offer Amount of Notes or portions thereof and other secured pari
passu Indebtedness tendered pursuant to the Asset Sale Offer, or if less than
the Asset Sale Offer Amount has been tendered, all Notes and other secured pari
passu Indebtedness tendered, and will deliver to the Trustee an Officer's
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 3.09. The
Company, the Depositary or the Paying Agent, as the case may be, will promptly
(but in any case not later than five Business Days after the Asset Sale Payment
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company will promptly issue a new Note and the Trustee, upon
written request from the Company, will
49
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered, if any,
provided that each new Note will be in a principal amount of $1,000 or an
integral multiple thereof. Any Note not so accepted will be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Asset Sale Offer on the Asset Sale Payment Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 will be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes. The Company will pay or cause to be
paid the principal of, premium, if any, interest and Additional Interest, if
any, on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, interest and Additional Interest, if any, will be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company will pay all Additional Interest, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Company will pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to the then applicable interest rate on the Notes to the extent lawful; it will
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Additional Interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company fails to maintain any such required
office or agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
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Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company shall furnish to the
Trustee for mailing to the Holders of the Notes, within ten Business Days of the
time periods specified in the SEC's rules and regulations:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and, with respect to the annual information only, a report on the annual
financial statements by the Company's certified independent accountants;
and
(ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports.
(b) In addition, whether or not required by the SEC, the Company
will file a copy of all of the information and reports referred to in Sections
4.03(a)(i) and (ii) above with the SEC for public availability within the time
periods specified in the SEC's rules and regulations (unless the SEC will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. The Company will at all times comply
with TIA Section 314(a);
(c) For so long as any Notes remain outstanding, if at any time
the Company is not required by the rules and regulations of the SEC to file the
reports set forth in Section 4.03(a) and 4.03(b) above, the Company shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year, a certificate (which need not comply with Section
12.05) executed by an Officer, who is the principal executive officer, the
principal financial officer or the principal accounting officer of the Company,
as to such Officer's knowledge of the Company's compliance with all conditions
and covenants under this Indenture, such compliance to be determined without
regard to any grace period of requirement of notice under this Indenture.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above will be accompanied by a
written statement of the Company's independent public accountants (who will be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants will not be
51
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.
(c) The Company will, so long as any of the Notes are outstanding,
deliver to the Trustee, promptly upon any Officer becoming aware of any Default
or Event of Default, an Officer's Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 Taxes.
The Company will pay, and will 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 Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this 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 will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
Section 4.07 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 Notes, except a payment of interest or principal at
the Stated Maturity thereof; or
52
(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:
(i) no Default has occurred and is continuing or would occur as
a consequence of such Restricted Payment;
(ii) 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 the first paragraph
of Section 4.09 of this Indenture; and
(iii) 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 (excluding Restricted Payments permitted
by clauses (ii), (iii), (iv), (vii), (ix), (x) and (xii) of Section
4.07(b) below), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the Issue Date 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 (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(B) 100% of the aggregate Net Cash Proceeds and the fair
market value of marketable securities received by the Company (and
the fair market value of any Permitted Business or assets used or
useful in a Permitted Business to the extent acquired in
consideration of Equity Interests (other than Disqualified Stock) of
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 from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company), plus
(C) to the extent that any Restricted Investment that was made
after the Issue Date is sold or otherwise liquidated, the cash plus
fair market value of any marketable securities received upon sale or
liquidation of such Restricted Investment (less the cost of
disposition, if any), plus
(D) to the extent that any Unrestricted Subsidiary of the
Company is redesignated as a Restricted Subsidiary after the Issue
Date, the aggregate fair market value of all Investments of the
Company or the Restricted Subsidiary in such Subsidiary as of the
date of such redesignation.
53
(b) The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or of any
Equity Interests of the Company or any of its Restricted Subsidiaries in
exchange for, or out of the Net Cash Proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Company) of, Equity
Interests of the Company (other than Disqualified Stock) or with cash in
an amount up to the fair market value of any Permitted Business or assets
used or useful in a Permitted Business to the extent acquired in a
substantially concurrent acquisition in consideration of Equity Interests
(other than Disqualified Stock) of the Company; provided that the amount
of any such proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition will be excluded
from clause (iii)(B) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness or Disqualified Stock of the Company with the
Net Cash Proceeds from an incurrence of Permitted Refinancing
Indebtedness;
(iv) the payment of any dividend or other payment or distribution
by a Restricted Subsidiary of the Company to the holders of its Equity
Interests on a pro rata basis;
(v) so long as no Material Default has occurred and is continuing
or would be caused thereby, the repurchase, redemption or other
acquisition or retirement for value in the ordinary course of business of
any Equity Interests of the Company or any Restricted Subsidiary of the
Company held by any existing or former employee or director of the Company
(or any of its Restricted Subsidiaries) pursuant to any equity
subscription agreement, stock option agreement or similar agreement;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests may not exceed $7.5 million in any
twelve-month period; provided further that any amounts paid by the Company
for any such repurchase, redemption or other acquisition or retirement
will not be counted for purposes of the foregoing limitation to the extent
the Utility has reimbursed the Company for such payments;
(vi) so long as no Material Default has occurred and is continuing
or would be caused thereby, the declaration and payment of dividends to
holders of any class or series of Disqualified Stock of the Company or
preferred stock of Restricted Subsidiaries issued in accordance with the
terms of this Indenture to the extent such dividends are included in the
definition of "Fixed Charges;"
(vii) any Restricted Payments made in connection with or in
contemplation of a Spin-Off;
54
(viii) following the Utility's confirmed plan of reorganization
under Chapter 11 of Title 11 of the United States Code (the "Utility's
Plan of Reorganization") if the Utility is a Restricted Subsidiary and so
long as no Material Default has occurred and is continuing or would be
caused thereby, the payment of regular quarterly cash dividends on the
Company's common stock after the Issue Date; provided that such dividends
are paid pursuant to the dividend policy established by the Board of
Directors of the Company and that the Company shall have received the cash
used for such dividends from distributions by the Utility of cash legally
available therefor;
(ix) following the Utility's Plan of Reorganization if the Utility
is an Unrestricted Subsidiary and so long as no Material Default has
occurred and is continuing or would be caused thereby, the payment of
regular quarterly cash dividends on the Company's common stock after the
Issue Date; provided that such dividends are paid pursuant to the dividend
policy established by the Board of Directors of the Company and that the
Company shall have received the cash used for such dividends from
distributions by the Utility of cash legally available therefor (excluding
however, any distributions of the cash proceeds of material asset sales
outside the ordinary course of business); provided further that any such
distributions by the Utility to the Company or a Restricted Subsidiary
that the Company pays as a dividend pursuant to this clause (ix) will not
be included in the Consolidated Net Income of the Company under clause
(iii)(A) of the preceding paragraph;
(x) Investments in the Utility by the Company or a Restricted
Subsidiary out of the Net Cash Proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of Equity Interests of
the Company (other than Disqualified Stock) or with cash in an amount up
to the fair market value of any Permitted Business or assets used or
useful in a Permitted Business to the extent acquired in a substantially
concurrent acquisition in consideration of Equity Interests (other than
Disqualified Stock) of the Company; provided that the amount of any such
proceeds that are utilized for any such Investments will be excluded from
clause (iii)(B) of the preceding paragraph;
(xi) so long as no Material Default has occurred and is continuing
or would be caused thereby, any dividends on preferred stock of the
Company; provided that such dividends can be paid under clause (iii) of
the preceding paragraph; and
(xii) so long as no Default has occurred and is continuing or would
be caused thereby, other Restricted Payments in an aggregate amount since
the Issue Date not to exceed $75.0 million.
(c) The amount of all Restricted Payments (other than cash) will
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.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined in good faith by the chief financial
officer of the Company, whose officer's certificate with respect thereto will be
delivered to the Trustee and if such fair market value exceeds $75.0 million, by
the Board of Directors of the Company, whose resolution with respect thereto
will be delivered to the Trustee. Not later than the date of making
55
any Restricted Payment, the Company shall deliver to the Trustee an Officer's
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed. Any sale of Capital Stock by a Restricted Subsidiary shall be deemed
to be an issuance of Capital Stock by the Company.
Section 4.08 Dividend and Other Payment Restrictions Affecting
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) Notwithstanding the foregoing, the restrictions in Section
4.08(a) above shall not apply to encumbrances or restrictions existing under or
by reason of:
(i) agreements governing Existing Indebtedness as in effect on the
Issue Date and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings
("Refinancings") of those agreements; provided that such Refinancings are
no more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in those agreements on the
Issue Date; provided further that with respect to any Refinancings within
six months of the Stated Maturity of any Existing Indebtedness or prior
Refinancing, such Refinancings may contain restrictions that are in the
reasonable opinion of the chief financial officer of the Company required
by the lenders in order to obtain such Refinancings and are customary for
such Refinancings;
(ii) agreements governing Indebtedness of the Utility or any of its
Subsidiaries existing at the time the Utility is designated a Restricted
Subsidiary pursuant to and in accordance with the terms of this Indenture;
provided that the encumbrances and restrictions are not materially more
restrictive than is customary in comparable financings;
(iii) this Indenture, the Notes and the Pledge Agreements;
(iv) applicable law or any applicable rule, regulation or order
of any court or governmental authority;
56
(v) any encumbrance imposed pursuant to the terms of Indebtedness
incurred pursuant to clause (iv), clause (v) (provided that any dividend
or other payment restrictions contained in such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the Indebtedness being refinanced) or clause (xiii) (provided
that such Indebtedness is Indebtedness of the Utility or any of its
Subsidiaries) of Section 4.09(b) below; provided that such encumbrance is
not materially more restrictive than is customary for comparable
financings;
(vi) 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 or Capital Stock 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, or the property or assets of the Person, so
acquired; provided that, in the case of Indebtedness, such Indebtedness
was permitted by the terms of this Indenture to be incurred;
(vii) customary non-assignment provisions in leases entered into
in the ordinary course of business and consistent with past practices;
(viii) Capital Lease Obligations, mortgage financings or purchase
money obligations for property acquired in the ordinary course of business
that impose restrictions on that property of the nature described in
clause (iii) of Section 4.08(a) above;
(ix) 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;
(x) Permitted Refinancing Indebtedness; provided that the
encumbrances or 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;
(xi) Liens securing Indebtedness otherwise permitted to be incurred
under Section 4.12 that limit the right of the debtor to dispose of the
assets subject to such Liens;
(xii) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business; and
(xiii) restrictions on cash or other deposits or net worth imposed
by customers under contracts entered into in the ordinary course of
business.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred
Stock.
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(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), and the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and any
Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue
preferred stock, if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been at least 2.0 to 1, 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 any such Disqualified Stock or preferred stock
had been issued, as the case may be, at the beginning of such four-quarter
period.
(b) Notwithstanding the foregoing, clause (a) above shall not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) following the substantial consummation of the Utility's Plan
of Reorganization, the incurrence by the Company and any Restricted
Subsidiary of Indebtedness under one or more Credit Facilities in an
aggregate amount at any one time outstanding under this clause (i) (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Subsidiaries
thereunder) not to exceed $500.0 million;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented
by the Notes issued on the Issue Date and the Exchange Notes;
(iv) the incurrence by the Company and 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 and the incurrence
of any Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (iv) in an
aggregate amount (after giving effect to the retirement of the
Indebtedness so refunded, refinanced or replaced) not to exceed $35.0
million at any one 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 (other than intercompany Indebtedness) that was permitted by
this Indenture to be incurred under clause (a) or clauses (ii), (iii) or
(v) of this Section 4.09(b);
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(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 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 Notes; and
(B) (i) 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 of the
Company and (ii) any sale or other transfer of any such Indebtedness
to a Person that is not either the Company or a Restricted
Subsidiary of the Company will be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or a
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 in the normal course of business and
not for speculative purposes, designed to protect the Company or its
Restricted Subsidiary against fluctuations in interest rates or currency
exchange rates with respect to Indebtedness incurred by the Company or any
of its Restricted Subsidiaries or against fluctuations in the price of
commodities used by that entity at the time;
(viii) the Guarantee by the Company or any of its Restricted
Subsidiaries of any Indebtedness that was permitted to be incurred by
another provision of this Section 4.09; provided that in the event the
Indebtedness that is being Guaranteed is subordinated in right of payment
to the Notes, then the Guarantee of that Indebtedness by the Company shall
be subordinated in right of payment to the Notes;
(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, or in the case of any Restricted
Subsidiary, preferred stock, in the form of additional shares of the same
class of Disqualified Stock or preferred stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock or
preferred stock for purposes of this Section 4.09; provided, in each such
case, that the amount thereof is included in Fixed Charges of the Company
as accrued;
(x) Indebtedness incurred in respect of workers' compensation
claims, self-insurance obligations, performance, surety and similar bonds
and completion guarantees provided by the Company or a Restricted
Subsidiary in the ordinary course of business;
(xi) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business;
(xii) the incurrence by the Company of Indebtedness that is
subordinated in right of payment to the Notes, and the incurrence of any
Permitted Refinancing
59
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (xii) in an aggregate amount (after
giving effect to the retirement of any Indebtedness so refunded,
refinanced or replaced) not to exceed $200.0 million at any one time
outstanding; and
(xiii) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness and the incurrence of any
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (xiii) in an
aggregate amount (after giving effect to the retirement of any
Indebtedness so refunded, refinanced or replaced) not to exceed $500.0
million at any one time outstanding.
(c) For purposes of determining compliance with this Section 4.09,
in the event that an item of Indebtedness (including Acquired Debt) at any time
meets the criteria of more than one of the categories of Permitted Debt
described in clauses (i) through (xiii) of Section 4.09(b) above, or is entitled
to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted
to classify (and later reclassify) in whole or in part in its sole discretion
such item of Indebtedness in any manner that complies with Section 4.09.
(d) For purposes of determining compliance with any U.S.
dollar-denominated restriction on the incurrence of Indebtedness, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency will be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided that if such Indebtedness is incurred to refinance other Indebtedness
denominated in the same foreign currency, and such refinancing would cause the
applicable U.S. dollar denominated restriction to be exceeded if calculated at
the relevant currency exchange rate in effect on the date of such refinancing,
the U.S. dollar-denominated restriction will be deemed not to have been exceeded
so long as the principal amount of the refinancing Indebtedness does not exceed
the principal amount of the Indebtedness being refinanced. Notwithstanding any
other provision of this Section 4.09, the maximum amount of Indebtedness that
the Company may incur pursuant to this covenant will not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of currencies.
Section 4.10 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 the Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(ii) the fair market value is determined by the Company's chief
financial officer and set forth in an Officer's Certificate delivered to
the Trustee; and
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(iii) at least 75% of the consideration received in the Asset Sale
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
will 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 Notes) that
are transferred to the transferee by operation of law or assumed by
the transferee of any such assets pursuant to an agreement that
releases the Company or such Restricted Subsidiary from, or fully
indemnifies it against, further liability;
(B) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are, within 60 days, converted by the Company or such Restricted
Subsidiary into cash, to the extent of the cash received in that
conversion; and
(C) Additional Assets received in an exchange of assets
transaction.
(b) Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or the applicable Restricted Subsidiary may apply those
Net Proceeds at its option:
(i) to repay Senior Debt or any Indebtedness of a Restricted
Subsidiary and, if the Senior Debt or such 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 Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested
as provided in Section 4.10(b) hereof will constitute "Excess Proceeds". When
the aggregate amount of Excess Proceeds exceeds $30.0 million, the Company will
make an Asset Sale Offer to all Holders of Notes and, to the extent required, to
all holders of other secured Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets in
accordance with Section 3.09 hereof, to purchase the maximum principal amount of
Notes (in integral multiples of $1,000) and such other secured pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of principal amount of Notes and
other secured pari passu Indebtedness to be purchased or the lesser amount
required under agreements governing such
61
other secured pari passu Indebtedness, plus accrued and unpaid interest and
Additional Interest, if any, to the date of purchase, and will be payable in
cash. 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 this Indenture, including any similar offer to purchase unsecured
Indebtedness. If the aggregate principal amount of Notes and other secured pari
passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee will select the Notes and such other secured pari
passu Indebtedness to be purchased on a pro rata basis. Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
(c) 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 each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Sections 3.09 or 4.10 of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under those provisions of this Indenture by virtue of
such conflict.
Section 4.11 Transactions with Affiliates.
(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, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
(i) the 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
(ii) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $25.0 million, an Officer's Certificate of the chief
financial officer of the Company certifying that such Affiliate
Transaction complies with this Section 4.11(a); and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $50.0 million, an opinion issued by an accounting,
appraisal or investment banking firm of national standing as to the
fairness to the holders of such Affiliate Transaction from a
financial point of view or that the terms of the Affiliate
Transaction are no less favorable to the Company or the relevant
Restricted Subsidiary than terms that would have been obtained in a
comparable transaction with an unrelated person or entity.
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(b) Notwithstanding the foregoing, the following items shall not
be deemed to be Affiliate Transactions and, therefore, will not be subject to
the provisions of Section 4.11(a) above:
(i) any (A) employment or indemnification arrangements, (B)
transactions relating to compensation, stock option or other benefit plans
or arrangements, in each case with any employee, consultant or director of
the Company or any of its Restricted Subsidiaries that is entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course
of business or (C) any redemption or repurchase of the Capital Stock of
the Company held by employees upon death, disability or termination of
employment;
(ii) transactions between or among any of the Company and/or its
Restricted Subsidiaries and/or the Utility;
(iii) transactions between the Company and any of its Restricted
Subsidiaries, on the one hand, and any Unrestricted Subsidiary if such
transaction: (A) is contemplated by or provided for in a confirmed plan of
reorganization in a bankruptcy proceeding of NEG or otherwise necessary to
comply with such a plan or in connection with a court-approved judgment or
settlement of litigation related to a bankruptcy proceeding of NEG or (B)
is subject to tariff or pricing regulation by the CPUC or the FERC or
similar regulatory agencies or bodies;
(iv) any agreement in effect as of the Issue Date or any amendment
thereto (so long as such amendment is not disadvantageous to the Holders
in any material respect) or any transaction contemplated thereby;
(v) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in, or controls, such
Person;
(vi) payment of reasonable directors fees;
(vii) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Company;
(viii) Restricted Payments that are permitted by Section 4.07
hereof;
(ix) transactions pursuant to or contemplated by a Spin-Off;
(x) any payments or other transactions pursuant to any existing,
substantially similar or customary tax sharing agreement between the
Company and any other Person with which the Company files a consolidated
tax return or with which the Company is or was part of a consolidated
group for tax purposes;
(xi) Permitted Investments described in clauses (9) or (10) of
the definition thereof;
(xii) the grant of intellectual property licenses by the Company
or any Restricted Subsidiary to an Unrestricted Subsidiary; and
63
(xiii) the provision of general corporate administrative, operating
and management services including, without limitation, procurement,
construction, engineering, construction administration, legal, accounting,
financial, tax, management, risk management, personnel, corporate
communications, public and governmental relations, information technology,
administration and business planning, operating, management, energy
trading and price risk management service, in each case, on terms no less
favorable to the Company or Restricted Subsidiary than cost-based.
Section 4.12 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) securing
Indebtedness, Attributable Debt or trade payables upon the Collateral, unless:
(a) such Liens secure Indebtedness incurred under clauses (i) or (xiii) of
Section 4.09(b) and the lenders become a party to the Pledge Agreements, or
otherwise agree to be bound by the terms thereof, in connection with the
creation of such Liens and, in each case, all payments due under this Indenture
and the Notes are secured on at least an equal and ratable basis with the
obligation so secured or (b) such Liens secure any other Indebtedness the
outstanding principal amount of which does not exceed at any time $100.0
million, on a basis that is junior to all payments due under this Indenture and
the Notes, and the lenders become a party to the Pledge Agreements, or otherwise
agree to be bound by the terms thereof, in connection with the creation of such
Liens; provided that, following the Investment Grade Date, an aggregate amount
of Indebtedness at any time outstanding of up to 15% of Consolidated Tangible
Assets may be secured by Liens on the Collateral on an equal and ratable basis
with, or junior to, the Notes.
Section 4.13 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 Subsidiaries taken
as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; provided,
however, that the Company will not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Restricted Subsidiaries, if the Board of Directors determines that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.15 Offer to Repurchase upon Change of Control, Spin-Off or
Reorganization Event.
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(a) If a Change of Control, Spin-Off or Reorganization Event occurs,
each Holder of Notes shall have the right to require the Company to repurchase
all or any part (equal to $1,000 or an integral multiple of $1,000) of that
Holder's Notes pursuant to an offer by the Company (a "Change of Control Offer")
at a purchase price in cash (the "Change of Control Payment") equal to 101% of
the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Additional Interest, if any, for the Notes repurchased, to the date
of purchase. Within 30 days following any Change of Control or no sooner than 60
days prior to and no later than 30 days following a Spin-Off or Reorganization
Event, as the case may be, the Company shall mail a notice to each Holder
describing the transaction or transactions that constitute the Change of
Control, Spin-Off or Reorganization Event, as the case may be, and offering to
repurchase Notes on the date specified in the notice, which date will 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"). Such notice, which will govern
the terms of the Change of Control Offer, will state: (i) that the Change of
Control Offer is being made pursuant to this Section 4.15 and that all Notes
tendered will be accepted for payment; (ii) the purchase price and the purchase
date; (iii) that any Note not tendered will continue to accrue interest; (iv)
that, unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
will cease to accrue interest after the Change of Control Payment Date; (v) that
Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes completed, to the Paying
Agent 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 election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have the Notes purchased; and (vii) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral
multiple thereof. The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes as a result of a Change of Control, Spin-Off or
Reorganization Event. To the extent that the provisions of any securities laws
or regulations conflict with the provisions of Section 3.09 or 4.15 hereof, the
Company will comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under Section 3.09 hereof or this
Section 4.15 by virtue of such conflict.
(b) On the Change of Control Payment Date the Company shall, to
the extent lawful:
(i) accept for payment all Notes or portions of Notes 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 Notes or portions of Notes properly
tendered; and
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(iii) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officer's Certificate stating the
aggregate principal amount of Notes or portions of Notes being purchased
by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each new Note will be in a principal amount
of $1,000 or an integral multiple thereof. The Company will publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon a Change
of Control, Spin-Off, or Reorganization Event, as applicable, 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 Section 3.09 hereof and this
Section 4.15 and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer.
Section 4.16 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 Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the
Notes unless such consideration is offered to be paid and is paid to all Holders
of the Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
Section 4.17 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, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under Section 4.07(a) of this Indenture
or Permitted Investments, as determined by the Company. That designation will
only be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
Section 4.18 Covenant Termination.
Upon the first date upon which the Notes are rated BBB- or better by
Standard & Poor's and Baa3 or better by Moody's (or, if either such entity
ceases to rate the Notes 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 Company as a replacement agency) and no
Material Default has occurred and is continuing under this Indenture (the
"Investment Grade Date"),
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the Company and its Restricted Subsidiaries shall cease to be subject to the
provisions of Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.13 and 4.16, which will
be deemed to be terminated as of and from such date; provided that the
provisions of Sections 4.03, 4.12, 4.15 and 5.01 (except as set for in such
Section 5.01) shall not be so terminated.
ARTICLE 5
SUCCESSORS
Section 5.01 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, lease, convey or otherwise dispose
of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole (other than in connection with the
Spin-Off), 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,
lease, conveyance or other disposition has been made is a corporation
organized or existing under the laws of the United States, any state of
the United States 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, lease, conveyance or other disposition has been made
assumes all the obligations of the Company under the Notes, this
Indenture, the Pledge Agreements (other than in the case of a
Reorganization Event, in which case the Pledge Agreements will terminate
and the Collateral will be released) and the Registration Rights Agreement
pursuant to agreements reasonably satisfactory to the Trustee; provided
that in the case of a lease of all or substantially all of the assets of
the Company and its Restricted Subsidiaries, the Company will not be
released from the obligations to pay the principal of, whether at maturity
or otherwise, and interest on the Notes;
(iii) immediately after such transaction no Material Default
shall have occurred and be continuing; 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, lease, conveyance or other disposition has
been made, will, immediately after 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, have a
Fixed Charge Coverage Ratio that is equal to or greater than the Fixed
Charge Coverage Ratio of the Company immediately prior to such
transaction.
Notwithstanding the preceding clause (iv) above, (a) any Restricted
Subsidiary of the Company may consolidate with, merge into or transfer all or
part of its properties and assets to the
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Company and (b) the Company may merge with an Affiliate that has no significant
assets or liabilities and was formed solely for the purpose of changing the
jurisdiction of organization of the Company to another state of the United
States so long as the amount of the Company's Indebtedness and the Indebtedness
of its Restricted Subsidiaries is not increased thereby. In addition, following
an Investment Grade Date the Company shall not be required to comply with clause
(iv).
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made will succeed to, be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" will refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company will not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets in a transaction that meets the requirements of Section
5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
An Event of Default occurs if:
(1) the Company defaults for 30 days in the payment when due of
interest on, or Additional Interest with respect to, the Notes;
(2) the Company defaults in the payment when due of the
principal of, or premium, if any, on the Notes;
(3) the Company or any of its Restricted Subsidiaries fails to
comply with the provisions described under Section 4.10, Section 4.15 or
Section 5.01;
(4) the Company or any of its Restricted Subsidiaries fails for 60
days after notice to comply with any of the other covenants or agreements
in this Indenture;
(5) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any 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, if that
default:
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(A) 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
(B) results in the acceleration of such Indebtedness prior to
its Stated 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 $50.0 million or more;
(6) the Company or any of its Restricted Subsidiaries fails to pay
final judgments aggregating in excess of $50.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(7) (a) except as permitted by the Pledge Agreements, any
amendments thereto, the provisions of this Indenture, or other than as a
result of a Reorganization Event, either of the Pledge Agreements ceases
to be in full force and effect or ceases to be effective, in all material
respects, to create the Lien purported to be created in the Collateral in
favor of the holders for 60 days after notice, (b) the Company challenges
the Lien on the Collateral under the Pledge Agreements prior to the time
that the Collateral is to be released to the Company or (c) the Company
asserts that either of the Pledge Agreements is invalid and unenforceable,
other than in accordance with its terms;
(8) 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:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a custodian of it or
for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors or
(E) generally is not paying its debts as they become due;
or
(9) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) in an involuntary case that 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;
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(B) 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 Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(C) 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
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to the Company, all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately.
However, a Default under clause (4) above will not constitute an
Event of Default until the Trustee or the Holders of 25% in principal amount of
the outstanding Notes notify the Company of the Default and the Company does not
cure such Default within the time specified after receipt of such notice.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium and
Additional Interest, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of at least a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, or interest or premium or Additional Interest, if
any, on the Notes, including in connection with an offer to purchase; provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration, if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived. Upon any such waiver, such
Default will cease to exist, and any Event
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of Default arising therefrom will be deemed to have been cured for every purpose
of this Indenture; but no such waiver will extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding
Notes shall have the right to direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines may be unduly prejudicial to the rights
of other Holders of Notes or that may involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of
a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Additional
Interest, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, will not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as Trustee of an express trust against
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the Company for the whole amount of principal of, premium and Additional
Interest, if any, and interest remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest and such further amount as
will be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and will be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee consents to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, is denied for any reason, payment of the same will be
secured by a Lien on, and will be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained will be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it
will pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Additional Interest, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Additional Interest, if any, and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction directs.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
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Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties Of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee will exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations will be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee will examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of Section 7.01(b)
hereof;
(ii) the Trustee will not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
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(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to Section
7.01(a), (b) and (c) hereof.
(e) No provision of this Indenture will require the Trustee to
expend or risk its own funds or incur any liability. The Trustee will be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder has offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee will not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02 Rights Of Trustee.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in such document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel or both. The Trustee
will not be liable for any action it takes or omits to take in good faith in
reliance on such Officer's Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
will be full and complete authorization and protection from liability in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and will
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee will not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders will have offered to the Trustee
reasonable security or indemnity against any loss, expenses and liabilities that
might be incurred by it in compliance with such request or direction.
(g) The Trustee will not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
Default or Event of Default is received by the Trustee at the Corporate Trust
Office of the Trustee and such notice references the Notes and this Indenture.
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(h) In the event the Trustee receives inconsistent or conflicting
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority in aggregate principal amount of the Notes
outstanding, pursuant to the provisions of this Indenture, the Trustee, in its
sole discretion, may determine what action, if any, will be taken.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and will be enforceable by, the Trustee in
connection with the performance of its duties under this Indenture, and to each
agent, custodian and other Person employed to act hereunder.
Section 7.03 Individual Rights of Trustee.
The Trustee or any Affiliate of the Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Company or any Affiliate of the Company with the same rights it would
have if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest, it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as Trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
Section 7.04 Trustee's Disclaimers.
The Trustee will not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it will not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee will mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium or
Additional Interest, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each July 15 beginning with the July 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the 12 months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA Section 313(b)(2). The Trustee will also transmit by mail
all reports as required by TIA Section 313(c).
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(b) A copy of each report at the time of its mailing to the
Holders of Notes will be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company will promptly notify the Trustee when the Notes are listed
on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time such
compensation as the Company and the Trustee from time to time have agreed in
writing for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company will indemnify the Trustee or any predecessor
Trustee against any and all losses, liabilities or expenses, including taxes
(except for taxes based upon the income of the Trustee), incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company, any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee will
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company will not relieve the Company of
its obligations hereunder. The Company will defend the claim and the Trustee
will cooperate in the defense. The Trustee may have separate counsel and the
Company will pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without their consent, which consent will
not be unreasonably withheld.
(c) The obligations of the Company under this Section 7.07 will
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee.
(d) To secure the Company's payment obligations in this Section
7.07, the Trustee will have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(8) or (9) hereof occurs, the expenses
and the compensation for such services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
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Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(iii) a custodian or public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company will promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee (at the
Company's expense), the Company, or the Holders of at least 10% in principal
amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder of a Note
who has been a Holder for at least six months, fails to comply with Section 7.10
hereof, such Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders of the Notes. The retiring Trustee will promptly transfer all
property held by it as Trustee to the successor Trustee, provided that all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof will
continue for the benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
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If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act will be the
successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed will be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant
Defeasance.
The Company may at any time, elect to have either Section 8.02 or
8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which will thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in clauses (i) and (ii) below, and to have satisfied all its other
obligations under such Notes, and this Indenture (and the Trustee, on demand of
and at the expense of the Company, will execute proper instruments acknowledging
the same), except for the following provisions which will survive until
otherwise terminated or discharged hereunder:
(i) the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section,
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payments in respect of the principal of, or interest or premium and
Additional Interest, if any, on such Notes when such payments are due;
(ii) the Company's obligations with respect to such Notes under
Sections 2.06, 2.07, 2.10 and 4.02 hereof;
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith;
and
(iv) this Section 8.02.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15,
4.16 and 4.17, Article 5 and Article 11 hereof with respect to the outstanding
Notes on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes will 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 will continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes will not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and will 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 will not constitute a Default or an Event
of Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes will be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6)
hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, 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
investment bank or firm of independent public accountants, to pay the
principal of, or interest or premium and Additional Interest, if any, on
the outstanding Notes on the Stated Maturity or on the applicable
redemption date, as the case may be,
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and the Company must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(ii) in the case of an election under Section 8.02 hereof, the
Company will deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in
the applicable federal income tax law; in either case to the effect that,
and based thereon such Opinion of Counsel will confirm that, the Holders
of the outstanding Notes 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;
(iii) in the case of an election under Section 8.03 hereof, the
Company will deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(iv) no Default or Event of Default has occurred and is continuing
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);
(v) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this 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;
(vi) the Company will deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company; and
(vii) the Company will deliver to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to Legal Defeasance or Covenant
Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes will be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of
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such Notes of all sums due and to become due thereon in respect of principal,
interest, premium and Additional Interest, if any, but such money need not be
segregated from other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(i) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium and
Additional Interest, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium and Additional Amounts, if any, or
interest has become due and payable will be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in The New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium and Additional Interest, if any, or interest on
any Note following the reinstatement of its obligations, the Company will be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture, the Pledge Agreements or the
Notes without the consent of any Holder of a Note to:
(i) cure any ambiguity, defect or inconsistency;
(ii) provide for uncertificated Notes in addition to or in place of
certificated Notes;
(iii) provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation or sale of
all or substantially all of the Company's assets pursuant to Article 5
hereof;
(iv) make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder or under the Pledge Agreements of any Holder of a
Note;
(v) provide for the issuance of Additional Notes in accordance
with the terms of this Indenture;
(vi) comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(vii) evidence and provide for the acceptance and appointment under
this Indenture of a successor Trustee pursuant to the requirements
thereof.
The consent of the Holders is not necessary under this Indenture to
approve the particular form of any proposed amendment. It is sufficient if such
consent approves the substance of the proposed amendment.
After an amendment under this Indenture becomes effective, the
Company is to mail to Holders of the Notes a notice briefly describing such
amendment. However, the failure to give such notice to all Holders of the Notes,
or any defect therein, will not impair or affect the validity of the amendment.
Upon (x) 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 (y) receipt by the Trustee of the documents described
in Section 7.02 hereof, the Trustee will join with the Company in the execution
of any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee will not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
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Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15 hereof) and the Notes with the consent of the
Holders of at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Notes), and, subject to Sections
6.04 and 6.07 hereof, any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of, premium or
Additional Interest, if any, or interest on the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Notes). Amendments to the Pledge
Agreements shall be made in accordance with their terms.
Upon (x) the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, (y) the filing with the Trustee of evidence satisfactory
to the Trustee of the consent of the Holders of Notes as aforesaid and (z)
receipt by the Trustee of the documents described in Section 7.02 hereof, the
Trustee will join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but will not be obligated to,
enter into such amended or supplemental Indenture.
The Company may, but will not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders of Notes on such
record date, or their duly designated proxies, and only such Persons, will be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent will
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 180 days after such record date; any such consent
previously given will automatically and without further action by any Holder be
canceled and of no further effect.
It will not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it will be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment, supplement or waiver may not (with respect
to any Notes held by a non-consenting Holder):
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(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal amount of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the
Notes (other than provisions relating to Sections 3.09, 4.10 and 4.15
hereof);
(iii) reduce the rate of or change the time for payment of interest
on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of, or interest or premium or Additional Interest, if any, on
the Notes (except a rescission of acceleration of the Notes by the Holders
of at least a majority in aggregate principal amount of the Notes and a
waiver of the payment default that resulted from such acceleration);
(v) make any Note payable in currency other than that stated in
the Notes;
(vi) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Additional Interest,
if any, on the Notes;
(vii) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 and 4.15 hereof);
(viii) make any change in the ranking or priority of any Note that
would adversely affect the Holders (other than any change resulting from
an amendment to the Pledge Agreements in accordance with their terms); or
(ix) make any change in Section 6.04 and 6.07 hereof or in the
foregoing amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the
Pledge Agreements in any manner (i) that adversely affects the rights of the
Holders of the Notes or (ii) that releases any of the Collateral from the Liens
under the Pledge Agreements (in each case, other than in accordance with the
terms of such documents) will require the consent of the Holders of at least
66-2/3% of the aggregate principal amount of Notes then outstanding.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent
84
Holder of a Note may revoke the consent as to its Note 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.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee will authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee will be entitled to receive, and (subject to Section 7.01 hereof)
will be fully protected in relying upon, an Officer's Certificate and an Opinion
of Counsel stating that the execution of such amended or supplemental indenture
is authorized or permitted by this Indenture.
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01 Satisfaction and Discharge.
(c) This Indenture will be discharged and will cease to be of
further effect as to all Notes issued thereunder, when:
(i) either:
(A) all Notes that have been authenticated, except lost,
stolen or destroyed Notes that have been replaced or paid and Notes
for whose payment money has been deposited in trust and thereafter
repaid to the Company, have been delivered to the Trustee for
cancellation; or
(B) all Notes that have not been delivered to the Trustee
for cancellation have become due and payable or will become due and
payable within one year by reason of the mailing of a notice of
redemption or otherwise 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 of cash in U.S.
dollars and non-callable Government Securities, in 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
85
principal, premium and Additional Interest, if any, and accrued
interest to the date of maturity or redemption;
(ii) no Default or Event of Default has occurred and is continuing
on the date of the deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or
will occur as a result of the deposit and the deposit will not result in a
breach or violation of, or constitute a default under, any other
instrument to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries is bound;
(iii) the Company has paid or caused to be paid all sums payable by
it under this Indenture; and
(iv) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case may
be.
(d) In addition, the Company shall deliver an Officer's
Certificate and an Opinion of Counsel to the Trustee stating that all conditions
precedent to satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to Section 10.01(i)(B)
hereof, the provisions of Section 10.02 and Section 8.06 will survive. In
addition, nothing in this Section 10.01 will be deemed to discharge those
provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 10.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money
deposited with the Trustee pursuant to Section 10.01 will be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 10.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes will
be revived and reinstated as though no deposit had occurred pursuant to Section
10.01 hereof; provided that if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company will be subrogated to the rights of the Holders of such
Notes to receive such payment from the money or Government Securities held by
the Trustee or Paying Agent.
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ARTICLE 11.
COLLATERAL
Section 11.01 Pledge Agreements.
The due and punctual payment of the principal of, interest on and
Additional Interest, if any, on the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, interest on the overdue principal of and
interest (to the extent permitted by law), if any, on the Notes and performance
of all other obligations under this Indenture, including, without limitation,
the obligations of the Company set forth in Section 7.07 herein, and the Notes,
shall be secured as provided in the Pledge Agreements. The Trustee and the
Company hereby agree that the Collateral Agent shall hold the Collateral in
trust for the benefit of all of the Holders, in each case pursuant to the terms
of the Pledge Agreements.
Each Holder of the Notes, by its acceptance thereof, consents and
agrees to the terms of the Pledge Agreements (including, without limitation, the
provisions providing for foreclosure and release of Collateral) as the same may
be in effect or may be amended from time to time in accordance with their terms
and authorizes and directs (i) the Collateral Agent, with respect to each of the
Pledge Agreements to which it is a party, and (ii) the Trustee to perform their
respective obligations and exercise their respective rights thereunder in
accordance therewith.
The Trustee and each Holder, by accepting the Notes, acknowledges
that, as more fully set forth in the Pledge Agreements, the Collateral as now or
hereafter constituted shall be held for the benefit of all the Holders and other
secured parties under the Pledge Agreements, and that the Lien of this Indenture
and the Pledge Agreements in respect of the Collateral Agent and the Holders is
subject to and qualified and limited in all respects by the Pledge Agreements
and actions that may be taken thereunder.
Notwithstanding (i) anything to the contrary contained in this
Indenture, Pledge Agreements, Notes or any other instrument governing,
evidencing or relating to any Indebtedness, (ii) the time, order or method of
attachment of any Liens, (iii) the time or order of filing or recording of
financing statements or other documents filed or recorded to perfect any Lien
upon any Collateral, (iv) the time of taking possession or control over any
Collateral or (v) the rules for determining priority under the Uniform
Commercial Code or any other law governing relative priorities of secured
creditors:
(i) the Liens will rank equally and ratably with all valid,
enforceable and perfected Liens, whenever granted upon any present or
future Collateral, but only to the extent such Liens are permitted under
this Indenture to exist and to rank equally and ratably with the Notes;
and
(ii) all proceeds of the Pledge Agreements shall be allocated and
distributed as set forth in the Pledge Agreements.
Section 11.02 Opinions.
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Promptly after the effectiveness of this Indenture, to the extent
required by the TIA, the Company shall deliver the opinion(s) required by
Section 314(b)(1) of the TIA. Subsequent to the execution and delivery of this
Indenture, to the extent required by the TIA, the Company shall furnish to the
Trustee on or prior to each anniversary of the Issue Date, an Opinion of
Counsel, dated as of such date, stating either that (i) in the opinion of such
counsel, all action has been taken with respect to any filing, re-filing,
recording or re-recording with respect to the Collateral as is necessary to
maintain the Lien on the Collateral in favor of the Holders or (ii) in the
opinion of such counsel, that no such action is necessary to maintain such Lien.
Section 11.03 Release of the Collateral.
(a) The parties hereto hereby agree and acknowledge that the
Collateral may be released by the Collateral Agent at any time in accordance
with the provisions of the Pledge Agreements and this Indenture or upon the
termination of this Indenture and, in any such case, the Collateral so released
shall automatically be released as Collateral for the Notes without any action
on the part of the Trustee or the Holders. For purposes of the TIA, the release
of any Collateral from the terms of the Pledge Agreements will not be deemed to
impair the security under this Indenture in contravention of the provisions
hereof or affect the Lien of this Indenture or the Pledge Agreements if and to
the extent the Collateral is released pursuant to the Pledge Agreements or upon
the termination of this Indenture. To the extent applicable, the Company shall
cause TIA Section 314(d) relating to the release of property or securities from
the lien of the Pledge Agreements and relating to the substitution therefor of
any property or securities to be subjected to the lien of the Pledge Agreements
to be complied with.
(b) The fair value of Collateral released from the Liens of the
Pledge Agreements pursuant to Section 11.03(a) hereof shall not be considered in
determining whether the aggregate fair value of Collateral released from the
Liens of the Pledge Agreements in any calendar year exceeds the 10% threshold
specified in Section 314(d)(l) of the TIA. It is expressly understood that
Section 11.03(a) and this Section 11.03(b) relate only to the Company's
obligations under the TIA and shall not restrict or otherwise affect the
Company's rights or abilities to release Collateral pursuant to the terms of
this Indenture and the Pledge Agreements or as otherwise permitted by the
Trustee under this Indenture.
Section 11.04 Certificates of the Company.
Subject to Section 11.03(b) the Company shall furnish to the Trustee
prior to each proposed release of Collateral all documents required by TIA
Section 314(d), if any. The Trustee may, to the extent permitted by Sections
7.01 and 7.02 hereof, accept as conclusive evidence of compliance with the
foregoing provisions the appropriate statements contained in such documents. Any
certificate or opinion required by TIA Section 314(d), if applicable, may be
made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent engineer,
appraiser or other expert within the meaning of TIA Section 314(d).
Section 11.05 Authorization of Actions to be Taken by the Trustee
Under the Pledge Agreements.
88
The Trustee shall be the representative on behalf of the Holders and
shall act upon the written direction of the Holders with regard to all voting,
consent and other rights granted to the Holders under the Pledge Agreements.
Subject to the provisions of the Pledge Agreements, the Trustee may, in its sole
discretion and without the consent of the Holders, on behalf of the Holders,
take all actions it deems necessary or appropriate in order to (a) enforce any
of its rights or any of the rights of the Holders under the Pledge Agreements
and (b) receive any and all amounts payable from the Collateral in respect of
the obligations of the Company hereunder. Subject to the provisions of the
Pledge Agreements, the Trustee shall have the power to institute and to maintain
such suits and proceedings as it may deem expedient to prevent any impairment of
the Collateral by any acts that may be unlawful or in violation of the Pledge
Agreements or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interest and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders or the Trustee).
Section 11.06 Authorization of Receipt of Funds by the Trustee Under
the Pledge Agreements.
The Trustee is authorized to receive any funds for the benefit of
the Holders distributed by the Collateral Agent under the Pledge Agreements, and
to make further distributions of such funds to the Holders according to the
provisions of this Indenture and the Pledge Agreements.
Section 11.07 Release Upon Termination of the Company's Obligations.
(a) If (i) the Company delivers an Officer's Certificate and an
Opinion of Counsel certifying that all of its obligations under this Indenture
have been satisfied and discharged by complying with the provisions of Article 8
hereof, (ii) all outstanding Notes issued under this Indenture shall be
surrendered to the Trustee for cancellation, (iii) the release of the Collateral
in accordance with the terms of the Pledge Agreements occurs or (iv) any other
release of the Collateral as security for obligations of the Company or a
Subsidiary under this Indenture occurs, the Trustee shall deliver to the
Collateral Agent a notice stating that the Trustee, for itself and on behalf of
the Holders, disclaims and has given up any and all rights it has in or to the
Collateral, and any rights it has under the Pledge Agreements, and, upon and
after the receipt by the Collateral Agent of such notice, the Collateral Agent
shall no longer be deemed to hold the Lien in the Collateral on behalf of the
Trustee for the benefit of the Holders.
(b) Any release of Collateral made in compliance with this Section
11.07 shall not be deemed to impair the Lien under the Pledge Agreements or the
Collateral thereunder in contravention of the provisions of this Indenture or
the Pledge Agreements.
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
89
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties will control.
Section 12.02 Notices.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
PG&E Corporation
One Market, Spear Tower, Suite 2400
San Francisco, California 94105
Attention: Chief Counsel - Corporate (Fax: (415) 817-8225)
With a copy to:
Orrick, Herrington & Sutcliffe LLP
400 Sansome Street
San Francisco, California 94111-3143
Attention: Leslie P. Jay (Fax: (415) 773-5759)
If to the Trustee:
Bank One, N.A.
1 Bank One Plaza, Suite IL1-0595
Chicago, Illinois 60670
Attention: Janice Ott Rotunno (Fax: (312) 336-8840
The Company or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
will be deemed to have been duly given, at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
90
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
Section 12.03 Communications By Holders of Notes with Other Holders
of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else will have the protection of
TIA Section 312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company will furnish to the Trustee:
(I) an Officer's Certificate in form and substance
reasonably satisfactory to the Trustee (which will include the
statements set forth in Section 12.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action
have been satisfied; and
(II) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which will include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) will comply with the provisions of
TIA Section 314(e) and will include:
(I) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(II) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(III) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or
not such covenant or condition has been satisfied; and
(IV) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
91
Section 12.06 Rule by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers,
Employees and Shareholders.
No director, officer, employee, incorporator or shareholder of the
Company or any director, officer, employee or incorporator of any Subsidiary of
the Company, as such, will have any liability for any obligations of the Company
under the Notes, this Indenture, the Pledge Agreements or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder, by accepting a Note, waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.
Section 12.08 Governing Law.
THIS INDENTURE AND THE NOTES WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 12.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such Indenture, loan or debt agreement may not be used to interpret
this indenture.
Section 12.10 Successors.
All agreements of the Company in this Indenture and the Notes will
bind its successors. All agreements of the Trustee in this Indenture will bind
its successors.
Section 12.11 Severability.
In case any provision in this Indenture or in the Notes will be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 12.13 Table of Contents, Headings, etc.
92
The table of contents, cross-reference table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
93
SIGNATURES
Dated as of July 2, 2003
PG&E CORPORATION
By: /s/ Peter A. Darbee
---------------------------------------
Name: Peter A. Darbee
Title: Senior Vice President and Chief
Financial Officer
BANK ONE, N.A.
as Trustee
By: /s/ Janice Ott Rotunno
------------------------------------
Name: Janice Ott Rotunno
Title: Vice President and Assistant
Secretary
S-1
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Note Legend]
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(c) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.
[Private Placement Legend]
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT, OR OTHER SECURITIES
LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OR (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING ITS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR
TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS
NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS
THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, REFERRED TO AS THE RESALE
RESTRICTION TERMINATION DATE, OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
A-1
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED STATES, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (I) PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND
(II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER
IN THE FORM REQUIRED BY THE INDENTURE IS COMPLETED AND DELIVERED BY THIS
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
A-2
CUSIP NO.
----------
ISIN
----------
No. $
---------------------- ---------------
6-7/8% Senior Secured Notes Due 2008
PG&E Corporation, a California corporation, promises to pay to Cede
& Co., or registered assigns, the principal sum of Dollars on July 15,
2008. --------
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Note are set forth on the other side
of this Note.
Dated: July 2, 2003
PG&E CORPORATION
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BANK ONE, N.A.
as Trustee, certifies that this
is one of the Notes referred
to in the Indenture.
By:
---------------------------------------
Authorized Signatory
A-3
[FORM OF REVERSE SIDE OF NOTE]
6-7/8% Senior Secured Note due 2008
Capitalized terms used herein will have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. Interest. PG&E Corporation, a California corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 6-7/8% per
annum from July 2, 2003 until maturity and will pay the Additional Interest, if
any, payable pursuant to Section 5 of the Registration Rights Agreement referred
to below. The Company will pay interest and Additional Interest, if any,
semi-annually on January 15 and July 15 of each year, or if any such day is not
a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"), with the same force and effect as if made on the date for such payment.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from July 2, 2003; provided that
if there is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest will accrue from such next succeeding
Interest Payment Date; provided, further, that the first Interest Payment Date
will be January 15, 2004. The Company will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is the then
applicable interest rate on the Notes to the extent lawful; it will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Additional Interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method Of Payment. The Company will pay interest on the Notes (except
defaulted interest) and Additional Interest, if any, to the Persons who are
registered Holders of Notes at the close of business on the January 1 and July 1
(whether or not a Business Day) next preceding the Interest Payment Date, even
if such Notes are canceled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes will be payable as to principal, premium and
Additional Interest, if any, and interest at the office or agency of the Company
maintained for such purpose within The City and State of New York, or, at the
option of the Company, payment of interest and Additional Interest may be made
by check mailed to the Holders at their respective addresses set forth in the
register of Holders; provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest,
premium and Additional Interest on, all Global Notes and all other Notes the
Holders of which have provided wire transfer instructions to the Company or the
Paying Agent if such Holders are registered Holders of at least $250,000 in
principal amount of the Notes. Such payment will be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent And Registrar. Initially, Bank One, N.A., the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
or any of its Subsidiaries may act in any such capacity.
A-4
4. Indenture. The Company issued the Notes under an Indenture dated as of
July 2, 2003 ("Indenture") between the Company and the Trustee. The terms of the
Notes 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
Sections 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. To the
extent any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture will govern and be controlling.
5. Optional Redemption.
(a) Except as set forth in clause (b) and (c) of this paragraph 5,
the Notes will not be redeemable at the Company's option prior to July 15, 2006.
Thereafter, the Company may redeem all or a part of the Notes upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Additional Interest thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on July 15th of the
years indicated below:
YEAR PERCENTAGE
---- ----------
2006................................... 103.438%
2007................................... 101.719%
(b) Notwithstanding the foregoing, at any time prior to July 15,
2006, the Company may on any one or more occasions redeem up to 35% of the
aggregate principal amount of the Notes issued under the Indenture at a
redemption price of 106.875% of the principal amount thereof, plus accrued and
unpaid interest and Additional Interest thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings by the Company;
provided that at least 65% of the aggregate principal amount of Notes issued
under the Indenture remains outstanding immediately after the occurrence of each
such redemption (excluding Notes held by the Company and its Subsidiaries); and
provided, further, that any such redemption occurs within 120 days of the date
of the closing of such Equity Offering.
(c) At any time and from time to time prior to July 15, 2006, the
Company may, at its option, redeem all or a portion of the Notes at the
Make-Whole Price plus accrued and unpaid interest to the redemption date.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company will not be
required to make mandatory redemption payments with respect to the Notes.
7. Repurchase At Option Of Holder.
(a) If there is a Change of Control, Spin-Off or Reorganization
Event, the Company will 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
of $1,000 thereof) of each Holder's Notes at a purchase price in cash equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Additional Interest, if any, to the date of the purchase (the "Change of
Control Payment").
A-5
Within 30 days following any Change of Control or no sooner than 60 days prior
to and no later than 30 days following a Spin-Off or Reorganization Event, as
the case may be, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control, Spin-Off or
Reorganization Event, as the case may be, and offering to repurchase Notes on
the date specified in the notice, which date will 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"), pursuant to the procedures required by the Indenture and
described in such notice.
(b) If the Net Proceeds of any Asset Sales consummated by the
Company or a Restricted Subsidiary are not applied or invested as provided in
Section 4.10(b) of the Indenture, such Net Proceeds will constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $30.0 million,
the Company will commence an offer to all Holders of Notes and all holders of
other secured Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets (an "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture, to purchase the maximum principal
amount of Notes (in integral multiples of $1,000) and such other secured 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 of Notes and
other secured pari passu Indebtedness to be purchased or the lesser amount
required under agreements governing such other secured pari passu Indebtedness,
plus accrued and unpaid interest and Additional Interest, if any, to the date of
purchase. 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 Notes and
other secured pari passu Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee will select the Notes and
such other secured pari passu Indebtedness to be purchased on a pro rata basis.
Holders of Notes 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 Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. Notice Of Redemption. Notice of redemption will be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each Holder whose Notes are to be redeemed at its registered address. Notes
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date, interest ceases to accrue on Notes
or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder 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 Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
A-6
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement And Waiver. Subject to certain exceptions, the
Indenture, the Pledge Agreements or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes. Without
the consent of any Holder of a Note, the Indenture, the Pledge Agreements or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's obligations
to Holders of the Notes in case of a merger or consolidation or sale of all or
substantially all of the Company's assets in accordance with the Indenture, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture or the Pledge Agreements of any such Holder, to provide for the
issuance of Additional Notes in accordance with the terms of the Indenture, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, or to evidence and
provide for the acceptance and appointment under the Indenture of a successor
Trustee pursuant to the procedures set forth in the Indenture.
12. Defaults and Remedies. An "Event of Default" occurs if: (i) default
for 30 days in the payment when due of interest on, or Additional Interest with
respect to, the Notes; (ii) default in payment when due of the principal of, or
premium, if any, on the Notes; (iii) failure by the Company or any of its
Restricted Subsidiaries to comply with the covenants contained in Sections 4.10,
4.15 or 5.01 of the Indenture; (iv) failure by the Company or any of its
Restricted Subsidiaries for 60 days after notice to comply with any of the other
covenants or agreements of the Indenture; (v) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
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 date of the Indenture, which
default 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
results in the acceleration of such Indebtedness prior to its Stated 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
$50.0 million or more; (vi) failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of $50.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days; (vii) (a) except as
permitted by the Pledge Agreements, any amendments thereto and the provisions of
the Indenture or other than as a result of a Reorganization Event, either of the
Pledge Agreements ceases to be in full force and effect or ceases to be
effective, in all material respects, to create the Lien purported to be created
in the Collateral in favor of the Holders for 60 days after notice, (b) the
Company challenges the Lien on the Collateral under the Pledge Agreements prior
to the time that the Collateral is to be released to the Company or (c) the
Company asserts that either of the Pledge Agreements is invalid and
unenforceable, other than in accordance with its terms; or (viii) certain events
of bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries
A-7
or any group of Restricted Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all outstanding Notes to be due and payable immediately. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, all outstanding Notes
will become due and payable without further action or notice. Holders of the
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes shall have the right to direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee. The Trustee may withhold from Holders of the Notes
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, except with respect to a Default
or Event of Default relating to the payment of principal of, or interest or
premium of Additional Interest, if any, on, the Notes.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may, on behalf of the Holders of all
of the Notes, 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 principal of, or interest or premium or Additional
Interest, if any, on, the Notes; provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may rescind
an acceleration and its consequences, if the rescission would not conflict with
any judgment or decree or if all existing Events of Default have been cured or
waived.
13. Trustee Dealings With Company. The Trustee, 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.
14. No Recourse Against Others. A director, officer, employee,
incorporator or shareholder of the Company or any director, officer, employee or
incorporator of any Subsidiary of the Company, as such, will not have any
liability for any obligations of the Company under the Notes, the Indenture, the
Pledge Agreements or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. Authentication. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder 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).
17. Additional Rights Of Holders Of Transfer Restricted Securities. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted
A-8
Securities will have all the rights set forth in the Registration Rights
Agreement dated as of July 2, 2003, between the Company and the parties named on
the signature pages thereof, or, with respect to any Additional Notes, Holders
of Transfer Restricted Securities will have all the rights set forth in one or
more registration rights agreements between the Company and the other parties
thereto, relating to rights given by the Company to the purchasers of Additional
Notes (collectively, the "Registration Rights Agreement").
18. 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 Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law. This Note will be governed by, and construed in
accordance with, the laws of the State of New York.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
PG&E Corporation
One Market, Spear Tower, Suite 2400
San Francisco, California 94105
Attention: Chief Counsel - Corporate (Fax: (415) 817-8225)
A-9
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------
to transfer this Note 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.
A-10
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $
-----------------------
Date: Your Signature:
----------------- ----------------------------
(Sign exactly as your name appears on
the Note)
Tax Identification No.:
-------------------
Signature Guarantee.
A-11
Schedule of Exchanges of Interests in the Global Note
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal
Amount of Amount of Amount of this Signature of
Decrease in Increase in Global Note Authorized
Principal Principal following such Officer of
Amount of this Amount of this Decrease Trustee or
Date of Exchange Global Note Global Note (or Increase) Note Custodian
- ---------------- ----------- ----------- ------------- --------------
A-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
PG&E Corporation
One Market, Spear Tower, Suite 2400
San Francisco, California 94105
Attn: [ ]
Bank One, N.A.
1 Bank One Plaza, Suite 1L1-0595
Chicago, Illinois 60670
Attn: [ ]
Re: 6 7/8% Senior Secured Notes due 2008
Reference is hereby made to the Indenture, dated as of July 2, 2003 (the
"Indenture"), between PG&E Corporation, as issuer (the "Company"), and Bank One,
N.A., as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.[ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE RULE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believed and believes is purchasing the beneficial interest or Definitive Note
for its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Rule 144A Global Note and/or the Definitive Note
and in the Indenture and the Securities Act.
2. [ ]CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a Person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the
B-1
United States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act and, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note and/or the Definitive Note and in the Indenture and the Securities
Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE DEFINITIVE NOTES PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to the
beneficial interest in Restricted Global Notes and Definitive Notes bearing the
Private Placement Legend and pursuant to and in accordance with the Securities
Act and any applicable blue sky securities laws of any State of the United
States, and accordingly the Transferor hereby further certifies that (check
one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
OR
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
OR
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the
B-2
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
----------------------------------------
Name:
Title:
Dated:
---------------
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] Rule 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] Rule 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
PG&E Corporation
One Market, Spear Tower, Suite 2400
San Francisco, California 94105
Attn: [ ]
Bank One, N.A.
1 Bank One Plaza, Suite 1L1-0595
Chicago, Illinois 60670
Attn: [ ]
Re: 6 7/8% Senior Secured Notes due 2008
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of July 2, 2003 (the
"Indenture"), between PG&E Corporation, as issuer (the "Company"), and Bank One,
N.A., as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to
C-1
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] Rule 144A Global Note, [ ] Regulation S Global Note, with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
C-2
----------------------------------------
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
Dated:
--------------------
C-3