E-183
Exhibit No. 8
Form 8-K
Headway Corporate Resources, Inc.
SEC File No. 0-23170
HEADWAY CORPORATE RESOURCES, INC., as Issuer
and
STATE STREET BANK AND TRUST COMPANY, N.A., as Trustee
INDENTURE
Dated as of March 19, 1998
$10,000,000
Increasing Rate Senior Subordinated Notes
Due 2006
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE 1
SECTION 1.01 Definitions 1
SECTION 1.02 Incorporation by Reference of TIA 20
SECTION 1.03 Rules of Construction. 21
ARTICLE II.THE SECURITIES 22
SECTION 2.01 Form and Dating 22
SECTION 2.02 Execution and Authentication 22
SECTION 2.03 Registrar and Paying Agent 23
SECTION 2.04 Paying Agent To Hold Assets in Trust 24
SECTION 2.05 Securityholder Lists 24
SECTION 2.06 Transfer and Exchange 24
SECTION 2.07 Replacement Securities 25
SECTION 2.08 Outstanding Securities 25
SECTION 2.09 Treasury Securities. 26
SECTION 2.10 Temporary Securities 26
SECTION 2.11 Cancellation 26
SECTION 2.12 Defaulted Interest 27
SECTION 2.13 Deposit of Monies 27
SECTION 2.14 CUSIP Number 27
SECTION 2.15 Restrictive Legends. 27
SECTION 2.16 Book Entry Provisions for Global Security. 28
SECTION 2.17 Special Transfer Provisions. 29
ARTICLE III. REDEMPTION 31
SECTION 3.01 Notices to Trustee 31
SECTION 3.02 Selection of Securities To Be Redeemed 31
SECTION 3.03 Notice of Redemption 32
SECTION 3.04 Effect of Notice of Redemption 33
SECTION 3.05 Deposit of Redemption Price 33
SECTION 3.06 Securities Redeemed in Part 33
ARTICLE IV.COVENANTS 33
SECTION 4.01 Payment of Securities 33
SECTION 4.02 Maintenance of Office or Agency 34
SECTION 4.03 Corporate Existence 34
SECTION 4.04 Payment of Taxes and Other Claims 34
SECTION 4.05 Maintenance of Properties and Insurance 35
SECTION 4.06 Compliance Certificates; Notice of Default 35
SECTION 4.07 Compliance with Laws 36
SECTION 4.08 SEC Reports and Other Information 36
SECTION 4.09 Waiver of Stay Extension or Usury Laws 37
SECTION 4.10 Limitation on Indebtedness 37
SECTION 4.11 Limitation on Restricted Payments 39
SECTION 4.12 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries. 40
SECTION 4.13 Limitation on Liens. 41
SECTION 4.14 Limitation on Investments, Loans and Advances41
SECTION 4.15 Limitation on Transactions with Affiliates 42
SECTION 4.16 Change of Control 42
SECTION 4.17 Disposition of Proceeds of Asset Sales 44
SECTION 4.18 Limitation on Issuances and Sales of
Preferred Stock by Subsidiaries 46
SECTION 4.19 Limitation on Liquidations,
Dissolutions, Mergers and Consolidation 47
SECTION 4.20 Net Worth 47
SECTION 4.21 ERISA Compliance 47
SECTION 4.22 Limitation on Acquisitions 48
SECTION 4.23 Certain Consolidated Ratios 48
SECTION 4.24 Limitation on Hedging Obligations 49
SECTION 4.25 Sale of Subsidiaries. 49
SECTION 4.26 Conduct of Business 49
SECTION 4.27 Additional Guarantors. 49
ARTICLE V. SUCCESSOR CORPORATION 49
SECTION 5.01 Consolidation, Merger, Conveyance, Transfer or
Lease 49
SECTION 5.02 Successor Entity Substituted 51
ARTICLE VI.DEFAULT AND REMEDIES 51
SECTION 6.01 Events of Default 51
SECTION 6.02 Acceleration 53
SECTION 6.03 Other Remedies 54
SECTION 6.04 Waiver of Past Defaults 54
SECTION 6.05 Control by Required Holders 54
SECTION 6.06 Limitation on Suits 55
SECTION 6.07 Rights of Holders To Receive Payment 55
SECTION 6.08 Collection Suit by Trustee 55
SECTION 6.09 Trustee May File Proofs of Claim 55
SECTION 6.10 Priorities 56
SECTION 6.11 Undertaking for Costs 56
SECTION 6.12 Rights and Remedies Cumulative 57
SECTION 6.13 Delay or Omission Not Waiver 57
ARTICLE VII. TRUSTEE 57
SECTION 7.01 Duties of Trustee 57
SECTION 7.02 Rights of Trustee 58
SECTION 7.03 Individual Rights of Trustee 59
SECTION 7.04 Trustee's Disclaimer 59
SECTION 7.05 Notice of Default 59
SECTION 7.06 Reports by Trustee to Holders 60
SECTION 7.07 Compensation and Indemnity 60
SECTION 7.08 Replacement of Trustee 61
SECTION 7.09 Successor Trustee by Merger, Etc 62
SECTION 7.10 Eligibility: Disqualification 62
SECTION 7.11 Preferential Collection of Claims Against
Company 62
ARTICLE VIII. DISCHARGE OF INDENTURE; DEFEASANCE 62
SECTION 8.01 Discharge of Indenture 62
SECTION 8.02 Legal Defeasance and Covenant Defeasance 63
SECTION 8.03 Application of Trust Money 66
SECTION 8.04 Repayment to Company 66
SECTION 8.05 Reinstatement 67
SECTION 8.06 Acknowledgment of Discharge by Trustee 67
ARTICLE IX.AMENDMENTS, SUPPLEMENTS AND WAIVERS 67
SECTION 9.01 Without Consent of Holders 67
SECTION 9.02 With Consent of Holders 68
SECTION 9.03 Compliance with TIA 69
SECTION 9.04 Revocation and Effect of Consents 69
SECTION 9.05 Notation on or Exchange of Securities 70
SECTION 9.06 Trustee To Sign Amendments, Etc. 70
ARTICLE X. SUBORDINATION 70
SECTION 10.01Securities Subordinated to Senior Indebtedness70
SECTION 10.02Suspension of Payment on Securities in Certain
Events. 71
SECTION 10.03Securities Subordinated to Prior Payment of
All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Company. 72
SECTION 10.04Holders to be Subrogated to Rights of Holders
of Senior Indebtedness. 73
SECTION 10.05Obligations of the Company Unconditional. 73
SECTION 10.06Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. 74
SECTION 10.07Application by Trustee of Assets Deposited
with It. 74
SECTION 10.08No Waiver of Subordination Provisions. 75
SECTION 10.09Holders Authorize Trustee to Effectuate
Subordination of Notes. 75
SECTION 10.10Right of Trustee to Hold Senior Indebtedness.76
SECTION 10.11.This Article X Not To Prevent Events of Default. 76
SECTION 10.12.No Fiduciary Duty of Trustee to Holders of Senior Indebtedness
76
ARTICLE XI.MISCELLANEOUS 77
SECTION 11.01TIA Controls 77
SECTION 11.02Notices 77
SECTION 11.03Communications by Holders with Other Holders78
SECTION 11.04Certificate and Opinion as to Conditions
Precedent 78
SECTION 11.05Statements Required in Certificate or Opinion78
SECTION 11.06Rules by Trustee, Paying Agent, Registrar 79
SECTION 11.07Legal Holidays 79
SECTION 11.08Governing Law 79
SECTION 11.09No Adverse Interpretation of Other Agreements80
SECTION 11.10No Recourse Against Others 80
SECTION 11.11Successors 80
SECTION 11.12Counterparts 80
SECTION 11.13Severability 80
SECTION 11.14Table of Contents, Headings. Etc. 80
Reconciliation and tie between the Trust Indenture
Act of 1939 and this Indenture, dated as of March 19, 1998:
Trust Indenture Initially Refl
Act Section ected in
Indenture S
ection
309 (b)(9) 7.10
310 (a)(1) 7.10
(a)(2) 7.10
(a)(5) 7.10
(b) 7.10
311 (a) 7.11
(b) 7.11
312 (a) 2.05
(b) 11.03
(c) 11.03
313 (a) 7.06
(b) 7.06
(c) 7.06
(d) 4.08
314 (a) 11.02
(c)(3) 5.01
315 (b) 11.02
316 (b) 9.04
INDENTURE, dated as of March 19, 1998, between HEADWAY
CORPORATE RESOURCES INC., a Delaware corporation (the "Company"),
and STATE STREET BANK AND TRUST COMPANY, N.A., a national banking
association, as Trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of
each other party and for the equal and ratable benefit of the
Holders of the Company's Increasing Rate Senior Subordinated
Notes Due 2006:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION I.1 Definitions.
"Acquired Indebtedness" means with respect to any
person, Indebtedness of another person existing at the time such
other Person becomes a Subsidiary of such person or is merged
with or into such person or a Subsidiary of such Person, and not
incurred in connection with, or in anticipation of, such other
person becoming a Subsidiary of such Person or the merger with or
into such other Person.
"Acquisition" means the acquisition of (i) a
controlling equity or other ownership interest in another Person
(including the purchase of an option, warrant or convertible,
exchangeable or similar type security to acquire such a
controlling interest at the time it becomes exercisable,
convertible or exchangeable by the holder thereof), whether by
purchase of such equity or other ownership interest or upon
exercise of an option or warrant for, or conversion or exchange
of securities into, such equity or other ownership interest, or
(ii) assets of another Person which constitute all or any
material part of the assets of such Person or of a line or lines
of business conducted by such Person.
"Acquisition Documents" means, collectively, (a) that
certain Asset Purchase Agreement dated as of March 31, 1997
between the Company, Headway Corporate Staffing Services of North
Carolina, Inc., Advanced Staffing Solutions, Inc., H. Wade
Gresham and Mark F. Herron, (b) that certain Asset Purchase
Agreement dated as of July 28, 1997 between the Company, ASA
Personnel Services, Inc., Administrative Sales Associates, Inc.,
Administrative Sales Associates Temporaries, Inc., Richard Brody
and Arnold Katz, (c) that certain Asset Purchase Agreement dated
as of September 29, 1997 between the Company, Irene Cohen Temps,
Inc., Quality Outsourcing, Inc., George J. Burt, Richard E. Gaudy
and Peter F. Notaro, (d) that certain Purchase Agreement dated as
of September 30, 1997 between the Company, Headway Corporate
Staffing Services of Connecticut, Inc., Electronic Data
Resources, L.L.C., EDR Associates, Inc., Maurice Dusel, James
Roberts and Michael Russell, (e) that certain Asset Purchase
Agreement, to be dated on or about March 23, 1998, among the
Company, Headway Corporate Staffing Services of North Carolina,
Inc., Select Staffing Services, Inc. and Jack Powell, (f) that
certain Asset Purchase Agreement, to be dated on or about March
23, 1998, among the Company, Cheney Associates, L.L.C. and
Timothy Cheney, an individual doing business under the names
Cheney Associates, Inc. and Cheney Consulting Group, (g) that
certain Stock Purchase Agreement, to be dated on or about March
23, 1998, among the Company, L&M Shore Family Holdings Limited
Partnership, Elder Investments Limited Partnership, Mark Shore
and Linda Elder, and (h) any other purchase agreement entered
into hereafter by the Company and/or any Subsidiaries relating to
the acquisition of any entity or any assets thereof.
"Affiliate" means, with respect to any specified
Person, any other Person who directly or indirectly through one
or more intermediaries controls, or is controlled by, or is under
common control with, such specified Person. The term "control"
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.
"Affiliate Transaction" means the conduct of business
or any transactions or series of transactions by the Company or
any of its Subsidiaries with or for the benefit of any of their
respective Affiliates.
"Agent" means any Registrar, Paying Agent or co-
Registrar.
"Agent Members" has the meaning provided in Section
2.16.
"Asset Acquisition" means (i) any capital contribution
(by means of transfer of cash or other property to others or
payment for property or services for the account or use of
others, or otherwise) to, or purchase or acquisition of Capital
Stock in, any other Person by the Company or any of its
Subsidiaries, in either case pursuant to which such Person shall
become a Subsidiary of the Company or any of its Subsidiaries or
shall be merged with or into the Company or any of its
Subsidiaries or (ii) any acquisition by the Company or any of its
Subsidiaries of the assets of any person which constitute
substantially all of an operating unit or business of such
Person.
"Asset Sale" means with respect to any Person, any
direct or indirect sale, issuance, conveyance, transfer, lease,
assignment or other disposition (including, without limitation,
by merger or consolidation or by exchange of assets and whether
by operation of law or otherwise) in a single transaction or
series of transactions, made by such Person or a Subsidiary of
such Person to any other Person of (i) any Capital Stock of such
Person or any Subsidiary of such Person (whether structured as a
sale, issuance or other disposition by such Person or a
Subsidiary of such Person) or (ii) any other Property or asset of
such Person or any Subsidiary of such Person (other than cash or
Cash Equivalents), in each case, other than inventory in the
ordinary course of business and other than isolated transactions
(not involving Capital Stock) which do not exceed $1,000,000
individually and $2,500,000 during any consecutive 12 month
period. With respect to the Company and its Subsidiaries, the
term "Asset Sale" shall not include (a) any disposition of
properties and assets of the Company or any of its Subsidiaries
that is governed under and complies with the requirements set
forth in Article V hereof, (b) any sale by the Company to a
Wholly-Owned Subsidiary of the Company or a sale by a Subsidiary
of the Company to the Company or to a Wholly-Owned Subsidiary of
the Company, (c) any sale by the Company of its Capital Stock
pursuant to a Permitted Acquisition, (d) the sale, lease,
conveyance, disposition or other transfer of all or substantially
all of the assets of the Company as permitted under Section 5.01
or any disposition that constitutes a Change of Control or (e)
the sale, for cash in the amount equal to the Fair Market Value
thereof, of up to 7,072,307 ordinary shares of the common stock
of INCEPTA Group, plc.
"Asset Sale Offer" has the meaning provided in Section
4.17.
"Asset Sale Payment Date" means, with respect to any
Excess Proceeds from an Asset Sale, the earlier of (x) (i) the
360th day following receipt of Net Proceeds (other than Net
Equity Proceeds) and (ii) the 90th day following the receipt of
Net Equity Proceeds, or (y) such earlier date on which an Asset
Sale Offer shall expire.
"Attributable Indebtedness" means, in respect of a
Sale/Leaseback Transaction, as at the time of determination, the
present value (discounted at the interest rate borne, or to be
borne, as the case may be, by the Securities, compounded
annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such
lease has been extended).
"Authorized Representative" means any of the Chief
Executive Officer, President and Chief Operating Officer or any
Senior Vice President of the Company, or with respect to
financial matters only, the Senior Vice President and Director of
Corporate Development, Chief Financial Officer, Chief Operating
Officer or Treasurer of the Company, or any other person
expressly designated by the Board of Directors of the Company (or
the appropriate committee thereof) as an Authorized
Representative of the Company.
"Bankruptcy Law" means Title 11 of the U.S. Code or any
similar Federal, state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any Person,
the board of directors or other applicable governing body of
such Person or any committee of the board of directors or of such
other governing body of such Person duly authorized, with respect
to any particular matter, to exercise the power of the board of
directors or other applicable governing body of such Person.
"Board Resolution" means, with respect to any Person, a
copy of a resolution certified by the Secretary or an Assistant
Secretary of such Person, to have been duly adopted by the Board
of Directors of such Person and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Book-Entry Security" means a Security represented by a
Global Security and registered in the name of the nominee of the
Depository.
"Business Day" means any day that is not a Legal
Holiday.
"Capital Expenditures" means, with respect to the
Company and its Subsidiaries on a consolidated basis, for any
period the sum of (without duplication) (i) all expenditures
(whether paid in cash or accrued as liabilities) by the Company
or any of its Subsidiaries during such period for items that
would be classified as "property, plant or equipment" or
comparable items on the consolidated balance sheet of the Company
and its Subsidiaries, including, without limitation, all
transactional costs incurred in connection with such expenditures
provided the same have been capitalized, excluding, however, the
amount of any Capital Expenditures paid for with proceeds of
casualty insurance as evidenced in writing and submitted to the
Trustee together with any compliance certificate delivered
pursuant to the Credit Agreement, and (ii) with respect to any
Capital Lease entered into by the Company or any of its
Subsidiaries during such period, the capitalized amount of such
Capital Lease, all the foregoing in accordance with GAAP applied
on a Consistent Basis.
"Capital Lease" means all leases which have been or
should be capitalized in accordance with GAAP as in effect from
time to time, including Statement No. 13 of the Financial
Accounting Standards Board and any successor thereof.
"Capitalized Lease Obligation" means any obligation to
pay rent or other amounts under a lease of (or other agreement
conveying the right to use) any property (whether real, personal
or mixed) that is required to be classified and accounted for as
a Capital Lease and, for the purpose of this Indenture, the
amount of such obligation at any date shall be the capitalized
amount thereof at such date, determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any
and all shares, interests, participations, rights in, or other
equivalents (however designated and whether voting or non-voting)
of such Person's capital stock or any form of membership
interest, as applicable, whether outstanding on the Issue Date or
issued after the Issue Date, and any and all rights, warrants or
options exercisable or exchangeable for or convertible into such
capital stock.
"Cash Equivalents" means at any time (i) any evidence
of Indebtedness with a maturity of 180 days or less issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less
than $500,000,000; (iii) commercial paper with a maturity of 180
days or less issued by a corporation (except an Affiliate of the
Company) organized under the laws of any state of the United
States or the District of Columbia and rated at least A-1 by
Standard & Poor's Corporation or at least P-1 by Moody's
Investors Service, Inc.; (iv) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing
within one year from the date of acquisition; provided, however,
that the terms of such agreements comply with the guidelines set
forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by
the Comptroller of the Currency; and (v) money market funds
investing principally in the types of securities described in
clauses (i) and (ii) above.
"Certificate of Designations" means the Certificate of
Designations, Preferences and Rights of the Series F Preferred
Stock.
"Change of Control" means a change of control of the
Company of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, whether or not the Company is
then subject to such reporting requirement; provided, that,
without limitation, such a Change of Control shall be deemed to
have occurred if: (i) any "person" (as defined in Sections 13(d)
and 14(d) of the Exchange Act) or "group" (as such term is used
in Section 13(d)(3) of the Exchange Act) other than Permitted
Holders is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company's then
outstanding securities; provided, however, that no Change of
Control shall be deemed to have occurred if prior to the
acquisition of such thirty percent (30%) of the combined voting
power of the Company's then outstanding securities, a majority of
the Continuing Directors (as defined below) approves such
acquisition; or (ii) if there shall cease to be a majority of the
Board of Directors of the Company comprised of Continuing
Directors; or (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least eighty percent (80%)
of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation; or (iv) if any recapitalization
event occurs as a result of which the holders of voting
securities of the Company outstanding immediately prior thereto
do not continue to hold at least eighty percent (80%) of the
combined voting power of the voting securities of the Company
immediately after such recapitalization event; or (v) the
stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets; or (vi) a majority of the "named executive
officers" set forth in the Company's most recent Proxy Statement
or Annual Report on Form 10-K or Form 10-KSB, as the case may be
(excluding Edward E. Furash), cease to occupy such positions
within a period of 365 consecutive days. As used herein,
"Continuing Directors" means individuals who as of the Issue Date
constitute the Board of Directors of the Company and any new
director(s) whose election by the Board of Directors for the
Company or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved.
"Change of Control Date" has the meaning provided in
Section 4.16.
"Change of Control Offer" has the meaning provided in
Section 4.16.
"Change of Control Payment Date" has the meaning
provided in Section 4.16.
"Company" means the party named as such in this
Indenture until a successor replaces it pursuant to the terms and
conditions of this Indenture and thereafter means such successor.
"Company Order" means a written order or request signed
in the name of the Company by its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Consistent Basis" in reference to the application of
GAAP means the accounting principles observed in the period
referred to are comparable in all material respects to those
applied in the preparation of the audited financial statements of
the Company contained in the Company's Annual Report on Form 10-
KSB for the fiscal year ended December 31, 1997 filed with the
Commission.
"Consolidated EBITDA" means, with respect to the
Company and its Subsidiaries for any Four-Quarter Period (or
other period of Fiscal Quarters as provided in the definitions of
"Consolidated Fixed Charge Ratio" and "Consolidated Interest
Coverage Ratio") ending on the date of computation thereof, the
sum of, without duplication, (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) taxes on income, (iv)
amortization, and (v) depreciation, all determined on a
consolidated basis in accordance with GAAP applied on a
Consistent Basis; provided, however, that with respect to an
Acquisition that is accounted for as a "purchase", for the four
Four-Quarter Periods ending next following the date of such
Acquisition, Consolidated EBITDA shall include the results of
operations of the Person or assets so acquired, which amounts
shall be determined on a historical pro forma basis as if such
Acquisition had been consummated as a "pooling of interests";
provided, further, however, that with respect to disposition,
sale, conveyance, transfer, liquidation or cessation of business
of a Subsidiary of the Company or any division, operating unit or
other business unit of the Company during such measurement
period, Consolidated EBITDA shall exclude the results of
operations of the Subsidiary division, operating unit or other
business unit so disposed, sold, conveyed, transferred,
liquidated or the business of which has ceased.
"Consolidated Fixed Charge Ratio" means, with respect
to the Company and its Subsidiaries for the applicable period
described below ending on the date of computation thereof, the
ratio of (i) Consolidated EBITDA for such period less (without
duplication) Capital Expenditures for such period, to (ii)
Consolidated Fixed Charges for such period; such computation
shall be for (A) the Fiscal Quarter ending June 30, 1998, (B) the
two Fiscal Quarters ending September 30, 1998 and (C) the three
Fiscal Quarters ending December 31, 1998 and thereafter for each
Four-Quarter Period then ended; provided, however, that for
purposes of such computation for the periods ending on the dates
set forth below, the amount of any Earnouts paid during such
period shall be multiplied by the percentage shown opposite such
date:
Date Percentage
June 30, 1998 25%
September 30, 1998 50%
December 31, 1998 75%
"Consolidated Fixed Charges" means, with respect to the
Company and its Subsidiaries for any Four-Quarter Period (or
other period of Fiscal Quarters as provided in the definitions of
"Consolidated Fixed Charge Ratio") ending on the date of
computation thereof, the sum of, without duplication, (i)
Consolidated Interest Expense incurred during such period, (ii)
scheduled principal amounts of Consolidated Funded Indebtedness
(other than the principal amount of borrowings outstanding under
the Credit Agreement) paid during such period, (iii) Earnouts
paid in cash during such period, and (iv) all Restricted Payments
made during such period, all determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis.
"Consolidated Funded Indebtedness" means, with respect
to the Company and its Subsidiaries, at any time as of which the
amount thereof is to be determined, the sum of (i) Indebtedness
for Money Borrowed of the Company and its Subsidiaries at such
time and (ii) the face amount of all outstanding Letters of
Credit issued for the account of the Company or any of its
Subsidiaries and all obligations (to the extent not duplicative)
arising under such Letters of Credit, all determined on a
consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Interest Coverage Ratio" means, with
respect to the Company and its Subsidiaries for the applicable
period described below ending on the date of computation thereof,
the ratio of (i) Consolidated EBITDA for such period to (ii)
Consolidated Interest Expense for such period; such computation
shall be for (A) the Fiscal Quarter ending June 30, 1998, (B) the
two Fiscal Quarters ending September 30, 1998 and (C) the three
Fiscal Quarters ending December 31, 1998 and thereafter for each
Four-Quarter Period then ended.
"Consolidated Interest Expense" means, with respect to
any period of computation thereof, the gross interest expense of
the Company and its Subsidiaries, including without limitation
(i) the current amortized portion of debt discounts to the extent
included in gross interest expense, (ii) the current amortized
portion of all fees (including fees payable in respect of any
Hedging Obligation) payable in connection with the incurrence of
Indebtedness to the extent included in gross interest expense
(but not including any fees incurred in connection with the ING
Facility, the Credit Agreement and this Agreement or the
termination thereof), and (iii) the portion of any payments made
in connection with Capital Leases allocable to interest expense,
all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Funded
Indebtedness determined as at such date to (ii) Consolidated
EBITDA for the Four-Quarter Period ending on (or most recently
ended prior to) such date.
"Consolidated Net Income" means, for any period of
computation thereof, the gross revenues from operations of the
Company and its Subsidiaries (including payments received by the
Company and its Subsidiaries of (i) interest income, and (ii)
dividends and distributions made in the ordinary course of their
businesses by Persons in which investment is permitted pursuant
to this Indenture and the Credit Agreement and not related to an
extraordinary event), less all operating and non-operating
expenses of the Company and its Subsidiaries including taxes on
income, all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis; but excluding (for all
purposes other than compliance with Section 4.20) as income: (a)
net gains on the sale, conversion or other disposition of capital
assets, (b) net gains on the acquisition, retirement, sale or
other disposition of Capital Stock and other securities of the
Company or its Subsidiaries, (c) net gains on the collection of
proceeds of life insurance policies, (d) any write-up of any
asset, and (e) any other net gain or credit of an extraordinary
nature as determined in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Net Worth" means, as of any date on which
the amount thereof is to be determined, Consolidated
Shareholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and
retained earnings) all reserves (other than contingency reserves
not allocated to any particular purpose), including without
limitation reserves for depreciation, depletion, amortization,
obsolescence, deferred income taxes, insurance and inventory
valuation all as determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis.
"Consolidated Shareholders' Equity" means, as of any
date on which the amount thereof is to be determined, the sum of
the following in respect of the Company and its Subsidiaries
(determined on a consolidated basis and excluding any upward
adjustment after the Issue Date due to revaluation of assets):
(i) the amount of issued and outstanding share capital, plus (ii)
the amount of additional paid-in capital and retained earnings
(or, in the case of a deficit, minus the amount of such deficit),
plus (iii) the amount of any foreign currency translation
adjustment (if positive, or, if negative, minus the amount of
such translation adjustment), minus (iv) the amount of any
treasury stock all as determined in accordance with GAAP applied
on a Consistent Basis.
"Contingent Obligation" of any Person means all
contingent liabilities required (or which, upon the creation or
incurring thereof, would be required) to be included in the
financial statements (including footnotes) of such Person in
accordance with GAAP applied on a Consistent Basis, including
Statement No. 5 of the Financial Accounting Standards Board, all
Hedging Obligations and any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend
or other obligation of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, including
obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation or
any property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the
purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working
capital, net worth or other balance sheet condition or
any income statement condition of the primary obligor;
(3) to grant or convey any Lien, charge or other
encumbrance on any property or assets of such Person to
secure payment of such Indebtedness or other
obligation;
(4) to lease property or to purchase securities or other
property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to
make payment of such Indebtedness or other obligation;
or
(5) otherwise to assure the owner of the Indebtedness or
such obligation of the primary obligor against loss in
respect thereof.
; provided, however, in no event shall Earnouts be a Contingent
Obligation hereunder.
"Cost of Acquisition" means, with respect to any
Acquisition, as at the date of entering into any agreement
therefor, the sum of the following (without duplication): (i) the
value of the Capital Stock of the Company or any of its
Subsidiaries to be transferred in connection therewith (as
permitted under this Indenture), (ii) the amount of any cash and
fair market value of other Property (including the unpaid
principal amount of any debt instrument) given as consideration,
(iii) the amount (determined by using the face amount or the
amount payable at maturity, whichever is greater) of any
Indebtedness incurred, assumed or acquired by the Company or any
of its Subsidiaries in connection with such Acquisition, (iv) all
additional purchase price amounts in the form of Earnouts and
Contingent Obligations, (v) all amounts paid in respect of
covenants not to compete, consulting agreements that should be
recorded on financial statements of the Company and its
Subsidiaries in accordance with GAAP, and other affiliated
contracts in connection with such Acquisition, (vi) the aggregate
fair market value of all other consideration given by the Company
or any of its Subsidiaries in connection with such Acquisition,
and (vii) out-of-pocket transaction costs for the services and
expenses of attorneys, accountants and other advisors and
consultants incurred in effecting such transaction, and other
similar transaction costs so incurred and capitalized in
accordance with GAAP. For purposes of determining the Cost of
Acquisition for any transaction, (A) the Capital Stock of the
Company shall be valued (w) if the shares are listed or admitted
for trading on any national securities exchange or included in
The Nasdaq National Market or Nasdaq SmallCap Market, the last
reported sales price as reported on such exchange or Market; (x)
if the shares are not listed or admitted for trading on any
national securities exchange or included in The Nasdaq National
Market or Nasdaq SmallCap Market, the average of the last
reported closing bid and asked quotation for the shares as
reported on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or a similar service if
NASDAQ is not reporting such information; (y) if the shares are
not listed or admitted for trading on any national securities
exchange or included in The Nasdaq National Market or Nasdaq
SmallCap Market or quoted by NASDAQ or a similar service, the
average of the last reported bid and asked quotation for the
shares as quoted by a market maker in the shares (or if there is
more than one market maker, the bid and asked quotation shall be
obtained from two market makers and the average of the lowest bid
and highest asked quotation); or (z) if the Capital Stock is not
publicly traded, the fair market value as determined in good
faith by a committee composed of the members of the Board of
Directors of the Company and, if requested by the Trustee, or the
Minimum Required Holders (as defined below) determined to be a
reasonable valuation by an independent public accounting firm
with an established national reputation, (B) the Capital Stock of
any Subsidiary shall be valued as determined in good faith by a
committee composed of the members of the Board of Directors of
such Subsidiary and, if requested by the Trustee, or the Minimum
Required Holders determined to be a reasonable valuation by an
independent public accounting firm with an established national
reputation, and (C) with respect to any Acquisition accomplished
pursuant to the exercise of options or warrants or the exchange
or conversion of securities, the Cost of Acquisition shall
include both the cost of acquiring such option, warrant or
exchangeable or convertible security as well as the cost of
exercise, exchange or conversion.
"Credit Agreement" means the $75,000,000 Credit
Agreement, dated as of March 19, 1998, entered into between the
Company and NationsBank, National Association, as agent, and the
lenders party thereto, providing for working capital and other
financing, as the same may at any time be amended, amended and
restated, supplemented or otherwise modified, including any
refinancing, refunding, replacement or extension thereof
permitted hereunder which provides for working capital and other
financing, whether by the same or any other lender or group of
lenders.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy
Law.
"Default" means any event that is, or after notice or
the passage of time or both would be, an Event of Default.
"Default Amount" shall have the meaning set forth in
Section 6.02.
"Depository" means, with respect to the Securities
issuable or issued in one or more Book-Entry Securities, the
Person specified in Section 2.02 as the Depository with respect
to the Securities until the successor shall have been appointed
and becomes such pursuant to the applicable provisions of this
Indenture, and, thereafter, "Depository" shall mean or include
such successor.
"Disqualified Stock" means with respect to any Person,
any Capital Stock which, by its terms (or by the terms of any
security into which it is convertible or for which it is
exchangeable, in each case, at the option of the holder thereof),
or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise,
or is exchangeable for Indebtedness, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to
the Maturity Date.
"Domestic Subsidiary" means a Subsidiary which is
organized under the laws of one of the states or territories
comprising the United States of America.
"Earnouts" has the specific meaning therefor set forth
in each of the Acquisition Documents and collectively means all
such payments, a schedule of such Earnouts with respect to
Acquisitions consummated prior to the Issue Date is set forth on
Schedule 5.35 to the Securities Purchase Agreement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Event of Default" has the meaning provided in Section
6.01.
"Excess Proceeds" shall have the meaning set forth in
Section 4.17.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated by
the SEC thereunder.
"Fair Market Value" or "fair value" means, with respect
to any asset or property, the price which could be negotiated in
an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. With
respect to any Person, Fair Market Value shall be determined by
the Board of Directors of such Person (and with respect to the
Company or any of its Subsidiaries, a majority of the Independent
Directors of the Company) acting in good faith and shall be
evidenced by a Board Resolution thereof delivered to the Trustee;
provided, however, that the Board of Directors does not have to
make such determination with respect to the common stock of the
INCEPTA Group, plc.
"Financing" means the consummation of the sale by the
Company of the Securities and $20,000,000 of the Series F
Preferred Stock.
"Financing Documents" means the this Indenture, the
Certificate of Designations, the Stock Purchase Agreement, the
Registration Rights Agreement, the Guaranty Agreement and any
other document executed by or on behalf of the Company in
connection with the Financing.
"Fiscal Quarter" means a three month quarter of a
Fiscal Year and when followed by reference to a year, means the
first, second, third or fourth quarter of such Fiscal Year, as
indicated.
"Fiscal Year" means the twelve month fiscal period of
the Company and its Subsidiaries commencing on January 1 of each
calendar year and ending on December 31 of such calendar year.
"GAAP" means generally accepted accounting principles
in the United States of America as in effect as of the date
hereof and as such principles may be amended from time to time,
including, without limitation, those set forth in the opinions
and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or
in such other statements by such other entity as may be approved
by a significant segment of the accounting profession of the
United States, which are applicable as of the date of
determination.
"GarMark" means GarMark Partners, L.P.
"Global Security" means a Security evidencing all or a
part of the Securities to be issued as Book-Entry Securities,
issued to the Depository in accordance with Section 2.02 and
bearing the legend prescribed in Exhibit B to this Indenture.
"Guarantor" means each Domestic Subsidiary of the
Company now or hereinafter existing which has executed the
Guaranty Agreement.
"Guaranty Agreement" means the Guaranty Agreement,
dated as of March 19, 1998, by and among each of the Company's
Domestic Subsidiaries and the Trustee, for the benefit of the
Holders, substantially in the form on Exhibit F to the Securities
Purchase Agreement, as amended, modified or supplemented from
time to time in accordance with the terms thereof, together with
any exhibits, schedules or attachments thereto.
"HCRI Preferred Stock" means, collectively (a) the
Company's Series E Convertible Preferred Stock containing such
terms as are set forth in the Company's Certification of
Designation filed with the Secretary of State of Delaware on
October 25, 1996, no shares of which are issued and outstanding
on the Closing Date; and (b) the Series F Preferred Stock.
"Hedging Obligations" means any and all obligations of
the Company or any of its Subsidiaries, whether absolute or
contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any
and all agreements, devices or arrangements designed to protect
at least one of the parties thereto from the fluctuations of
interest rates, exchange rates (including without limitation
commodity exchange rates) or forward rates applicable to such
party's assets, liabilities or exchange transactions, including,
but not limited to, U.S. dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange
agreements, commodity exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest
rate options, puts, warrants and those commonly known as interest
rate "swap" agreements; and (ii) any and all cancellations,
buybacks, reversals, terminations or assignments of any of the
foregoing.
"Holder" or "Securityholder" means the person in whose
name a Security is registered on the Registrar's books.
"IAI Global Security" means a permanent global security
in a registered form representing the aggregate principal amount
of Securities sold to Institutional Accredited Investors.
"ING Facility" means the credit facility pursuant to
the Fourth Amended and Restated Credit Agreement dated as of
September 15, 1997, by and among the Company, ING (U.S.) Capital
Corporation and the various lenders named therein, as amended,
modified or supplemented from time to time in accordance with the
terms thereof, together with any exhibits, schedules or
attachments thereto.
"Indebtedness" means, with respect to any person,
without duplication, (i) any liability, contingent or otherwise,
of such Person (a) for borrowed money (whether or not the
recourse of the lender is to the whole of the Property of such
Person or only to a portion thereof), (b) evidenced by bonds,
notes, debentures or similar instruments or representing the
balance deferred and unpaid of any part of the purchase price of
Property or other assets (including Investments) or for the cost
of Property or other assets constructed or of improvements
thereto (including any obligation under or in connection with any
letter of credit related thereto), (c) under or in connection
with any letter of credit issued for the account of such Person,
and all drafts drawn, reimbursement obligations or demands for
payment thereunder, or (d) for the payment of money relating to
any Capitalized Lease Obligations; (ii) any liability of others
of the kind described in the preceding clause (i) which the
Person has guaranteed or which is otherwise its legal liability;
(iii) any liability, contingent or otherwise, secured by any Lien
in respect of Property of such Person, whether or not the
obligations secured thereby shall have been assumed by or shall
otherwise be such Person's legal liability, provided, that,
solely in the case of any Indebtedness of the type described in
this clause (iii), recourse for the payment of which is limited
to such Property, the amount of such Indebtedness shall be deemed
to be the lesser of the fair market value of such Property or the
amount of the obligation so secured; and (iv) any and all
deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability of the kind
described in any of the preceding clauses (i), (ii) and (iii).
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations
as described above and the maximum liability of such Person in
respect of any such contingent obligations at such date.
"Indebtedness for Money Borrowed" means with respect to
any Person, without duplication, all indebtedness in respect of
money borrowed of such Person, including without limitation all
Capital Leases and the deferred purchase price of any property or
asset, evidenced by a promissory note, bond, debenture or similar
written obligations for the payment of money (including
conditional sales or similar title retention agreements), other
than trade payables incurred in the ordinary course of business.
"Indenture" means this Indenture, as amended or
supplemented from time to time in accordance with the terms
hereof.
"Independent Director" means any director that (i) is
not and has not been an officer or employee of the Company or any
of its Affiliates, (ii) does not have any relationship that, in
the opinion of the Board of Directors of the Company (exclusive
of any such Independent Director), would interfere with his/her
exercise of independent judgment in carrying out the
responsibilities of director and (iii) with respect to any
transaction or series of related transactions, does not have any
material direct or indirect financial interest in or with respect
to such transaction or series of related transactions.
"Initial Holder" means the Holders on the Issue Date
and their respective Affiliates.
"Institutional Accredited Investor" means an
institution that is an "accredited investor" as that term is
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Securities.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended to the date hereof and from time to time
hereafter.
"Investment" means, with respect to any Person, any
direct or indirect advance, loan or other extension of credit to
(including any guarantee of a loan or other extension of credit)
or investment in, capital contribution to (by means of any
transfer of cash or other Property to others or any payment for
Property for the account or use of others or otherwise including,
without limitation, amounts paid in advance on account of the
purchase price of merchandise or equipment to be delivered within
one year of the date of advance), or purchase of Capital Stock,
bonds, notes, debentures or other securities issued by, any other
Person.
"Issue Date" means the date of first issuance of the
Securities under this Indenture.
"Legal Holiday" means, with respect to a particular
place of payment, a Saturday, a Sunday or a day on which banking
institutions in New York, New York or at such place of payment
are authorized or obligated by law, executive order or
governmental decree to be closed.
"Lien" means any mortgage, lien, pledge, charge,
security interest, encumbrance, claim, hypothecation, assignment
for security, deposit arrangement or preference or other security
agreement of any kind or nature whatsoever, whether or not filed,
recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement and any
lease deemed to constitute a security interest). For purposes
hereof, a Person shall be deemed to own subject to a Lien any
Property which it has acquired or holds subject to the interest
of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement.
"Material Subsidiary" means, with respect to any
person, any Subsidiary of such person which would be a
"significant subsidiary" pursuant to Article 1-02 of Regulation S-
X.
"Maturity Date" means March 19, 2006.
"Minimum Required Holders" means the Initial Holders of
at least thirty percent (30%) in aggregate principal amount of
the outstanding Securities; provided that in the event that each
Initial Holder, other than GarMark, shall own less than 100% in
the aggregate principal of the outstanding Securities owned by
such Initial Holder on the Issue Date, then such term shall mean
the Holder or Holders of at least thirty-five percent (35%) of
the aggregate principal amount of the outstanding Securities.
"Moore" means Remington Investment Strategies, L.P. and
Moore Global Investments, Ltd. or any of their Affiliates.
"Multiemployer Plan" means a plan described in Section
3(37) of ERISA.
"Net Cash Proceeds" means, with respect to any Asset
Sale the proceeds thereof in the form of cash or Cash
Equivalents, including payments in respect of deferred payment
obligations when received in the form of cash or Cash Equivalents
net of (i) brokerage commissions and other reasonable fees and
expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale; (ii) provisions for all
taxes payable within one year as a result of such Asset Sale;
(iii) payments made to retire Indebtedness secured by the assets
subject to such Asset Sale to the extent required pursuant to the
terms of such Indebtedness; (iv) appropriate amounts to be
provided by the Company or any of its Subsidiaries, as the case
may be, as a reserve, required in accordance with GAAP against
any liabilities associated with such Asset Sale and retained by
the Company or any of its Subsidiaries, as the case may be, after
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, provided, however,
that the amount of any such reserve at such time that such amount
is no longer required to be provided as a reserve in accordance
with GAAP and is not applied to the liability for which such
reserve was established shall be deemed Net Cash Proceeds; and
(v) any amount required to be paid to any Person owning a
beneficial interest in the Property sold, conveyed, transferred,
leased or otherwise disposed of in an amount proportionate to
such beneficial interest.
"Net Equity Proceeds" means, with respect to an Asset
Sale, the Net Proceeds therefrom relating to the sale of Capital
Stock by the Company or any Subsidiary thereof.
"Net Proceeds" means, with respect to any Person (a) in
the case of any sale of Capital Stock by such Person or common
equity contribution to such Person, the aggregate net proceeds
received by such Person after payment of expenses, commissions
and the like, if any, incurred in connection therewith, (b) in
the case of the issuance of any Indebtedness by such Person, the
aggregate net proceeds received by such Person, after payment of
expenses, commissions and the like incurred in connection
therewith, or (c) in the case of any exchange, exercise,
conversion or surrender of outstanding securities of any kind of
the Company for or into shares of Capital Stock of the Company
which is not Disqualified Stock, the net proceeds received by the
Company upon such exchange, exercise, conversion or surrender
(plus, with respect to the issuance of any such securities after
the Issue Date, the net proceeds received by such Person upon the
issuance of such securities), less any and all payments made to
the holders, e.g., on account of fractional shares, and less all
expenses, commissions and the like incurred by the Company in
connection therewith.
"Non-U.S. Person" means a person who is not a U.S.
person as defined in Regulation S.
"Obligations" means all obligations for principal,
premium, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the
Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, the Controller, the
Secretary or the Assistant Secretary of such Person.
"Officers' Certificate" means, with respect to any
Person, a certificate signed by two Officers (one of whom shall
be the Chief Financial Officer) or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of such Person and
otherwise complying with the requirements of Sections 11.04 and
11.05.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee complying with the
requirements of Sections 11.04 and 11.05. Unless otherwise
required by the TIA, the legal counsel may be an employee of or
counsel to the Company.
"Paying Agent" has the meaning provided in Section
2.03.
"Permitted Acquisition" means each Acquisition effected
with the consent and approval of the Board of Directors of the
Person being acquired, and with the duly obtained approval of
such shareholders or other holders of equity or other ownership
interest as such Person may be required to obtain, so long as
either (x) the prior written consent of the Required Holders has
been obtained or (y) (i) immediately prior to and immediately
after the consummation of such Acquisition, no Default or Event
of Default has occurred and is continuing, (ii) substantially all
of the sales and operating profits generated by such Person (or
assets) so acquired or invested are derived from a line or lines
of business that are part of, or complimentary to, the executive
search, temporary staffing, pay-rolling and strategic advisory
services as then conducted by the Company and its Subsidiaries,
(iii) (x) for Acquisitions with respect to which the Cost of
Acquisition is less than $7,500,000, a consolidated balance sheet
and statements of income, cash flow and stockholders' equity of
the Person being acquired, or (y) for Acquisitions with respect
to which the Cost of Acquisition is equal to or greater than
$7,500,000, an audited consolidated balance sheet and audited
statements of income, cash flow and stockholders' equity of the
Person being acquired, in each case as of its most recent fiscal
year end are delivered to the Trustee not less than five (5)
Business Days prior to the consummation of such Acquisition, (iv)
pro forma consolidated historical financial statements of the
Company and its Subsidiaries as of the end of the most recent
Fiscal Quarter for the four (4) Fiscal Quarters most recently
ended giving effect to such Acquisition, are delivered to the
Trustee not less than five (5) Business Days prior to the
consummation of such Acquisition, together with a certificate of
an Authorized Representative demonstrating pro forma compliance
with Sections 4.20 and 4.23 hereof after giving effect to such
Acquisition, (v) in the event the Person so acquired is not a
Wholly-Owned Subsidiary, (A) the Company is permitted to make
such acquisition pursuant to Section 4.14 and the Company's
strategic plan includes additional permitted Investment in such
Person sufficient for it to become a Wholly-Owned Subsidiary
within nine (9) months of the date of the initial Investment in
such Person, and (B) the Acquisition complies with the provisions
of Section 4.14(iii), (vi) any Indebtedness included in the Cost
of Acquisition otherwise qualifying as a Permitted Acquisition
hereunder shall be permitted to be incurred pursuant to Section
4.10 hereof and (vii) the pro forma Consolidated Leverage Ratio
giving effect to such Acquisition as certified pursuant to (iv)
above shall not exceed 3.0 to 1.00.
"Permitted Holders" means the initial purchasers of the
Securities and their respective Affiliates.
"Permitted Investments" means (i) obligations of the
United States government due within one year; (ii) certificates
of deposit or Eurodollar deposits due within one year with a
financial institution that is a member of the Federal Reserve
System having combined capital and surplus and undivided profits
of at least $500,000,000 or more; (iii) commercial paper rated at
least A-1 by Standard & Poor's Corporation or at least P-1 by
Moody's Investors Service, Inc.; (iv) debt of any state or
political subdivision that is rated among the two highest rating
categories obtainable from either Standard & Poor's Corporation
or Moody's Investors Service, Inc. and is due within one year;
(v) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or
unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one
year from the date of acquisition; provided, however, that the
terms of such agreements comply with the guidelines set forth in
the Federal Financial Agreements of Depository Institutions with
Securities Dealers and Others, as adopted by the Comptroller of
the Currency; and (vi) Investments represented by Hedging
Obligations permitted to be made pursuant to Section 4.24.
"Permitted Liens" means, with respect to any Person,
any Lien arising by reason of (a) any judgment, decree or order
of any court, so long as such Lien is being contested in good
faith and is adequately bonded, and any appropriate legal
proceedings which may have been duly initiated for the review of
such judgment, decree or order shall not have been finally
terminated or the period within which such proceedings may be
initiated shall not have expired; (b) Liens arising by operation
of law for taxes, assessments, governmental charges or claims not
yet delinquent or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted and if a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been
made therefore and enforcement is stayed and which Liens are not
yet enforceable against other creditors; (c) security for payment
of workers' compensation or other insurance or social security
legislation; (d) security for the performance of tenders,
contracts (other than contracts for the payment of money) or
leases (including any Capitalized Lease Obligations, provided
that such Capitalized Lease Obligations are permitted to be
incurred pursuant to the terms of Section 4.10 hereof) incurred
in the ordinary course of business; (e) deposits to secure public
or statutory obligations, or in lieu of surety, performance or
appeal bonds, entered into in the ordinary course of business;
(f) Liens arising by operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, laborers,
employees or suppliers, incurred in the ordinary course of
business for sums which are not yet delinquent or are being
contested in good faith by negotiations or by appropriate
proceedings which suspend the collection thereof and if a reserve
or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and which
Liens are not yet enforceable against other creditors; (g)
easements, rights-of-way, zoning and similar covenants and
restrictions and other similar encumbrances or title defects
which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the
Property subject thereto or materially interfere with the
ordinary conduct of the business of the Company or any of its
Subsidiaries; (h) Liens arising in the ordinary course of
business in favor of custom and revenue authorities to secure
payment of custom duties; (i) Liens existing as of the Issue
Date; (j) Liens securing the Indebtedness of the Company and its
Subsidiaries pursuant to Section 4.10(b) hereof; and (k) Liens in
favor of the lenders party to the Credit Agreement securing
Indebtedness of the Company pursuant to Section 4.10(e) hereof.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or any other entity or
organization including a government or political subdivision or
any agency or instrumentality thereof.
"Physical Securities" has the meaning set forth in
Section 2.02.
"Plan" means an employment benefit plan within the
meaning of Section 3(3) of ERISA.
"Preferred Stock" means, with respect to any Person,
any and all shares, interests, participations or other
equivalents (however designated) of such Person's preferred or
preference stock, whether now outstanding or issued after the
Issue Date, and including, without limitation, all classes and
series of preferred or preference stock of such Person.
"Principal" of any Indebtedness (including the
Securities) means the principal of such Indebtedness plus the
premium, if any, on such Indebtedness.
"Private Placement Legend" means the legend initially
set forth on the Securities as set forth in Exhibit A.
"Property" or "property" means any assets or property
of any kind or nature whatsoever, real, personal or mixed
(including fixtures), whether tangible or intangible.
"Qualified Institutional Buyer" or "QIB" shall have the
meaning specified in Rule 144A under the Securities Act.
"Record Date" means the Record Dates specified in the
Securities; provided that if any such date is a Legal Holiday,
the Record Date shall be the first day immediately preceding such
specified day that is not a Legal Holiday.
"Redemption Date" when used with respect to any
Security to be redeemed, means the date fixed for such redemption
pursuant to this Indenture and the Securities.
"Redemption Price" when used with respect to any
Security to be redeemed, means the price fixed for such
redemption pursuant to this Indenture and the Securities;
provided that the Redemption Price prior to the first anniversary
of the Issue Date is 105% of the Principal of the Securities to
be redeemed.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration
Rights Agreement by and among the Company and the investors named
therein, dated as of March 19, 1998, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities
Act.
"Regulation S Global Security" means a permanent global
security in registered form representing the aggregate principal
amount of Securities sold in reliance on Regulation S.
"Representative" means the trustee, agent or
representative in respect of any Senior Indebtedness and shall
mean NationsBank, National Association in such capacity, until
such time as it is no longer the representative pursuant to the
terms of the Credit Agreement; provided, however, that if, and
for so long as, any Senior Indebtedness lacks such a
representative, then the Representative for such Senior
Indebtedness shall at all times constitute the holders of a
majority in outstanding principal amount of such Senior
Indebtedness in respect of any Senior Indebtedness.
"Required Holders" means (i) the Initial Holders
holding at least (A) seventy percent (70%) of the aggregate
principal amount of the outstanding Securities or (B) two thirds
of the aggregate principal amount of the outstanding Securities
on or after the date upon which Moore owns less than one hundred
percent (100%) of the Securities acquired by it on the Issue
Date, or (ii) in the event that each of the Initial Holders,
other than GarMark, shall own less than fifty percent (50%) of
the aggregate principal amount of the outstanding Securities
owned by such Initial Holder on the Issue Date, then such term
shall mean the Holders of at least a majority of the aggregate
principal amount of outstanding Securities.
"Restricted Payment" means any of the following: (i)
the declaration or payment of any dividend or any other
distribution on Capital Stock of the Company or any of its
Subsidiaries or any payment made to the direct or indirect
holders (in their capacities as such) of Capital Stock of the
Company or any of its Subsidiaries (other than (x) dividends or
distributions payable solely in Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to
purchase Capital Stock (other than Disqualified Stock), (y) in
the case of Subsidiaries of the Company, dividends or
distributions payable to the Company or to a Wholly-Owned
Subsidiary of the Company and (z) the redemption, repurchase or
other retirement of the Warrants for an aggregate consideration
not to exceed $3,500,000), (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the
Company or any of its Subsidiaries, (iii) the making of any
principal payment on, or the purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value, prior to
any scheduled maturity, scheduled repayment or scheduled sinking
fund payment, of any Indebtedness of the Company which is
subordinated in right of payment to the Securities (other than
Indebtedness of the Company acquired in anticipation of
satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of
acquisition), and (iv) the making of any Investment other than
pursuant to clause (i), (ii), (iv) or (v) of Section 4.14 hereof.
"Restricted Security" has the meaning set forth in Rule
l44(a)(3) under the Securities Act.
"Sale/Leaseback Transaction" means any direct or
indirect arrangement with any person providing for the leasing to
the Company or any of its Subsidiaries of any real or tangible
personal property (except for leases between or among the Company
and any of its Subsidiaries), which property or similar property
has been or is to be sold or transferred by the Company or such
Subsidiary to such person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
"Securities" means, the Company's Increasing Rate
Senior Subordinated Notes due 2006, as amended or supplemented
from time to time in accordance with the terms hereof, that are
issued pursuant to the terms and conditions of this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
"Senior Debt Other Default: has the meaning provided in
Section 10.02 hereof.
"Senior Debt Payment Default" has the meaning provided
in Section 10.02 hereof.
"Senior Indebtedness" means all Indebtedness and other
amounts owing under the Credit Agreement or any refinancing,
refunding, replacement or extension thereof.
"Series F Preferred Stock" means the Series F
Convertible Preferred Stock, par value $.0001, of the Company.
"Securities Purchase Agreement" means the Securities
Purchase Agreement by and among the Company and the investors
named therein, dated as of March 19, 1998, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Subsidiary" means with respect to any Person (i) a
corporation a majority of whose Capital Stock with voting power,
under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person or (ii) any other Person (other than
a corporation) in which such Person, one or more Subsidiaries of
such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, individually or with another
Person, at the date of determination thereof, has (a) at least a
majority ownership interest or (b) the power to elect or direct
the election of a majority of the directors or other governing
body of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
SS 77aaa-77bbbb), as amended, as in effect on the date of the
execution of this Indenture.
"Trustee" means the party named as such in this
Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.
"Trust Officer" means any officer of the Trustee
assigned by the Trustee to administer its corporate trust
matters.
"U.S. Government Obligations" means direct non-callable
obligations of, or non-callable obligations guaranteed by, the
United States of America for the payment of which obligation or
guarantee the full faith and credit of the United States of
America is pledged.
"U.S. Legal Tender" means such coin or currency of the
United States of America as at the time of payment shall be legal
tender for the payment of public and private debts.
"voting power" means with respect to any Person, the
power under ordinary circumstances, pursuant to the ownership of
shares of any class or classes of Capital Stock, to elect at
least a majority of the board of directors, managers or trustees
of such Person (irrespective of whether or not, at the time,
stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
"Warrants" means the Series E Warrants issued by the
Company pursuant to that certain Warrant Purchase Agreement dated
as of May 31, 1996, as hereafter amended.
"Wholly-Owned Subsidiary" means with respect to any
Person any Subsidiary of such person, 100% of the Capital Stock
of which (other than shares of Capital Stock representing any
director's qualifying shares or investments by foreign nationals
mandated by applicable law) is owned by such Person, by a Wholly-
Owned Subsidiary of such Person or by such Person and one or more
Wholly-Owned Subsidiaries of such Person.
SECTION I.2 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the
TIA, such provision is incorporated by reference in, and made a
part of, this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a
Security holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Company
or any other obligor on the Securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have the
meanings assigned to them therein.
SECTION I.3 Rules of Construction.
(a) 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
words in the plural include the singular;
(v) provisions apply to successive events and
transactions;
(vi) the words "include" and "including" shall be
deemed to mean "include, without limitation," and
"including, without limitation";
(vii) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(viii) references to Sections or Articles means
references to such Section or Article in this Indenture,
unless stated otherwise; and
(ix) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by the
SEC from time to time.
ARTICLE II.
THE SECURITIES
SECTION II.1 Form and Dating.
The Securities and the Trustee's certificate of
authentication with respect thereto shall be substantially in the
form of Exhibit A hereto, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock
exchange rules, usage or agreement to which the Company is
subject, including without limitation the legends set forth in
Exhibits A and B hereto. The Company and the Trustee shall
approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of
its authentication, shall bear interest from the Issue Date and
shall be payable on the Interest Payment Dates and the Maturity
Date.
The terms and provisions contained in the Securities
shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound
thereby.
SECTION II.2 Execution and Authentication.
One Officer shall sign (who shall have been duly
authorized by all requisite corporate actions) the Securities for
the Company by manual or facsimile signature. If an Officer
whose signature is on a Security was an Officer at the time of
such execution but no longer holds that office at the time the
Trustee authenticates the Security, the Security shall
nevertheless be valid. A Security shall not be valid until an
authorized signatory of the Trustee manually signs the
certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate Securities for original
issue up to an aggregate principal amount of Ten Million dollars
($10,000,000) upon a written order of the Company in the form of
an Officers' Certificate to a Trust Officer directing the Trustee
to authenticate the Securities and certifying that all conditions
precedent to the issuance of the Securities contained herein have
been complied with. Upon the written order of the Company in the
form of an Officers' Certificate, the Trustee shall authenticate
Securities in substitution of Securities issued on the Issue Date
to reflect any name change of the Company. The aggregate
principal amount of Securities outstanding at any time may not
exceed Ten Million dollars ($10,000,000) except as provided in
Section 2.07 hereof.
The Principal and interest on Book-Entry Securities
shall be payable to the Depository or its nominee, as the case
may be, as the sole registered owner and the sole holder of the
Book-Entry Securities represented thereby. The Principal of and
interest on Securities in certificated form ("Physical
Securities") shall be payable at the office of the Paying Agent.
The Trustee may appoint an authenticating agent
reasonably acceptable to the Company to authenticate Securities.
Unless otherwise provided in the appointment, an authenticating
agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent
has the same rights as an Agent to deal with the Company and
Affiliates of the Company.
The Securities shall be issuable only in registered
form without coupons in denominations of $100,000 and any
integral multiple of $1,000 in excess thereof.
If the Securities are to be issued in the form of one
or more Global Securities, then the Company shall execute and the
Trustee shall authenticate and deliver one or more Global
Securities that (i) shall represent and shall be in minimum
denominations of $1,000, (ii) shall be registered in the name of
the Depository for such Global Security or Securities or the
nominee of such Depository, (iii) shall be delivered to the
Trustee as custodian for such Depository or pursuant to such
Depository's instructions, and (iv) shall bear the legend set
forth in Exhibit B.
SECTION II.3 Registrar and Paying Agent.
The Company shall maintain an office or agency in the
Borough of Manhattan, The City of New York, where (a) Securities
may be presented or surrendered for registration of transfer or
for exchange (the "Registrar"), (b) Securities may be presented
or surrendered for payment (the "Paying Agent"), and (c) notices
and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Company may also from time
to time designate one or more other offices or agencies where the
Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations
provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of New
York, for such purposes. Neither the Company nor any Affiliate
of the Company shall act as Paying Agent. The Registrar shall
keep a register of the Securities and of their transfer and
exchange. The Company, upon notice to the Trustee, may appoint
one or more co-Registrars and one or more additional paying
agents reasonably acceptable to the Trustee. The term "Paying
Agent" includes any additional paying agent. The Company
initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices or demands in connection with the
Securities and this Indenture until such time as the Trustee has
resigned or a successor has been appointed. Securities, notices
and demands may be delivered to the Trustee at 61 Broadway, 15th
Floor, New York, New York 10006, Attn: Corporate Trust
Department.
The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which
agreement shall incorporate the provisions of the TIA. The
agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall promptly notify the
Trustee of the name and address of any such Agent. If the
Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.07 hereof.
SECTION II.4 Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than
the Trustee to agree in writing that each Paying Agent shall hold
in trust for the benefit of the Holders or the Trustee all assets
held by the Paying Agent for the payment of Principal of, or
interest on, the Securities (whether such assets have been
distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee of any Default by the
Company (or any other obligor on the Securities) in making any
such payment. The Trustee may at any time during the continuance
of any Default by the Company in making any such payment, upon
written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account
for any assets distributed. The Company at any time may require
a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed. Upon distribution to the
Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent shall have no
further liability for such assets.
SECTION II.5 Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of the Holders and shall otherwise comply
with TIA 312(a). If the Trustee is not the Registrar, the
Company shall furnish to the Trustee five (5) days before each
Record Date and at such other times as the Trustee may request in
writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of the Holders,
which list may be conclusively relied upon by the Trustee, and
the Company shall otherwise comply with TIA 312(a).
SECTION II.6 Transfer and Exchange.
When Securities in certificated form are presented to
the Registrar or a co-Registrar with a request from the Holder
thereof to register the transfer of such Securities or to
exchange such Securities for an equal principal amount of
Securities of other authorized denominations, the Registrar or co-
Registrar, as the case may be, shall register the transfer or
make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Securities
surrendered for registration of transfer or exchange shall be
duly endorsed or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar, or co-
Registrar, as the case may be, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company
shall execute by manual or facsimile signature and issue, and the
Trustee shall authenticate new Securities evidencing such
transfer or exchange at the Registrar's or co-Registrar's
request, as the case may be. No service charge shall be made for
any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental
charge payable upon exchanges or transfers pursuant to Section
2.02, 2.07, 2.10, 3.06, 4.16, 4.17 or 9.05). The Registrar or co-
Registrar shall not be required to register the transfer of or
exchange of any Security (i) during a period beginning at the
opening of business fifteen (15) days before the mailing of a
notice of redemption of Securities and ending at the close of
business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article III, except
the unredeemed portion of any Security being redeemed in part.
Notwithstanding any other provision of this Section
2.06, a Global Security representing Book-Entry Securities may
not be transferred in whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor depository or a
nominee of such successor depository.
Notwithstanding the foregoing, no Global Security shall
be registered for transfer or exchange, or authenticated and
delivered, whether pursuant to this Section 2.06, Section 2.07,
2.10 or 3.06 or otherwise, in the name of a person other than the
Depository for such Global Security or its nominee until (i) the
Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time
the Depository ceases to be a clearing agency registered under
the Exchange Act, and a successor depository is not appointed by
the Company within thirty (30) days, (ii) the Company executes
and delivers to the Trustee a Company Order that all such Global
Securities shall be exchangeable or (iii) there shall have
occurred and be continuing an Event of Default.
Except as provided above, any Security authenticated
and delivered upon registration of transfer or, or in exchange
for, or in lieu of, any Global Security, whether pursuant to this
Section 2.06, Section 2.07, 2.10 or 3.06 or otherwise, shall also
be a Global Security and bear the legend specified in Exhibit B.
SECTION II.7 Replacement Securities.
If a mutilated Security is surrendered to the Trustee
or the Registrar or if the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft
of any Security, the Company shall issue and the Trustee, upon
receipt of a Company Order, shall authenticate a replacement
Security if the Trustee's requirements are met. If required by
the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee or
any Agent from any loss which any of them may suffer if a
Security is replaced. The Company and the Trustee may charge
such Holder for their respective reasonable, out-of-pocket
expenses in replacing a Security, including reasonable fees and
expenses of counsel. Every replacement Security shall constitute
an additional obligation of the Company and shall be entitled to
all benefits of this Indenture equally and proportionately with
all other Securities duly issued hereunder.
SECTION II.8 Outstanding Securities.
Securities outstanding at any time are all the
Securities that have been authenticated by the Trustee except
those canceled by it, those delivered to it for cancellation and
those described in this Section as not outstanding. Except as
set forth in Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds
the Security.
If a Security is replaced pursuant to Section 2.07
(other than a mutilated Security surrendered for replacement), it
ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant
to Section 2.07.
If the principal amount of any Security is considered
paid under Section 4.01 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
If on a Redemption Date or the Maturity Date the Paying
Agent holds U.S. Legal Tender sufficient to pay all of the
Principal and interest due on the Securities payable on that date
and is not prohibited from paying such Principal and interest due
on such date, then on and after such date such Securities cease
to be outstanding and interest on them ceases to accrue.
SECTION II.9 Treasury Securities.
In determining whether the Holders of the required
principal amount of Securities have concurred in any declaration
of acceleration or notice of default or direction, waiver or
consent or any amendment, modification or other change to this
Indenture, the Securities owned by the Company or an Affiliate of
the Company shall be disregarded as though they were not
outstanding, except that, for the purposes of determining whether
the Trustee shall be protected in relying on any such direction,
waiver or consent, only Securities that the Trustee knows are so
owned shall be disregarded.
SECTION II.10 Temporary Securities.
Until definitive Securities are prepared and ready for
delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities upon receipt of a written order
of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary
Securities to be authenticated and the date on which the
temporary Securities are to be authenticated. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall
authenticate, upon receipt of a written order of the Company
pursuant to Section 2.02, definitive Securities in exchange for
temporary Securities. Until such exchange, Holders of temporary
Securities shall be entitled to the same rights, benefits and
privileges as definitive Securities.
SECTION II.11 Cancellation.
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying
Agent (other than the Company or a Subsidiary), and no one else,
shall cancel and, pursuant to a Company Order, shall dispose of
all Securities surrendered for registration of transfer,
exchange, payment, replacement or cancellation and certification
of their destruction (subject to the record retention
requirements of the Exchange Act) shall be delivered to the
Company unless, by a Company order, the Company shall direct that
canceled Securities be returned to it. Subject to Section 2.07,
the Company may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation.
If the Company shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant
to this Section 2.11.
SECTION II.12 Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall, unless the Trustee fixes another record
date pursuant to Section 6.10, pay the defaulted interest, plus
(to the extent lawful) any interest payable on the defaulted
interest to the persons who are Holders on a subsequent special
record date, which date shall be a Business Day at least five (5)
Business Days prior to the payment date, in each case at the rate
provided in the Securities and in Section 4.01 hereof. The
Company shall fix or cause to be fixed such special record date
and payment date in a manner reasonably satisfactory to the
Trustee. At least fifteen (15) days before the subsequent
special record date, the Company shall mail or cause to be mailed
to each Holder, with a copy to the Trustee, a notice that states
the subsequent special record date, the payment date and the
amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid. The Company may also pay
defaulted interest in any other lawful manner.
SECTION II.13 Deposit of Monies.
On or before 10:00 a.m. on each Interest Payment Date
and the Maturity Date, as the case may be, the Company shall
deposit or cause to be deposited with the Paying Agent, in
immediately available funds, U.S. Legal Tender sufficient to make
cash payments, if any, due on such Interest Payment Date or the
Maturity Date, as the case may be, in a timely manner that
permits the Trustee to remit payment to the Holders on such
Interest Payment Date or the Maturity Date, as the case may be.
SECTION II.14 CUSIP Number.
The Company in issuing the Securities may use one or
more CUSIP numbers, and if so, the Trustee shall use the CUSIP
numbers in notices of redemption or exchange as a convenience to
Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the
CUSIP number printed in the notice or on the Securities, and that
reliance may be placed only on the other identification numbers
printed on the Securities.
SECTION II.15 Restrictive Legends.
Each Global Security and Physical Security that
constitutes a Restricted Security shall bear the Private
Placement Legend on the face thereof until after the second
anniversary of the later of the Issue Date and the last date on
which the Company or any Affiliate of the Company was the owner
of such Security (or any predecessor security) (or such shorter
period of time as permitted by Rule 144(k) under the Securities
Act or any successor provision thereunder) (or such longer period
of time as may be required under the Securities Act or applicable
state securities laws in the opinion of counsel for the Company,
unless otherwise agreed by the Company and the Holder thereof).
Each Global Security shall also bear the legend as set
forth in Exhibit B.
SECTION II.16 Book Entry Provisions for Global Security.
(a) Members of, or participants in, the Depository
("Agent Members") shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the
Depository, or the Trustee as its custodian, or under the Global
Securities, and the Depository may be treated by the Company, the
Trustee and any Agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any Agent of the Company or
the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the
rights of a Holder of any Security.
(b) Transfers of a Global Security shall be limited to
transfers in whole, but not in part, to the Depository, its
successors or their respective nominees. Interests of beneficial
owners in a Global Security may be transferred or exchanged for
Physical Securities in accordance with the rules and procedures
of the Depository and the provisions of Section 2.17. In
addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a
Global Security if (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository for the
Global Securities and a successor depositary is not appointed by
the Company within ninety (90) days of such notice or (ii) an
Event of Default has occurred and is continuing and the Registrar
has received a written request from the Depository to issue
Physical Securities.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in a Global Security to
beneficial owners pursuant to paragraph (b) of this Section 2.16,
the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease
in the principal amount of such Global Securities in an amount
equal to the principal amount of the beneficial interest in the
Global Security to be transferred, and the Company shall execute
and the Trustee shall authenticate and deliver, one or more
Physical Securities of like tenor and amount.
(d) In connection with the transfer of an entire
Global Security to beneficial owners pursuant to paragraph (b) of
this Section 2.16, such Global Security shall be deemed to be
surrendered to the Trustee for cancellation, and the Company
shall execute and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depository in exchange
for its beneficial interest in the Global Security, an equal
aggregate principal amount of Physical Security of authorized
denominations.
(e) Any Physical Security constituting a Restricted
Security delivered in exchange for an interest in a Global
Security pursuant to paragraph (c) or (d) of this Section 2.16
shall, except as otherwise provided by paragraphs (a)(i)(x) and
(d) of Section 2.17, bear the Private Placement Legend.
(f) The Holder of a Global Security may grant proxies
and otherwise authorize any Person, including Agent Members and
Persons that may hold interest through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or
the Securities.
SECTION II.17 Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited
Investors and Non-U.S. Persons. The following provisions shall
apply with respect to the registration of any proposed transfer
of a Security constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) The Registrar shall register the transfer of
any Security constituting a Restricted Security, whether or not
such Security bears the Private Placement Legend, if (x) the
requested transfer is after the second anniversary of the Issue
Date (provided, however, that neither the Company nor any
Affiliate of the Company has held any beneficial interest in such
Security, or portion thereof, at any time on or prior to the
second anniversary of the Issue Date) or (y) (1) in the case of a
transfer to an Institutional Accredited Investor which is not a
QIB (excluding Non-U.S. Persons), the proposed transferee has
delivered to the Registrar a certificate substantially in the
form of Exhibit C hereto or (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit C
hereto; and
(ii) if the proposed transferee is an Agent Member
and the Securities to be transferred consist of Physical
Securities which after transfer are to be evidence by an interest
in the IAI Global Security or Regulation S Global Security, as
the case may be, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if
any, required by clause (y) of paragraph (i) above, the Registrar
shall register the transfer and reflect on its books and records
the date and an increase in the principal amount of the IAI
Global Security to be transferred, and the Trustee shall cancel
the Physical Securities so transferred; and
(iii) if the proposed transferor is an Agent
Member seeking to transfer an interest in a Global Security, upon
receipt by the Registrar of (x) written instructions given in
accordance with Depository's and the Registrar's procedures and
(y) the appropriate certificate, if any, required by clause (y)
of paragraph (i) above, the Registrar shall register the transfer
and reflect on its books and records the date and (a) a decrease
in the principal amount of the Global Security from which such
interests are to be transferred in an amount equal to be the
principal amount of the Securities to be transferred and (B) an
increase in the principal amount of the IAI Global Security or
the Regulation S Global Security, as the case may be, in an
amount equal to the principal amount of the Securities to be
transferred.
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer
of a Security constituting a Restricted Security to a QIB
(excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer of
any Restricted Security if such transfer is being made by a
proposed transferor who has checked the box provided for on the
form of Security stating, or has otherwise advised the Company
and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who
has signed the certification provided for on the form of Security
stating, or has otherwise advised the Company and the Registrar
in writing, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB
within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent
Member, and the Securities to be transferred consist of Physical
Securities which after transfer are to be evidenced by an
interest in a Global Security, upon receipt by the Registrar of
written instructions given in accordance with the Depository's
and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal
amount of such Global Security in an amount equal to the
principal amount of the Physical Securities to be transferred,
and the Trustee shall cancel the Physical Securities so
transferred; and
(iii) if the proposed transferor is an Agent
Member seeking to transfer an interest in the IAI Global Security
or the Regulation S Global Security, upon receipt by the
Registrar of written instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall
register the transfer and reflect on its books and records the
date and (A) a decrease in the principal amount of the IAI Global
Security or the Regulation S Global Security, as the case may be,
in an amount equal to the principal amount of the Securities to
be transferred and (B) an increase in the principal amount of the
Global Security in an amount equal to the principal amount of the
Securities to be transferred.
(c) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this
Indenture, a Global Security may not be transferred as a whole
except by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or any such nominee
to a successor Depository or a nominee of such successor
Depository.
(d) Private Placement Legend. Upon the transfer,
exchange or replacement of Securities not bearing the Private
Placement Legend, the Registrar shall deliver Securities that do
not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Securities bearing the Private
Placement Legend, the Registrar shall deliver only Securities
that bear the Private Placement Legend unless (i) the requested
transfer is after the second anniversary of the Issue Date
(provided, however, that, to the knowledge of the Trustee,
neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any
time prior to or on the second anniversary of the Issue Date), or
(ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(e) General. By its acceptance of any Security
bearing the Private Placement Legend, each Holder of such a
Security acknowledges the restrictions on transfer of such Note
set forth in this Indenture and in the Private Placement Legend
and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to
Section 2.16 or this Section 2.17. The Company shall have the
right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable
written notice to the Registrar.
(f) Transfers of Securities Held by Affiliates. Any
certificate (i) evidencing a Security that has been transferred
to an Affiliate of the Company within two (2) years after the
Issue Date, as evidenced by a notation on the Assignment Form for
such transfer or in the representation letter delivered in
respect thereof or (ii) evidencing a Security that has been
acquired from an Affiliate (other than by an Affiliate) in a
transaction or a chain of transactions not involving any public
offering, shall, until two (2) years after the last date on which
the Company or any Affiliate of the Company was an owner of such
Security, in each case, bear the Private Placement Legend, unless
otherwise agreed by the Company (with written notice thereof to
the Trustee).
ARTICLE III.
REDEMPTION
SECTION III.1 Notices to Trustee.
If the Company elects to redeem Securities pursuant to
paragraph 5 of the Securities, it shall notify the Trustee and
the Paying Agent in writing of the Redemption Date, the
Redemption Price and the principal amount of the Securities to be
redeemed and whether it wants the Trustee to give notice of
redemption to the Holders (at the Company's expense) at least
forty-five (45) days (unless a shorter notice shall be
satisfactory to the Trustee) but not more than sixty (60) days
before the Redemption Date, together with an Officers'
Certificate stating that such redemption will comply with the
conditions contained herein and in the Securities. Any such
notice may be canceled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void
and of no effect. Notwithstanding anything set forth in this
Article III, the Company shall at all times comply with Article X
hereof.
SECTION III.2 Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed,
the Trustee shall select the Securities to be redeemed pro rata
in proportion to the relative number of Securities of each
Holder. The Trustee shall make the selection not more than sixty
(60) days and not less than thirty (30) days before the
Redemption Date from the Securities outstanding and not
previously called for redemption. The Trustee shall promptly
notify the Company in writing of the Securities selected for
redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed.
Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for
redemption.
SECTION III.3 Notice of Redemption.
At least thirty (30) days but not more than sixty (60)
days before a Redemption Date, the Company shall mail a notice of
redemption by first class mail to each Holder whose Securities
are to be redeemed at the address of such Holder appearing in the
Security register maintained by the Registrar. At the Company's
request, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. Each notice of
redemption shall identify the Securities to be redeemed and shall
state:
(i) the Redemption Date;
(ii) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(iii) the name and address of the Paying Agent;
(iv) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price and accrued interest, if any;
(v) that, unless the Company defaults in making the
redemption payment or such redemption payment is prevented
for any reason, interest on Securities called for redemption
ceases to accrue on and after the Redemption Date, and the
only remaining right of the Holders of such Securities is to
receive payment of the Redemption Price upon surrender to
the Paying Agent of the Securities redeemed;
(vi) if fewer than all the Securities are to be
redeemed, the identification of the particular Securities
(or portion thereof) to be redeemed, as well as the
aggregate principal amount of Securities to be redeemed and
the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(vii) if any Security is being redeemed in part,
the portion of the principal amount of such Security to be
redeemed and that, after the Redemption Date, and upon
surrender of such Security, a new Security or Securities in
the aggregate principal amount equal to the unredeemed
portion thereof will be issued without charge to the
Security holder;
(viii) the CUSIP number, if any, relating to such
Securities pursuant to Section 2.14 hereof; and
(ix) that the notice is being sent pursuant to this
Section 3.03 and pursuant to the optional redemption
provisions of the Securities.
SECTION III.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with
Section 3.03, Securities called for redemption become due and
payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Trustee or Paying Agent, such Securities called
for redemption shall be paid at the Redemption Price plus accrued
and unpaid interest, if any, to the Redemption Date, but interest
installments whose maturity is on or prior to such Redemption
Date will be payable on the relevant Interest Payment Dates to
the Holders of record at the close of business on the relevant
Record Dates referred to in the Securities.
Notice of redemption shall be deemed to be given when
mailed to each Holder in the manner herein provided whether or
not the Holder receives such Notice. In any event, failure to
give such notice, or any defect therein, shall not affect the
validity of the proceedings for the redemption of any other
Security.
SECTION III.5 Deposit of Redemption Price.
On or prior to each Redemption Date, the Company shall
deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price of all Securities to be redeemed on that
date. Upon the written request of the Company, the Paying Agent
shall promptly return to the Company any U.S. Legal Tender so
deposited which is not required for that purpose except with
respect to monies owed as obligations to the Trustee pursuant to
Article VII.
If the Company complies with the preceding paragraph,
interest on the Securities to be redeemed will cease to accrue on
the applicable Redemption Date, whether or not such Securities
are presented for payment. If any Security called for redemption
shall not be so paid upon surrender for redemption, interest will
be paid, from the Redemption Date until such Redemption Price is
paid, on the unpaid Principal of and on any interest not paid on
such unpaid Principal, in each case, at the rate provided in the
Securities.
SECTION III.6 Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in
part, the Company shall issue and the Trustee shall authenticate
for the Holder, at the expense of the Company, a new Security or
Securities equal in principal amount to the unredeemed portion of
the Security surrendered.
ARTICLE IV.
COVENANTS
SECTION IV.1 Payment of Securities.
The Company shall pay the Principal of and interest on
the Securities on the dates and in the manner provided in the
Securities and this Indenture. An installment of Principal of or
interest on the Securities shall be considered paid on the date
it is due if the Trustee or Paying Agent holds on that date U.S.
Legal Tender designated for and sufficient to pay the installment
and/or interest then due and is not prohibited from paying such
installment on such date.
The Company shall pay interest on (i) overdue Principal
at the rate set forth in the second paragraph of paragraph 1 of
the Securities, and (ii) overdue installments of interest at the
same rate, to the extent lawful.
SECTION IV.2 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan,
The City of New York, the office or agency required under Section
2.03. The Company shall give prior notice to the Trustee of the
location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders,
notices and demands described in such Section 2.03 may be made or
served at the address of the Trustee set forth in Section 2.03.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York, for
such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency. The
Company hereby initially designates the corporate trust office of
the Trustee set forth in Section 2.03 as such office.
SECTION IV.3 Corporate Existence.
Except as otherwise permitted by Article V, the Company
shall do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of
each of its Subsidiaries, in accordance with the respective
organizational documents of each of them and the rights (charter
and statutory) and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be
required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Subsidiaries, any such
existence, right or franchise, if (a) the Board of Directors of
the Company shall determine reasonably and in good faith that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and (b) the loss thereof is not adverse
in any material respect to the Holders.
SECTION IV.4 Payment of Taxes and Other Claims.
The Company shall and shall cause each of its
Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to
taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries, and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might
by law become a Lien upon the property of it or any of its
Subsidiaries; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge or claim if either (a) the
amount, applicability or validity thereof is being contested in
good faith by appropriate proceedings and an adequate reserve has
been established therefor to the extent required by GAAP, or (b)
the failure to make such payment or effect such discharge
(together with all other such failures) would not have a material
adverse effect on the financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole.
SECTION IV.5 Maintenance of Properties and Insurance.
(a) The Company shall cause all Properties used or useful
in the conduct of its business or the business of any of its
Subsidiaries to be maintained and kept in satisfactory condition,
repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all
as in its judgment may be necessary, so that the business carried
on in connection therewith may be properly and advantageously
conducted at all times unless the failure to so maintain such
properties (together with all other such failures) would not have
a material adverse effect on the financial condition or results
of operations of the Company and its Subsidiaries taken as a
whole; provided, however, that nothing in this Section 4.05 shall
prevent the Company or any of its Subsidiary from discontinuing
the operation or maintenance of any of such properties or
disposing of any of them if such discontinuance or disposal is
either (i) in the ordinary course of business, (ii) in the good
faith judgment of the Board of Directors of the Company or the
Subsidiary concerned, or of the senior officers of the Company or
such Subsidiary, as the case may be, desirable in the conduct of
the business of the Company or such Subsidiary, as the case may
be, or (iii) is otherwise permitted by this Indenture.
(b) The Company shall provide or cause to be provided, for
itself and each of its Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds
that, in the reasonable, good faith opinion of the Company are
adequate and appropriate for the conduct of the business of the
Company and such Subsidiaries in a prudent manner, with reputable
insurers or with the government of the United States of America
or an agency or instrumentality thereof, in such amounts, with
such deductibles, and by such methods as shall be customary, in
the reasonable, good faith opinion of the Company, for companies
similarly situated in the industry, unless the failure to provide
such insurance (together with all other such failures) would not
have a material adverse effect on the financial condition or
results of operations of the Company and its Subsidiaries, taken
as a whole.
(c) The Company shall and shall cause each of its
Subsidiaries to keep proper books of record and account, in which
full and correct entries shall be made of all financial
transactions and the assets and business of the Company and each
Subsidiary in accordance with GAAP consistently applied to the
Company and its Subsidiaries taken as a whole.
SECTION IV.6 Compliance Certificates; Notice of Default.
(a) The Company shall deliver to the Trustee, within sixty
(60) days after the end of each of the Company's first three
fiscal quarters and within ninety (90) days after the end of the
Company's fiscal year, an Officers' Certificate stating that a
review of the Company's activities and the activities of its
Subsidiaries during the preceding fiscal period has been made
under the supervision of the signing Officers with a view to
determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that
to the best of his knowledge, the Company during such preceding
fiscal period has kept, observed, performed and fulfilled each
and every such covenant and no Default or Event of Default
occurred during such period and at the date of such certificate
there is no Default or Event of Default that has occurred and is
continuing or, if such signers do know of such Default or Event
of Default, the certificate shall describe the Default or Event
of Default and its status with particularity and what action the
Company has taken or proposes to take with respect thereto. The
Officers' Certificate shall also include all calculations
necessary to show covenant compliance. The Officers' Certificate
shall also notify the Trustee should the Company elect to change
the manner in which it fixes its fiscal year end.
(b) So long as (and to the extent) not contrary to the then
current recommendations of the American Institute of Certified
Public Accountants, the Company shall deliver to the Trustee
within ninety (90) days after the end of each fiscal year a
written statement by a nationally recognized firm of independent
public accountants stating (A) that their audit examination has
included a review of the terms of this Indenture and the
Securities as they relate to accounting matters, and (B) whether,
in connection with their audit examination, any Default or Event
of Default has come to their attention and if such a Default or
Event of Default has come to their attention, specifying the
nature and period of existence thereof.
(c) The Company will deliver to the Trustee promptly, and
in any event within ten (10) days after the Company becomes aware
or should reasonably have become aware of the occurrence of any
Default or Event of Default, an Officers' Certificate describing
such Default or Event of Default and its status with
particularity and what action the Company is taking or proposes
to take with respect thereto.
SECTION IV.7 Compliance with Laws.
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with the respective organizational
documents of each of them and all applicable statutes, rules,
regulations, orders and restrictions of the United States of
America, all states, provinces and municipalities thereof, and of
any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing,
in respect of the conduct of their respective businesses and the
ownership of their respective properties, except such the
noncompliance with which would not in the aggregate have a
material adverse effect on the financial condition or results of
operations of the Company and its Subsidiaries taken as a whole.
SECTION IV.8 SEC Reports and Other Information.
(a) To the extent permitted by applicable law or
regulation, whether or not the Company is subject to Section
13(a) or 15(d) of the Exchange Act, the Company shall file with
the SEC the annual reports, quarterly reports and other documents
which the Company would have been required to file with the SEC
pursuant to such Sections 13(a) and 15(d) if the Company were so
subject, such documents to be filed with the SEC on or prior to
the respective dates (the "Required Filing Dates") by which the
Company would have been required so to file such documents if the
Company were so subject. The Company shall comply with its
reporting and filing obligations under the applicable federal
securities laws. The Company shall also in any event (x) within
fifteen (15) days after each Required Filing Date (i) transmit by
mail to all Holders, as their names and addresses appear in the
register of Securities maintained by the Registrar, without cost
to such Holders and (ii) file with the Trustee, copies of the
annual reports, quarterly reports and other documents which the
Company would have been required to file with the SEC pursuant to
Sections 13(a) and 15(d) of the Exchange Act if the Company were
subject to such Sections and (y) if filing such documents by the
Company with the SEC is not permitted under the Exchange Act,
promptly upon written request supply copies of such documents to
any prospective Holder. In any event, such annual reports will
contain consolidated financial statements and notes thereto,
together with an opinion thereon expressed by an independent
public accounting firm with an established national reputation
and management's discussion and analysis of financial condition
and results of operations, and such quarterly reports will
contain unaudited condensed consolidated financial statements for
the first three quarters of each fiscal year. Upon qualification
of this Indenture under the TIA, the Company shall also comply
with the provisions of TIA 314(a).
(b) At any time when the Company is not subject to Section
13 or 15(d) of the Exchange Act, upon the request of a Holder,
the Company will promptly furnish or cause to be furnished such
information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto) to such
Holder or to a prospective purchaser of such Security designated
by such Holder, as the case may be, in order to permit compliance
by such Holder with Rule 144A under the Securities Act.
SECTION IV.9 Waiver of Stay Extension or 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 or extension law or any usury law or other
law that would prohibit or forgive the Company from paying all or
any portion of the Principal of or interest on the Securities as
contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not
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 had been enacted.
SECTION IV.10 Limitation on Indebtedness.
The Company shall not, and shall not cause or permit
any of its Subsidiaries to, directly or indirectly, create,
incur, assume, issue, guarantee or in any manner become liable
for or with respect to the payment of, any Attributable
Indebtedness or Indebtedness (including any Acquired
Indebtedness), except that the Company and its Subsidiaries may
incur (each of which shall be given independent effect):
(a) Indebtedness of the Company evidenced by the Securities
or otherwise arising under this Indenture;
(b) Indebtedness of the Company and its Subsidiaries
outstanding from time to time pursuant to the Credit Agreement
not to exceed at any one time $75.0 million in the aggregate,
minus the amount of Indebtedness pursuant to the Credit Agreement
repaid after the Issue Date with the Net Cash Proceeds from an
Asset Sale pursuant to Section 4.17;
(c) Indebtedness of the Company and its Subsidiaries
outstanding on the Issue Date; provided, none of the instruments
and agreements evidencing or governing such Indebtedness shall be
amended, modified or supplemented after the Issue Date to change
any terms of subordination, payment of Principal, interest, fees
or other amounts due, or rights of conversion, put, exchange or
other similar rights or any other covenants, terms or conditions
thereof to be less favorable to the Holders than such terms,
rights and conditions as is effect on the Issue Date.
(d) purchase money Indebtedness of the Company described in
Section 4.13(d) not to exceed an aggregate outstanding amount at
any time of $3,000,000;
(e) Indebtedness of the Company, in an aggregate principal
amount not to exceed $7,500,000 if, (x) immediately after giving
pro forma effect to the incurrence thereof, no Default or Event
of Default shall have occurred and (y) the aggregate amount of
Indebtedness that the Company could borrow under the Credit
Agreement pursuant to the terms thereof and clause (b) above is
less than $5,000,000;
(f) Indebtedness of a Subsidiary of the Company issued to
and held by the Company or a Wholly-Owned Subsidiary of the
Company; provided, however, that any transfer of such
Indebtedness (other than to the Company or a Wholly-Owned
Subsidiary of the Company) shall be deemed, in such case, to
constitute a new incurrence of such Indebtedness by the issuer
thereof;
(g) Indebtedness of the Company owed to or held by a Wholly-
Owned Subsidiary of the Company that is unsecured and
subordinated in right of payment to the Securities; provided,
however, that any subsequent issuance or transfer of any Capital
Stock which results in any such other Wholly-Owned Subsidiary
ceasing to be a Wholly-Owned Subsidiary of the Company, or any
transfer of such Indebtedness (other than to a Wholly-Owned
Subsidiary of the Company), shall be deemed in each case to
constitute a new incurrence of such Indebtedness by the Company;
(h) Indebtedness represented by Hedging Obligations of the
Company or its Subsidiaries with respect to Indebtedness of the
Company or its Subsidiaries (which Indebtedness is otherwise
permitted to be incurred under this Section 4.10 and which
Hedging Obligations are otherwise permitted to be incurred under
Section 4.24) to the extent the notional principal amount of such
Hedging Obligations does not exceed the principal amount of the
Indebtedness to which such Hedging Obligations relate;
(i) any replacements, renewals, refinancings and extensions
of Indebtedness incurred under clauses (a), (b), (c), (d), (e),
(f) and (g) above provided that (i) any such replacement,
renewal, refinancing and extension (x) shall not provide for any
mandatory redemption, amortization or sinking fund requirement in
an amount greater than or at a time prior to the amounts and
times specified in the Indebtedness being replaced, renewed,
refinanced or extended and (y) shall be contractually
subordinated to the Securities at least to the extent, if at all,
that the Indebtedness being replaced, renewed, refinanced or
extended is subordinate to the Securities, (ii) any such
Indebtedness of any person must be replaced, refinanced or
extended with Indebtedness incurred by such person or by the
Company, (iii) the principal amount of Indebtedness incurred
pursuant to this clause (i) (or, if such Indebtedness provides
for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the maturity
thereof, the original issue price of such Indebtedness) shall not
exceed the sum of the principal amount (or with respect to
Indebtedness which provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the accreted value thereof)
of Indebtedness so replaced, renewed, refinanced or extended,
plus accrued interest, the amount of any premium required to be
paid in connection with such replacement, renewal, refinancing or
extension pursuant to the terms of such Indebtedness or the
amount of any premium reasonably determined by the Company as
necessary to accomplish such replacement, renewal, refinancing or
extension by means of a tender offer or privately negotiated
purchase and the amount of fees and expenses incurred in
connection therewith, (iv) the covenants, terms and conditions of
any such extension, renewal, refunding or refinancing
Indebtedness (and of any agreement or instrument entered into in
connection therewith) are no less favorable to the Holders than
the terms of the Indebtedness as in effect prior to such action,
and (v) immediately prior to and immediately after giving effect
to any such extension, renewal, refunding or refinancing, no
Default or Event of Default shall have occurred and be
continuing; and
(j) the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business.
SECTION IV.11 Limitation on Restricted Payments.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted
Payment, unless at the time of and after giving effect to such
Restricted Payment:
(a) no Default or Event of Default shall have occurred and
be continuing or occur as a consequence thereof;
(b) the Company could incur at least $1.00 of Indebtedness
pursuant to clause (e) of Section 4.10 hereof; and
(c) the aggregate of all Restricted Payments declared or
made after the Issue Date through and including the date of such
Restricted Payment does not exceed the sum of (1) 50% of the
Company's Consolidated Net Income (or in the event such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit) from and including April 1, 1998 to and including the
last day of the fiscal quarter immediately preceding the date of
such Restricted Payment.
The provisions of this Section 4.11 shall not prohibit
(i) the payment of any dividend within sixty (60) days after the
date of declaration thereof, if such payment would comply with
the provisions of this Indenture at the date of the declaration
of such payment, (ii) the retirement of any shares of Capital
Stock of the Company or Indebtedness of the Company which is
subordinated in right of payment to the Securities by conversion
into, or by an exchange for, shares of Capital Stock of the
Company that are not Disqualified Stock or out of the Net
Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of Capital Stock
(other than Disqualified Stock) of the Company, and (iii) the
redemption or retirement of Indebtedness of the Company which is
subordinated in right of payment to the Securities in exchange
for, by conversion into, or out of the Net Proceeds of, a
substantially concurrent sale of subordinated Indebtedness of the
Company (other than to a Subsidiary of the Company) that is
contractually subordinated in right of payment to the Securities
at least to the same extent that the Indebtedness being redeemed
or retired is subordinated to the Securities.
In determining the amount of Restricted Payments
permissible under clause (c) above, amounts expended pursuant to
clauses (i) and (ii) above shall be included as Restricted
Payments.
Not later than the date of making any Restricted
Payment (other than the dividend payments on the Series F
Preferred Stock), the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations
required by this Section 4.11 were computed, which calculations
may be based upon the Company's latest available financial
statements.
So long as no Default or Event of Default shall have
occurred and be continuing, or occur as a consequence thereof,
the provisions of this Section 4.11 shall not prohibit (i) the
declaration or payment of the dividends payable on the Series F
Preferred Sock as set forth in the Certificate of Designations
and (ii) purchases, in open market transactions, of Common Stock
in connection with the exercise of any warrants or options of the
Company, provided the payments made in connection with such
purchases do not exceed $500,000 in the aggregate in any Fiscal
Year or $2,000,000 in the aggregate during the term of this
Agreement.
SECTION IV.12 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective or enter into any
agreement with any person that would cause any consensual
encumbrance or restriction of any kind on the ability of any
Subsidiary of the Company to (a) pay dividends, in cash or
otherwise, or make any other distributions on its Capital Stock
or any other interest or participation in, or measured by, its
profits owned by, or pay any Indebtedness owed to, the Company or
any of its Subsidiaries, (b) make loans or advances to the
Company or any of its Subsidiaries or (c) transfer any of its
Properties to the Company or any of its Subsidiaries, except, in
each case, for such encumbrances or restrictions existing under
or contemplated by or by reason of (i) any restrictions existing
under the Credit Agreement as in effect on the Issue Date, (ii)
any restrictions existing under any agreement that refinances,
replaces, amends or extends an agreement containing a restriction
permitted by clause (i) above; provided that the terms and
conditions of any such restrictions are not materially less
favorable to the holders of the Securities than those under or
pursuant to the agreement being refinanced, replaced, amended or
extended or (iii) customary non-assignment or sublease provisions
of any agreement of the Company or its Subsidiaries.
SECTION IV.13 Limitation on Liens.
Other than Permitted Liens, the Company shall not, and
the Company shall not permit, cause or suffer any of its
Subsidiaries to, create, incur, assume or suffer to exist any
Lien, charge or other encumbrance of any kind with respect to any
property or assets now owned or hereafter acquired by it, which
(a) secures Indebtedness of the Company subordinated in right of
payment to the Securities, unless the Securities are secured by a
Lien on such property that is senior to such Lien, (b) secures
Indebtedness of the Company which is pari passu in right of
payment with the Securities, unless the Securities are secured by
a Lien on such Property that is equal and ratable with such Lien,
(c) secures Indebtedness incurred to refinance Indebtedness which
has been secured by a Lien permitted under this Indenture and is
permitted to be refinanced under this Indenture, to the extent
such Liens extend to or cover Property of the Company or any of
its Subsidiaries not securing the Indebtedness so refinanced or
increase the extent of such Liens, or (d) purchase money Liens to
secure Indebtedness permitted under this Indenture (or as
extended or renewed as permitted under this Indenture) and
incurred to purchase fixed assets, unless such Indebtedness
represents not less than seventy-five percent (75%) and not more
than one hundred percent (100%) of the purchase price of such
assets as of the date of purchase thereof and no Property other
than the assets so purchased secures such Indebtedness.
Notwithstanding the foregoing, Liens shall be permitted
by the previous clauses (a) and (b) only to the extent that any
Indebtedness secured by such Liens is incurred pursuant to and in
accordance with this Indenture.
SECTION IV.14 Limitation on Investments, Loans and Advances.
The Company shall not make, and shall not permit any of
its Subsidiaries to make, any Investment, except: (i)
Investments by the Company or any of its Subsidiaries in any
Wholly-Owned Subsidiary of the Company (including any such
Investment pursuant to which a Person becomes a Wholly-Owned
Subsidiary of the Company) or in the Company by any of its
Subsidiaries; (ii) Investments represented by receivables created
or acquired in the ordinary course of business or the settlement
of such receivables in the ordinary course of business; (iii)
Investments permitted to be made pursuant to Section 4.11; (iv)
Investments represented by advances to employees, officers and
directors of the Company or its Subsidiaries made in the ordinary
course of business and consistent with reasonable and customary
business practices; (v) Permitted Investments; (vi) Investments
permitted to be made with the Net Cash Proceeds of Asset Sales
pursuant to Section 4.17; (vii) Investments existing on the Issue
Date which are set forth on Schedule 5.36 to the Securities
Purchase Agreement; (viii) Investments in Hedging Obligations
permitted under Section 4.24; (ix) Investments represented by
loans or advances to Subsidiaries which are not Guarantors
provided that (y) the aggregate outstanding principal amount of
such Investments shall not at any time exceed $1,000,000 and (z)
the repayment of such Investments is subordinated to the rights
of the Holders under this Indenture and the Guaranty Agreements;
and (x) Investments permitted to be made pursuant to Section
4.10(f) and Section 4.10(g).
SECTION IV.15 Limitation on Transactions with Affiliates.
The Company will not, and will not permit, cause or
suffer, any of its Subsidiaries to, participate in an Affiliate
Transaction, except in good faith and on terms that are no less
favorable to the Company or such Subsidiary, as the case may be,
than those that could have been obtained in a comparable
transaction on an arm's length basis from a person not an
Affiliate of the Company or such Subsidiary. With respect to any
Affiliate Transaction (and each series of related Affiliate
Transactions which are similar or part of a common plan)
involving aggregate payments or other market value in excess of
$1,000,000, the Company shall deliver an Officers' Certificate to
the Trustee certifying that such Affiliate Transaction (or series
of related Affiliate Transactions) complies with the foregoing
provisions and that such Affiliate Transaction (or series of
related Affiliate Transactions) was approved by a majority of the
Independent Directors of the Company and the Board of Directors
of the Company as a whole. Notwithstanding the foregoing, the
restrictions set forth in this Section 4.15 shall not apply to
(i) any employment agreement, consulting agreement and
indemnification obligations entered into by the Company or any of
its Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such
Subsidiary, (ii) the payment of reasonable and customary fees to
directors of the Company who are not employees of the Company,
and (iv) transactions permitted under Sections 4.10, 4.11 and
4.14 hereof.
SECTION IV.16 Change of Control.
(a) Upon the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), the Company
shall notify or cause to be notified the Holders in writing of
such occurrence and shall make an offer to purchase (the "Change
of Control Offer"), on a Business Day (the "Change of Control
Payment Date") not later than sixty (60) days following the
Change of Control Date, all Securities then outstanding at the
Redemption Price plus accrued and unpaid interest, if any, to the
Change of Control Payment Date. The Change of Control Offer
shall remain open for at least twenty (20) Business Days and
until 5:00 p.m., New York City time, on the Business Day next
preceding the Change of Control Payment Date. Within ten (10)
days after the Change of Control Date requiring the Company to
make a Change of Control Offer pursuant to this Section 4.16, the
Company shall so notify the Trustee. Such notice shall be
accompanied by an Officers' Certificate setting forth the
circumstances and relevant facts regarding such Change of
Control. In connection with such notification to the Trustee,
the Company may instruct the Trustee to give, at the cost and
expense of the Company, the notice required to be given by clause
(b) below.
(b) Notice of a Change of Control Offer shall be sent, by
first class mail, to each Holder not less than twenty-five (25)
days nor more than forty-five (45) days before the Change of
Control Payment Date, with copies to the Trustee, which notice
shall, consistent with the provisions of this Section 4.16,
govern the terms of the Change of Control Offer. Such notice
shall contain all instructions and materials necessary to enable
such Holders to tender Securities pursuant to the Change of
Control Offer and shall state:
(i) that the Change of Control Offer is being made
pursuant to this Section 4.16 and that all Securities
properly tendered will be accepted for payment;
(ii) the Redemption Price (including the amount of
accrued interest) and the Change of Control Payment Date;
(iii) that any Security not tendered will continue
to accrue interest in accordance with the terms thereof;
(iv) that, unless the Company defaults in making
payment therefor, any Security accepted for payment pursuant
to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date;
(v) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to
surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the last page of the Security
completed, to the Paying Agent at the address specified in
the notice prior to 5:00 p.m., New York City time, on the
Business Day prior to the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Business Day prior to the
Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder delivered
for purchase, the Security certificate number (if any) and a
statement that such Holder is withdrawing its election to
have such Security purchased;
(vii) that Holders whose Securities are purchased
only in part will be issued new Securities in a principal
amount equal to the unpurchased portion of the Securities
surrendered; and
(viii) the circumstances and relevant facts
regarding such Change of Control.
(c) On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Securities or portions
thereof tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the purchase price of all Securities so tendered, and (iii)
deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof
being purchased by the Company. The Paying Agent shall promptly
mail to the Holders of Securities so accepted payment in an
amount equal to the Redemption Price, and the Trustee shall
promptly authenticate and mail to such Holders new Securities
equal in principal amount to any unpurchased portion of the
Securities surrendered. The Paying Agent shall, upon written
request, return to the Company any U.S. Legal Tender not required
to fund the payment for Securities accepted for payment by the
Company. If any Security called for redemption shall not be so
paid upon surrender for redemption because of the failure of the
Company to comply with this clause (c), interest will be paid on
the unpaid Redemption Price from the Change of Control Payment
Date until such Redemption Price is paid, at the rate provided in
the Securities. Any Securities not so accepted shall be promptly
mailed by the Company to the Holder thereof.
(d) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and
any other securities laws or regulations in connection with the
repurchase of securities pursuant to a Change of Control Offer.
To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.16,
the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its
obligations under this Section 4.16 by virtue thereof.
(e) The Company will, to the extent required to or
permitted by applicable Laws, publicly announce the results of
the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.
SECTION IV.17 Disposition of Proceeds of Asset Sales.
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any Asset Sale unless (i) the Company or
the applicable Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the assets sold or otherwise disposed of
and (ii) at least eighty (85%) of the Net Proceeds received by
the Company or such Subsidiary, as the case may be, from such
Asset Sale shall be in the form of cash or Cash Equivalents (with
Indebtedness of the Company or its Subsidiaries assumed by the
purchaser being counted as cash for such purposes if the Company
and its Subsidiaries are permanently released from all liability
therefor); provided, however, that 100% of the Net Proceeds
received by the Company or such Subsidiary, as the case may be,
in such Asset Sale from the sale or other disposition of Capital
Stock shall be in the form of cash or Cash Equivalents.
(b) The Company shall or shall cause its Subsidiaries to,
within (i) 180 days of receipt of any Net Cash Proceeds (other
than Net Equity Proceeds) from an Asset Sale and (ii) within 90
days of the receipt of any Net Equity Proceeds from an Asset
Sale:
(x) apply such Net Cash Proceeds to permanently prepay
Indebtedness outstanding under the Credit Agreement and
effect a permanent reduction of the commitment available
under such Credit Agreement; or
(y) apply such Net Cash Proceeds to (1) make a
Permitted Acquisition or (2) acquire or construct capital
assets of the Company or any of its Subsidiaries in lines
of business related to the Company's and its Subsidiaries'
businesses as in existence on the Issue Date; provided, that
only Net Cash Proceeds that do not constitute Net Equity
Proceeds may be applied as provided in this clause (y).
To the extent such Net Cash Proceeds are not applied as provided
in the previous clauses (x) and (y) such Net Cash Proceeds shall
constitute "Excess Proceeds" subject to disposition as provided
in clause (c) below.
(c) When the aggregate amount of unutilized Excess Proceeds
equals or exceeds $2,500,000, the Company shall make an offer to
repurchase (the "Asset Sale Offer") on the Asset Sale Payment
Date an aggregate principal amount of the Securities equal to
such entire unutilized Company Excess Proceeds (and not just the
amount in excess of $2,500,000) at a price in cash equal to the
Redemption Price, plus accrued interest, if any, to the Asset
Sale Payment Date. The Company shall, subject to the provisions
described herein, be required to repurchase all Securities
validly tendered into such Asset Sale Offer and not withdrawn.
Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset to zero and any unutilized Excess
Proceeds may be utilized by the Company for any purpose.
(d) The Company shall provide the Trustee with prompt
notice of the occurrence of an Asset Sale Offer. Such notice
shall be accompanied by an Officers' Certificate setting forth
(i) a statement to the effect that the Company or any of its
Subsidiaries has made an Asset Sale and (ii) the aggregate
principal amount of Securities offered to be purchased and the
Redemption Price.
(e) Notice of an Asset Sale Offer shall be sent, by first
class mail, by the Company (or caused to be mailed by the
Company), with a copy to the Trustee, to all Holders of
Securities not less than thirty (30) days nor more than sixty
(60) days before the Asset Sale Payment Date at their last
registered address. The Asset Sale Offer shall remain open from
the time of mailing for at least twenty (20) Business Days and
until at least 5:00 p.m., New York City time, on the Business Day
next preceding the Asset Sale Payment Date. The notice to the
Holders shall contain all instructions and materials necessary to
enable such Holders to tender Securities pursuant to the Asset
Sale Offer. At the Company's request, the Trustee shall give, at
the cost and expense of the Company, the notice required by this
paragraph (e). Such notice shall state:
(i) that the Asset Sale Offer is being made pursuant
to this Section 4.17;
(ii) the Redemption Price (including the amount of
accrued interest, if any) for each Security and the Asset
Sale Payment Date;
(iii) that any Security not tendered or accepted
for payment will continue to accrue interest in accordance
with the terms thereof;
(iv) that unless the Company defaults on making payment
therefor, any Security accepted for payment pursuant to the
Asset Sale Offer shall cease to accrue interest after the
Asset Sale Payment Date;
(v) that Holders electing to have a Security purchased
pursuant to an Asset Sale Offer will be required to
surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the last page of the Security
completed, to the Paying Agent at the address specified in
the notice prior to 5:00 p.m., New York City time, on the
Business Day prior to the Asset Sale Payment Date;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Business Day prior to the
Asset Sale Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder,
the principal amount of Securities the Holder delivered for
purchase, the Security certificate number (if any) and a
statement that such Holder is withdrawing his election to
have such Securities purchased;
(vii) that if Securities in a principal amount in
excess of the principal amount of the Securities to be
acquired pursuant to the Asset Sale Offer are tendered and
not withdrawn pursuant to the Asset Sale Offer, the Company
shall purchase Securities on a pro rata basis among the
Securities tendered (with such adjustment as may be deemed
appropriate by the Company so that only Securities in
denominations of $1,000 or integral multiples of $1,000
shall be so acquired);
(viii) that Holders whose Securities are purchased
only in part will be issued new Securities in a principal
amount equal to the unpurchased portion of the Securities
surrendered; and
(ix) the instructions that Holders must follow in order
to tender their Securities.
(f) On or before an Asset Sale Payment Date, the Company
shall (i) accept for payment, on a pro rata basis, the Securities
or portions thereof tendered pursuant to the Asset Sale Offer
(subject to adjustment as contemplated by paragraph (vii) above),
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient
to pay the purchase price of all Securities or portions thereof
so tendered, and (iii) deliver to the Paying Agent the Securities
so accepted together with an Officers' Certificate identifying
the Securities or portions thereof accepted for payment by the
Company. The Paying Agent shall promptly mail to Holders of
Securities tendered to and accepted for payment an amount equal
to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders new Securities equal in
principal amount to any unpurchased portion of the Securities
surrendered. Any Securities not so accepted shall, upon written
request, be promptly mailed or delivered by the Company to the
Holder thereof. The Paying Agent shall return to the Company any
U.S. Legal Tender not required to fund the payment for Securities
accepted for payment by the Company. The Company will publicly
announce the results of the Asset Sale Offer as promptly as
practicable following the Asset Sale Payment Date.
(g) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and
any other securities laws or regulations in connection with the
repurchase of Securities pursuant to an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations
conflict with provisions of this Section 4.17, the Company shall
comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this
Section 4.17 by virtue thereof.
SECTION IV.18 Limitation on Issuances and Sales of Preferred
Stock by Subsidiaries.
The Company (i) will not permit any of its Subsidiaries
to issue any Preferred Stock (other than to the Company or to a
Wholly-Owned Subsidiary of the Company) and (ii) will not permit
any person (other than the Company or a Wholly-Owned Subsidiary
of the Company) to own any Preferred Stock of any Subsidiary of
the Company.
SECTION IV.19 Limitation on Liquidations, Dissolutions, Mergers
and Consolidation.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey
sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets, or make
any material change in its present method of conducting business,
except, (i) any Subsidiary of the Company may be merged or
consolidated with or into the Company (provided that the Company
shall be the continuing or surviving corporation) or with or into
any one or more Wholly-Owned Subsidiaries of the Company
(provided that a Wholly-Owned Subsidiary of the Company shall be
the continuing or surviving corporation) and after giving effect
to any of such transactions, no Default or Event of Default shall
exist; and (ii) any Wholly-Owned Subsidiary of the Company may
sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Company
or any of its Wholly-Owned Subsidiaries.
SECTION IV.20 Net Worth.
The Company will not and will not permit any of its
Subsidiaries to permit Consolidated Net Worth to be less than (i)
eighty percent (80%) of the Consolidated Net Worth of the Company
as of the Issue Date, plus the amount of the Net Cash Proceeds
from the sale of the Series F Preferred Stock to be issued
pursuant to the Securities Purchase Agreement, and (ii) as at the
last day of each succeeding Fiscal Quarter of the Company and
until (but excluding) the last day of the next following Fiscal
Quarter of the Company, the sum of (A) the amount of Consolidated
Net Worth required to be maintained pursuant to this Section 4.20
as at the end of the immediately preceding Fiscal Quarter, plus
(B) sixty-five percent (65%) of Consolidated Net Income (with no
reduction for net losses during any period) for the Fiscal
Quarter of the Company ending on such day (including within
"Consolidated Net Income" certain items otherwise excluded as
provided for in the definition of "Consolidated Net Income", less
cash dividends paid with respect to the HCRI Preferred Stock),
plus (C) one hundred percent (100%) of the aggregate amount of
all increases in the stated capital and additional paid-in
capital accounts of the Company resulting from the issuance of
Capital Stock of the Company; provided, however, in the event all
the outstanding Warrants are redeemed, purchased, put, called,
exercised or otherwise no longer outstanding (pursuant to the
terms hereof) as of March 31, 1999, then in such event the
minimum Consolidated Net Worth under (i) above shall be
recalculated to be an amount equal to 68% of the Consolidated Net
Worth as at the Issue Date and corresponding adjustments under
(ii)(A) above shall be made accordingly.
SECTION IV.21 ERISA Compliance.
The Company will not and will not permit any of its
Subsidiaries to, directly or indirectly, (i) engage in a
"prohibited transaction," as such term is defined in Section 406
of ERISA or Section 4975 of the Internal Revenue Code, with
respect to any Plan or Multiemployer Plan or knowingly consent to
any other "party in interest" or any "disqualified person," as
such terms are defined in Section 3(14) of ERISA or Section
4975(e)(2) of the Internal Revenue Code, respectively, engaging
in any "prohibited transaction," with respect to any Plan or
Multiemployer Plan maintained by the Company or any of its
Subsidiaries; (ii) permit any Plan maintained by the Company or
any of its Subsidiaries to incur any "accumulated funding
deficiency," as defined in Section 302 of ERISA or Section 412 of
the Internal Revenue Code, unless such incurrence shall have been
waived in advance by the Internal Revenue Services; (iii)
terminate any Plan in a manner which could result in the
imposition of a Lien on any property of the Company or any of its
Subsidiaries pursuant to Section 4068 of ERISA; (iv) breach, or
knowingly permit any employee of officer or any trustee or
administrator of any Plan maintained by the Company or any of its
Subsidiaries to breach, any fiduciary responsibility imposed
under Title I of ERISA with respect to any Plan; (v) engage in
any transaction which would result in the incurrence of a
liability under section 4069 of ERISA; or (vi) fail to make
contributions to a Plan or Multiemployer Plan which results in
the imposition of a Lien on any property of the Company or any of
its Subsidiaries pursuant to Section 302(f) of ERISA or Section
412(n) of the Internal Revenue Code.
SECTION IV.22 Limitation on Acquisitions.
The Company will not and will not permit any of its
Subsidiaries to enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or
take any action to solicit the tender of securities or proxies in
respect thereof in order to effect any Acquisition, other than
(i) Permitted Acquisitions, (ii) that certain acquisition
pursuant to, and in accordance with the terms of, the Asset
Purchase Agreement, to be dated on or about March 23, 1998, among
the Company, Headway Corporate Staffing Services of North
Carolina, Inc., Select Staffing Services, Inc. and Jack Powell,
(iii) that certain acquisition pursuant to, and in accordance
with the terms of, the Asset Purchase Agreement, to be dated on
or about March 23, 1998, among the Company, Cheney Associates,
L.L.C. and Timothy Cheney, an individual doing business under the
names Cheney Associates, Inc. and Cheney Consulting Group, and
(iv) that certain acquisition pursuant to, and in accordance with
the terms of, the Stock Purchase Agreement, to be dated on or
about March 23, 1998, among the Company, L&M Shore Family
Holdings Limited Partnership, Elder Investments Limited
Partnership, Mark Shore and Linda Elder.
SECTION IV.23 Certain Consolidated Ratios.
The Company will not and will not permit any of its
Subsidiaries to:
(a) permit at any time the Consolidated Leverage Ratio as
of the end of each four-quarter period ending during the
applicable period set forth below, to be greater than that ratio
set forth opposite each such period:
Consolidated Leverage Ratio
Period Must Not Be Greater Than
Issue Date through and including 3.75 to 1.00
September 30, 1999
October 1, 1999 through and including 3.5 to 1.00
September 30, 2001
October 1, 2001 and thereafter 3.0 to 1.00;
(b) permit at any time the Consolidated Fixed Charge Ratio
to be less than 1.35 to 1.00; and
(c) permit at any time the Consolidated Interest Coverage
Ratio to be less than 3.0 to 1.00.
SECTION IV.24 Limitation on Hedging Obligations.
The Company will not and will not permit any of its
Subsidiaries to incur any Hedging Obligations or enter into any
agreements, arrangements, devices or instruments relating to
Hedging Obligations, except for Hedging Obligations the aggregate
notional amount of which does not exceed, the aggregate at any
time the lower of (i) 45,000,000, and (ii) 60% of the aggregate
commitment under the Credit Agreement, less any permanent
reductions in such commitment.
SECTION IV.25 Sale of Subsidiaries.
The Company will not sell, convey, transfer, assign or
otherwise dispose of any Subsidiary of the Company or any
division, operating unit or other business unit of the Company
that, on a pro forma basis, constitutes more than 20% of the pro
forma Consolidated EBITDA of the Company.
SECTION IV.26 Conduct of Business.
The Company shall not, and shall not permit any of its
Subsidiaries to, engage in any business other than the business
engaged in on the Issue Date.
SECTION IV.27 Additional Guarantors.
The Company shall cause each newly formed or acquired
Domestic Subsidiary to execute the Guaranty Agreement within
fifteen (15) Business Days of the formation or acquisition of
such Subsidiary.
ARTICLE V.
SUCCESSOR CORPORATION
SECTION V.1 Consolidation, Merger, Conveyance, Transfer or
Lease.
The Company shall not consolidate with or merge with or
into or sell, assign, convey, lease, transfer or otherwise
dispose of all or substantially all of its properties and assets
(determined on a consolidated basis for the Company and its
Subsidiaries, taken as a whole) to another Person or Persons, in
a single transaction or through a series of related transactions,
or cause or permit any of its Subsidiaries to do any of the
foregoing, unless:
(a) the Company is the continuing Person, or the Person
formed by or surviving such consolidation or merger or the Person
to which such sale, assignment, conveyance, lease, transfer or
other disposition is made (the "surviving entity") is a
corporation organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia;
(b) the surviving entity shall expressly assume, by a
supplemental indenture executed and delivered to the Trustee, in
form and substance reasonably satisfactory to the Trustee, all of
the obligations of the Company under the Securities and this
Indenture;
(c) immediately before and immediately after giving effect
to such transaction, or series of transactions (including,
without limitation, any Indebtedness incurred or anticipated to
be incurred in connection with or in respect of such transaction
or series of transactions), no Default or Event of Default shall
have occurred and be continuing;
(d) the Company or the surviving entity (in the case of a
merger or consolidation involving the Company or any sale,
assignment, conveyance, lease, transfer or other disposition of
all or substantially all of the Company's properties and assets)
shall immediately after giving effect to such transaction or
series of transactions (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection
with or in respect of such transaction or series of transactions)
have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such
transaction or series of transactions;
(e) immediately after giving effect to such transaction or
series of transactions, the Company or the surviving entity (in
the case of a merger or consolidation involving the Company or
any sale, assignment, conveyance, lease, transfer or other
disposition of all or substantially all of the Company's assets)
could incur $1.00 of Indebtedness pursuant to clause (e) of
Section 4.10 hereof;
(f) the Company or the surviving entity shall have
delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that (i) such consolidation, merger,
sale, assignment, conveyance, lease, transfer or other
disposition, (ii) if a supplemental indenture is required in
connection with such transaction or series of transactions, such
supplemental indenture complies with this Section 5.01, and (iii)
all conditions precedent in this Indenture relating to the
transaction or series of transactions have been satisfied; and
(g) the Company has delivered to the Trustee an opinion or
certificate of a nationally recognized firm of independent public
accountant complying with the applicable provisions of TIA
314(c)(3) and setting forth the computation of the Consolidated
Net Worth (i) of the surviving entity as provided in Section
5.01(d) and the ability of the Company or the surviving entity to
incur at least $1.00 in additional Indebtedness as provided in
Section 5.01(e), immediately following the transaction, and (ii)
of the Company, immediately preceding such transaction, in
accordance with clause (d) or (e) above, certifying to the
accuracy thereof.
SECTION V.2 Successor Entity Substituted.
Upon any consolidation, merger or any transfer of all
or substantially all of the assets of the Company in accordance
with Section 5.01, the surviving entity formed by such
consolidation or into or with which the Company is merged or to
which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such surviving entity
had been named as the Company herein and the Company shall be
discharged from all obligations and covenants under the Indenture
and the Securities.
ARTICLE VI.
DEFAULT AND REMEDIES
SECTION VI.1 Events of Default.
An "Event of Default" occurs if:
(i) the Company defaults in the payment of interest on
any Security when the same becomes due and payable and
continuance of any such default for a period of thirty (30) days;
or
(ii) the Company defaults in the payment of the
Principal of or premium on any Security as and when due and
payable (including a default in payment upon an offer to purchase
required to be made by this Indenture); or
(iii) the Company defaults in the performance, or
breach, of any material covenant, obligation or agreement in the
Securities or this Indenture (other than defaults specified in
clause (i) or (ii) above), and such default or breach continues
for a period of thirty (30) days after written notice to the
Company by the Trustee or to the Company and the Trustee by the
Holders of at least 30% in aggregate principal amount of the
outstanding Securities; or
(iv) the failure by the Company to observe or perform
any material covenant, obligation or agreement contained in the
Securities Purchase Agreement or the Registration Rights
Agreement and such failure continues for a period of thirty (30)
days; or
(v) a Series F Stock Event of Default (as such term is
defined in the Certificate of Designations) has occurred and is
continuing (including, without limitation, the Company's failure
to pay any dividend or the failure to make any redemption payment
that it is obligated to make, whether or not such payment is
legally permissible or conflicts with any other agreement to
which the Company or any of its Subsidiaries is a party or by
which any of its or their respective Properties are bound); or
(vi) any representation or warranty contained in the
Financing Documents or any writing furnished by the Company or
any of its Subsidiaries to any Holder, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading; or
(vii) failure by the Company or any of its
Subsidiaries (a) to make any payment when due with respect to any
other Indebtedness under one or more classes or issues of
Indebtedness which one or more classes or issues of Indebtedness
are in an aggregate principal amount of $5,000,000 or more and,
with respect to Indebtedness under the Credit Agreement, such
failure results in acceleration of the maturity thereof; or (b)
to perform any term, covenant, condition, or provision of one or
more classes or issues of Indebtedness which one or more classes
or issues of Indebtedness are in an aggregate principal amount of
$5,000,000 or more, which failure, in the case of this clause
(b), results in an acceleration of the maturity thereof; or
(viii) one or more judgments, orders or decrees for
the payment of money in excess of $2,500,000, either individually
or in an aggregate amount, shall be entered against the Company
or any of its Subsidiaries or any of their respective properties
and shall not be discharged and there shall have been a period of
thirty (30) days during which a stay of enforcement of such
judgment or order, by reason of pending appeal or otherwise,
shall not be in effect; or
(ix) any of the Financing Documents ceases to be in
full force and effect (other than as a result of termination
pursuant to its terms) or any such Financing Document or any of
its material provisions is declared or asserted to be null and
void or otherwise becomes unenforceable in accordance with its
terms;
(x) the Company or any Subsidiary redeems, or calls
for redemption, or purchases or enters into any agreement with
respect to the redemption or purchase, or the holders thereof
exercise any rights to cause the redemption, of any shares of
Series F Preferred Stock;
(xi) the Company or any Material Subsidiary of the
Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding with
respect to itself,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of
it or for all or any material part of its property,
(D) makes a general assignment for the benefit of
its creditors,
(E) consents to or acquiesces in the institution
of bankruptcy or insolvency proceedings against it,
(F) shall generally not pay its debts when such
debts become due or shall admit in writing its
inability to pay its debts generally, or
(G) takes any corporate action in furtherance of
or to facilitate, conditionally or otherwise, any of
the foregoing; or
(xii) a court of competent jurisdiction enters a
decree, judgment or order under any Bankruptcy Law that:
(A) is for relief against the Company or any
Material Subsidiary of the Company in an involuntary
case or proceeding,
(B) appoints a Custodian of the Company or any
Material Subsidiary of the Company for all or
substantially all of its properties, or
(C) orders the winding-up or liquidation of the
Company or any Material Subsidiary of the Company, and
in each case the order or decree remains unstayed and
in effect for sixty (60) days; or
(xiii) this Indenture ceases to be in full force and
effect or ceases to give the Trustee, an any material
respect, the liens, rights, powers and privileges purported
to be created thereby, in each case, as determined by a
court of competent jurisdiction.
The Company shall, within sixty (60) days following the
end of each of its first three Fiscal Quarters, and within ninety
(90) days following the end of each of its Fiscal Years, file
with the Trustee an Officers' Certificate certifying that the
Company has performed all of its obligations under this Indenture
in all material respects and that no Event of Default has
occurred during the preceding Fiscal Quarter or Fiscal Year, as
the case may be, or in the event any such Event of Default has
occurred, the facts and circumstances resulting in such Event of
Default. The Company shall promptly upon the occurrence thereof
provide notice to the Trustee of an Event of Default.
SECTION VI.2 Acceleration.
If an Event of Default (other than an Event of Default
specified in clause (xi) or (xii) above with respect to the
Company or any Material Subsidiary of the Company) occurs and is
continuing, then the Trustee or the Holders of at least thirty
percent (30%) in aggregate principal amount of the outstanding
Securities may, by written notice to the Company and the Trustee,
and the Trustee upon the request of the Holders of not less than
thirty percent (30%) in aggregate principal amount of the
outstanding Securities shall, subject in each case to Section
10.02(e), declare the Principal of and accrued and unpaid
interest, if any, on all the Securities on the date of such
declaration to be due and payable immediately together with an
amount equal to the premium that would be payable if all
outstanding Securities at the time were redeemed by the Company,
or any Material Subsidiary of the Company, pursuant to Article
III hereof (the "Default Amount"). Upon any such declaration,
the Default Amount shall become due and payable immediately. If
an Event of Default specified in clause (xi) or (xii) above with
respect to the Company occurs and is continuing, then the Default
Amount on all of the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.
After a declaration of acceleration, the Required
Holders may, by notice to the Trustee, rescind such declaration
of acceleration if all existing Events of Default have been cured
or waived, other than nonpayment of the Default Amount on the
Securities that have become due solely as a result of such
acceleration and if the rescission of acceleration would not
conflict with any judgment, order or decree by a court of
competent jurisdiction. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION VI.3 Other Remedies.
If an Event of Default occurs and is continuing, the
Trustee may, subject to Section 10.02(e), pursue any available
remedy by proceeding at law or in equity to collect the payment
of Principal of, or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture
as may be required or permitted thereunder.
The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of them
in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default.
No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
SECTION VI.4 Waiver of Past Defaults.
Subject to Sections 6.02, 6.07 and 9.02, the Required
Holders by notice to the Trustee may waive an existing Default or
Event of Default and its consequences, except a Default in the
payment of Principal of or interest on any Security as specified
in clauses (i) and (ii) of Section 6.01 or in respect of any
provision hereof which cannot be modified or amended without the
consent of the Holder so affected pursuant to Section 9.02. When
a Default or Event of Default is so waived, it shall be deemed
cured and ceases to exist, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent
thereon.
SECTION VI.5 Control by Required Holders.
The Required Holders may direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it
including, without limitation, any remedies provided for in
Section 6.03. Subject to Section 7.01, however, the Trustee may
refuse to follow any direction that conflicts with any law or
this Indenture that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder, or that may
involve the Trustee in personal liability unless the Trustee has
asked for and received indemnification reasonably satisfactory to
it against any loss, liability or expense caused by its following
such direction; provided that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION VI.6 Limitation on Suits.
A Securityholder may not pursue any remedy with respect
to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee notice of a continuing
Event of Default;
(b) Holders of at least thirty percent (30%) in principal
amount of the outstanding Securities make a written request to
the Trustee to pursue the remedy;
(c) such Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense to be incurred in compliance with such request;
(d) the Trustee does not comply with the request within
thirty (30) days after receipt of the request and the offer of
indemnity; and
(e) during such thirty (30) day period the Required Holders
do not give the Trustee a direction which, in the opinion of the
Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to
prejudice the rights of another Securityholder or to obtain a
preference or priority over such other Securityholder.
SECTION VI.7 Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture,
except as set forth in Article X, the right of any Holder to
receive payment of Principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to
bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without
the consent of such Holder.
SECTION VI.8 Collection Suit by Trustee.
If an Event of Default in payment of Principal or
interest specified in clause (i) or (ii) of Section 6.01 occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company or
any other obligor on the Securities for the whole amount of
Principal and accrued interest remaining unpaid, together with
interest on overdue Principal and, to the extent that payment of
such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION VI.9 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, taxes, disbursements and
advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relating to
the Company or any other obligor upon the Securities, any of
their respective creditors or any of their respective property
and shall be entitled and empowered to collect and receive any
monies or other securities or property payable or deliverable
upon the conversion or exchange of the Securities or upon any
such claims and to distribute the same, and any Custodian in any
such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such
payments directly to the Securityholders, to first pay to the
Trustee any amount due to it for the reasonable compensation,
expenses, taxes, disbursements and advances of the Trustee, its
agent and counsel, and any other amounts due the Trustee under
Section 7.07. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Security holder any plan of
reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any
Security holder in any such proceeding.
SECTION VI.10 Priorities.
If the Trustee collects any money pursuant to this
Article VI, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section
7.07;
Second: to Holders for Principal, interest and
premiums owing under the Securities, ratably, according to
the amounts due and payable on the Securities for Principal,
in the following order of priority: first to any premiums,
then to interest and lastly to Principal; and
Third: to the Company or any other obligor on the
Securities, as their interests may appear, or as a court of
competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix
a record date and payment date for any payment to Securityholders
pursuant to this Section 6.10.
SECTION VI.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, 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
pursuant to Section 6.07, or a suit by a Holder or Holders of
more than ten percent (10%) in principal amount of the
outstanding Securities.
SECTION VI.12 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION VI.13 Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any
Security to exercise any right or remedy arising upon any Event
of Default shall impair the exercise of any such right or remedy
or constitute a waiver of any such Event of Default. Every right
and remedy given by this Article VI or by law to the Trustee or
to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
ARTICLE VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by
this Indenture and covenants and agrees to perform the same, as
herein expressed.
SECTION VII.1 Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of
care and skill in its exercise thereof as a prudent person would
exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of a Default or an Event
of Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and
no covenants or obligations shall be implied in this
Indenture that are adverse to the Trustee.
(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 shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture but need not
verify the accuracy of the contents thereof.
(c) The Trustee may not be relieved from liability 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
paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.05.
(d) The Trustee may refuse to perform any duty or exercise
any right or power unless it receives indemnity reasonably
satisfactory to it against any loss, liability or expense.
(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(f) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (e) of
this Section 7.01.
(g) The Trustee shall not be liable for interest on any
money or assets received by it except as the Trustee may agree
with the Company. Assets held in trust by the Trustee need not
be segregated from other assets except to the extent required by
law.
SECTION VII.2 Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in
acting or refraining from acting 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 the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 11.04 and
11.05 hereof. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon.
(d) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of
any agent (other than the negligence or misconduct of an agent
who is an employee of the Trustee) appointed with due care.
(e) The Trustee shall not be liable for any action that it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers, provided that the
Trustee's conduct does not constitute negligence or bad faith.
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, notice, request,
direction, consent, order, bond, debenture, or other paper or
document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon
reasonable notice to the Company, to examine the books, records,
and premises of the Company, personally or by agent or attorney.
(g) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders pursuant to the
provisions of this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred by it
in compliance with such request, order or direction.
SECTION VII.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal
with the Company, any Subsidiary of the Company or their
respective Affiliates with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11
hereof.
SECTION VII.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity
or adequacy of this Indenture or the Securities. Further, the
Trustee shall not be accountable for the Company's use of the
proceeds from the Securities, nor be responsible for any
statement in the Securities other than the Trustee's certificate
of authentication.
SECTION VII.5 Notice of Default.
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall
mail to each Securityholder, as their names and addresses appear
on the Securityholder list described in Section 2.05 hereof,
notice of the Default or Event of Default within thirty (30) days
after such Default or Event of Default has occurred, unless such
Default or Event of Default shall have been cured or waived.
Except in the case of a Default or an Event of Default in payment
of Principal of or interest on, any Security, and a Default or
Event of Default that resulted from the failure to comply with
Section 4.16, 4.17 or 5.01 hereof, the Trustee may withhold the
notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its
directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Securityholders.
SECTION VII.6 Reports by Trustee to Holders.
If required by law, within sixty (60) days after each
May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall mail to the Holders, at the
Company's expense, a brief report dated as of such reporting date
that complies with TIA 313(a) (but if no event described in TIA
313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also
shall comply with TIA 313(b)(2) to the extent applicable. The
Trustee shall also transmit by mail all reports as required by
TIA 313(c).
A copy of each report at the time of its mailing to
Holders shall be filed with the SEC and each stock exchange or
market on which the Securities are listed or quoted. The Company
shall notify the Trustee when the Securities are listed on any
stock exchange or quoted on any market.
SECTION VII.7 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all tax
obligations imposed on the Trustee related to this Indenture and
all reasonable out-of-pocket expenses incurred or made by it.
Such expenses shall include the reasonable fees and expenses of
the Trustee's agents, compensation and counsel.
The Company shall indemnify the Trustee and its agents
for, and hold them harmless against, any loss, liability or
expense incurred by them without negligence, bad faith or willful
misconduct on their part, arising out of or in connection with
the administration of this trust including the reasonable costs
and expenses of enforcing this Indenture against the Company
(including Section 7.07 hereof) and of defending themselves
against any claim (whether asserted by any Security holder or the
Company) or liability in connection with the exercise or
performance of any of their rights, powers or duties hereunder.
The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of
such counsel; provided that the Company will not be required to
pay such fees and expenses if they assume the Trustee's defense
and there is no conflict of interest between the Company and the
Trustee in connection with such defense as reasonably determined
by the Trustee. The Company need not pay for any settlement made
without its written consent. The Company need not reimburse any
expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or
willful misconduct.
To secure the Company's payment obligations in this
Section 7.07, the Trustee shall have a lien prior to the
Securities on all assets or money held or collected by the
Trustee, in its capacity as Trustee, except assets or money held
in trust to pay Principal of or interest on Securities.
When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(xi) or (xii)
occurs, such expenses and the compensation for such services are
intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION VII.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment
of a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign by so notifying the Company in
writing at least thirty (30) days prior to the date of the
proposed resignation; provided, however, that no such resignation
shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.08. The Required Holders
may remove the Trustee by so notifying the Company and the
Trustee and may appoint a successor Trustee with the Company's
consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.01 or 7.10;
(b) 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;
(c) a receiver Custodian or other public officer takes
charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall
notify each Holder of such event and shall promptly appoint a
successor Trustee. Within one (1) year after the successor
Trustee takes office, the Required Holders may appoint a
successor Trustee to replace the successor Trustee appointed by
the Company.
A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.
Immediately after that, the retiring Trustee shall transfer all
property held by it as Trustee to the successor Trustee, subject
to the lien provided in Section 7.07, the resignation or removal
of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Security holder.
If a successor Trustee does not take office within
sixty (60) days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of at least ten
percent (10%) in principal amount of the outstanding Securities
may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Security holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
Trustee.
Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
SECTION VII.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation, the resulting, surviving
or transferee corporation without any further act shall, if such
resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee.
SECTION VII.10 Eligibility: Disqualification.
This Indenture shall always have a Trustee who
satisfies the requirement of TIA 310(a)(1) and 310(a)(5). The
Trustee (or in the case of a corporation included in a bank
holding company system, the related bank holding company) shall
always have a combined capital and surplus of at least
$500,000,000 as set forth in its most recent published annual
report of condition. In addition, if the Trustee is a
corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet
the capital requirements of TIA 310(a)(2). The Trustee shall
comply with TIA 310(b) including the optional provision
permitted by the second sentence of TIA 309(b)(9); provided,
however, that there shall be excluded from the operation of TIA
310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements
for such exclusion set forth in TIA 310(b)(1) are met.
SECTION VII.11 Preferential Collection of Claims Against
Company.
The Trustee shall comply with TIA 311(a), excluding
any creditor relationship listed in TIA 311(b). A Trustee who
has resigned or been removed shall be subject to TIA 311(a) to
the extent indicated therein.
ARTICLE VIII.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION VIII.1 Discharge of Indenture.
This Indenture shall cease to be of further effect
(except that the Company's obligations under Sections 7.07, 8.04
and 8.05 shall survive) as to all outstanding Securities when all
such Securities theretofore authenticated and delivered (except
lost, stolen or destroyed Securities which have been replaced or
paid and Securities for the payment of which money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable
hereunder. In addition, the Company may terminate all of its
obligations under this Indenture (except the Company's
obligations under Sections 7.07, 8.04 and 8.05) if:
(a) either (i) pursuant and subject to compliance with
Article III, the Company shall have given notice to the Trustee
and mailed a notice of redemption to each Holder of the
redemption of all of the Securities or (ii) all Securities have
otherwise become due and payable in accordance with the terms of
this Indenture (including the provisions of Article X).
(b) the Company shall have irrevocably deposited or caused
to be deposited with the Trustee or a trustee satisfactory to the
Trustee, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust funds in
trust solely for the benefit of the Holders for that purpose,
U.S. Legal Tender sufficient to pay Principal of and interest, if
any, on the outstanding Securities to redemption; provided that
the Trustee shall have been irrevocably instructed to apply such
U.S. Legal Tender to the payment of said Principal and interest
with respect to the Securities;
(c) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent providing for the termination of
the Company's obligation under the Securities and this Indenture
have been complied with; and
(d) the Company shall have paid all sums payable by it
hereunder.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.02,
7.07, 7.08, 8.03, 8.04 and 8.05 hereof shall survive until the
Securities are no longer outstanding. After the Securities are
no longer outstanding, the Company's obligations in Sections
7.07, 8.04 and 8.05 hereof shall survive.
After such delivery or irrevocable deposit the Trustee
upon request shall acknowledge in writing the discharge of the
Company's obligations under the Securities and this Indenture
except for those surviving obligations specified above.
SECTION VIII.2 Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution, at
any time, with respect to the Securities, elect to have either
paragraph (b) or paragraph (c) below be applied to the
outstanding Securities upon compliance with the conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (b), the Company shall be
deemed to have been released and discharged from its obligations
with respect to the outstanding Securities on the date the
conditions set forth in paragraph (d) below are satisfied
(hereinafter, "legal defeasance"). For this purpose, such legal
defeasance means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (e) below and
the other Sections of and matters under this Indenture referred
to in (i) and (ii) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Securities to receive solely from the
trust fund described in paragraph (d) below and as more fully set
forth in such paragraph, payments in respect of the Principal of
and interest on such Securities when such payments are due, (ii)
the Company's obligations with respect to such Securities under
Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.02, 7.07, 7.08, 8.03,
8.04 and 8.05, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, and (iv) this Section 8.02.
Subject to compliance with this Section 8.02, the Company may
exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with
respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (c), the Company shall be
released and discharged from its obligations under any covenant
contained in Article V and in Sections 4.10 through 4.18 with
respect to the outstanding Securities on and after the date the
conditions set forth in paragraph (d) below are satisfied
(hereinafter, "covenant defeasance"), and the Securities shall
thereafter be deemed to be not "outstanding" for the purpose of
any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all
other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the outstanding
Securities, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default
under Section 6.01, but, except as specified above, the remainder
of this Indenture and such Securities shall be unaffected
thereby.
(d) The following shall be the conditions to application of
either paragraph (b) or paragraph (c) above to the outstanding
Securities:
(i) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 7.10 who shall agree
to comply with the provisions of this Section 8.02
applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the
Holders of such Securities, (A) U.S. Legal Tender in an
amount, or (B) U.S. Government Obligations which through the
scheduled payment of Principal of and interest in respect
thereof in accordance with their terms will provide (without
giving effect to the reinvestment of any interest thereon),
not later than one (1) day before the due date of any
payment, U.S. Legal Tender in an amount, or (C) a
combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to
the Trustee, to pay and discharge and which shall be applied
by the Trustee (or other qualifying trustee) to pay and
discharge Principal of and interest, on the outstanding
Securities on the Maturity Date of such principal or
installment of principal or interest in accordance with the
terms of this Indenture and of such Securities; provided,
however, that the Trustee (or other qualifying trustee)
shall have received an irrevocable Company Order instructing
the Trustee (or other qualifying trustee) to apply such U.S.
Legal Tender or the proceeds of such U.S. Government
Obligations to said payments with respect to the Securities;
(ii) no Default or Event of Default or event which with
notice or lapse of time or both would become a Default or an
Event of Default with respect to the Securities shall have
occurred and be continuing on the date of such deposit or,
in so far as Sections 6.01(xi) and (xii) are concerned, at
any time during the period ending on the 91st day after the
date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration
of such period);
(iii) such legal defeasance or covenant defeasance
shall not result in a breach or violation of, or constitute
a Default or Event of Default under, this Indenture or any
other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which any of them is
bound;
(iv) in the case of an election under paragraph (b)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (x) the Company has received
from, or there has been published by, the Internal Revenue
Service a ruling, or (y) 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 shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such
legal defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same
times as would have been the case if such legal defeasance
had not occurred;
(v) in the case of an election under paragraph (c)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant
defeasance had not occurred;
(vi) in the case of an election under either paragraph
(b) or (c) above, an Opinion of Counsel to the effect that,
(x) the trust funds will not be subject to any rights of any
other holders of any other Indebtedness of the Company after
the 91st day following the deposit, and (y) after the 91st
day following the deposit, the trust funds will not be
subject to the effect of any applicable Bankruptcy Law;
(vii) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that (A) all conditions precedent provided for
relating to either the legal defeasance under paragraph (b)
above or the covenant defeasance under paragraph (c) above,
as the case may be, have been complied with; and (B) if any
other Indebtedness of the Company (including, without
limitation, the Senior Indebtedness) shall then be
outstanding, such legal defeasance will not violate the
provisions of the agreements or instruments evidencing such
Indebtedness; and
(viii) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit
was not made by the Company with the intent of preferring
the Holders of the Securities over other creditors of the
Company or with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others.
(e) All money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this paragraph
(e), the "Trustee") pursuant to paragraph (d) above in respect of
the outstanding Securities shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through
any Paying Agent as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in
respect of Principal, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to paragraph (d)
above or the Principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Securities.
Anything in this Section 8.02 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon the request, in writing, by the Company
any money or U.S. Government Obligations held by it as provided
in paragraph (d) above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant
defeasance.
SECTION VIII.3 Application of Trust Money.
The Trustee shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to
Sections 8.01 and 8.02, and shall apply the deposited U.S. Legal
Tender and the U.S. Legal Tender from U.S. Government Obligations
in accordance with this Indenture to the payment of Principal of
and interest on the Securities.
SECTION VIII.4 Repayment to Company.
Subject to Sections 7.07, 8.01 and 8.02, the Trustee
shall, subject to Article X, promptly pay to the Company, upon
receipt by the Trustee of an Officers' Certificate, any excess
money, determined in accordance with Sections 8.02(d)(i) and (e),
held by it at any time. The Trustee and the Paying Agent shall
pay to the Company upon receipt by the Trustee or the Paying
Agent, as the case may be, of an Officers' Certificate, any money
held by it for the payment of Principal or interest that remains
unclaimed for two (2) years, provided, however, that the Trustee
and the Paying Agent before being required to make any payment
may, but need not, at the expense of the Company, cause to be
published once in a newspaper of general circulation in The City
of New York or mail to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified
therein, which shall be at least thirty (30) days from the date
of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to money must
look solely to the Company for payment as general creditors
unless an applicable abandoned property law designates another
person.
SECTION VIII.5 Reinstatement.
If the Trustee or Paying Agent is unable to apply any
U.S. Legal Tender or U.S. Government Obligations in accordance
with this Indenture 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, then and only then the Company's obligations under
this Indenture and the Securities shall be revived and reinstated
as though no deposit had been made pursuant to this Indenture
until such time as the Trustee is permitted to apply all such
U.S. Legal Tender or U.S. Government Obligations in accordance
with this Indenture; provided, however, that if the Company has
made any payment of Principal of or interest on of any Securities
because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the U.S. Legal Tender or
U.S. Government Obligations held by the Trustee or Paying Agent.
SECTION VIII.6 Acknowledgment of Discharge by Trustee.
After (i) the conditions of Section 8.02 have been
satisfied, (ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company, and (iii) the
Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee
upon written request shall acknowledge in writing the discharge
of the Company's obligations under this Indenture except for
those surviving obligations specified in Section 8.01.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION IX.1 Without Consent of Holders.
The Company, when authorized by its Board Resolution,
and the Trustee, together, may without notice to or the consent
of any Securityholder amend, waive or supplement this Indenture
or the Securities:
(i) to cure any ambiguity, defect or inconsistency or to
make any other provisions with respect to matters or questions
arising under this Indenture; provided that such action does not
adversely affect the rights of any Holder;
(ii) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein
conferred upon the Company, or to provide any additional rights
or benefits to the Holders;
(iii) to evidence the succession of another person to
the Company, and the assumption by any such successor of the
obligations of the Company herein and in the Securities in
accordance with Article V;
(iv) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(v) to make any other change that does not adversely affect
the rights of any Securityholders hereunder;
(vi) to comply with the TIA; or
(vii) to comply with any requirements of the SEC in
connection with the qualification of this Indenture under the
TIA;
provided that the Company has delivered to the Trustee an Opinion
of Counsel and an Officers' Certificate, each stating that such
amendment or supplement complies with the provisions of this
Section 9.01.
SECTION IX.2 With Consent of Holders.
Subject to Section 6.07, the Company when authorized by
its Board Resolution, and the Trustee, together, with the written
consent of the Required Holders, may amend or supplement this
Indenture or the Securities, without notice to any other
Securityholders. However, without the consent of each
Securityholder affected, no amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may:
(i) reduce the principal amount of any Security or premium,
if any, with respect thereto;
(ii) change the Maturity Date of, or alter the redemption or
repurchase or other provisions of the Securities, in a manner
that adversely affects the rights of any Holder;
(iii) reduce the percentage in principal amount
outstanding of Securities which must consent to an amendment,
supplement or waiver or consent to take any action under this
Indenture or the Securities;
(iv) impair the right to institute suit for the enforcement
of any payment on or with respect to the Securities;
(v) make any changes in the provisions concerning waivers
of Defaults or Events of Default by Holders of the Securities or
the rights of Holders to recover the principal of, interest on,
or redemption payment with respect to, any Security;
(vi) make any change in or affecting the ranking of the
Securities with respect to any other obligation of the Company or
any Subsidiary in a way that adversely affects the rights of any
Holder;
(vii) reduce the interest rate or extend the time for
payment of interest, if any, on the Securities;
(viii) make the principal of, premium, if any, or the
interest on, any Security payable with anything, at any place of
payment or in any manner other then as provided for in this
Indenture and the Security as in effect on the date hereof;
(ix) following the mailing of a Change of Control Offer,
modify the provisions of this Indenture with respect to such
Change of Control Offer in a manner adverse to any Holder; or
(x) make any changes in this Section 9.02 in a manner that
adversely affects the rights of any Holder.
It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Company shall mail to the
Holders affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment,
supplement or waiver.
SECTION IX.3 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture
or the Securities shall comply with the TIA as then in effect.
SECTION IX.4 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes
effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Security or portion
of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on
any Security. However, prior to becoming effective, any such
Holder or subsequent Holder may revoke the consent as to his
Security or portion of his Security by notice to the Trustee or
the Company if such notice is received by the Trustee or the
Company before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the
requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or
waiver. Notwithstanding the above, nothing in this paragraph
shall impair the right of any Securityholder under 316(b) of the
TIA.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled
to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those persons who were Holders
at such record date (or their duly designated proxies), and only
those persons, shall be entitled to revoke any consent previously
given, whether or not such persons continue to be Holders after
such record date. No such consent shall be valid or effective
for more than ninety (90) days after such record date unless
consents from Holders of the principal amount of Securities
required hereunder for such amendment, supplement or waiver to be
effective shall have been given and not revoked within such
ninety (90) day period.
After an amendment, supplement or waiver becomes
effective, it shall bind every Securityholder, unless it makes a
change described in any of clauses (i) through (x) of Section
9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security;
provided, however, that any such waiver shall not impair or
affect the right of any Holder to receive payment of Principal of
and interest on a Security, on or after the respective dates set
for such amounts to become due and payable expressed in such
Security, or to bring suit for the enforcement of any such
payment on or after such respective dates.
SECTION IX.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms
of a Security, the Trustee may require the Holder of the Security
to deliver the Security to the Trustee. The Trustee may place an
appropriate notation on the Security about the changed terms and
return the Security to the Holder. Alternatively, if the Company
or the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the
appropriate notation or issue a new Security shall not affect the
validity and effect of such amendment, supplement or waiver.
SECTION IX.6 Trustee To Sign Amendments, Etc.
Subject to the next sentence, the Trustee shall execute
any amendment, supplement or waiver authorized pursuant to this
Article IX, provided, however, that the Trustee may, but shall
not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or
immunities under this Indenture. The Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each stating that
the execution of any amendment, supplement or waiver is
authorized or permitted by this Indenture.
ARTICLE X.
SUBORDINATION
SECTION X.1 Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder (and
each Person holding any Security, whether upon original issue, or
upon transfer, assignment or exchange thereof) of the Securities,
by its acceptance thereof, likewise covenants and agrees that:
(i) all Securities shall be issued subject to the provisions of
this Article X; (ii) the payment of the Principal of, and
interest on, the Securities by the Company shall, to the extent
and in the manner herein set forth, be subordinated and junior in
right of payment to the prior payment in full, in cash or Cash
Equivalents, of the Senior Indebtedness; and (iii) the
subordination is for the benefit of, and shall be relied upon and
be enforceable directly by, the holders of Senior Indebtedness.
The Company and each Holder hereby agree not to amend, modify or
change in any manner any provision of this Article X (and any
defined term used in this Article X) so that the terms and
conditions hereof, as so amended, modified or changed, are less
favorable to the holders of the Senior Indebtedness and their
Representative than the terms hereof on the Issue Date, without
the prior written consent of the necessary holders of Senior
Indebtedness as required under the Credit Agreement.
SECTION X.2 Suspension of Payment on Securities in Certain
Events.
(a) If (i) any default occurs and is continuing after the
expiration of any applicable cure period (each a "Senior Debt
Payment Default"), in the payment when due, whether at maturity,
upon any redemption, by declaration or otherwise, of any
Principal of, or interest on the Senior Indebtedness, or fees or
other amounts due under the terms of the Credit Agreement, and
(ii) the Representative of the holders of the Senior Indebtedness
gives written notice (a "Default Notice") of such Senior Debt
Payment Default to the Trustee, then no payment of any kind or
character shall be made by or on behalf of the Company or any
other Person on its behalf with respect to any Principal of, or
interest on or fees or other amounts due with respect to, the
Securities or to redeem, repurchase or otherwise acquire any of
the Securities for cash or property or otherwise, until such
payment is made in full or Senior Payment Default has been cured,
waived or has ceased to exist.
(b) If (i) any event of default other than a Senior Debt
Payment Default (a "Senior Debt Other Default") occurs and is
continuing with respect to the Senior Indebtedness, as such
Senior Debt Other Default is defined in the instrument creating
or evidencing such Senior Indebtedness, permitting the holders of
such Senior Indebtedness to accelerate the maturity thereof, and
(ii) the Representative of the holders of the Senior
Indebtedness gives a Default Notice to the Trustee, then until
the earlier of (A) the Trustee receiving notice from the
Representative of the holders of the Senior Indebtedness
terminating the Blockage Period (as defined below), (B) the date
on which the Senior Debt Other Default giving rise to the
Blockage Period is cured or waived, or (C) 180 days after the
delivery of such Default Notice (the "Blockage Period"), neither
the Company nor any other Person on its behalf shall make any
payment of any kind or character with respect to any Principal
of, or interest on, or fees or other amounts due with respect to
the Securities, or redeem, repurchase or otherwise acquire any
of the Securities for cash or property or otherwise; provided,
however, that if such Senior Indebtedness has not been
accelerated or become the subject of judicial proceedings within
the Blockage Period, then the Company shall resume making any and
all required payments in respect of the Securities. At the
expiration or termination, as applicable, of such Blockage Period
the Company shall promptly pay to the Trustee all sums not paid
during such Blockage Period as a result of this subsection (b).
Notwithstanding anything herein to the contrary, in no event will
a Blockage Period extend beyond 180 days from the date of the
Senior Debt Other Default and only one such Blockage Period may
be commenced within any period of 360 consecutive days. No
Senior Debt Other Default or event which, with the giving of
notice and/or lapse of time or otherwise, would become a Senior
Debt Other Default which existed on the date of the commencement
of such Blockage Period, may be used as the basis for declaring
any subsequent Blockage Period unless such Senior Debt Other
Default or event, as the case may be, shall in the interim have
been cured or waived for a period of not less than ninety (90)
consecutive days.
(c) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such
payment is prohibited by Sections 10.02(a) and (b), then unless
and until such payment is no longer prohibited by this Section
10.02, such payment shall be held in trust for the benefit of,
and shall as soon practicable be paid over or delivered to, the
Representative of the holders of the Senior Indebtedness. No
amount paid by the Company, or any other Person on its behalf, to
the Trustee or any Holder of the Securities, and paid over by
such Person to the Representative of the holders of the Senior
Indebtedness pursuant to this Article X shall, as between the
Company and the Holders of the Securities, be deemed a payment by
the Company to or on account of any payments due in respect of
the Securities.
(d) The Company shall give prompt written notice to the
Trustee of any Senior Debt Payment Default or any Senior Debt
Other Default, under the Senior Indebtedness or under any
agreement pursuant to which Senior Indebtedness may have been
issued. Failure to give such notice shall not affect the
subordination of the Securities to the Senior Indebtedness
provided in this Article X.
(e) Nothing contained in this Article X shall limit the
right of the Trustee or the Holders of Securities to take any
action to accelerate the maturity of the Securities pursuant to
Section 6.02 or to pursue any rights or remedies available under
this Indenture or otherwise; provided that the Trustee or the
Holders shall, prior to commencing any such action, provide the
Representative of the holders of the Senior Indebtedness with
five (5) days prior written notice of its intention to take such
action; provided further that all Senior Indebtedness thereafter
due or declared to be due shall first be paid in full, in cash or
Cash Equivalents, before the Holders are entitled to receive any
payment of any kind or character with respect to Principal of, or
interest on or fees or other amounts due with respect to, the
Securities.
SECTION X.3 Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation or Reorganization
of Company.
(a) Upon any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or
securities, to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of
creditors or marshaling of assets of the Company or in a
bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to the Company or its property,
whether voluntary or involuntary, all Senior Indebtedness shall
first be paid in full in, cash or Cash Equivalents (or such
payment shall be duly provided for), before any payment or
distribution of any kind or character is made on account of any
Principal of, or interest on, or fees or other amounts due with
respect to, the Securities, or for the acquisition of any of the
Securities for cash or property or otherwise. Upon any such
dissolution, winding-up, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution
of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders of the
Securities or the Trustee under this Indenture would be entitled,
except for the provisions hereof, shall be paid by the Company or
by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by
the Holders or by the Trustee under this Indenture if received by
them, to the Representative of the holders of the Senior
Indebtedness, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness
has been paid in full, in cash or Cash Equivalents, after giving
effect to any concurrent payment, distribution or provision
therefor to or for the holders of Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness
(whether by or on behalf of the Company, as proceeds of security
or enforcement of any right of setoff or otherwise) is declared
to be fraudulent or preferential, set aside or required to be
paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such
payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar
Person, the Senior Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred.
(c) The consolidation of the Company with, or the merger of
the Company with or into, another corporation or the liquidation
or dissolution of the Company following the conveyance or
transfer of all or substantially all of its assets, to another
corporation upon the terms and conditions provided in Article V
hereof and as long as permitted under the terms of the Senior
Indebtedness shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if
such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, assume in writing, to the
reasonable satisfaction of the Representative, the Company's
obligations hereunder in accordance with Article V hereof.
(d) The Company shall give prompt written notice to the
Trustee of any dissolution, winding-up, liquidation or
reorganization of the Company, but failure to give such notice
shall not affect the subordination of the Securities to the
Senior Indebtedness provided in this Article X.
SECTION X.4 Holders to be Subrogated to Rights of Holders of
Senior Indebtedness.
Subject to the payment in full, in cash or Cash
Equivalents, of the Senior Indebtedness, the Holders shall be
subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Indebtedness until the
Securities shall be paid or converted in full. For the purposes
of such subrogation, no such payments or distributions of cash,
property or securities of the Company to the holders of the
Senior Indebtedness by or on behalf of the Company or by or on
behalf of the Holders by virtue of this Article X which otherwise
would have been made to the Holders shall, as between the Company
and the Holders, be deemed to be a payment by the Company to or
on account of the Senior Indebtedness, it being understood that
the provisions of this Article X are and are intended solely for
the purpose of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
SECTION X.5 Obligations of the Company Unconditional.
Nothing contained in this Article X or elsewhere in
this Indenture or in the Securities, is intended to or shall
impair, as between the Company and the Holders, the obligation of
the Company, which is absolute and unconditional, to pay to the
Holders the principal of, and interest on, the Securities as and
when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article
X of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise
of any such remedy. Upon any payment or distribution of cash,
property or securities of the Company referred to in this
Article X, the Trustee, subject to the provisions of Sections
7.01 and 7.02, and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in
which any liquidation, dissolution, winding-up or reorganization
proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee or agent or other
Person making any payment or distribution to the Trustee or to
the Holders for the purpose of ascertaining (i) the Persons
entitled to participate in such payment or distribution, (ii) the
holders of Senior Indebtedness and other Indebtedness of the
Company, (iii) the amount thereof or payable thereon, (iv) the
amount or amounts paid or distributed thereon, and (iv) all other
facts pertinent thereto or to this Article X. Nothing in this
Article X shall apply to the claims of, or payments to, the
Trustee under or pursuant to Section 7.07. The Trustee, subject
to Section 1.01, shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself or itself to
be the Representative of the holders of the Senior Indebtedness.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a
Representative of the holders of the Senior Indebtedness, the
Trustee may request such Person to furnish evidence thereof to
the reasonable satisfaction of the Trustee, and if such evidence
is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to right of such Person
to receive such payment on behalf of the holders of the Secured
Indebtedness.
SECTION X.6 Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice.
The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article X.
Regardless of anything to the contrary contained in this Article
X or elsewhere in this Indenture, the Trustee shall not be
charged with knowledge of the existence of any Senior Debt
Payment Default or Senior Debt Other Default or of any other
facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice
in writing from the Company, or from a holder of Senior
Indebtedness or a Representative thereof, together with proof
satisfactory to the Trustee of such holding of Senior
Indebtedness or of the authority of such Representative, and,
prior to the receipt of any such written notice, the Trustee
shall be entitled to assume (in the absence of actual knowledge
to the contrary), subject to the provisions of Section 7.01 and
7.02 that no such facts exist.
SECTION X.7 Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government Obligations
deposited in trust with the Trustee pursuant to and in accordance
with Sections 8.01 and 8.02 shall be for the sole benefit of the
Holders of the Securities and, to the extent allocated for the
payment of Securities, shall not be subject to the subordination
provisions of this Article X. Otherwise, any deposit of assets,
property or securities by or on behalf of the Company with the
Trustee or any Paying Agent (whether or not in trust) for the
payment of Principal of, or interest on, any Securities shall be
subject to the provisions of this Article X; provided, however,
that if prior to the second Business Day preceding the date on
which by the terms of this Indenture any such assets may become
distributable for any purpose (including, without limitation, the
payment of either Principal of, or interest on, any Security) the
Trustee or such Paying Agent shall not have received with respect
to such assets the notice provided for in Section 10.06, then the
Trustee or such Paying Agent shall have full power and authority
to receive such assets and to apply the same to the purpose for
which they were received, and shall not be affected by any notice
to the contrary received by it on or after such date. Nothing
contained in this Section 10.07 shall limit the right of the
holders of Senior Indebtedness to recover payments as
contemplated by this Article X.
SECTION X.8 No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or
failure to act, in good faith, by any such holder, or by any non-
compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of
this Section 10.08, the holders of Senior Indebtedness may, at
any time and from time to time, without the consent of or notice
to the Trustees or the Holders, without incurring responsibility
to the Holders and without impairing or releasing the
subordination provided in this Article X or the obligations
hereunder of the Holders to the holders of Senior Indebtedness,
do any one or more of the following: (1) change the manner,
place, terms or time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (2)
sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3)
release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION X.9 Holders Authorize Trustee to Effectuate
Subordination of Notes.
Each Holder of the Securities by such Holders'
acceptance thereof authorizes and expressly directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to effectuate, as between the Holders and the holders
of Senior Indebtedness, the subordination provisions contained in
this Article X, and appoints the Trustee such Holders' attorney-
in-fact for such purpose, including, in the event of any
liquidation, dissolution, winding-up, reorganization, assignment
for the benefit of creditors or marshaling of assets of the
Company (whether in bankruptcy, insolvency or receivership
proceedings or upon assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets
of the Company, the immediate filing of a claim for the unpaid
balance of such Holder's Securities in the form required in said
proceedings and cause said claim to be approved. If the Trustee
does not file a proper claim or proof of debt in the form
required in such proceeding prior to thirty (30) days before the
expiration of the time to file such claim or proof, then any of
the holders of the Senior Indebtedness or their Representative is
hereby authorized, but is not obligated, to file an appropriate
claim for and on behalf of the Holders of said Securities.
Nothing herein contained shall be deemed to authorize the Trustee
or the holders of Senior Indebtedness or their Representative to
authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder
thereof, or to authorized the Trustee or the holders of Senior
Indebtedness or their Representative to vote in respect of the
claim of any Holder in any such proceeding.
SECTION X.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee and any agent of the Company shall be
entitled to all the rights set forth in this Article X with
respect to any Senior Indebtedness which may at any time be held
by it in its individual or any other capacity to the same extent
as any other holder of Senior Indebtedness and nothing in this
Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article X, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness shall be read into this
Indenture against the Trustee.
Whenever a distribution is to be made or a notice given
to holders or owners of Senior Indebtedness, the distribution
will be made and the notice will be given to their
Representative.
SECTION 10.11. This Article X Not To Prevent Events of Default.
The failure to make a payment on account of Principal
of, or interest on, the Securities by reason of any provision of
this Article X will not be construed as preventing the occurrence
of an Event of Default.
Nothing contained in this Article X shall limit the
right of the Trustee or the Holders of the Securities to take
any action to accelerate the maturity of the Securities pursuant
to Article VI or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this
Article X of the holders, from time to time, of Senior
Indebtedness.
SECTION 10.12. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness, and it undertakes to
perform or observe such of its covenants and obligations as are
specifically set forth in this Article X, and no implied
covenants or obligations with respect to the Senior Indebtedness
shall be read into this Indenture against the Trustee. The
Trustee shall not be liable to any such holders (other than for
its willful misconduct or gross negligence) if it shall pay over
or deliver to the Holders or the Company or any other Person
money or assets in compliance with the terms of this Indenture.
Nothing in this Section 10.12 shall affect the obligation of any
Person other than the Trustee to hold such payment for the
benefit of, and to pay such payment over to, the holders of
Senior Indebtedness or their Representative.
ARTICLE XI.
MISCELLANEOUS
SECTION XI.1 TIA Controls.
If any provision of this Indenture limits, qualifies,
or conflicts with another provision which is required to be
included in this Indenture by the TIA, the required provision
shall control.
SECTION XI.2 Notices.
Any notices or other communications required or
permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid,
return receipt requested, or overnight courier addressed as
follows:
if to the Company:
Headway Corporate Resources, Inc.
850 Third Avenue
New York, NY 10022
Attention: Barry Roseman, President and Chief
Operating Officer
Fax: (212) 508-3540
with a copy to:
Christy & Viener
Rockefeller Center
620 Fifth Avenue
New York, New York 10020
Attention: Richard B. Salomon, Esq.
Fax: (212) 632-5555
if to the Trustee:
State Street Bank and Trust Company, N. A.
61 Broadway
15th Floor
New York, NY 10006
Attention: Corporate Trust Department
Fax: (212) 612-3202
Each of the Company and the Trustee by written notice
to each other may designate additional or different addresses for
notices. Any notice or communication to the Company or the
Trustee shall be deemed to have been given or made as of the date
so delivered, if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if faxed; five (5)
calendar days after mailing, if sent by registered or certified
mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by
the addressee); 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 mailed to a Securityholder,
including any notice delivered in connection with TIA 310(b),
TIA 313(c), TIA 314(a) and TIA 315(b) shall be mailed to him
by first class mail or other equivalent means at his address as
it appears on the registration books of the Registrar and shall
be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders. If a notice
or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
SECTION XI.3 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA 312(b)
with other Securityholders with respect to their rights under
this Indenture or the Securities. The Company, the Trustee, the
Registrar and any other person shall have the protection of TIA
312(c).
SECTION XI.4 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
shall furnish to the Trustee at the request of the Trustee:
(a) an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(b) an Opinion of Counsel (in form and reasonably
satisfactory to the Trustee) stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION XI.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that the person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such person, he 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 complied with; and
(d) a statement as to whether or not, in the opinion of
each such person, such condition or covenant has been complied
with; provided, however, that, with respect to certain matters of
fact not involving any legal conclusion, an Opinion of Counsel
may, upon the consent of the parties relying on such opinion,
rely on an Officers' Certificate or certificates of public
officials.
SECTION XI.6 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance
with the Trustee's customary practices for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may
make reasonable rules and set reasonable requirements for its
functions.
SECTION XI.7 Legal Holidays.
If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION XI.8 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
THE PARTIES HERETO AGREE TO IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING
IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPT FOR
THEMSELVES AND IN RESPECT OF THEIR PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE
PARTIES HERETO IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY
OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
THE VENUE OR THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
COMPANY IN ANY OTHER JURISDICTION.
SECTION XI.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any of its
Subsidiaries, except to the extent necessary to interpret the
meanings of provisions or defined terms specifically incorporated
by reference. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture, except to the extent
necessary to interpret the meanings of provisions or defined
terms specifically incorporated by reference.
SECTION XI.10 No Recourse Against Others.
A director, officer, employee, stockholder or
Affiliate, as such, of the Company and each of its Subsidiaries
shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation.
Each Securityholder by accepting a Security waives and releases
all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION XI.11 Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements
of the Trustee in this Indenture shall bind its successors and
assigns.
SECTION XI.12 Counterparts.
This Indenture may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be and original and all of
which taken together shall constitute one and the same agreement.
SECTION XI.13 Severability.
In case any provision in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in
any respect for any reason, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby; it being intended that all of
the provisions hereof shall be enforceable to the full extent of
the law.
SECTION XI.14 Table of Contents, Headings. Etc.
The table of contents, cross-reference sheet and
headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, and are not to be
considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
HEADWAY CORPORATE
RESOURCES, INC., as Issuer
By: /s/ Signature
STATE STREET BANK AND
TRUST COMPANY, N.A., as
Trustee
By: /s/ Signature