EXHIBIT 4.1
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CENTRAL GARDEN & PET COMPANY
and each of the Guarantors named herein
9.125% SENIOR SUBORDINATED NOTES DUE 2013
_______________________________
INDENTURE
Dated as of January 30, 2003
_______________________________
and
Wells Fargo Bank, National Association
as Trustee
_______________________________
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A.
(a)(5)................................................................... 7.10
(b)...................................................................... 7.10
(c)...................................................................... N.A.
311(a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312(a)...................................................................... 2.05
(b)...................................................................... 13.03
(c)...................................................................... 13.03
313(a)...................................................................... 7.06
(b)(1)................................................................... N.A.
(b)(2)................................................................... 7.06; 7.07
(c)...................................................................... 7.06; 13.02
(d)...................................................................... 7.06
314(a)...................................................................... 4.03;13.02; 13.05
(b)...................................................................... N.A.
(c)(1)................................................................... 13.04
(c)(2)................................................................... 13.04
(c)(3)................................................................... N.A.
(d)...................................................................... N.A.
(e)...................................................................... 13.05
(f)...................................................................... N.A.
315(a)...................................................................... 7.01
(b)...................................................................... 7.05,13.02
(c)...................................................................... 7.01
(d)...................................................................... 7.01
(e)...................................................................... 6.11
316(a) (last sentence)...................................................... 2.09
(a)(1)(A)................................................................ 6.05
(a)(1)(B)................................................................ 6.04
(a)(2)................................................................... N.A.
(b)...................................................................... 6.07
(c)...................................................................... 2.12
317(a)(1)................................................................... 6.08
(a)(2)................................................................... 6.09
(b)...................................................................... 2.04
318(a)...................................................................... 13.01
(b)...................................................................... N.A.
(c)...................................................................... 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions................................................................................ 1
Section 1.02 Other Definitions..........................................................................19
Section 1.03 Incorporation by Reference of Trust Indenture Act..........................................20
Section 1.04 Rules of Construction......................................................................20
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating............................................................................21
Section 2.02 Execution and Authentication...............................................................21
Section 2.03 Registrar and Paying Agent.................................................................22
Section 2.04 Paying Agent to Hold Money in Trust........................................................22
Section 2.05 Holder Lists...............................................................................22
Section 2.06 Transfer and Exchange......................................................................22
Section 2.07 Replacement Notes..........................................................................34
Section 2.08 Outstanding Notes..........................................................................34
Section 2.09 Treasury Notes.............................................................................35
Section 2.10 Temporary Notes............................................................................35
Section 2.11 Cancellation...............................................................................35
Section 2.12 Defaulted Interest.........................................................................35
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.........................................................................36
Section 3.02 Selection of Notes to Be Redeemed or Purchased.............................................36
Section 3.03 Notice of Redemption.......................................................................36
Section 3.04 Effect of Notice of Redemption.............................................................37
Section 3.05 Deposit of Redemption or Purchase Price....................................................37
Section 3.06 Notes Redeemed or Purchased in Part........................................................38
Section 3.07 Optional Redemption........................................................................38
Section 3.08 Mandatory Redemption.......................................................................38
Section 3.09 Offer to Purchase by Application of Excess Proceeds........................................39
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes...........................................................................40
Section 4.02 Maintenance of Office or Agency............................................................41
Section 4.03 Reports....................................................................................41
Section 4.04 Compliance Certificate.....................................................................42
Section 4.05 Taxes......................................................................................42
Section 4.06 Stay, Extension and Usury Laws.............................................................42
Section 4.07 Restricted Payments........................................................................43
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.............................45
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.................................47
Section 4.10 Asset Sales................................................................................49
i
Section 4.11 Transactions with Affiliates...............................................................51
Section 4.12 Liens......................................................................................52
Section 4.13 Line of Business...........................................................................52
Section 4.14 Corporate Existence........................................................................52
Section 4.15 Offer to Repurchase Upon Change of Control.................................................52
Section 4.16 No Additional Indebtedness Senior to Notes and Junior to Senior Debt.......................54
Section 4.17 Payments for Consent.......................................................................54
Section 4.18 Additional Subsidiary Guarantees...........................................................54
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries and Certain Permitted Investments..55
Section 4.20 Redemption of Convertible Subordinated Notes...............................................55
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets...................................................55
Section 5.02 Successor Corporation Substituted..........................................................56
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..........................................................................57
Section 6.02 Acceleration...............................................................................58
Section 6.03 Other Remedies.............................................................................59
Section 6.04 Waiver of Past Defaults....................................................................59
Section 6.05 Control by Majority........................................................................60
Section 6.06 Limitation on Suits........................................................................60
Section 6.07 Rights of Holders of Notes to Receive Payment..............................................61
Section 6.08 Collection Suit by Trustee.................................................................61
Section 6.09 Trustee May File Proofs of Claim...........................................................61
Section 6.10 Priorities.................................................................................61
Section 6.11 Undertaking for Costs......................................................................62
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee..........................................................................62
Section 7.02 Rights of Trustee..........................................................................63
Section 7.03 Individual Rights of Trustee...............................................................64
Section 7.04 Trustee's Disclaimer.......................................................................64
Section 7.05 Notice of Defaults.........................................................................64
Section 7.06 Reports by Trustee to Holders of the Notes.................................................64
Section 7.07 Compensation and Indemnity.................................................................65
Section 7.08 Replacement of Trustee.....................................................................65
Section 7.09 Successor Trustee by Merger, etc...........................................................66
Section 7.10 Eligibility; Disqualification..............................................................66
Section 7.11 Preferential Collection of Claims Against Company..........................................67
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...................................67
Section 8.02 Legal Defeasance and Discharge.............................................................67
Section 8.03 Covenant Defeasance........................................................................68
Section 8.04 Conditions to Legal or Covenant Defeasance.................................................68
ii
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions................................................................................69
Section 8.06 Repayment to Company.......................................................................70
Section 8.07 Reinstatement..............................................................................70
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................70
Section 9.02 With Consent of Holders of Notes...........................................................71
Section 9.03 Compliance with Trust Indenture Act........................................................72
Section 9.04 Revocation and Effect of Consents..........................................................72
Section 9.05 Notation on or Exchange of Notes...........................................................73
Section 9.06 Trustee to Sign Amendments, etc............................................................73
ARTICLE 10.
SUBORDINATION
Section 10.01 Agreement to Subordinate...................................................................73
Section 10.02 Certain Definitions........................................................................73
Section 10.03 Liquidation; Dissolution; Bankruptcy.......................................................74
Section 10.04 Default on Designated Senior Debt..........................................................75
Section 10.05 Occurrence of an Event of Default..........................................................75
Section 10.06 When Distribution Must Be Paid Over........................................................75
Section 10.07 Notice by Company..........................................................................76
Section 10.08 Subrogation................................................................................76
Section 10.09 Relative Rights............................................................................76
Section 10.10 Subordination May Not Be Impaired by Company...............................................77
Section 10.11 Distribution or Notice to or by Representative.............................................77
Section 10.12 Rights of Trustee and Paying Agent.........................................................77
Section 10.13 Authorization to Effect Subordination......................................................77
Section 10.14 Amendments.................................................................................77
Section 10.15 Trustee Not Fiduciary for Holders of Senior Debt...........................................78
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01 Guarantee..................................................................................78
Section 11.02 Subordination of Subsidiary Guarantee......................................................79
Section 11.03 Limitation on Guarantor Liability..........................................................79
Section 11.04 Execution and Delivery of Subsidiary Guarantee.............................................79
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms.........................................80
Section 11.06 Release of Guarantors in Certain Circumstances.............................................80
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.................................................................81
Section 12.02 Application of Trust Money.................................................................82
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls...............................................................82
Section 13.02 Notices....................................................................................82
Section 13.03 Communication by Holders of Notes with Other Holders of Notes..............................84
iii
Section 13.04 Certificate and Opinion as to Conditions Precedent.........................................84
Section 13.05 Statements Required in Certificate or Opinion..............................................84
Section 13.06 Rules by Trustee and Agents................................................................84
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders...................84
Section 13.08 Governing Law..............................................................................85
Section 13.09 No Adverse Interpretation of Other Agreements..............................................85
Section 13.10 Successors.................................................................................85
Section 13.11 Severability...............................................................................85
Section 13.12 Counterpart Originals......................................................................85
Section 13.13 Table of Contents, Headings, etc...........................................................85
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL INVESTOR
Exhibit E FORM OF SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
iv
INDENTURE dated as of January 30, 2003 among Central Garden & Pet
Company, a Delaware corporation (the "Company"), the Guarantors (as defined) and
Wells Fargo Bank, National Association, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 9.125% Senior Subordinated Notes due 2013 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging
with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"Additional Notes" means any Notes (other than the Initial Notes)
issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as
part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights, other than sales of inventory in the ordinary course
of business consistent with past practices; provided that the sale,
conveyance or other disposition of all or substantially all of the
assets of the Company and
1
its Subsidiaries taken as a whole will be governed by Section 4.15
and/or Section 5.02 hereof and not by the provisions of Section 4.10
hereof; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $2.0 million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries,
(3) an issuance of Equity Interests by a Subsidiary to the
Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business;
(5) the sale or other disposition, without the sale or other
disposition of other types of assets as part of the same transaction,
of cash or Cash Equivalents or Government Securities; and
(6) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof.
"Bankruptcy Law" means title 11, U.S. Code, as amended from time to
time, or any similar federal or state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership or limited liability company,
the Board of Directors of the general partner of the partnership or
managing member of the limited liability company; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
"Borrowing Base" means, as of any date, an amount equal to:
(1) 85% of the face amount of all accounts receivable owned by
the Company and its Subsidiaries as of the end of the most recent
fiscal quarter preceding such date that were not more than 90 days
past due; plus
2
(2) 50% of the book value of all inventory owned by the Company
and its Subsidiaries as of the end of the most recent fiscal quarter
preceding such date.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality of the United States government (provided that the
full faith and credit of the United States is pledged in support of
those securities) having maturities of not more than six months from
the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500.0 million and a
Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clauses (2) and
(3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Rating Services
and in each case maturing within six months after the date of
acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
3
"Clearstream" means Clearstream Banking, S.A., or its successors.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as that term is used in Section
13(d)(3) of the Exchange Act) other than a Permitted Holder;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above), other than a Permitted Holder,
becomes the Beneficial Owner, directly or indirectly, of more than 50%
of the Voting Stock of the Company, measured by voting power rather
than number of shares; or
(4) the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors.
"Company" means Central Garden & Pet Company, and any and all
successors thereto.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period, plus
(without duplication):
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted
in computing such Consolidated Net Income;
(2) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that
such provision for taxes was deducted in computing such Consolidated
Net Income;
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations), to the extent that any such
expense was deducted in computing such Consolidated Net Income;
(4) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net
Income; and
4
(5) if applicable to such calculation, "other charges and unusual
items" for the fiscal year ended September 28, 2002 or any fiscal
quarter or quarters thereof, as set forth in note (3) under the
caption "Offering Memorandum Summary -- Summary Consolidated
Historical Financial Data," to the extent that such "other charges and
unusual items" were deducted in computing such Consolidated Net
Income;
minus non-cash items increasing such Consolidated Net Income for such period,
other than any items that represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period or the accrual of
revenue in the ordinary course of business, in each case, on a consolidated
basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the
income or profits, depreciation and amortization and other non-cash expenses,
and net adjustment to Consolidated Cash Flow of a Restricted Subsidiary of the
Company will be added to Consolidated Net Income to compute Consolidated Cash
Flow of the Company only to the extent that a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders; and
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition will be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such
nomination or election.
"Convertible Subordinated Notes" means the 6% Convertible Subordinated
Notes due 2003 of the Company.
5
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Second Amended and Restated Loan
Agreement, dated as of December 12, 2000, as amended, by and among the Company
and certain of its Subsidiaries and Congress Financial Corporation (Western),
including any related notes, guarantees, collateral documents, instruments, and
agreements executed in connection therewith, and in each case, as amended,
restated, modified, refunded, replaced, or refinanced in whole or in part from
time to time.
"Credit Facilities" means one or more debt facilities (including
without limitation the Credit Agreement) or commercial paper facilities, in each
case with banks or other institutional lenders providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, amended and restated, supplemented, modified, renewed, refunded,
replaced or refinanced from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note will not
bear the Global Note Legend and will not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
6
"Equity Market Value" means with respect to Equity Interests of the
Company:
(1) if the Equity Interests are registered under the Exchange Act
and listed on a national securities exchange or the Nasdaq National
Market, the closing price of the Equity Interests on the date of
determination (or if the date of determination is not a Business Day,
the first Business Day after the date of determination) on the
principal national securities exchange or automated quotation system
on which the Equity Interests are traded; or
(2) if clause (1) is not applicable because such Equity Interests
are not so registered and listed or if there is no trading in the
Equity Interests on the applicable day, the fair market value as
determined by the Company's Board of Directors which will be evidenced
by a resolution of such Board of Directors set forth in an Officers'
Certificate delivered to the Trustee and will be based upon an opinion
or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if the fair market value exceeds $5.0
million.
"Euroclear" means Euroclear Bank S.A./N.V., or its successors, as
operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Facilities and
Indebtedness represented by the Convertible Subordinated Notes) in existence on
the date of this Indenture in an aggregate amount not to exceed $25.0 million,
until such amounts are repaid.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such
reference period and
7
on or prior to the Calculation Date will be given pro forma effect as
if they had occurred on the first day of the four- quarter reference
period and Consolidated Cash Flow for such reference period will be
calculated on a pro forma basis in accordance with clause (2) below,
but without giving effect to clause (3) of the proviso set forth in
the definition of Consolidated Net Income;
(2) any pro forma calculation under clause (1) will be set forth
in an Officers' Certificate of the Company delivered to the Trustee,
which calculation may include (a) any adjustments that would satisfy
the requirements of Regulation S-X under the Securities Act and (b)
any other operating expense reductions the Company reasonably expects
to result from the acquisition transaction, if such expected
reductions are (i) set forth in reasonable detail in a plan approved
by or resolutions of the Company's Board of Directors, and (ii)
limited to operating expenses specified in such plan or resolutions
(and, if any such reductions are set forth as a range, the lowest
amount of such range) that would otherwise have resulted in the
payment of cash within twelve months after the date of consummation of
such transaction, net of any operating expenses (other than
extraordinary items, non-recurring or temporary charges and other
similar one-time expenses associated with such transaction) reasonably
expected to be incurred to implement such plan or to obtain goods or
services (including without limitation personnel, occupancy and
transportation expenses) in replacement of goods and services that are
being curtailed or eliminated to effect such expected reductions and
that are to be paid in cash during such twelve-month period.
(3) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be
excluded; and
(4) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense during such period on Indebtedness of
another Person that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person
or one of its Restricted Subsidiaries, whether or not such Guarantee
or Lien is called upon; plus
(4) the product of (a) all dividends paid or accrued during such
period, whether or not in cash, on any Disqualified Stock of such
Person or any preferred stock of its Restricted
8
Subsidiaries, other than dividends payable solely in Equity Interests
(other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus
the then current combined marginal federal, state and local income tax
rate of such Person (taking into account the deductibility of state
and local taxes for federal income tax purposes), expressed as a
decimal, in each case, on a consolidated basis and in accordance with
GAAP.
"Foreign Subsidiary" means any Restricted Subsidiary that is not a
Domestic Subsidiary.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) Four Paws Products Ltd., Grant Laboratories, Inc., Kaytee
Products, Incorporated, Matthews Redwood & Nursery Supply, Inc.,
Pennington Seed, Inc., Phaeton Corporation (dba Unicorn Labs), Seeds
West, Inc., All-Glass Aquarium Co., Inc., Oceanic Systems, Inc.,
T.F.H. Publications, Inc., Wellmark International, Norcal Pottery
Products, Inc., Pennington Seed Inc. of Nebraska and Gro Tech, Inc.;
and
(2) any other Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture,
which Subsidiary Guarantee has not been released, and their respective
successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
9
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an
accrued expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will
be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in
the case of any other Indebtedness;
(3) the lesser of the Indebtedness and the fair market value of
the collateral asset, in the case of any Indebtedness of others
secured by a Lien on any asset of the specified Person; and
(4) the lesser of the primary Indebtedness and any stated limit
on recourse under the Guarantee, in the case of Indebtedness of others
secured by a Guarantee of the specified Person.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $150,000,000 aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
10
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
directors, officers, employees and consultants made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Company's Investments in such Subsidiary that were not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07 hereof. The acquisition by the Company or any of its Restricted
Subsidiaries of a Person that holds an Investment in a third Person will be
deemed to be an Investment by the Company or such Restricted Subsidiary in such
third Person in an amount equal to the fair market value of the Investments held
by the acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 4.07 hereof, if the acquired Person becomes a
Restricted Subsidiary as a result of such acquisition and such third Person does
not become a Restricted Subsidiary as a result of such acquisition.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest will accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset.
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection with:
(a) any Asset Sale; or
(b) the disposition of any securities by such Person or any
of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
11
(2 ) any extraordinary gain (but not loss other than any loss
incurred in connection with the redemption of the Convertible
Subordinated Notes), together with any related provision for taxes on
such extraordinary gain (but not any such loss);
(3) the cumulative effect of a change in accounting principles;
and
(4) any non-cash impairment loss determined in accordance with
GAAP related to the carrying value of goodwill of the Company or its
Restricted Subsidiaries reflected in the consolidated financial
statements of the Company.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(a) the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and financial advisory and investment banking or finders'
fees, and sales commissions, and any relocation, severance or separation
expenses incurred as a result of the Asset Sale, and costs of environmental
investigation and remediation associated with the properties or assets conducted
in connection with the Asset Sale, (b) taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, (c) amounts required to be applied
to the repayment of Indebtedness, other than Senior Debt secured by a Lien on
the asset or assets that were the subject of such Asset Sale, and amounts
required to be expended from any reserve established in accordance with GAAP in
connection with such Asset Sale, including pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, and (d) amounts required to be paid to any Person (other than the Company
or any Restricted Subsidiary) owning a beneficial interest in the assets that
are subject to the Asset Sale.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness) or (b) is directly or indirectly liable as a guarantor
or otherwise;
(2) no default with respect to which (including any rights that
the holders of the Indebtedness may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice, lapse of
time or both any holder of any other Indebtedness of the Company or
any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company
or any of its Restricted Subsidiaries (other than Equity Interests in
an Unrestricted Subsidiary).
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes will be treated as a
single class for all purposes under this Indenture, and unless the context
otherwise requires, all references to the Notes will include the Initial Notes
and any Additional Notes.
12
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the Company's Offering Memorandum, dated
January 24, 2003.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel that meets
the requirements of Section 13.05 hereof. The counsel may be an employee of or
counsel to the Company or any Subsidiary of the Company.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, will include Euroclear and
Clearstream).
"Permitted Business" means any business in which the Company and its
Restricted Subsidiaries were engaged on the date of this Indenture, any other
business in the garden products industry or the pet products industry, and any
business determined in good faith by the Company's Board of Directors to be
reasonably related or complementary thereto.
"Permitted Holder" means (i) William E. Brown, (ii) the spouse or
lineal descendants of William E. Brown or (iii) any corporation, limited
liability company, partnership, trust or other entity, the controlling equity
interests in which are held by or for the benefit of William E. Brown and/or his
spouse or lineal descendants.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary
of the Company that (except for Foreign Subsidiaries) is a Guarantor;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Subsidiary of the
Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the
Company; or
(b) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or a Restricted Subsidiary
of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof;
13
(5) any acquisition of assets solely in exchange for the issuance
of Equity Interests (other than Disqualified Stock) of the Company;
(6) any Investments received in compromise of obligations or
liabilities, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of the obligor
or the Person subject to the liability so compromised or upon
foreclosure on any secured Investment;
(7) Hedging Obligations;
(8) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (8)
since the date of this Indenture not to exceed in original amount at
any time outstanding 10% of the book value of the Company's tangible
assets as of the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of any such Investment;
(9) only in the event that amounts available for Permitted
Investments under the preceding clause (8) have been fully utilized
and in addition to any amounts utilized under such clause, other
Investments having an aggregate fair market value (measured on the
date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (9) since the date of this
Indenture not to exceed in original amount at any time outstanding 10%
of the book value of the Company's tangible assets as of the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Investment if:
(a) after giving pro forma effect to such Investment as if
it were made at the beginning of the Company's most recently
ended four full fiscal quarters for which internal financial
statements are available, the Company's Fixed Charge Coverage
Ratio for such period would have been at least 3.0 to 1,
excluding from such calculation (i) in the case of an Investment
in a Restricted Subsidiary or other entity, the Consolidated Cash
Flow attributable to such Investment for such period, and (ii) in
the case of any Restricted Subsidiary that is being designated as
a Permitted Investment pursuant to this clause (9) in accordance
with Section 4.19 hereof, the Consolidated Cash Flow attributable
to such Restricted Subsidiary for such period, in each case as
reasonably determined by the Company's Board of Directors;
(b) the rating of the Notes by each of Moody's and S&P at
the time such Investment is made is equal to or higher than the
respective rating of the Notes by each such rating agency on the
date of this Indenture;
(c) no Default or Event of Default has occurred and is
continuing; and
(d) in respect of each Investment made or deemed made
pursuant to this clause (9) in excess of $2.0 million, the
Company will provide notice to the Trustee of such Investment by
filing with the Trustee a certified copy of the board resolution
giving effect to such Investment and an Officers' Certificate
certifying that such Investment complied with the preceding
conditions; and
(10) any Guarantee permitted to be incurred under Section 4.09
hereof or any payment pursuant to any such Guarantee.
14
"Permitted Liens" means:
(1) Liens on assets of the Company and its Restricted
Subsidiaries securing Senior Debt that was permitted by the terms of
this Indenture to be incurred;
(2) Liens in favor of the Company and its Restricted
Subsidiaries;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by the Company or any Restricted Subsidiary of the Company;
provided that such Liens were in existence prior to the contemplation
of such acquisition;
(5) Liens securing reimbursement obligations with respect to
letters of credit and surety or performance bonds issued in the
ordinary course of business;
(6) Liens existing on the date of this Indenture;
(7) Liens on Equity Interests in Unrestricted Subsidiaries that
secure Non-Recourse Debt; and
(8) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect
of bankers' acceptances issued or created for the account of such
Person to facilitate the purchase, shipment or storage of such
inventory or other goods.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness
extended, refinanced, renewed, replaced, defeased or refunded (plus
all accrued interest on the Indebtedness and the amount of all
expenses and premiums incurred in connection therewith, including
consent fees);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes or the Subsidiary Guarantees, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity
date of the Notes, and is subordinated in right of payment to, the
Notes or the Subsidiary Guarantees on
15
terms at least as favorable to the Holders of the Notes as those
contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company, by the
Restricted Subsidiary that is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded or by
any intermediate Restricted Subsidiary.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Public Equity Offering" means an offer and sale of Capital Stock
(other than Disqualified Stock) of the Company pursuant to a registration
statement that has been declared effective by the Commission pursuant to the
Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of January __, 2003, among the Company, the Guarantors and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements among the Company,
the Guarantors and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given by
the Company to the purchasers of Additional Notes to register such Additional
Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject and who will have responsibility for
the administration of this Indenture.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
16
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard & Poor's Ratings Group and any successor thereto.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned
or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person (or a combination thereof);
and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person
or (b) the only general partners of which are that Person or one or
more Subsidiaries of that Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
17
"Unrestricted Global Note" means a permanent Global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Company's Board of Directors as an Unrestricted Subsidiary
pursuant to a resolution of such Board of Directors, but only to the extent that
such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation
(a) to subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that is
not a director or executive officer of the Company or any of its
Restricted Subsidiaries and has at least one executive officer that is
not a director or executive officer of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the Resolution of the Company's Board of Directors giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the preceding conditions and was permitted by Section
4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it will thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and (i) will be
deemed to be redesignated as a Restricted Subsidiary and (ii) any Indebtedness
of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of Section 4.09. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation. Upon any such designation as a Restricted
Subsidiary, such Subsidiary (unless it is a Restricted Subsidiary designated as
a Permitted Investment made under clause (8) or (9) of the definition of
"Permitted Investments" in accordance with
18
the applicable provisions of the Indenture) will become a Guarantor and execute
a Subsidiary Guarantee as and to the extent required under Section 4.18 hereof.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (x) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (y) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly-Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares) are
owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of
such Person.
Section 1.02 Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"................................ 4.11
"Asset Sale Offer"..................................... 3.09
"Authentication Order"................................. 2.02
"Change of Control Offer".............................. 4.15
"Change of Control Payment"............................ 4.15
"Change of Control Payment Date"....................... 4.15
"Covenant Defeasance".................................. 8.03
"Designated Senior Debt"............................... 10.02
"DTC".................................................. 2.03
"Event of Default"..................................... 6.01
"Excess Proceeds"...................................... 4.10
"incur"................................................ 4.09
"Legal Defeasance"..................................... 8.02
"Mandatory Redemption Date"............................ 4.20
"Offer Amount"......................................... 3.09
"Offer Period"......................................... 3.09
"Paying Agent"......................................... 2.03
"Permitted Debt"....................................... 4.09
"Permitted Junior Securities".......................... 10.02
"Purchase Date"........................................ 3.09
"Registrar"............................................ 2.03
"Representative"....................................... 10.02
19
Defined in
Term Section
---- ----------
"Restricted Payments".................................. 4.07
"Senior Debt".......................................... 10.02
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) "will" will be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
20
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication will be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note will be dated the date of its authentication. The Notes will
be in denominations of $1,000 and integral multiples thereof. The Notes will be
dated the date of their authentication.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture will govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note will represent such of the outstanding Notes as are
specified therein and each will provide that it represents the aggregate
principal amount of outstanding Notes from time to time endorsed thereon and
that the aggregate principal amount of outstanding Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
An Officer of the Company must sign the Notes for the Company by
manual or facsimile signature.
If an Officer of the Company whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note will
nevertheless be valid.
A Note will not be valid until authenticated by the manual signature
of the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company
signed by one Officer of the Company (an "Authentication Order"), authenticate
Notes for original issue up to the aggregate principal amount stated in
paragraph 4 of the Notes.
21
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company will notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee will act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and will otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company will otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a
22
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary;
(2) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee; or
(3) there has occurred and is continuing a Default or Event of
Default with respect to the Notes and Beneficial Owners holding
interests representing an aggregate principal amount of at least 51%
of such Notes represented by Global Notes advise the Trustee in
writing that the continuation of a book-entry system through the
Depositary is no longer in such owner's best interests.
Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes will be issued in such names as the Depositary will
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
will be authenticated and delivered in the form of, and will be, a Global Note.
A Global Note may not be exchanged for another Note other than as provided in
this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
If a Holder is an Institutional Accredited Investor or a if a Holder
is required to do so pursuant to any applicable law or regulation, such Holder
may obtain Definitive Notes upon written request in accordance with the
Depositary's and the Registrar's procedures and in accordance with this Section
2.06.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also will require
compliance with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Regulation S Global
Note may not be made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser). Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions will be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
23
(2) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be
transferred or exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in
whose name such Definitive Note will be registered to effect
the transfer or exchange referred to in (1) above. Upon
consummation of the Exchange Offer by the Company in
accordance with the Registration Rights Agreement, the
requirements of this Section 2.06(b)(2) will be deemed to
have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and
the Notes or otherwise applicable under the Securities Act,
the Trustee will adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may
be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee takes delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
will be required to deliver a certificate in the form of Exhibit
B hereto, including the certifications in item (1) thereof; and
(B) if the transferee takes delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor will be required to deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (2)
thereof.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted
24
Global Note may be exchanged by any holder thereof for a beneficial
interest in an Unrestricted Global Note or transferred to a Person who
takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(a)
thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who will take delivery thereof in the
form of a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company will issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such
25
beneficial interest for a Restricted Definitive Note or to transfer
such beneficial interest to a Person who takes delivery thereof in the
form of a Restricted Definitive Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company will execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) will be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest will instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Trustee will deliver such Definitive Notes to the Persons in whose names
such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(1) will bear the Private Placement Legend and will be subject to all
restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
26
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who will take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Company will execute and the Trustee
will authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will
be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest requests through
instructions to the Registrar from or through the Depositary and the Participant
or Indirect Participant. The Trustee will deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will
not be required to bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
27
(1) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note and increase or
cause to be increased the aggregate principal amount of the Restricted
Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
28
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who will take delivery thereof in
the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee will cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or
(3) above at a time when an Unrestricted Global Note has not yet been
issued, the Company will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
29
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer is made pursuant to Rule 144A under the
Securities Act, then the transferor will be required to deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer is made pursuant to Rule 903 or Rule 904,
then the transferor will be required to deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer is made pursuant to any other exemption from
the registration requirements of the Securities Act, then the
transferor will be required to deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who will take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
30
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note.
Upon receipt of a request to register such a transfer, the Registrar will
register the Unrestricted Definitive Notes pursuant to the instructions
from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes tendered into the Exchange Offer by Persons that
certify in the applicable Letters of Transmittal that they are not (A)
Broker-Dealers, (B) participating in a distribution of the Exchange Notes
or (C) affiliates (as defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) will bear the legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
31
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY:
(i)(a) TO A PERSON WHO IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF THE SECURITIES ACT (AN
INSTITUTIONAL "ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS),
(ii) TO THE COMPANY OR
(iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY
EVIDENCED HEREBY."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4), (c)(2),
(c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section
2.06 (and all Notes issued in exchange therefor or substitution
thereof) will not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
32
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company
will execute and the Trustee will authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order in accordance with Section
2.02 or at the Registrar's request.
(2) No service charge may be made to a Holder of a Global Note or to
a Holder of a Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(3) The Registrar will not be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
will be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or
exchange.
(5) The Company will not be required:
33
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on the day of
selection;
(B) to register the transfer of or to exchange any Note selected
for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company will be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company will
not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
34
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee knows are so owned will be
so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Company will require that the Registrar and Paying Agent forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
will dispose of canceled Notes in its customary manner. Certification of the
destruction of all canceled Notes will be delivered to the Company. The Company
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
35
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption
will occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the Trustee will deem fair
and appropriate.
In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, will be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company will mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address, except that redemption notices may
be mailed more than 60 days prior to a redemption date if the notice is issued
in connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 12 of this Indenture.
36
The notice will identify the Notes (including applicable CUSIP numbers) to
be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion will be issued upon cancellation of the
original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee will give the notice of redemption in
the Company's name and at its expense; provided, however, that the Company has
delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or purchase price date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Liquidated
Damages, if any, on all Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent will promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or purchase price of, and accrued
interest and Liquidated Damages, if any, on, all Notes to be redeemed or
purchased.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest will be paid
to the Person
37
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption or purchase is not so paid upon
surrender for redemption or purchase because of the failure of the Company to
comply with the preceding paragraph, interest will be paid on the unpaid
principal, from the redemption or purchase date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Company
will issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to February 1, 2006, the Company may on any one or
more occasions redeem up to 33% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 109.125% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the redemption date, with the net cash proceeds of one or more Public Equity
Offerings; provided that:
(1) at least 67% of the aggregate principal amount of Notes issued
under this Indenture remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by the Company and its
Subsidiaries); and
(2) the redemption must occur within 60 days of the date of the
closing of such Public Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Company's option prior to February 1, 2008.
(c) After February 1, 2008 the Company may redeem all or a part of the
Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on February 1 of the years indicated below:
Year Percentage
---- ----------
2008....................................................... 104.563%
2009....................................................... 103.042%
2010....................................................... 101.521%
2011 and thereafter........................................ 100.000%
(d) Any redemption pursuant to this Section 3.07 will be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
38
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is required
to commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"),
it will follow the procedures specified below.
The Asset Sale Offer will be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets. The Asset Sale Offer will remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "Offer Period"). No later than three Business Days after the
termination of the Offer Period (the "Purchase Date"), the Company will apply
all Excess Proceeds (the "Offer Amount") to the purchase of Notes and such other
pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased will be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to
accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(6) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;
39
(8) that, if the aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by Holders exceeds the Offer Amount, the
Company will select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and
such other pari passu Indebtedness surrendered (with such adjustments as
may be deemed appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof, will be purchased);
and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted will be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 will be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if any,
and interest and Liquidated Damages, if any, on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest and
Liquidated Damages, if any will be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due. The Company will pay all Liquidated Damages, if
any, in the same manner on the dates and in the amounts set forth in the
Registration Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
40
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission will in any manner relieve the Company of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes, within the time periods specified in the SEC's rules and regulations
(together with any extensions granted by the SEC):
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and, with respect to the annual information only, a report on the annual
financial statements by the Company's certified independent accountants;
and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
In addition, following the consummation of the Exchange Offer, whether or
not required by the SEC, the Company will file a copy of all of the information
and reports referred to in clauses (1) and (2) above with the SEC for public
availability (unless the SEC will not accept such a filing) within the time
periods specified in the SEC's rules and regulations (together with any
extensions granted by the SEC) and make such information available to securities
analysts and prospective investors upon request. The Company will at all times
comply with TIA Section 314(a).
41
(b) For so long as any Notes (other than Exchange Notes) remain
outstanding, the Company and the Guarantors will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) will deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above will be accompanied by a
written statement of the Company's independent public accountants (who will be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants will not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will deliver
to the Trustee, forthwith upon any Officer of the Company becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay, prior
to delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of
42
any such law, and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or any
of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or to the Company
or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Subsidiary Guarantees (excluding
intercompany Indebtedness between or among the Company and its Restricted
Subsidiaries), except a payment of interest (including any amount
comparable to Liquidated Damages) or principal at the Stated Maturity
thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in these clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment; and
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of paragraph
(b) below), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the first day of the
Company's second fiscal quarter of fiscal year 2003 to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
43
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds received by the
Company since the date of this Indenture as a contribution to its
common equity capital or from the issue or sale of Equity Interests of
the Company (other than Disqualified Stock) or from the issue or sale
of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company), plus
(C) in the event the Company issues Equity Interests of the
Company in consideration for an acquisition by the Company or any of
its Restricted Subsidiaries of a Person that becomes a Wholly-Owned
Restricted Subsidiary of the Company as a result of such acquisition
or of assets that are acquired by the Company or a Wholly-Owned
Restricted Subsidiary of the Company, an amount equal to 75% of the
Equity Market Value of the Equity Interests of the Company so issued
as of the closing of the acquisition; plus
(D) in the event any return of capital is realized in respect of
any Restricted Investment that was made after the date of this
Indenture, the lesser of (i) the cash return of capital with respect
to such Restricted Investment (less any direct, out-of-pocket cost of
disposition, if any) and (ii) the initial amount of such Restricted
Investment less any amounts previously realized under clause (i) with
respect to such Restricted Investment; plus
(E) to the extent that any Subsidiary that was designated as an
Unrestricted Subsidiary after the date of this Indenture is
redesignated as a Restricted Subsidiary, the lesser of (i) the amount
of the Investment in the Subsidiary treated as a Restricted Payment at
and since the time that the Subsidiary was designated as an
Unrestricted Subsidiary, as determined by the last paragraph of this
Section 4.07 and (ii) the fair market value of the Investment in the
Subsidiary as of the date that it is redesignated as a Restricted
Subsidiary; plus
(F) the increase in stockholders' equity resulting from any
conversion of any of the Company's outstanding Convertible
Subordinated Notes; plus
(G) $10.0 million.
(b) So long as no Default has occurred and is continuing or would be
caused thereby, the provisions of Section 4.07(a) will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any
Guarantor or of any Equity Interests of the Company in exchange for, or out
of the net cash proceeds of the substantially concurrent sale (other than
to a Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for
44
any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (3)(B) of the preceding
paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Guarantor in exchange for,
or out of the net cash proceeds received from, the substantially concurrent
sale of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its Equity Interests on a pro rata basis and the
redemption, purchase, cancellation or other retirement of Equity Interests
in a Restricted Subsidiary;
(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary
of the Company held by any member of the Company's (or any of its
Restricted Subsidiaries') management pursuant to any management equity
subscription agreement, stock option agreement, stockholders agreement or
similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests will not exceed
$1.0 million in any twelve-month period and $10.0 million in the aggregate;
(6) the repurchase of Equity Interests of the Company or any
Restricted Subsidiary of the Company deemed to occur upon the exercise of
stock options if such Equity Interests represent a portion of the purchase
price thereof;
(7) the redemption of the Convertible Subordinated Notes in
accordance with Section 4.20 hereof; and
(8) Restricted Payments in an aggregate amount not to exceed $10.0
million.
The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
assets or securities that are required to be valued by this Section 4.07 will be
determined by the Company's Board of Directors whose resolution with respect
thereto will be delivered to the Trustee. Such determination will be based upon
an opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if the fair market value exceeds $5.0 million. Not
later than three Business Days after the date of making any Restricted Payment,
the Company will 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 4.07 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or with respect
to any other interest or participation in, or measured by, its profits, or
pay any indebtedness owed to the Company or any of its Restricted
Subsidiaries;
45
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) will not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and the Credit
Facilities as in effect on the date of this Indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements; provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than
those contained in those agreements on the date of this Indenture;
(2) this Indenture, the Notes and the Subsidiary Guarantees;
(3) applicable law;
(4) any instrument or agreement of a Restricted Subsidiary acquired
by the Company or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except to the extent such instrument or agreement
was entered into or amended or modified to add or increase such encumbrance
or restriction in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to the Company or any
Restricted Subsidiary, or the properties or assets of the Company or any
Restricted Subsidiary, other than the Restricted Subsidiary, or the
property or assets of the Restricted Subsidiary, so acquired; provided
that, in the case of instruments or agreements governing Acquired Debt,
such Acquired Debt would be permitted by the terms of this Indenture to be
incurred upon consummation of the acquisition;
(5) any instrument or agreement of a Restricted Subsidiary that has
been designated as a Permitted Investment made under clause (8) or (9) of
the definition of "Permitted Investments" in accordance with the applicable
provisions of this Indenture, which encumbrance or restriction is not
applicable to the Company or any Restricted Subsidiary, or the properties
or assets of the Company or any Restricted Subsidiary, other than the
Restricted Subsidiary, or the property or assets of the Restricted
Subsidiary, so designated;
(6) non-assignment and sub-letting provisions in leases, licenses and
other agreements that are customary for such agreements and are entered
into in the ordinary course of business;
(7) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on that property of the nature
described in clause (3) of Section 4.08(a);
(8) any agreement for the sale or other disposition of a Restricted
Subsidiary or assets of the Company or a Restricted Subsidiary that
restricts distributions by that Restricted Subsidiary or transfers of such
assets pending such sale or other disposition;
46
(9) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(10) Liens securing Indebtedness otherwise permitted to be incurred
under Section 4.12 hereof that limit the right of the debtor to dispose of
the assets subject to such Liens;
(11) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
stock sale agreements and other similar agreements that have been approved
by the Board of Directors of the Company; and
(12) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue Disqualified Stock and will not permit any
of its Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, and the Company's Restricted Subsidiaries that are
Guarantors or Foreign Subsidiaries may incur Indebtedness or issue preferred
stock, if the Fixed Charge Coverage Ratio for the Company's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.0 to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been incurred
or the preferred stock or Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any of its Restricted
Subsidiaries of Indebtedness and letters of credit under Credit Facilities
in an aggregate principal amount at any one time outstanding under this
clause (1) (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) not to exceed the greater of (x) $225.0 million
less the aggregate amount of all Net Proceeds of Asset Sales applied by the
Company or any of its Subsidiaries since the date of this Indenture to
repay any term Indebtedness under a Credit Facility or to repay any
revolving credit Indebtedness under a Credit Facility and effect a
corresponding commitment reduction thereunder pursuant to Section 4.10
hereof or (y) the amount of the Borrowing Base as of the date of such
incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the related Subsidiary Guarantees to be issued
on the date of this Indenture and the Exchange Notes and the related
Subsidiary Guarantees to be issued pursuant to the Registration Rights
Agreement;
47
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by this Indenture
to be incurred under Section 4.09(a) or clauses (2), (3), (4) or (9) of
Section 4.09(b);
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations then due with respect
to the Notes, in the case of the Company, or the Subsidiary Guarantee,
in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other
than the Company or a Restricted Subsidiary of the Company and (ii)
any sale or other transfer of any such Indebtedness to a Person that
is not either the Company or a Restricted Subsidiary of the Company;
will be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (5);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations with respect to any Indebtedness that
is permitted by the terms of this Indenture to be outstanding;
(7) the guarantee by the Company or any of its Restricted Subsidiaries
of Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09;
(8) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock for purposes of this Section 4.09;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued; and
(9) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (9), not to exceed $50.0
million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (9) above,
or is entitled to be incurred pursuant to Section 4.09(a), the Company will be
permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 4.09. Indebtedness under the Credit Facilities
outstanding on the date on which Notes are first issued and authenticated under
this Indenture will be deemed to have been incurred on such date in reliance on
the exception provided by clause (1) of the definition of Permitted Debt.
48
Section 4.10 Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or the Restricted Subsidiary receives
consideration at the time of the Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) the fair market value (including the fair market value of
any non-cash assets transferred or liabilities assumed) is determined
by the Company's Board of Directors and evidenced by a resolution of
the such Board of Directors set forth in an Officers' Certificate
delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset Sale
by the Company or such Restricted Subsidiary is in the form of cash.
For purposes of this provision, each of the following shall be deemed
to be cash:
(A) any liabilities, as shown on the Company's most recent
consolidated balance sheet, of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes or any
Subsidiary Guarantee) that are assumed by the transferee of any
such assets and are (i) subject to a customary novation agreement
that releases the Company or such Restricted Subsidiary from
further liability with respect to any such liabilities other than
accounts payable or (ii) satisfied in full within 60 days of the
Asset Sale;
(B) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such
transferee in respect of which cash is received by the Company or
such Restricted Subsidiary within 60 days of the Asset Sale, to
the extent of the cash received;
(C) in the case of the sale of all of the Equity Interests
in any of the Company's Restricted Subsidiaries, or the merger of
a Restricted Subsidiary with a Person as a result of which the
Company and its Restricted Subsidiaries do not own any of the
Equity Interests in the surviving entity of such merger, any
liabilities of the Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated
to the Notes or any Subsidiary Guarantee) for which the
Restricted Subsidiary or surviving entity remains liable after
the Asset Sale;
(D) cash held in escrow as security for any purchase price
settlement, for damages in respect of a breach of representations
and warranties or covenants or for payment of other contingent
obligations in connection with the Asset Sale; and
(E) up to $25.0 million of non-cash consideration received
from any person other than an Affiliate of the Company
outstanding (not converted to cash) at any time.
Notwithstanding the immediately preceding paragraph, the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with such paragraph if:
(1) The Company or the applicable Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at
least equal to the fair market value of the assets or
49
other property sold, issued or otherwise disposed of, as evidenced by
a resolution of the Board of Directors of the Company set forth in an
Officers' Certificate delivered to the Trustee, and
(2) at least 75% of the consideration for such Asset Sale
constitutes cash or assets that are not classified as current assets
under GAAP and are used or useful in a Permitted Business;
provided that any cash received by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated under
this paragraph will constitute Net Proceeds (to the extent not excluded from the
definition of "Net Proceeds") subject to the provisions of the three succeeding
paragraphs.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or the Restricted Subsidiary may apply those Net Proceeds at
its option to any one or more of the following:
(1) to repay Senior Debt and, if the Senior Debt repaid is
revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make capital expenditures; or
(4) to acquire other assets that are not classified as current
assets under GAAP and are used or useful in a Permitted Business.
Pending the final application of any Net Proceeds, the Company or any
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by this
Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." Within 30
days after the aggregate amount of Excess Proceeds exceeds $10.0 million, the
Company will make an Asset Sale Offer to all Holders of Notes and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to
100% of principal amount plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of purchase, and will be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Company
may use those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee will select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis based upon the aggregate
principal amount of each that was properly tendered. Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Section 3.09 hereof or this Section 4.10, the Company will not be required to
comply with such provisions and will not be deemed to have breached its
obligations under such provisions by reason of such noncompliance.
50
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Company's Board of
Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with this Section 4.11 and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of the Company's Board of Directors; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $15.0 million, an opinion as to the fairness to the Company
of such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national
standing.
(b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a):
(1) any employment or consulting agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business of the Company or such Restricted Subsidiary;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) transactions with a Person (other than an Unrestricted
Subsidiary) that is an Affiliate of the Company solely because the Company
owns, directly or through a Subsidiary, an Equity Interest in, or controls,
such Person;
(4) payment of reasonable fees and compensation to, and indemnity
provided on behalf of, directors and officers of the Company or of any
Restricted Subsidiary;
(5) sales of Equity Interests (other than Disqualified Stock) of the
Company to Affiliates of the Company; and
(6) Restricted Payments that are permitted by Section 4.07 hereof
other than Restricted Payments that are permitted by reason of clause (4)
of Section 4.07(b).
51
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness for money borrowed on any asset
now owned or hereafter acquired, except Permitted Liens unless all payments due
under this Indenture and the Notes are secured on an equal and ratable basis
with the Indebtedness so secured.
Section 4.13 Line of Business.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business activities other than in a Permitted
Business.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of
the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of
the Company and its Subsidiaries; provided, however, that the Company will
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages on the Notes repurchased, if
any, to the date of purchase (the "Change of Control Payment"). Within ten days
following any Change of Control, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no later
than 30 business days and no later than 60 days from the date such notice
is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
52
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Section 3.09 hereof or this Section 4.15, the Company will not be
required to comply with such provisions and will not be deemed to have breached
its obligations under such provisions by reason of such noncompliance.
(b) On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Company.
The Company will cause the Paying Agent to promptly mail to each Holder of
Notes properly tendered the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that each new Note will be in
a principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
Prior to complying with any of the provisions of this Section 4.15, but in
any event within 90 days following a Change of Control, the Company will either
repay all outstanding Senior Debt or obtain the requisite waivers and consents,
if any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this Section 4.15.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth
53
in this Section 4.15 and Section 3.09 hereof and purchases all Notes validly
tendered and not withdrawn under the Change of Control Offer.
Section 4.16 No Additional Indebtedness Senior to Notes and Junior to Senior
Debt.
The Company will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of the Company and senior in any respect in right of
payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to the Senior Debt of such Guarantor and senior in any respect
in right of payment to such Guarantor's Subsidiary Guarantee; provided, however,
that notwithstanding the foregoing, no Indebtedness of the Company or any
Guarantor shall be deemed to be contractually subordinated in right of payment
to any other Indebtedness of the Company or such Guarantor solely by virtue of
being unsecured.
Section 4.17 Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.18 Additional Subsidiary Guarantees.
If, after the date of this Indenture, the Company or any of its Restricted
Subsidiaries:
(1) acquires or creates a Domestic Subsidiary that at any time has
total assets of more than $1,000,000 as reflected on such Domestic
Subsidiary's most recent balance sheet as of the date of determination or
Consolidated Cash Flow for the most recently ended four fiscal quarters for
which internal financial statements are available immediately preceding the
date of determination of more than $500,000; or
(2) has a Foreign Subsidiary that guarantees any Indebtedness of the
Company or any of its Restricted Subsidiaries (except Foreign Subsidiaries)
other than the Notes; or
(3) has a Domestic Subsidiary, including any Domestic Subsidiaries
that are not Guarantors on the date of this Indenture due to the fact that
such Domestic Subsidiary does not meet either of the thresholds set forth
in clause (1) above, that at any time exceeds either of the thresholds set
forth in clause (1) above,
then that Foreign Subsidiary or Domestic Subsidiary will become a Guarantor and
execute a Subsidiary Guarantee and deliver an Opinion of Counsel satisfactory to
the Trustee regarding the authorization and enforceability of such Subsidiary
Guarantee within 30 days of the date on which it was acquired, created or
otherwise becomes subject to this Section 4.18; provided that any Restricted
Subsidiary designated as a Permitted Investment made under clause (8) or (9) of
the definition of "Permitted Investments" in accordance with the applicable
provisions of this Indenture will not be required to become a Guarantor unless
it guarantees other Indebtedness of the Company or a Restricted Subsidiary of
the Company (other than a Foreign Subsidiary guaranteeing the Indebtedness of
another Foreign Subsidiary).
54
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries and
Certain Permitted Investments.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary or to be a Permitted Investment made
under clause (8) or (9) of the definition of "Permitted Investments," if that
designation would not cause a Default. If a Restricted Subsidiary is designated
as an Unrestricted Subsidiary, the aggregate fair market value of all
outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary to be designated will be deemed to be an Investment made as of
the time of the designation and will reduce the amount available for Restricted
Payments under the first paragraph of Section 4.07 hereof or, if applicable, the
amount available for Permitted Investments under clause (8) or (9) of the
definition of "Permitted Investments," as determined by the Company. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. If a Restricted Subsidiary is designated as a Permitted
Investment under clause (8) and/or (9) of the definition of "Permitted
Investments," the aggregate fair market value of all outstanding Investments
owned by the Company and its Restricted Subsidiaries in the Subsidiary to be
designated will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available under clause (8) and/or (9) of
the definition of "Permitted Investments." Such designation will only be
permitted if the Investment would be permitted by clause (8) or (9) of the
definition of "Permitted Investments" at that time. Any designation of a
Restricted Subsidiary as a Permitted Investment made under clause (8) or (9) of
the definition of "Permitted Investments" will be evidenced to the Trustee by
filing with the Trustee a certified copy of the board resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation was permitted by this Section 4.19. Upon a Restricted Subsidiary's
designation as an Unrestricted Subsidiary or a Permitted Investment in
accordance with this Section 4.19, it will cease to be a Guarantor and its
Subsidiary Guarantee will be released. The Board of Directors of the Company may
redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default. Upon any such redesignation or other
designation as a Restricted Subsidiary, such Subsidiary (unless designated as a
Permitted Investment made under clause (8) or (9) of the definition of
"Permitted Investments") will become a Guarantor and execute a Subsidiary
Guarantee as and to the extent required under Section 4.18 hereof. Fair market
value for purposes of this Section 4.19 will be determined by the Board of
Directors as specified in the last paragraph of Section 4.07 hereof.
Section 4.20 Redemption of Convertible Subordinated Notes
The Company will redeem all of the outstanding Convertible Subordinated
Notes on or prior to February 28, 2003 (the "Mandatory Redemption Date").
Concurrently with the closing of the offering of the Notes, the Company will
mail a notice of redemption of the Convertible Subordinated Notes that complies
with the terms of the indenture governing the Convertible Subordinated Notes and
will irrevocably deposit the amount sufficient to redeem all outstanding
Convertible Subordinated Notes, including any applicable premium and accrued
interest to the redemption date with the Trustee for the Convertible Notes.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly, consolidate or merge with or
into another Person (whether or not the Company is the surviving corporation),
or sell, assign, transfer, convey or otherwise
55
dispose of all or substantially all of the properties or assets of the Company
and its Subsidiaries taken as a whole, in one or more related transactions, to
another Person; unless:
(1) either:
(A) the Company is the surviving corporation; or
(B) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which
such sale, assignment, transfer, conveyance or other disposition
has been made is a corporation organized or existing under the
laws of the United States, any state of the United States or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition will have been
made assumes all the obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default or Event of
Default exists; and
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition has been
made would, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same
had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a) hereof.
In addition, the Company shall not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Restricted Subsidiaries that are Guarantors or to a
merger between the Company and any Restricted Subsidiary that is a Guarantor.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made will
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" will refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company will not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets in a transaction that is subject to, and that complies with
the provisions of, Section 5.01 hereof.
56
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an Event of Default:
(1) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Notes, whether or
not prohibited by the subordination provisions of this Indenture;
(2) the Company defaults in the payment when due (at maturity, upon
redemption or otherwise) of the principal of, or premium, if any, on the
Notes whether or not prohibited by the subordination provisions of this
Indenture;
(3) the Company or any of its Subsidiaries fails to comply with the
provisions of Section 4.10, 4.15 or 5.01 hereof;
(4) the Company or any of its Subsidiaries fails to comply with the
provisions of Section 4.07 or 4.09 hereof, and such failure continues for
30 days;
(5) the Company or any of its Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in
this Indenture or the Notes for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class;
(6) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Indebtedness
or guarantee now exists, or is created after the date of this Indenture, if
that default:
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to
its express maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $15.0 million or more;
(7) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company
or any Restricted Subsidiary, which judgment or judgments are not paid,
discharged or stayed for a period of 60 days; provided that the aggregate
of all such undischarged judgments exceeds $15.0 million (to the extent not
insured); and
57
(8) the Company, any Restricted Subsidiary that is a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within the meaning
of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is not paying its debts as they become due; or
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company, any Restricted Subsidiary
that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;
(B) appoints a custodian of the Company, any Restricted
Subsidiary that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary or for all or substantially all of the property of the
Company, any Restricted Subsidiary that is a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company, any Restricted
Subsidiary that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(10) except as permitted by this Indenture, any Subsidiary
Guarantee will be held in any judicial proceeding to be unenforceable
or invalid or will cease for any reason to be in full force and effect
or any Guarantor, or any Person acting on behalf of any Guarantor,
will deny or disaffirm its obligations under its Subsidiary Guarantee;
and
(11) failure of the Company to redeem all of the outstanding
Convertible Subordinated Notes on or prior to February 28, 2003.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary, all outstanding Notes
will become due and payable immediately without further action or notice. If any
other Event of
58
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.
Upon any such declaration, the Notes will become due and payable
immediately. The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after February 1, 2008 by reason
of any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to February 1,
2008 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium will also become and be immediately due and payable
in an amount, for each of the years beginning on February 1 of the years set
forth below, as set forth below (expressed as a percentage of the principal
amount of the Notes on the date of payment that would otherwise be due but for
the provisions of this sentence):
YEAR PERCENTAGE
---- ----------
2003....................................... 109.125%
2004....................................... 108.213%
2005....................................... 107.300%
2006....................................... 106.388%
2007....................................... 105.475%
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium and
Liquidated Damages, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal (including redemption or purchase price) of, premium
and Liquidated Damages, if any, or interest on, the Notes (including in
connection with an offer to purchase); provided, however, that at any time after
a declaration of acceleration under this Indenture, but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate
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principal amount of the outstanding Notes, by written notice to the Company and
the Trustee, may rescind such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay (A) all overdue interest on all Notes, (B) all unpaid
principal of (and premium, if any, on) any outstanding Notes that has
become due, other than by such declaration of acceleration, and interest
thereon at the rate borne by the Notes, (C) to the extent that payment of
such interest is lawful, interest upon overdue interest and overdue
principal at the rate borne by the Notes, and (D) all sums paid or advanced
by the Trustee under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on), or interest on, the Notes that have
become due solely by such declaration of acceleration, have been cured or
waived.
No such rescission will affect any subsequent default or impair any right
consequent thereon.
Upon any such waiver, such Default will cease to exist, and any Event of Default
arising therefrom will be deemed to have been cured for every purpose of this
Indenture; but no such waiver will extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of
a continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability, claim, damage or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
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Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, will not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as will be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and will be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee will consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, will be denied for any reason, payment of the same will be
secured by a Lien on, and will be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained will be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it will
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority
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of any kind, according to the amounts due and payable on the Notes for
principal, premium and Liquidated Damages, if any and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction will direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations will be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
with respect to opinions and certificates specifically required to be
furnished to it by any provision hereunder, the Trustee will examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of any mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
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(2) the Trustee will not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) 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), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document (whether in its
original or facsimile form) believed by it to be genuine and to have been signed
or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its own selection and the advice of such counsel or any Opinion of
Counsel will be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company will be sufficient if signed by an
Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee reasonable security
or indemnity reasonably satisfactory to it against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee will not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer has actual knowledge thereof or unless
written notice of any event that is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice references
the Notes and this Indenture. The Trustee will be deemed to have actual
knowledge of the
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failure of the Company to pay any principal of, or accrued interest or
Liquidated Damages on, the Notes when due.
(h) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and will be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.
(i) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it will not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium (including
redemption or purchase price) or Liquidated Damages, if any, or interest on any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each February 15 beginning with the February 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA Section 313(b)(2). The Trustee will also transmit by mail
all reports as required by TIA Section 313(c).
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(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed, if any, in
accordance with TIA Section 313(d). The Company will promptly notify the Trustee
when the Notes are listed on any stock exchange or delisted therefrom.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company and the Guarantors, jointly and severally, will indemnify
the Trustee against any and all losses, liabilities, claims, damages or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company and the Guarantors
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company, the Guarantors or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability, claim, damage
or expense is determined by a court of competent jurisdiction to have been
caused by its own negligence or willful misconduct. The Trustee will notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company will not relieve the Company or any of the
Guarantors of their obligations hereunder. The Company or such Guarantor will
defend the claim and the Trustee will cooperate in the defense. The Trustee may
have separate counsel and the Company will pay the reasonable fees and expenses
of such counsel. Neither the Company nor any Guarantor need pay for any
settlement made without its consent, which consent will not be unreasonably
withheld.
(c) The obligations of the Company and the Guarantors under this Section
7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(8) or (9) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
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(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) 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;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition at the expense of the Company any court of competent jurisdiction
for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee; provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
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This Indenture will always have a Trustee who satisfies the requirements of
TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed will be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution of such Board of Directors set forth in an Officers' Certificate, at
any time, elect to have either Section 8.02 or 8.03 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guarantees), which will thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in clauses (1) and (2) below,
and to have satisfied all their other obligations under such Notes, the
Subsidiary Guarantees and this Indenture (and the Trustee, on demand of and at
the expense of the Company, will execute proper instruments acknowledging the
same), except for the following provisions which will survive until otherwise
terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such Notes when such payments are due from the trust referred to
in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantors' obligations in connection
therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
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Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.03,
4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18 and 4.19
hereof and clause (4) of Section 5.01 hereof with respect to the outstanding
Notes on and after the date the conditions set forth in Section 8.04 hereof are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes will thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but will continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes will not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Subsidiary
Guarantees, the Company and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6)
hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized investment bank,
appraisal firm or firm of independent public accountants, to pay the
principal of, premium and Liquidated Damages, if any, and interest on the
outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;
(2) in the case of an election under Section 8.02 hereof, the Company
has delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that:
(A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been a change in
the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
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(3) in the case of an election under Section 8.03 hereof, the
Company must deliver to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default will have occurred and be
continuing on the date of such deposit and after giving effect
thereto;
(5) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance, as applicable, have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(1) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
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Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, if any, or
interest has become due and payable will be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter be permitted to look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which will not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Notes and the Subsidiary Guarantees will be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium or Liquidated Damages, if any, or interest on any Note following the
reinstatement of its obligations, the Company will be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 hereof, the Company, the Guarantors and
the Trustee may amend or supplement this Indenture, the Subsidiary Guarantees or
the Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article 2
hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;
(3) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to
the Company pursuant to Article 5 or Article 11 hereof;
(4) to provide for additional Subsidiary Guarantees or to limit
or eliminate the ability of the Company to obtain the release of a
Guarantor or a Subsidiary Guarantee.
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(5) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely
affect the legal rights hereunder of any Holder of the Note; or
(6) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Sections 3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees and the Notes
with the consent of the Holders of at least a majority in principal amount of
the Notes (including, without limitation, Additional Notes, if any) then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium or Liquidated Damages, if any, or interest
on the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture, the
Subsidiary Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). In addition, any amendment to,
or waiver of, the provisions of Article 10 hereof that adversely affects the
rights of the Holders of the Notes will require the consent of the Holders of at
least 75% in aggregate principal amount of Notes then outstanding. Section 2.08
hereof will determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.
It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or
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waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding voting as a single
class may waive compliance in a particular instance by the Company with any
provision of this Indenture or the Notes. However, without the consent of each
Holder affected, an amendment or waiver under this Section 9.02 may not (with
respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes (except as provided in Sections 3.09, 4.10 and 4.15);
(3) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of principal
(including redemption or purchase price) of or premium or Liquidated
Damages, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver of
the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions;
(7) waive a redemption payment with respect to any Note (other than a
payment required by Section 3.09, 4.10 or 4.15);
(8) release any Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the terms
of this Indenture; or
(9) make any change to clauses (1) through (8) above in this Section
9.02.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee will, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until its Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01 hereof) will be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental Indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01 Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt.
Section 10.02 Certain Definitions.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) after payment in full of all Obligations under the Credit
Agreement, or upon the consent of the lenders thereunder, any other
Senior Debt permitted under this Indenture the outstanding principal
amount of which is or may be $15.0 million or more and that has been
designated by the Company as "Designated Senior Debt."
"Permitted Junior Securities" means:
(1) Equity Interests in the Company or any Guarantor or any
successor to either of the foregoing; or
(2) debt securities that are subordinated to all Senior Debt and
any debt securities issued in exchange for Senior Debt to
substantially the same extent as, or to a greater extent than, the
Notes and the Subsidiary Guarantees are subordinated to Senior Debt
under this Indenture.
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"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Senior Debt" means:
(1) all Indebtedness of the Company or any Guarantor outstanding
under the Credit Facilities and all Hedging Obligations with respect
thereto;
(2) any other Indebtedness of the Company or any Guarantor permitted
to be incurred under the terms of this Indenture, unless the instrument
under which such Indebtedness is incurred expressly provides that it is
subordinated to any Senior Debt or on a parity with or subordinated in
right of payment to the Notes or any Subsidiary Guarantee, and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt
shall not include:
(1) any liability for federal, state, local or other taxes owed or
owing;
(2) any intercompany Indebtedness of the Company or any of its
Subsidiaries to the Company or any of its Affiliates;
(3) any trade payables;
(4) the portion of any Indebtedness that is incurred in violation of
this Indenture; or
(5) Indebtedness which, when incurred and without respect to any
election under section 1111(b) of title 11, U.S. Code, is without recourse
to the Company or any Guarantor.
Section 10.03 Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(1) holders of Senior Debt will be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any bankruptcy proceeding at the rate
specified in the applicable Senior Debt) before the Holders of Notes will
be entitled to receive any payment with respect to the Notes (except that
Holders of Notes may receive and retain Permitted Junior Securities and
payments made from any defeasance trust created pursuant to Section 8.01
hereof); and
(2) until all Obligations with respect to Senior Debt (as provided in
clause (1) above) are paid in full, any distribution to which Holders would
be entitled but for this Article 10 will be made to holders of Senior Debt
(except that Holders of Notes may receive and retain Permitted Junior
Securities and payments made from any defeasance trust created pursuant to
Section 8.01 hereof), as their interests may appear.
A distribution may consist of cash, securities or other property, by set-off or
otherwise.
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Section 10.04 Default on Designated Senior Debt.
(a) The Company may not make any payment or distribution to the Trustee or
any Holder in respect of Obligations with respect to the Notes and may not
acquire from the Trustee or any Holder any Notes for cash or property (other
than Permitted Junior Securities and payments made from any defeasance trust
created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:
(1) payment default on Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement, indenture
or other document governing such Designated Senior Debt; or
(2) any other default occurs and is continuing on any series of
Designated Senior Debt that permits holders of that series of Designated
Senior Debt to accelerate its maturity and the Trustee and the Company
receive a notice of such default (a "Payment Blockage Notice") from the
holders of any Designated Senior Debt (or their Representatives). If the
Trustee receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice will be effective for purposes of this Section unless and
until (A) at least 360 days have elapsed since the delivery of the
immediately prior Payment Blockage Notice and (B) all scheduled payments of
principal, premium and Liquidated Damages, if any, and interest on the
Notes that have come due have been paid in full in cash.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee may be, or may be made,
the basis for a subsequent Payment Blockage Notice.
(b) The Company may and will resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(1) in the case of a payment default, upon the date upon which such
default is cured or waived, and
(2) in the case of a nonpayment default, upon the earlier of the date
on which such nonpayment default is cured or waived or 179 days after the
date on which the applicable Payment Blockage Notice is received, unless
the maturity of any Designated Senior Debt has been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 10.05 Occurrence of an Event of Default.
The Company will promptly notify holders of Senior Debt (or their
Representative) upon the occurrence of an Event of Default.
Section 10.06 When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes (other than Permitted Junior Securities
and payments made from any defeasance trust created pursuant to Section 8.01
hereof) at a time when the payment is prohibited by this Article 10 and the
Trustee or such Holder, as applicable, has actual knowledge that such payment is
prohibited by Section
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10.04 hereof, such payment will be held by the Trustee or such Holder, in trust
for the benefit of, and will be paid forthwith over and delivered, upon written
request, to, the holders of Senior Debt as their interests may appear or their
Representative under the agreement, indenture or other document (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only those obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt will be read into this Indenture against
the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and will not be liable to any such holders if the
Trustee pays over or distributes to or on behalf of Holders or the Company or
any other Person money or assets to which any holders of Senior Debt are then
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 10.07 Notice by Company.
The Company will promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of any Obligations with
respect to the Notes to violate this Article 10, but failure to give such notice
will not affect the subordination of the Notes to the Senior Debt as provided in
this Article 10.
Section 10.08 Subrogation.
After all Senior Debt is paid in full and until the Notes are paid in full,
Holders of Notes will be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
Section 10.09 Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and holders
of Senior Debt. Nothing in this Indenture will:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of, premium and interest and Liquidated Damages, if any, on the
Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt;
or
(3) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of,
premium or interest or Liquidated Damages, if any, on a Note on the due date,
the failure is still a Default or Event of Default.
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Section 10.10 Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes may be impaired by any act or failure to act
by the Company or any Holder or by the failure of the Company or any Holder to
comply with this Indenture.
Section 10.11 Distribution or Notice to or by Representative.
Whenever a distribution is to be made or a notice given to or by holders of
Senior Debt, the distribution may be made and the notice given to or by their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders of Notes will be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of Notes
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
Section 10.12 Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other provision of
this Indenture, the Trustee will not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment or distribution by
the Trustee, and the Trustee and the Paying Agent may continue to make payments
on the Notes, unless the Trustee has received at its Corporate Trust Office at
least five Business Days prior to the date of such payment written notice of
facts that would cause the payment of any Obligations with respect to the Notes
to violate this Article 10. Only the Company or a Representative may give the
notice. Nothing in this Article 10 will impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
Section 10.13 Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.14 Amendments.
The provisions of this Article 10 may not be amended or modified without
the written consent of the holders of Senior Debt, as required under the
agreement, indenture or other document (if any) governing such Senior Debt. In
addition, any amendment to, or waiver of, the provisions of this Article 10 that
adversely affects the rights of the Holders of the Notes will require the
consent of the Holders of at least 75% in aggregate principal amount of Notes
then outstanding.
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Section 10.15 Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee will not be deemed to owe any fiduciary duty to the holders of
Senior Debt and will not be liable to any such holders if the Trustee will in
good faith (and without gross negligence or willful misconduct) mistakenly pay
over or distribute to Holders of Notes or to the Company or to any other person
cash, property or securities to which any holders of Senior Debt will be
entitled by virtue of this Article 10 or otherwise. With respect to the holders
of Senior Debt, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article 10 and no
implied covenants or obligations with respect to holders of Senior Debt will be
read into this Indenture against the Trustee.
ARTICLE 11.
Subsidiary GUARANTEES
Section 11.01 Guarantee.
(a) Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium and Liquidated Damages, if any, and
interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated
in full force and effect.
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(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (2) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) will forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors will have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantee.
Section 11.02 Subordination of Subsidiary Guarantee.
The Obligations of each Guarantor under its Subsidiary Guarantee pursuant
to this Article 11 will be junior and subordinated to the Senior Debt of such
Guarantor on the same basis as the Notes are junior and subordinated to Senior
Debt of the Company. For the purposes of the foregoing sentence, the Trustee and
the Holders will have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.
Section 11.03 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
Section 11.04 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01 hereof,
each Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit E hereto will be endorsed by an
Officer of such Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of such Guarantor by
one of its Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 hereof will remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
79
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in
this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Domestic Subsidiary
after the date of this Indenture, if required by Section 4.18 hereof, the
Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.18 hereof and this Article 11, to the extent applicable.
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06 hereof, no Guarantor may sell
or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor,
unless:
(1) immediately after giving effect to such transaction, no Default
or Event of Default exists; and
(2) either:
(a) subject to Section 11.06 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally assumes all
the obligations of that Guarantor under this Indenture, its Subsidiary
Guarantee and the Registration Rights Agreement, pursuant to a
supplemental indenture in form and substance reasonably satisfactory
to the Trustee, under the Notes, this Indenture and the Subsidiary
Guarantee on the terms set forth herein or therein; or
(b) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore will not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 11.06 Release of Guarantors in Certain Circumstances.
In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, a sale or other disposition of the Capital Stock of any Guarantor (if
such Guarantor is no longer a Subsidiary of the Company as a result of such sale
or
80
other disposition), in any such case to a Person that is not (either before or
after giving effect to such transactions) a Subsidiary of the Company, or if the
Company designates any Restricted Subsidiary that is a Guarantor as an
Unrestricted Subsidiary or if the Company designates a Restricted Subsidiary
that is a Guarantor as a Permitted Investment made pursuant to clause (8) or (9)
of the definition of "Permitted Investments," then such Guarantor (in the event
of a sale or other disposition, by way of merger, consolidation or otherwise of
the capital stock of such Guarantor), the corporation acquiring the property (in
the event of a sale or other disposition of all or substantially all of the
assets of such Guarantor) or the Guarantor that is designated as a Permitted
Investment will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that such sale or other disposition does not violate the
applicable provisions of this Indenture, including without limitation Section
4.10 hereof or that such designation does not violate Section 4.07 hereof. Upon
delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of this Indenture, including
without limitation Section 4.10 hereof, the Trustee will execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and Notes
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the Trustee
for cancellation; or
(b) all Notes that have not been delivered to the Trustee
for cancellation have become due and payable by reason of the mailing
of a notice of redemption or otherwise or will become due and payable
within one year and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire indebtedness
on the Notes not delivered to the Trustee for cancellation for
principal, premium and Liquidated Damages, if any, and accrued
interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or will occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
81
(3) the Company or any Guarantor has paid or caused to be paid
all sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case
may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section 12.01, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited
with the Trustee pursuant to Section 12.01 hereof will be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and any Guarantor's obligations under this Indenture
and the Notes will be revived and reinstated as though no deposit had occurred
pursuant to Section 12.01 hereof; provided that if the Company has made any
payment of principal of, premium, if any, or interest on any Notes because of
the reinstatement of its obligations, the Company will be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties will control.
Section 13.02 Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
82
If to the Company and/or any Guarantor:
Central Garden & Pet Company
3697 Mt. Diablo Blvd., Suite 310
Lafayette, CA 94549
Facsimile: (925) 283-4984
Attention: Chief Executive Officer
With a copy to:
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, CA 94111
Facsimile: (415) 773-5759
Attention: John F. Seegal
If to the Trustee:
Wells Fargo Bank, National Association
707 Wilshire Blvd., 17th Floor
Los Angeles, CA 90017
Telecopier No.: (213) 614-3355
Attention: Corporate Trust Administration
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
83
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company will furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) must comply with the provisions of
TIA Section 314(e) and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Subsidiary Guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and
84
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors.
All agreements of the Company in this Indenture and the Notes will
bind its successors. All agreements of the Trustee in this Indenture will bind
its successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.06 hereof.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 13.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
85
SIGNATURES
Dated as of January 30, 2003
CENTRAL GARDEN & PET COMPANY
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman and Chief Executive
Officer
FOUR PAWS PRODUCTS LTD.
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman
KAYTEE PRODUCTS, INCORPORATED
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman
PENNINGTON SEED, INC.
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman
ALL-GLASS AQUARIUM CO., INC.
By: /s/ GLENN W. NOVOTNY
--------------------------------------
Name: Glenn W. Novotny
Title: Chief Executive Officer
S-1
T.F.H. PUBLICATIONS, INC.
By: /s/ GLEN S. AXELROD
--------------------------------------
Name: Glen S. Axelrod
Title: President and Chief Executive
Officer
WELLMARK INTERNATIONAL
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman and Chief Executive
Officer
NORCAL POTTERY PRODUCTS, INC.
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman
PENNINGTON SEED, INC., OF NEBRASKA
By: /s/ BROOKS M. PENNINGTON III
--------------------------------------
Name: Brooks M. Pennington III
Title: President
GRO TEC, INC.
By: /s/ BROOKS M. PENNINGTON III
--------------------------------------
Name: Brooks M. Pennington III
Title: President
GRANT LABORATORIES, INC.
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman and Chief Executive
Officer
S-2
MATTHEWS REDWOOD & NURSERY SUPPLY, INC.
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman and Chief Executive
Officer
PHAETON CORPORATION
By: /s/ BROOKS M. PENNINGTON III
--------------------------------------
Name: Brooks M. Pennington III
Title: Chief Executive Officer and
President
SEEDS WEST, INC.
By: /s/ WILLIAM E. BROWN
--------------------------------------
Name: William E. Brown
Title: Chairman
OCEANIC SYSTEMS, INC.
By: /s/ GLENN W. NOVOTNY
--------------------------------------
Name: Glenn W. Novotny
Title: Chief Executive Officer
WELLS FARGO BANK, NATIONAL ASSOCIATION,
By: /s/ JEANIE MAR
--------------------------------------
Name: Jeanie Mar
Title: Vice President
S-3
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the date of the Indenture:
Four Paws Products Ltd.
Kaytee Products, Incorporated
Pennington Seed, Inc.
All-Glass Aquarium Co., Inc.
T.F.H. Publications, Inc.
Wellmark International
Norcal Pottery Products, Inc.
Pennington Seed, Inc. of Nebraska
Gro Tec, Inc.
Grant Laboratories, Inc.
Matthews Redwood & Nursery Supply, Inc.
Phaeton Corporation
Seeds West, Inc.
Oceanic Systems, Inc.
I-1
EXHIBIT A
[Face of Note]
- --------------------------------------------------------------------------------
CUSIP/CINS ____________
9.125% Senior Subordinated Notes due 2013
No. _____ $____________
CENTRAL GARDEN & PET COMPANY
promises to pay to CEDE & CO. or registered assigns, the principal sum of
____________________
Dollars on February 1, 2013.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated: January 30, 2003
CENTRAL GARDEN & PET COMPANY
By:
--------------------------------------
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------------
Authorized Signatory
- --------------------------------------------------------------------------------
A-1
[Back of Note]
___% Senior Subordinated Notes due 2013
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Central Garden & Pet Company, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Note at 9.125% per annum from January 30, 2003 until maturity and will pay
the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company will pay
interest and Liquidated Damages, if any, semi-annually in arrears on
February 1 and August 1 of each year, or if any such day is not a Business
Day, on the next succeeding Business Day (each, an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest
Payment Date, interest will accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date will
be the first of February 1 or August 1 to occur after the date of issuance,
unless such February 1 or August 1 occurs within one calendar month of such
date of issuance, in which case the first Interest Payment Date will be the
second of February 1 or August 1 to occur after the date of issuance. The
Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at a rate that is
1% per annum in excess of the rate then in effect; it will pay interest
(including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest and Liquidated Damages, if any,
(without regard to any applicable grace periods) at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons
who are registered Holders of Notes at the close of business on the January
15 or July 15 next preceding the Interest Payment Date, even if such Notes
are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. The Notes will be payable as to principal, premium and
Liquidated Damages, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City and State of
New York, or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders at
their addresses set forth in the register of Holders; provided that payment
by wire transfer of immediately available funds will be required with
respect to principal of and interest, premium and Liquidated Damages, if
any, on, all Global Notes and any other Notes if any Holder of $1.0 million
or more in aggregate principal amount of such Notes has provided wire
transfer instructions to the Company or the Paying Agent for that purpose.
Such payment will be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, Wells Fargo Bank, National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The
A-2
Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of January 30, 2003 (the "Indenture") among the Company, the Guarantors
and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture will govern and be controlling.
The Notes are obligations of the Company unlimited in aggregate principal
amount.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to February 1, 2008.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on February 1 of the years indicated below:
Year Percentage
---- ----------
2008......................................................... 104.563%
2009......................................................... 103.042%
2010......................................................... 101.521%
2011 and thereafter.......................................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to February 1, 2006, the Company may redeem Notes with the
net proceeds of a Public Equity Offering at a redemption price equal to 109.125%
of the aggregate principal amount thereof; provided that at least 67% in
aggregate principal amount of the Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption and that such
redemption occurs within 60 days of the date of the closing of such Public
Equity Offering.
(6) MANDATORY REDEMPTION.
The Company will not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of each
Holder's Notes at a purchase price equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase (the "Change of Control Payment").
Within 10 days following any Change of Control, the Company will mail a
notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
A-3
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sale, within 30 days of each date on which the aggregate amount of
Excess Proceeds exceeds $10.0 million, the Company will commence an offer
to all Holders of Notes and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth in
the Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets (an "Asset Sale Offer") pursuant to Section
3.09 of the Indenture to purchase the maximum principal amount of Notes
(including any Additional Notes) and other pari passu Indebtedness that may
be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date fixed
for the closing of such offer, in accordance with the procedures set forth
in the Indenture. To the extent that the aggregate amount of Notes
(including any Additional Notes) and other pari passu Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company (or such Restricted Subsidiary) may use such deficiency for any
purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes and other pari passu Indebtedness surrendered by
holders thereof exceeds the amount of Excess Proceeds, the Trustee will
select the Notes and other pari passu Indebtedness to be purchased on a pro
rata basis. Holders of Notes that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company prior to any related
purchase date and may elect to have such Notes purchased by completing the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes
to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes and Additional Notes, if
any, voting as a single class, and any existing default or compliance with
any provision of the Indenture, the Subsidiary Guarantees or the Notes may
be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes and Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture,
the Subsidiary Guarantees or the Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in
A-4
place of certificated Notes or to alter the provisions of Article 2 of the
Indenture (including the related definitions) in a manner that does not
materially adversely affect any Holder, to provide for the assumption of
the Company's or any Guarantor's obligations to the Holders of the Notes in
case of a merger or consolidation, to provide for additional Subsidiary
Guarantees or to limit or eliminate the ability of the Company to obtain
the release of a Guarantor or a Subsidiary Guarantee, to make any change
that would provide any additional rights or benefits to the Holders of the
Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, or to comply with the requirements of the SEC
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) the Company
defaults for 30 days in the payment when due of interest on, or Liquidated
Damages with respect to, the Notes whether or not prohibited by the
subordination provisions of the Indenture; (ii) the Company defaults in the
payment when due (at maturity, upon redemption or otherwise) of the
principal of, or premium, if any, on the Notes, whether or not prohibited
by the subordination provisions of the Indenture, (iii) the Company or any
of its Subsidiaries fails to comply with the provisions of Section 4.10,
4.15 or 5.01 of the Indenture; (iv) the Company or any of its Subsidiaries
fails to comply with the provisions of Section 4.07 or 4.09 of the
Indenture, and such failure continues for 30 days; (v) the Company or any
of its Subsidiaries fails to observe or perform any other covenant,
representation, warranty or other agreement in the Indenture or the Notes
for 60 days after notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding
voting as a single class; (vi) default under certain other agreements
relating to Indebtedness of the Company which default results in the
acceleration of such Indebtedness prior to its express maturity; (vii)
certain final judgments against the Company or any Restricted Subsidiary
for the payment of money that remain undischarged for a period of 60 days;
(viii) certain events of bankruptcy or insolvency with respect to the
Company, any Restricted Subsidiary that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; (ix) except as permitted by the Indenture, any
Subsidiary Guarantee will be held in any judicial proceeding to be
unenforceable or invalid or will cease for any reason to be in full force
and effect or any Guarantor or any Person acting on its behalf will deny or
disaffirm its obligations under such Guarantor's Subsidiary Guarantee and
(x) failure of the Company to redeem all of the outstanding Convertible
Subordinated Notes on or prior to February 28, 2003. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of
an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without
further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except
a continuing Default or Event of Default in the payment of interest or
Liquidated Damages on, or the principal of, the Notes; provided, however,
that at any time after a declaration of acceleration under the Indenture,
but before a judgment or decree for payment of the money due has been
obtained by the Trustee, the Holders of a majority in aggregate principal
amount of the outstanding Notes, by written notice to the Company and the
Trustee, may rescind such declaration and its consequences given certain
circumstances as provided in the Indenture.
A-5
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
(13) SUBORDINATION. Payment of principal, interest and premium and
Liquidated Damages, if any, on the Notes is subordinated to the prior
payment of Senior Debt on the terms provided in the Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as
such, will not have any liability for any obligations of the Company or
such Guarantor under the Notes, the Subsidiary Guarantees or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations
or their creation. Each Holder by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
the issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes will have all the rights set forth in the
Registration Rights Agreement dated as of January 30, 2003, between the
Company, the Guarantors and the other parties named on the signature pages
thereof or, in the case of Additional Notes, Holders of Restricted Global
Notes and Restricted Definitive Notes will have the rights set forth in one
or more registration rights agreements, if any, among the Company, the
Guarantors and the other parties thereto, relating to rights given by the
Company and the Guarantors to the purchasers of any Additional Notes
(collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Central Garden & Pet Company
3697 Mt. Diablo Blvd., Suite 310
A-6
Lafayette, CA 94549
Attention: Chief Executive Officer
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
----------------------
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
[X] Section 4.10 [X] Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$______________
Date:
-------------------
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:
--------------------------
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- --------------------- ------------------- ------------------
* This schedule should be included only if the Note is issued in global form.
A-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Central Garden & Pet Company
3697 Mt. Diablo Blvd., Suite 310
Lafayette, CA 94549
Attention: Chief Executive Officer
Wells Fargo Bank, National Association
707 Wilshire Blvd., 17th Floor
Los Angeles, CA 90017
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2013
Reference is hereby made to the Indenture, dated as of _________, 2003 (the
"Indenture"), among Central Garden & Pet Company, as issuer (the "Company"), the
Guarantors named on the signature pages thereto and Wells Fargo Bank, National
Association, as trustee. Capitalized terms used but not defined herein will have
the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor
hereby further certifies that the beneficial interest or Definitive Note is
being transferred to a Person that the Transferor reasonably believed and
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [ ] Check if Transferee will take delivery of a beneficial interest in
the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a Person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act and (iii) the transaction is not part of a plan or
scheme to evade the registration
B-1
requirements of the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
3. [ ] Check and complete if Transferee will take delivery of a beneficial
interest in the Restricted Global Note or a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904 under the Securities Act, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within
the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is
in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Definitive Notes and in the Indenture and the Securities Act.
4. [ ] Check if Transferee will take delivery of a beneficial interest in
an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [ ] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or
B-2
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
--------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated:
--------------------------
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Central Garden & Pet Company
3697 Mt. Diablo Blvd., Suite 310
Lafayette, CA 94549
Attention: Chief Executive Officer
Wells Fargo Bank, National Association
707 Wilshire Blvd., 17th Floor
Los Angeles, CA 90017
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2013
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of _______, 2003 (the
"Indenture"), among Central Garden & Pet Company, as issuer (the "Company"), the
Guarantors named on the signature pages thereto and Wells Fargo Bank, National
Association, as Trustee. Capitalized terms used but not defined herein will have
the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [ ] Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in
C-1
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
144A Global Note, Regulation S Global Note, with an equal principal amount, the
Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer and (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
--------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
C-2
Dated:
---------------------
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Central Garden & Pet Company
3697 Mt. Diablo Blvd., Suite 310
Lafayette, CA 94549
Attention: Chief Executive Officer
Wells Fargo Bank, National Association
707 Wilshire Blvd., 17th Floor
Los Angeles, CA 90017
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2013
Reference is hereby made to the Indenture, dated as of _______, 2003 (the
"Indenture"), among Central Garden & Pet Company, as issuer (the "Company"), the
guarantors named on the signature pages thereto and Wells Fargo Bank, National
Association, as trustee. Capitalized terms used but not defined herein will have
the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 under the Securities Act, (E) pursuant
to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any Person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-----------------------------------------
[Insert Name of Accredited Investor]
By:
--------------------------------------
Name:
Title:
Dated:
---------------------
D-2
EXHIBIT E
FORM OF SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of ________, 2003 (the "Indenture") among
Central Garden & Pet Company, (the "Company"), the Guarantors listed on Schedule
I thereto and Wells Fargo Bank, National Association, as trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium and
Liquidated Damages, if any, and interest on the Notes (as defined in the
Indenture), whether at maturity, by acceleration, redemption or otherwise, the
due and punctual payment of interest on overdue principal of and interest on the
Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided, however, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in right
of payment upon any defeasance of this Note in accordance with the provisions of
the Indenture.
[NAME OF GUARANTOR(S)]
By:
-----------------------------------
Name:
Title:
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EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of Central Garden & Pet Company (or its permitted
successor), a Delaware corporation (the "Company"), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and Wells Fargo
Bank, National Association, as trustee under the indenture referred to below
(the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of ________, 2003, providing for the
issuance of ____% Senior Subordinated Notes due 2013 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary will execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary will unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
will have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Subsidiary Guarantee and in the Indenture, including but
limited to Article 11 thereof.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantee will remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
4. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, will have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE
S-1
EXHIBIT E
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy will be an original, but all of them
together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and will not affect the construction hereof.
8. THE TRUSTEE. The Trustee will not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
E-2
EXHIBIT E
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By:
------------------------------
Name:
Title:
CENTRAL GARDEN & PET COMPANY
By:
------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
------------------------------
Name:
Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------
Authorized Signatory
E-3