[L&W Draft Dated March 4, 1997]
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SYRATECH CORPORATION
and
SYRATECH HOLDING CORPORATION WALLACE INTERNATIONAL SILVERSMITH, INC.
INTERNATIONAL SILVER COMPANY WALLACE INTERNATIONAL DE P.R., INC.
INTERNATIONAL SILVER DE P.R., INC. PMW SILVER DE P.R., INC.
TOWLE MANUFACTURING COMPANY ROSEMAR SILVER COMPANY, INC.
TOWLE HOLLOWARE, INC. FARBERWARE INC.
SILVESTRI, INC. SILVESTRI, INC. OF SOUTH CAROLINA
RAUCH INDUSTRIES, INC. ROCHARD, INC.
HOLIDAY PRODUCTS, INC. NORTHSTAR SALES CORPORATION
LEONARD FLORENCE ASSOCIATE, INC. CHI INTERNATIONAL, INC.
SYRATECH SECURITY CORPORATION SYRATECH WEST COAST WAREHOUSE CORP.
175 AMLEGION REVERE REALTY TRUST SYRATECH SILVER SALES CORP.
US$205,000,000
___% SENIOR NOTES DUE 2007
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INDENTURE
Dated as of April __, 1997
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STATE STREET BANK AND TRUST COMPANY
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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).................................................... 10.03
(c).................................................... 10.03
313 (a)..................................................... 7.06
(b).................................................... 7.06
(c).................................................... 7.06;11.02
(d).................................................... 7.06
314 (a)..................................................... 4.03;11.05
(b).................................................... N.A.
(c)(1)................................................. 11.04
(c)(2)................................................. 11.04
(c)(3)................................................. N.A.
(d).................................................... N.A.
(e).................................................... 11.05
(f).................................................... N.A.
315 (a)..................................................... 7.01
(b).................................................... 7.05,11.02
(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
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*CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
317 (a)(1).................................................. 6.08
(a)(2)................................................. 6.09
(b).................................................... 2.04
318 (a)..................................................... 11.01
(b).................................................... N.A.
(c).................................................... 10.01
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........................................... 12
Section 1.03. Incorporation by Reference of Trust Indenture Act........... 13
Section 1.04. Rules of Construction....................................... 13
ARTICLE 2
THE SENIOR NOTES
Section 2.01. Form and Dating............................................. 14
Section 2.02. Execution and Authentication................................ 14
Section 2.03. Registrar and Paying Agent.................................. 15
Section 2.04. Paying Agent to Hold Money in Trust......................... 15
Section 2.05. Holder Lists................................................ 16
Section 2.06. Transfer and Exchange....................................... 16
Section 2.07. Replacement Senior Notes.................................... 17
Section 2.08. Outstanding Senior Notes.................................... 17
Section 2.09. Treasury Senior Notes....................................... 17
Section 2.10. Temporary Senior Notes...................................... 18
Section 2.11. Cancellation................................................ 18
Section 2.12. Record Date................................................. 18
Section 2.13. CUSIP Number................................................ 18
ARTICLE 3
REDEMPTION AND REPURCHASE
Section 3.01. Notices to Trustee.......................................... 19
Section 3.02. Selection of Senior Notes to Be Redeemed.................... 19
Section 3.03. Notice of Redemption........................................ 19
Section 3.04. Effect of Notice of Redemption.............................. 20
Section 3.05. Deposit of Redemption Price................................. 20
Section 3.06. Senior Notes Redeemed in Part............................... 21
Section 3.07. Optional Redemption......................................... 21
Section 3.08. Mandatory Redemption........................................ 22
Section 3.09. Offer to Purchase by Application of Excess Proceeds......... 22
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes..................................... 24
Section 4.02. Maintenance of Office or Agency............................. 24
Section 4.03. Reports..................................................... 25
Section 4.04. Compliance Certificate...................................... 25
Section 4.05. Taxes....................................................... 26
Section 4.06. Stay, Extension and Usury Laws.............................. 26
Section 4.07. Restricted Payments......................................... 26
i
Page
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries................................................ 28
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.. 29
Section 4.10. Asset Sales................................................. 31
Section 4.11. Transactions with Affiliates................................ 32
Section 4.12. Liens....................................................... 32
Section 4.13. Corporate Existence......................................... 32
Section 4.14. Offer to Repurchase Upon Change of Control.................. 33
Section 4.15. Sale and Leaseback Transactions............................. 34
Section 4.16. Limitation on Issuances and Sales of Capital
Stock of Wholly Owned Subsidiaries.......................... 34
Section 4.17. Payments for Consents....................................... 34
Section 4.18. Additional Subsidiary Guarantees............................ 35
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.................... 35
Section 5.02. Successor Corporation Substituted........................... 35
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default........................................... 36
Section 6.02. Acceleration................................................ 38
Section 6.03. Other Remedies.............................................. 39
Section 6.04. Waiver of Past Defaults..................................... 39
Section 6.05. Control by Majority......................................... 39
Section 6.06. Limitation on Suits......................................... 39
Section 6.07. Rights of Holders to Receive Payment........................ 40
Section 6.08. Collection Suit by Trustee.................................. 40
Section 6.09. Trustee May File Proofs of Claim............................ 40
Section 6.10. Priorities.................................................. 41
Section 6.11. Undertaking for Costs....................................... 41
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee........................................... 41
Section 7.02. Rights of Trustee........................................... 42
Section 7.03. Individual Rights of Trustee................................ 43
Section 7.04. Trustee's Disclaimer........................................ 43
Section 7.05. Notice of Defaults.......................................... 43
Section 7.06. Reports by Trustee to Holders............................... 43
Section 7.07. Compensation and Indemnity.................................. 44
Section 7.08. Replacement of Trustee...................................... 44
Section 7.09. Successor Trustee by Merger, etc............................ 45
Section 7.10. Eligibility; Disqualification............................... 45
Section 7.11. Preferential Collection of Claims Against the Company....... 46
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Page
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.... 46
Section 8.02. Legal Defeasance and Discharge.............................. 46
Section 8.03. Covenant Defeasance......................................... 47
Section 8.04. Conditions to Legal or Covenant Defeasance.................. 47
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions....................... 48
Section 8.06. Repayment to the Company.................................... 49
Section 8.07. Reinstatement............................................... 49
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes.................. 50
Section 9.02. With Consent of Holders of Senior Notes..................... 50
Section 9.03. Compliance with Trust Indenture Act......................... 52
Section 9.04. Revocation and Effect of Consents........................... 52
Section 9.05. Notation on or Exchange of Senior Notes..................... 52
Section 9.06. Trustee to Sign Amendments, etc............................. 52
ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01 Subsidiary Guarantee........................................ 53
Section 10.02 Execution and Delivery of Subsidiary Guarantee.............. 54
Section 10.03 Guarantors May Consolidate, etc., on Certain Terms.......... 54
Section 10.04 Releases Following Sale of Assets........................... 55
Section 10.05 "Trustee" to Include Paying Agent........................... 55
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls................................ 56
Section 11.02 Notices..................................................... 56
Section 11.03 Communication by Holders with Other Holders................. 57
Section 11.04 Certificate and Opinion as to Conditions Precedent.......... 57
Section 11.05 Statements Required in Certificate or Opinion............... 57
Section 11.06 Rules by Trustee and Agents................................. 58
Section 11.07 No Personal Liability of Directors, Officers, Employees
and Stockholders............................................ 58
Section 11.08 Governing Law............................................... 58
Section 11.09 No Adverse Interpretation of Other Agreements............... 58
Section 11.10 Successors.................................................. 58
Section 11.11 Severability................................................ 58
Section 11.12 Counterpart Originals....................................... 58
Section 11.13 Table of Contents, Headings, etc............................ 59
iii
EXHIBITS
Exhibit A FORM OF SENIOR NOTE AND TRUSTEE CERTIFICATE OF
AUTHENTICATION
Exhibit B FORM OF SUBSIDIARY GUARANTEE
iv
INDENTURE dated as of _________ __, 1997 among Syratech Corporation a
Delaware corporation (the "Company"), as issuer, each of Syratech Holding
Corporation, a New York corporation; Wallace International Silversmiths, Inc.,
a Delaware corporation; Wallace International de P.R., Inc., a Delaware
corporation; International Silver Company, a Delaware corporation; International
Silver de P.R., Inc., a Delaware corporation; PMW Silver de P.R., Inc., a
Delaware corporation; Towle Manufacturing Company, a Delaware corporation;
Rosemar Silver Company, Inc., a Delaware corporation; Towle Holloware, Inc., a
Delaware corporation; Farberware Inc., a Delaware corporation; Silvestri, Inc.,
a Delaware a corporation; Silvestri, Inc. of South Carolina, a South Carolina
corporation; Rauch Industries, Inc., a North Carolina corporation; Rochard,
Inc., a North Carolina corporation; Holiday Products, Inc., a North Carolina
corporation; Northstar Sales Corporation, a North Carolina corporation; Leonard
Florence Associates, Inc., a Massachusetts corporation; CHI International, Inc.,
a Maryland corporation; Syratech Security Corporation, a Massachusetts
corporation; Syratech West Coast Warehouse Corp., a California corporation; 175
Amlegion Revere Realty Trust, a Massachusetts Trust; and Syratech Silver Sales
Corp., a Georgia corporation, as guarantors (collectively, the "Subsidiary
Guarantors"); and State Street Bank and Trust Company, as trustee (the
"Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the Company's ___% Senior Notes due 2007 (the "Senior Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"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"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Subsidiaries taken as a whole will be governed by Section 4.14 and/or
Section 5.01 and not by Section 4.10 hereof), and (ii) the issue or sale by the
Company or any of its Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $1.0 million or (b) for Net Proceeds in excess of $1.0
million. Notwithstanding the foregoing: (i) a transfer of assets by the Company
to a Subsidiary or by a Subsidiary to the Company or to a Wholly Owned
Subsidiary, (ii) an issuance of Equity Interests by a Wholly Owned Subsidiary to
the Company or to another Wholly Owned Subsidiary, and (iii) a Restricted
Payment that is permitted by Section 4.07, will be deemed not to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the capital lease included in such sale and leaseback transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Board of Directors" means the board of directors, if any, of the
Company or any authorized committee thereof.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, shares of
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) 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 lender party to the New
Credit
2
Facility or with any domestic commercial bank having capital and surplus in
excess of $500 million and a Keefe Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, 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 assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act), other than Principals or their Related Parties, (ii) the adoption of a
plan relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than the Principals or their Related Parties, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the Voting Stock of the
Company (measured by voting power rather than number of shares), (iv) the first
day on which a majority of the members of the Board of Directors are not
Continuing Directors or (v) the Company consolidates with, or merges with or
into, any Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of the Company
outstanding immediately prior to such transaction is converted into or exchanged
for Voting Stock (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding share of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to such
issuance). For purposes of this definition, any transfer of an equity interest
of an entity that was formed for the purpose of acquiring Voting Stock of the
Company will be deemed to be a transfer of such portion of such Voting Stock as
corresponds to the portion of the equity of such entity that has been so
transferred.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt
3
issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash charges (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income, minus (v) non-cash items
increasing such Consolidated Net Income for such period, in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent Person or a Subsidiary thereof, (ii) the Net Income of any
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that 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 Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (iv) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date hereof in the book value of any asset
owned by such Person or a consolidated Subsidiary of such Person, (y) all
investments as of such date in unconsolidated Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount
4
and expense and unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date hereof or (ii) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 or such other address as the Trustee may give
notice to the Company.
"Credit Facilities" means, with respect to the Company, one or more
debt facilities (including, without limitation, the New Credit Facility) or
commercial paper facilities 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, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time. Indebtedness under Credit Facilities
outstanding on the date on which Senior Notes are first issued and authenticated
under this Indenture shall be deemed to have been incurred on such date in
reliance on the exception provided in clause (i) of the third paragraph of
Section 4.09.
"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.
"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), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Senior Notes mature.
"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).
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date hereof, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period,
without duplication, the sum of (i) the consolidated interest expense of such
Person and its 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
5
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging Obligations
(but excluding amortization of debt issuance costs)) and (ii) the consolidated
interest expense of such Person and its Subsidiaries that was capitalized during
such period, and (iii) any interest expense on Indebtedness of another Person
that is guaranteed by such Person or one of its Subsidiaries or secured by a
Lien on assets of such Person or one of its Subsidiaries (whether or not such
Guarantee or Lien is called upon) and (iv) the product of (a) all dividend
payments , whether or not in cash, on any series of preferred stock of such
Person or any of its Subsidiaries, times (b) a fraction, the numerator of which
is one and the denominator of which is one minus the then current combined
federal, state, and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Subsidiaries incurs, assumes, guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its 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 on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (iii) of
the proviso set forth in the definition of Consolidated Net Income, and (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Subsidiaries following
the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
6
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) each domestic Subsidiary of the Company
and (ii) any other Subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions hereof, and their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or the values of foreign currencies purchased or received by
the Company or any of its Subsidiaries in the ordinary course of business.
"Holder" means a person in whose name a Senior Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness that does not require
current payments of interest, and (ii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests
7
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, the Company shall
be deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07 hereof.
"Issue Date" means _________ __, 1997.
"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 shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
(other than Indebtedness under the Credit Facilities) secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
8
"New Credit Facility" means that certain credit facility, dated as of
__________ __, 1997, by and among the Company and [NationsBank], as agent and a
lender, providing for up to $130 million of revolving credit borrowings,
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers" means the Chief Executive Officer, the President, the
Executive Vice President, the Treasurer, any Assistant Treasurer, Controller,
Secretary or any Vice President of the Company.
"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 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Subsidiary of the Company; (b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Subsidiary of the Company in a Person,
if as a result of such Investment (i) such Person becomes a Wholly Owned
Subsidiary of the Company or (ii) 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 Wholly Owned Subsidiary of
the Company; (d) any Restricted 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; (e) any acquisition of assets solely in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of the
Company; and (f) 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 (g) that are at the time outstanding,
not to exceed $5.0 million.
"Permitted Liens" means (i) Liens on accounts receivable and inventory
securing Indebtedness under the Credit Facilities that are permitted by the
terms hereof to be incurred; (ii) Liens in favor of the Company; (iii) Liens on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any 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; (iv) Liens on property existing at
the time of acquisition thereof
9
by the Company or any Subsidiary of the Company, provided that such Liens were
in existence prior to the contemplation of such acquisition; (v) Liens to secure
the performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course of
business; (vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iii) of the third paragraph of Section 4.09
covering only the assets acquired with such Indebtedness; (vii) Liens existing
on the date hereof; (viii) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; and (ix) Liens incurred in
the ordinary course of business of the Company or any Subsidiary of the Company
with respect to obligations that do not exceed $2.5 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Subsidiary.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund
Existing Indebtedness or other Indebtedness of the Company or any of its
Subsidiaries incurred in accordance with this Indenture (other than Indebtedness
incurred in accordance with clauses (i), (vi), (vii), (viii), (ix), (x), (xi) or
(xii) of the third paragraph of Section 4.09 thereof; provided that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Senior Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Senior Notes on terms at least
as favorable to the Holders of Senior Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by
the Company or by the Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
10
" Principals" means Thomas H. Lee Equity III, L.P. and its co-investors
in the Company as of the Issue Date, Thomas H. Lee Foreign Fund III, L.P. and
Thomas H. Lee Company, and any Affiliates of Thomas H. Lee Company.
"Related Party" means, with respect to any Principal, (A) any
controlling stockholder or, 80% (or more) owned Subsidiary of such Principal or
(B) any trust, corporation, partnership or other entity of which the
beneficiaries, stockholders, partners, owners or other Persons beneficially
holding an 80% or more controlling interest consist of such Principal and/or
such other persons referred in the immediately preceding clause (A).
"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.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Notes" means the Company's ___% Senior Notes due 2007 issued
under this Indenture.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of
11
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such Person
(or any combination thereof).
"Subsidiary Guarantees" means the Guarantees, substantially in the form
of Exhibit B attached hereto, of (i) the Subsidiary Guarantors and (ii) any
other subsidiary that executes a Guarantee in accordance with the provisions of
this Indenture, and their respective successors and assigns.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under
the TIA, except as provided in Section 9.03 hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction".................................. 4.11
"Asset Sale Offer"....................................... 4.10
"Case"................................................... 6.01
"Change of Control Payment Date"......................... 4.15
"Change of Control Offer"................................ 4.15
"Change of Control Payment".............................. 4.15
"Covenant Defeasance".................................... 8.03
"Custodian".............................................. 6.01
"Event of Default"....................................... 6.01
12
"Excess Proceeds"........................................ 4.10
"incur".................................................. 4.09
"Legal Defeasance"....................................... 8.02
"Notice of Default"...................................... 6.01
"Offer Amount"........................................... 3.09
"Offer Period"........................................... 3.09
"Paying Agent"........................................... 2.03
"Payment Default"........................................ 6.01
"Permitted Debt"......................................... 4.09
"Purchase Date".......................................... 3.09
"Registrar".............................................. 2.03
"Restricted Payments".................................... 4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Senior Notes;
"indenture security holder" means a Holder of a Senior Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Notes means the Company or any successor
obligor upon the Senior Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(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 generally accepted accounting principles in the
United States;
13
(3) references to "generally accepted accounting principles" shall
mean generally accepted accounting principles in effect in the United
States as of the time when and for the period as to which such accounting
principles are to be applied;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the plural
include the singular;
(6) provisions apply to successive events and transactions; and
(7) the words "he," "his," and "him" refer to both the masculine and
feminine gender.
ARTICLE 2
THE SENIOR NOTES
SECTION 2.01. FORM AND DATING.
The Senior Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto, which is part of this
Indenture. The Senior Notes may have notations, legends or endorsements approved
as to form by the Company and required by law, stock exchange rules and
agreements to which either of the Company or any Guarantor is subject or usage.
Each Senior Note shall be dated the date of its authentication. The Senior Notes
shall be issuable only in denominations of $1,000 and integral multiples
thereof.
The terms and provisions contained in the Senior Notes and the
Subsidiary Guarantees shall 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.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Senior Notes for the Company
by manual or facsimile signature. An Officer of each Guarantor shall sign the
Subsidiary Guarantee for such Guarantor by manual or facsimile signature.
If an Officer of the Company or a Guarantor whose signature is on a
Senior Note or a Note Guarantee, as the case may be, no longer holds that office
at the time a Senior Note is authenticated, the Senior Note or the Subsidiary
Guarantee, as the case may be, shall nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Senior Note has been
14
authenticated under this Indenture. The form of Trustee's certificate of
authentication to be borne by the Senior Notes shall be substantially as set
forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Senior Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Senior Notes. The
aggregate principal amount of Senior Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Notes. An authenticating agent may authenticate
Senior 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 the Company or
an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Senior Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Senior Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Senior 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 prior notice to any Holder. The
Company shall 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 shall act as such. The
Company may act as Paying Agent or Registrar.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Senior Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall 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 of, or premium, if any, or interest on the Senior Notes, and will
notify the Trustee of any default by the Company or any Guarantor 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) shall have no
further liability for the money delivered to the Trustee. If the Company acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent.
15
Upon any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Senior Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA s. 312(a). If the Trustee is
not the Registrar, the Company shall 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
Senior Notes, including the aggregate principal amount of the notes held by each
thereof.
SECTION 2.06. TRANSFER AND EXCHANGE.
When Senior Notes are presented to the Registrar with a request to
register the transfer or to exchange them for an equal principal amount of
Senior Notes of other denominations, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met;
provided, however, that any Senior Note presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Registrar and the
Trustee duly executed by the Holder thereof or by his attorney duly authorized
in writing. To permit registrations of transfer and exchanges, the Company shall
issue and the Trustee shall authenticate Senior Notes at the Registrar's
request, subject to such rules as the Trustee may reasonably require.
Neither the Company nor the Registrar shall be required (i) to issue,
register the transfer of or exchange Senior Notes during a period beginning at
the opening of business on a Business Day 15 days before the day of any
selection of Senior Notes for redemption under Section 3.02 and ending at the
close of business on the day of selection, (ii) to register the transfer of or
exchange any Senior Note so selected for redemption in whole or in part, being
redeemed in part or (iii) to register the transfer or exchange of a Senior Note
between the record date and the next succeeding interest payment date.
No service charge shall be made to any Holder of a Senior Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), 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 such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06, or 9.05 hereof, which shall be paid
by the Company).
Prior to due presentment to the Trustee for registration of the
transfer of any Senior Note, the Trustee, any Agent, the Company or any
Guarantor may deem and treat the Person in whose name any Senior Note is
registered as the absolute owner of such Senior Note for the purpose of
receiving payment of principal of, or premium, if any, on such Senior Note
16
and for all other purposes whatsoever, whether or not such Senior Note is
overdue, and neither the Trustee, any Agent, the Company or any Guarantor shall
be affected by notice to the contrary.
SECTION 2.07. REPLACEMENT SENIOR NOTES.
If any mutilated Senior 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 Senior Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Senior Note if the Trustee's
requirements for replacements of Senior Notes 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 Senior Note is replaced. The Company may charge for
its expenses in replacing a Senior Note.
Every replacement Senior Note shall constitute a valid obligation of
the Company and shall evidence the same debt as the Senior Note for it is a
replacement.
SECTION 2.08. OUTSTANDING SENIOR NOTES.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation and those described in this Section as not outstanding.
Except as set forth in Section 2.09 hereof, a Senior Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Senior
Note.
If a Senior 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 Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrete.
SECTION 2.09. TREASURY SENIOR NOTES.
In determining whether the Holders of the required principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company, any Subsidiary of the Company or any Affiliate of the
Company shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Senior Notes that a Trustee knows are so
owned shall be so considered. Notwithstanding the foregoing, Senior Notes that
are to be acquired by the Company, any Subsidiary of the Company or any
Affiliate of the Company pursuant to an exchange offer, tender offer or other
agreement shall not be deemed
17
to be owned by the Company, a Subsidiary of the Company or an Affiliate of the
Company until legal title to such Senior Notes passes to the Company, such
Subsidiary or such Affiliate, as the case may be.
SECTION 2.10. TEMPORARY SENIOR NOTES.
Until definitive Senior Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Senior Notes upon a written
order of the Company signed by two Officers of the Company. Temporary Senior
Notes shall be substantially in the form of definitive Senior Notes but may have
variations that the Company considers appropriate for temporary Senior Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee, upon a written order of the Company
signed by two Officers of the Company, shall authenticate definitive Senior
Notes in exchange for temporary Senior Notes. Holders of temporary Senior Notes
shall be entitled to all of the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Senior Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Senior Notes (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all canceled Senior
Notes shall be delivered to the Company. The Company may not issue new Senior
Notes to replace Senior Notes that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12. RECORD DATE.
The record date for purposes of determining the identity of Holders of
the Senior Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA s. 316(c).
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Senior Notes may use a "CUSIP" number and,
if it does so, the Trustee shall use the CUSIP number in notices of redemption
or exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Senior Notes and that reliance may be
placed only on the other identification numbers printed on the Senior Notes. The
Company will promptly notify the Trustee of any change in the CUSIP number.
18
ARTICLE 3
REDEMPTION AND REPURCHASE
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Senior Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Senior Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF SENIOR NOTES TO BE REDEEMED.
If less than all of the Senior Notes are to be redeemed at any time,
the Trustee shall select the Senior Notes to be redeemed among the Holders of
the Senior Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Senior Notes are listed or, if the
Senior Notes are not so listed, on a pro rata basis, by lot or in accordance
with any other method the Trustee considers fair and appropriate; provided that
Senior Notes redeemed pursuant to Section 3.07(b) hereof shall be selected on a
pro rata basis. In the event of partial redemption by lot, the particular Senior
Notes to be redeemed shall be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption date by the Trustee
from the outstanding Senior Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Senior
Notes selected for redemption and, in the case of any Senior Note selected for
partial redemption, the principal amount thereof to be redeemed. Senior Notes
and portions of Senior Notes selected shall be in amounts of $1,000 or whole
multiples of $1,000; except that if all of the Senior Notes of a Holder are to
be redeemed, the entire outstanding amount of Senior Notes held by such Holder,
even if not a multiple of $1,000, shall be redeemed. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Senior Notes
called for redemption also apply to portions of Senior Notes called for
redemption.
In the event the Company is required to make an offer to redeem Senior
Notes pursuant to Sections 3.09 and 4.10 hereof and the amount of the Net
Proceeds from the Asset Sale is not evenly divisible by $1,000, the Trustee
shall promptly refund to the Company at the address set forth in Section 11.02
hereof of any remaining Net Proceeds.
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 shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Senior Notes are to be redeemed at its registered address.
19
The notice shall identify the Senior Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Note is being redeemed in part, the portion of the
principal amount of such Senior Note to be redeemed and that, after the
redemption date, upon surrender of such Senior Note, a new Senior Note or
Senior Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Senior Note;
(d) the name and address of the Paying Agent;
(e) that Senior Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Senior Notes called for redemption ceases to accrue on
and after the redemption date;
(g) the paragraph of the Senior Notes and/or Section of this Indenture
pursuant to which the Senior Notes called for redemption are being
redeemed; and
(h) 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 Senior
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have 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, Senior 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 PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Senior Notes to be redeemed on
that date. The Trustee or the Paying
20
Agent shall 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 price of, and accrued interest on, all Senior Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Senior
Notes or the portions of Senior Notes called for redemption, whether or not such
Senior Notes are presented for payment. If a Senior Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Senior Note was registered at the close of business on such record date. If
any Senior Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
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 Senior
Notes and in Section 4.01 hereof.
SECTION 3.06. SENIOR NOTES REDEEMED IN PART.
Upon surrender of a Senior Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Senior Note
equal in principal amount to the unredeemed portion of the Senior Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as otherwise provided in subsection (b) of this Section
3.07, the Company shall not have the option to redeem the Senior Notes pursuant
to this Section 3.07 prior to _______ __, 2002. Thereafter, the Company shall
have the option to redeem the Senior 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 thereon, if any, to the applicable redemption date, if redeemed during
the twelve-month period beginning on _______ __ of the years indicated below:
Year Percentage
2002.........................................______%
2003.........................................______%
2004.........................................______%
2005 and thereafter..........................100.00%
(b) At any time on or before _______ __, 2000, the Company may, at its
option, also redeem up to 37 1/2% of the aggregate principal amount of Senior
Notes originally issued hereunder at a redemption price of ____% of the
principal amount thereof, plus accrued and
21
unpaid interest thereon, if any, to the redemption date, with the net cash
proceeds of a public offering of the common stock of the Company provided that
at least $100.0 million in aggregate principal amount of Senior Notes remain
outstanding immediately after the occurrence of such redemption; and provided,
further, that such redemption shall occur within 45 days of the date of the
closing such public offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.14 hereof, the Company
shall not be required to make mandatory repurchase, redemption or sinking fund
payments with respect to the Senior Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an Asset Sale Offer, they shall follow the procedures
specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Senior Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Senior Notes tendered in response to the
Asset Sale Offer. Payment for any Senior Notes so purchased shall be made in the
same manner as interest payments are made.
The Company shall comply with any tender offer rules under the Exchange
Act which may then be applicable, including Rule 14e-1, in connection with any
offer required to be made by the Company to repurchase the Senior Notes as a
result of an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 3.09,
the Company shall comply with the applicable securities laws or regulations and
shall not be deemed to have breached its obligations hereunder by virtue
thereof.
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 shall
be paid to the Person in whose name a Senior Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The
22
notice shall contain all instructions and materials necessary to enable such
Holders to tender Senior Notes pursuant to the Asset Sale Offer. The Asset Sale
Offer shall be made to all Holders. The notice, which shall govern the terms of
the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Senior Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Senior Note
purchased and may not elect to have only a portion of such Senior Note
purchased;
(f) that Holders electing to have a Senior Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Senior Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Senior 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;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receive,
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 Senior Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Senior
Note purchased;
(h) that, if the aggregate principal amount of Senior Notes
surrendered by Holders exceeds the Offer Amount, the Company shall select
the Senior Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Senior Notes in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(i) that Holders whose Senior Notes were purchased only in part shall
be issued new Senior Notes equal in principal amount to the unpurchased
portion of the Senior Notes surrendered (or transferred by book-entry
transfer).
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On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Senior Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Senior Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Senior 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, shall promptly (but in any case not
later than five days after the Purchase Date) mail or deliver to each tendering
Holder an amount equal to the purchase price of the Senior Notes tendered by
such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Senior Note, and the Trustee, upon written request from the
Company shall authenticate and mail or deliver such new Senior Note to such
Holder, in a principal amount equal to any unpurchased portion of the Senior
Note surrendered. Any Senior Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall 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 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof. No repurchase of Senior Notes under this
Section 3.09 shall be deemed to be a redemption of Senior Notes.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR NOTES.
The Company shall pay or cause to be paid the principal of and premium,
if any, and interest on the Senior Notes on the dates and in the manner provided
in the Senior Notes. Principal, and premium, if any, shall be considered paid on
the date due if the Paying Agent, if other than the Company, 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, and
premium, if any, then due. Such Paying Agent shall return to the Company, no
later than five Business Days following the date of payment, any money
(including accrued interest) that exceeds such amount of principal of, premium,
if any, and interest required to be paid on the Senior Notes.
The Company shall pay interest (including post-petition interest in any
proceeding under any U.S. Bankruptcy Law) on overdue principal and premium, if
any, at the rate equal to 1% per annum in excess of the then applicable interest
rate on the Senior Notes to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall 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 Senior 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 Senior Notes and this Indenture may be
served. The Company shall 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
24
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands 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 Senior 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 shall in any manner
relieve the Company of its obligations to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Senior Notes are outstanding, the Company will furnish to the
Holders (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the Commission on Form 8-K if the Company were required to file
such reports. In addition, whether or not required by the rules and regulations
of the SEC, the Company will file a copy of all such information and reports
with the SEC for public availability (unless the SEC will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. The Company shall also comply with the
provisions of TIA s. 314(a).
(b) The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Trustee may
be required to deliver to the Holders of the Senior Notes under this Section
4.03.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall 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, the Guarantors and the Company's Subsidiaries
have kept, observed, performed and fulfilled their 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 shall have 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
25
existence by reason of which payments on account of the principal of the Senior
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 shall be accompanied by a
written statement of the Company's independent public accountants (who shall 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 of the financial provisions of Sections 4.01, 4.07, 4.08, 4.09 or 4.12
hereof or of Article 5 of this Indenture or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer 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 shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Senior 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 shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefits or advantages of any such law, and covenants that
it shall not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's or any of its Subsidiaries'
Equity Interests (including, without limitation, any payment in connection with
any merger or consolidation involving the Company) (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company; (ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity
26
Interests of the Company, any Subsidiary of the Company or any Affiliate of the
Company (other than any such Equity Interests owned by the Company or any Wholly
Owned Subsidiary); (iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness that
is pari passu with or subordinated to the Senior Notes (other than the Senior
Notes), except a payment of interest or principal at Stated Maturity; or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Subsidiaries after the date
hereof (excluding Restricted Payments permitted by clause (ii) of the next
succeeding paragraph), is less than the sum of (i) 50% of the Consolidated
Net Income of the Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing after the date
hereof to the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by the Company from the issue or sale since the date
hereof of Equity Interests of the Company or of Disqualified Stock or debt
securities of the Company that have been converted into such Equity
Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company and other
than Disqualified Stock or convertible debt securities that have been
converted into Disqualified Stock), plus (iii) to the extent that any
Restricted Investment that was made after the date hereof is sold for cash
or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (less the cost
of disposition, if any) and (B) the initial amount of such Restricted
Investment.
The foregoing provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any pari passu or subordinated Indebtedness of 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,
other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such
27
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (c) (ii) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition of pari
passu or subordinated Indebtedness with the net cash proceeds from an incurrence
of Permitted Refinancing Indebtedness;
(iv) the payment of any dividend by a Subsidiary of the Company to the
holders of its common stock on a pro rata basis; and
(v) the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Company or any Subsidiary of the Company held by
any member of the Company's (or any of its Subsidiaries') management upon
termination of employment; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
$750,000 in any twelve-month period (with unused amounts in any calendar year
being available for such purposes to the next two succeeding calendar years,
with a maximum of $1,500,000 so available in any one year) and no Default or
Event of Default shall have occurred and be continuing immediately after such
transaction.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined by the Board
of Directors whose resolution with respect thereto shall be delivered to the
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal upon which
the fair market value of any non-cash Restricted Payment was based.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to
(i)(a) pay dividends or make any other distributions to the Company or any of
its Subsidiaries (1) on its Capital Stock or (2) with respect to any other
interest or participation in, or measured by, its profits, or (b) pay any
Indebtedness owed to the Company or any of its Subsidiaries, (ii) make loans or
advances to the Company or any of its Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) applicable law,
(b) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was permitted by
the
28
terms of the Indenture to be incurred, (c) by reason of customary non-assignment
provisions in leases entered into in the ordinary course of business and
consistent with past practices, (d) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above solely on the property so acquired, or
(e) Permitted Refinancing Indebtedness, provided that the restrictions contained
in the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its 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 that the
Company shall not issue any Disqualified Stock or sell or otherwise directly or
indirectly transfer any preferred stock of any of its Subsidiaries to any other
person and shall not permit any of its Subsidiaries to issue any shares of
preferred stock other than to the Company; provided, however, that the Company
may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified
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 is issued would have been at least 2 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
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The Company shall not incur any Indebtedness that is contractually
subordinated to any other Indebtedness of the Company unless such Indebtedness
is also contractually subordinated to the Senior Notes on substantially
identical terms; provided, however, that no Indebtedness of the Company shall be
deemed to be contractually subordinated to any other Indebtedness of the Company
solely by virtue of being unsecured.
The provisions of this first paragraph of this Section 4.09 will not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company of revolving credit Indebtedness under
the Credit Facilities; provided that the aggregate principal amount of all
revolving credit Indebtedness and letters of credit outstanding under all Credit
Facilities after giving effect to such incurrence, does not exceed an amount
equal to $130.0 million less the aggregate amount of all Net Proceeds of Assets
Sales applied to permanently repay any such Indebtedness pursuant to Section
4.10 hereof.
(ii) the incurrence by the Company and its Subsidiaries of Indebtedness
represented by the Senior Notes and the Subsidiary Guarantees, respectively;
(iii) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of financing
all or any part of the purchase price or cost
29
of construction or improvement of property, plant or equipment used in the
business of the Company or such Subsidiary, in an aggregate principal amount not
to exceed $10.0 million at any time outstanding;
(iv) the incurrence by any corporation that becomes a Subsidiary after the
Issue Date of Acquired Debt, which Indebtedness is existing at the time such
corporation becomes a Subsidiary; provided, however, that (A) immediately after
giving effect to such corporation becoming a Subsidiary the Company could incur
at least $1.00 of additional Indebtedness (other than Permitted Debt) pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this
Section 4.09, (B) such Indebtedness is without recourse to the Company or to any
Subsidiary or to any of their respective properties or assets other than the
Person becoming a Subsidiary or its properties and assets and (C) such
Indebtedness was not incurred as a result of or in connection with or in
contemplation of such entity becoming a Subsidiary;
(v) the incurrence by the Company or any of its Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace, Indebtedness that is permitted by this
Indenture to be incurred;
(vi) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its Wholly
Owned Subsidiaries; provided, however, that (i) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinate to the prior
payment in full in cash of all Obligations with respect to the Senior Notes and
(ii)(A) 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 Wholly
Owned Subsidiary and (B) any sale or other transfer of any such Indebtedness to
a Person who is neither the Company nor a Wholly Owned Subsidiary shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by the
Company or such Subsidiary, as the case may be;
(vii) the incurrence by the Company of Hedging Obligations that are
incurred for the purpose of fixing or hedging currency risk or interest rate
risk with respect to any floating rate Indebtedness that is permitted by the
terms of this Indenture to be outstanding;
(viii) the Guarantee by any of the Guarantors of Indebtedness of the
Company or another Guarantor that is permitted to be incurred by this Indenture;
(ix) Indebtedness for letters of credit relating to workers' compensation
claims and self-insurance or similar requirements in the ordinary course of
business;
(x) Indebtedness arising from Guarantees of Indebtedness of the Company or
any Subsidiary or other agreements of the Company or a Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, incurred or assumed in connection with the disposition of any business,
assets or Subsidiary, other than Guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition, provided that the maximum aggregate
liability in respect all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and its Subsidiaries in connection
with such disposition;
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(xi) obligations in respect of performance bonds and completion guarantees
provided by the Company or any Subsidiary in the ordinary course of business;
and
(xii) the incurrence by the Company or any of its Subsidiaries of
additional Indebtedness in an aggregate principal amount at any time outstanding
not to exceed $10.0 million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xii) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this Section 4.09 and such item of Indebtedness
shall be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph hereof. Accrual of interest and the accretion of
accreted value will not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.09.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Subsidiaries to,
consummate an Asset Sale unless (i) the Company (or the Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least equal to
the fair market value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) at least 75%
of the consideration received therefor by the Company or such Subsidiary is in
the form of cash.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to permanently
reduce indebtedness under the Credit Facilities (and to correspondingly reduce
commitments with respect thereto) or (b) to acquire a controlling interest in
another business, to make a capital expenditure or to acquire other long-term
assets, in each case, in the same or a similar line of business as the Company
is engaged in on the date hereof. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce Indebtedness under the Credit
Facilities or otherwise invest such 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 first sentence of this paragraph will be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $5.0 million, the Company shall make an offer to all Holders
(an "Asset Sale Offer") to purchase the maximum principal amount of Senior Notes
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of purchase, in accordance with the
procedures set forth in this Indenture. To the extent that the aggregate amount
of Senior Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Senior Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Senior Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
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SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of
their respective 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 of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated Person and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $7.5 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing; provided that (v) any employment agreement entered
into by the Company or any of its Subsidiaries or any employee benefit plan
available to employees of the Company generally, in each case, in the ordinary
course of business and consistent with the past practice of the Company or such
Subsidiary, (w) transactions between or among the Company and/or its
Subsidiaries, (x) Restricted Payments (other than Restricted Investments) that
are permitted by Section 4.07, (y) investment banking and management fees in an
aggregate amount no greater than $450,000 in any calendar year (plus
reimbursement of expenses) to be paid by the Company to Thomas H. Lee Company
and (z) a cash fee of $3.0 million payable by the Company to Thomas H. Lee
Company on the date hereof, in each case, shall not be deemed Affiliate
Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired, or on any income or profits therefrom or
assign or convey any right to receive income therefrom, except Permitted Liens.
SECTION 4.13. CORPORATE EXISTENCE.
Subject to Articles 5 and 10 hereof, the Company and each of the
Guarantors shall do or cause to be done all things necessary to preserve and
keep in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company, such Guarantor or any such Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Company, each of the
Guarantors and its Subsidiaries; provided, however, that the Company and each of
the Guarantors shall 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
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preservation thereof is no longer desirable in the conduct of the business of
the Company, such Guarantor and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder will have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Senior Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, to the date of purchase (the "Change of Control Payment").
Within ten days following any Change of Control, the Company shall mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Senior Notes pursuant to the
procedures described in this Section and described in such notice. The notice
will state: (1) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Senior Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be at least 30 but not
more than 60 days from the date such notice is mailed (the "Change of Control
Payment Date"); (3) that any Senior Note not tendered will continue to accrue
interest; (4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Senior Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control Payment
Date; (5) that Holders electing to have any Senior Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Senior Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Senior
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 Senior Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Senior Notes
purchased; and (7) that Holders whose Senior Notes are being purchased only in
part will be issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple thereof. The
Company shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of the Senior
Notes as a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Senior 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
Senior Notes or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee the Senior Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Notes or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
each Holder so tendered the Change of Control Payment for such Senior Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new
33
Senior Note equal in principal amount to any unpurchased portion of the Senior
Notes surrendered, if any; provided that each such new Senior Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in Sections 4.14(a) and 4.14(b) hereof and purchases all Senior Notes
validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.15. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Company or one
of its Subsidiaries may enter into a sale and leaseback transaction if (i) the
Company or such Subsidiary could have (a) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such sale and leaseback transaction
pursuant to Section 4.09 and (b) incurred a Lien to secure such Indebtedness
pursuant to Section 4.12, (ii) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the fair market value (as determined
in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee) of the property that is the subject of
such sale and leaseback transaction and (iii) the transfer of assets in such
sale and leaseback transaction is permitted by, and the Company applies the
proceeds of such transaction in compliance with, Section 4.10.
SECTION 4.16. LIMITATION ON ISSUANCES AND SALES OF CAPITAL
STOCK OF WHOLLY OWNED SUBSIDIARIES.
Except to the extent permitted by Section 4.07 hereof, the Company (i)
shall not, and shall not permit any Wholly Owned Subsidiary to, transfer,
convey, sell, lease or otherwise dispose of any Capital Stock of any Wholly
Owned Subsidiary to any Person (other than the Company or a Wholly Owned
Subsidiary), unless (a) such transfer, conveyance, sale, lease or other
disposition is of all the Capital Stock of such Wholly Owned Subsidiary and (b)
the cash Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 4.10, and (ii) shall not
permit any Wholly Owned Subsidiary of the Company to issue any of its Equity
Interests (other than, if necessary, shares of its Capital Stock constituting
directors' qualifying shares) to any Person other than to the Company or a
Wholly Owned Subsidiary.
SECTION 4.17. PAYMENTS FOR CONSENTS.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Senior Notes unless such consideration is offered to be paid or is paid
to all Holders that consent, waiver or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
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SECTION 4.18. ADDITIONAL SUBSIDIARY GUARANTEES.
(a) The Company shall not permit any of its Subsidiaries that is not a
Guarantor to guarantee or secure through the granting of Liens the payment of
any Indebtedness of the Company or any Guarantor and (b) the Company shall not
and shall not permit any of its Subsidiaries to pledge any intercompany notes
representing obligations of any of its Subsidiaries, to secure the payment of
any Indebtedness of the Company or any Guarantor, in each case unless such
Subsidiary, the Company and the Trustee execute and deliver a supplemental
indenture evidencing such Subsidiary's Guarantee (providing for the
unconditional Guarantee by such Subsidiary, on a senior basis, of the Senior
Notes).
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate, or merge with or into (whether or
not the Company is the surviving corporation) or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation, or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Senior
Notes and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately after such
transaction, no Default or Event of Default exists; (iv) each of the Guarantors
confirms its obligations under the Subsidiary Guarantees and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee and (v) except in the case of a merger of the Company with or into a
Wholly Owned Subsidiary of the Company, the Company or the entity or Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) will, at the
time of such transaction and after giving pro forma effect thereto as if such
transaction 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 the first paragraph of Section
4.09.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance
35
or other disposition is made shall 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" shall refer instead to the successor corporation and not to the
Company, other than for purposes of calculating Consolidated Net Income in
connection with Section 4.07) 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 shall not be relieved from the obligation to pay the principal of, and
premium, if any, and interest on the Senior Notes except in the case of a sale
of all of the Company's assets that meets the requirements of Section 5.01
hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default by the Company in the payment of interest on any Senior
Note when the same becomes due and payable the Default continues for a
period of 30 days;
(ii) default by the Company in the payment of the principal of any
Senior Note (or premium, if any) when the same becomes due and payable at
maturity, upon redemption or otherwise;
(iii) failure by the Company to comply with Sections 4.07, 4.09, 4.10,
4.14 and 4.18 hereof;
(iv) failure by the Company to comply with any of its agreements in
this Indenture or the Senior Notes for 60 days after receiving the notice
specified below;
(v) default by the Company 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
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the date hereof, which default (a) is caused by a failure
to pay principal of or premium, if any, or interest 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 $10.0 million or more;
(vi) failure by the Company or any of its Subsidiaries to pay final
judgments for the payment of money entered by a court or courts of
competent jurisdiction against the Company or any of its Subsidiaries and
such judgment or judgments are not paid,
36
discharged or stayed for a period of 60 days, provided that the aggregate
of all such undischarged judgments exceeds $10.0 million;
(vii) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm
its obligations under its Subsidiary Guarantee.
(viii) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of U.S. 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
(ix) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary Case;
(b) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for all or substantially
all of the property of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or
(c) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; and, in each case,
the order or decree remains unstayed and in effect for 60 consecutive
days; or
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law. The term "Case" means an
application, petition, action, case or other proceeding (including the filing of
a notice of intention to file a proposal) before any court, tribunal or other
governmental authority under any applicable Bankruptcy Law (foreign or
domestic).
37
A Default under clause (iv) is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in principal amount
of the then outstanding Senior Notes notify the Company and the Trustee, of the
Default and the Company does not cure the Default within 60 days after receipt
of the notice. The notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default."
In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding payment
of the premium that the Company would have had to pay if the Company then had
elected to redeem the Senior Notes pursuant to Section 3.07 hereof, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law upon the acceleration of the Senior Notes. If an Event
of Default occurs prior to _______ __, 2002 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 Senior Notes prior to _______
__, 2002 pursuant to Section 3.07 hereof, then the premium, as discussed below,
shall become immediately due and payable to the extent permitted by law upon the
acceleration of the Senior Notes. The premium payable for purposes of this
paragraph for each of the years beginning on _______ __ of the years set forth
below shall be as set forth in the following table expressed as a percentage of
the amount that would otherwise be due but for the provisions of this sentence,
plus accrued interest, if any, to the date of payment:
Year Percentage
1997. . . . . . . . . . . . . . . . . . . . . . . ______%
1998. . . . . . . . . . . . . . . . . . . . . . . ______%
1999. . . . . . . . . . . . . . . . . . . . . . . ______%
2000. . . . . . . . . . . . . . . . . . . . . . . ______%
2001. . . . . . . . . . . . . . . . . . . . . . . ______%
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (viii) or (ix) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Significant Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Notes may declare all the Senior Notes to be due and payable
immediately. Upon any such declaration, the Senior Notes shall become due and
payable immediately. Notwithstanding the foregoing, if an Event of Default
specified in clause (viii) or (ix) of Section 6.01 hereof occurs with respect to
the Company, any of its Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary, all
outstanding Senior Notes shall be due and payable immediately without further
action or notice. The Holders of a majority in aggregate principal amount of the
then outstanding Senior 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. Except
as provided in Section
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6.01, in the event of any such acceleration of Senior Notes, the Company shall
become obligated to pay the aggregate principal amount of the Senior Notes
immediately.
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, and premium, if any,
on the Senior Notes or to enforce the performance of any provision of the Senior
Notes, this Indenture or the Subsidiary Guarantees.
The Trustee may maintain a proceeding even if it does not possess any
of the Senior Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. 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 Senior Notes by notice to the Trustee may on behalf of the
Holders of all of the Senior 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 interest on, or the principal of, or premium of, if any, the
Senior Notes. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Senior 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
unduly prejudicial to the rights of other Holders or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Senior Notes only if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Notes make a written request to the Trustee to pursue
the remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
39
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Notes do not give the Trustee a
direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal, premium, if any, any interest on the
Senior Note, on or after the respective due dates expressed in the Senior 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, shall 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(i) or (ii) 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, and premium, if any, and interest remaining unpaid on the Senior
Notes and interest on overdue principal and, to the extent lawful, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 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 allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Senior Notes), its creditors or its property and shall 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 shall 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, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall 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 shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization,
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arrangement, adjustment or composition affecting the Senior 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, it shall
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 for amounts due and unpaid on the Senior Notes for
principal, and premium, if any, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Senior Notes for
principal, and premium, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders 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, 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 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Senior Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
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(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture and to
confirm the correctness of all mathematical computations.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii)the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 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 and the requirements of the TIA.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall 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 rely upon any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in 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 shall not be
liable for any action it takes or omits to take in good faith and without
negligence in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith and without negligence 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 shall be sufficient if
signed by an Officer of the Company.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior 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 makes no representation as to the validity or adequacy of
this Indenture or the Senior Notes, it shall not be accountable for the
Company's use of the proceeds from the Senior Notes or any money paid to the
Company or upon the Company's direction under any provision of this Indenture,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee, and it shall not be responsible for any
statement of the Company in this Indenture or any statement in the Senior Notes
or any other document in connection with the sale of the Senior 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 shall mail to Holders a notice of the Default
or Event of Default within 45 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, or premium, if any, or
interest on any Senior 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.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15 following
the date hereof, and for so long as Senior Notes remain outstanding, the
Trustee shall mail to the Holders a brief report dated as of such reporting
date that complies with TIA s. 313(a). The Trustee also shall comply with
TIA s. 313(b). The Trustee shall also transmit by mail all reports as required
by TIA s. 313(c).
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to the Holders shall be mailed to
the Company and filed with the SEC and each stock exchange on which the Senior
Notes are listed in accordance with TIA s. 313(d).
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The Company shall promptly notify the Trustee when the Senior Notes are listed
on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable disbursements, advances and expenses incurred by it.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel, except such compensation,
disbursements and expenses as may be attributable to its negligence or bad
faith.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in the
next paragraphs. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Senior Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Senior Notes. Such Lien shall survive the satisfaction
and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(viii) or (ix) hereof occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign 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 Senior Notes may remove the Trustee by so notifying the
Trustee and the Company. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
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(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Senior Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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 Senior
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, 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 shall 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 shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The final paragraph of this Section shall not be operative as a part of
this Indenture until this Indenture is qualified under the TIA and until such
qualification this Indenture shall be construed as if said paragraph were not
contained herein.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
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This Indenture shall always have a Trustee who satisfies the
requirements of TIA s. 310(a)(1), (2) and (5). The Trustee is subject to
TIA s. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA s. 311(a), excluding any creditor
relationship listed in TIA s. 311(b). A Trustee that has resigned or been
removed shall be subject to TIA s. 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 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 Senior Notes
upon compliance with the conditions set forth below in this Article Eight.
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 the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from their respective obligations with respect to
all outstanding Senior Notes and Subsidiary Guarantees on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding
Senior Notes, which shall 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 (a) and (b) below, and to have satisfied all its other
obligations under such Senior Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Senior Notes to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Senior Notes
when such payments are due from the funds held by the Trustee in the trust, (b)
the Company's and the Guarantors' obligations with respect to such Senior Notes
under Sections 2.04, 2.06, 2.07, 2.10 and 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee under this Indenture and the
Company's obligations in connection therewith and (d) the obligations of the
Company under this Article Eight. Subject to compliance with this Article Eight,
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 shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.18 and Article 5 hereof with respect to
the outstanding Senior Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Senior Notes
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Senior Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Senior
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Indenture and such Senior
Notes shall 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(iii) through 6.01(vii) hereof shall not constitute Events of
Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Senior Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest
on the outstanding Senior Notes on the stated maturity for payment thereof
or on the applicable redemption date, as the case may be, and the Company
must specify whether the Senior Notes are being defeased to maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date hereof, 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 Senior Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will
be subject
47
to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Senior 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of
the proceeds of which will be used to defease the Senior Notes pursuant to
this Article Eight concurrently with such incurrence) or insofar as
Sections 6.01(viii) or 6.01(ix) hereof is concerned, at any time in the
period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a parties or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and
(h) the Company shall have delivered 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 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 Senior
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Senior 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 Senior Notes of all
sums due and to become due
48
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the 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 Senior
Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall 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(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO THE 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, or premium, if
any, or interest on any Senior Note and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Senior Note shall
thereafter, as a secured creditor, 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, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Senior
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Senior Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Senior Notes to receive such payment from
the money held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF SENIOR NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the
Subsidiary Guarantees or the Senior Notes without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes;
(c) to provide for the assumption of the Company's and the Guarantors'
obligations to the Holders in the case of a merger, consolidation or sale
of all or substantially all of the assets pursuant to Article Five hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights
hereunder of any Holder;
(e) 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 shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR NOTES.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the
Subsidiary Guarantees and the Senior Notes with the consent of the Holders of at
least a majority in principal amount of the Senior Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Senior 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, or
interest on, the Senior 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 Senior Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Senior Notes (including consents obtained in connection with a tender offer or
exchange offer for the Senior Notes).
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Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders as aforesaid, and upon receipt by the
Trustee of the documents described in Section 9.06 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture adversely affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental Indenture
or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority
in aggregate principal amount of the Senior Notes then outstanding may waive
compliance in a particular instance by the Company or any Guarantor with any
provision of this Indenture or the Senior Notes. However, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any Senior
Notes held by a non-consenting Holder):
(a) reduce the principal amount of Senior Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Senior
Note or alter or waive any of the provisions with respect to the redemption
of the Senior Notes except as provided above with respect to Sections 3.09,
4.10 and 4.14 hereof;
(c) reduce the rate of or change the time for payment of interest on
any Senior Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on, the Senior Notes (except a rescission
of acceleration of the Senior Notes by the Holders of at least a majority
in aggregate principal amount of the then outstanding Senior Notes and a
waiver of the payment default that resulted from such acceleration);
(e) make any Senior Note payable in money other than that stated in
the Senior Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders to receive payments of
principal of or premium, if any, or interest on, the Senior Notes;
51
(g) waive a redemption payment with respect to any Senior Note (other
than a payment required by Sections 4.10 or 4.14 hereof);
(h) 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
(i) make any change in the foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Senior Notes
shall be set forth in an 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 is a continuing consent by the Holder and every subsequent
Holder of a Senior Note or portion of a Senior Note that evidences the same debt
as the consenting Holder's Senior Note, even if notation of the consent is not
made on any Senior Note. However, any such Holder or subsequent Holder may
revoke the consent as to its Senior 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.
The Company may fix a record date for determining which Holders must
consent to such supplemental indenture, amendment or waiver. If the Company
fixes a record date, the record date shall be fixed at (i) the later of 30 days
prior to the first solicitation of such consent or the date of the most recent
list of Holders furnished to the Trustee prior to such solicitation pursuant to
Section 2.05, or (ii) such other date as the Company shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Note thereafter authenticated. The Company,
in exchange for all Senior Notes, may issue, and the Trustee shall authenticate,
new Senior Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine 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
shall be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that
52
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture and that all conditions precedent have been complied
with.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. SUBSIDIARY GUARANTEE.
Each of the Guarantors hereby, jointly and severally, fully and
unconditionally guarantee to each Holder of a Senior 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 Senior
Notes or the obligations of the Company hereunder or thereunder, that: (a) the
principal of and interest on the Senior 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 Senior 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 (b) in case of any extension of time of
payment or renewal of any Senior 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. The Guarantors hereby agree
that their obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Senior Notes or this Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of the Senior 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 Senior Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to return to
the Company or Guarantors, or any Custodian, Trustee, liquidator or other
similar official acting in relation to either the Company or Guarantors, any
amount paid by any such entity to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6, such obligations (whether or not due
and payable) shall forthwith become due and payable by
53
the Guarantors for the purpose of this Subsidiary Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Subsidiary Guarantee.
SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form of Exhibit B, which is part of this Indenture, shall
be endorsed by an officer of such Guarantor on each Senior Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by its President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Senior Note a notation of such Note 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
Senior Note on which a Subsidiary Guarantee is endorsed, the Subsidiary
Guarantee shall be valid nevertheless.
The delivery of any Senior Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.
SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5, nothing contained in this
Indenture or in any of the Senior Notes shall prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor, or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety, or
substantially as an entirety, to the Company, unless immediately after giving
effect to such transaction, a Default or Event of Default exists.
(b) Except as set forth in Articles 4 and 5, nothing contained in this
Indenture or in any of the Senior Notes shall prevent any consolidation or
merger of a Guarantor with or into (whether or not such Guarantor is the
surviving Person) another corporation, Person or entity, whether or not
affiliated with such Guarantor, or successive consolidations or mergers in which
a Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety or any sale or other disposition of all the capital
stock of any Guarantor, to a corporation other than the Company (whether or not
affiliated with the Guarantor) authorized to acquire and operate the same;
provided, however, (i) that each Guarantor hereby covenants and agrees that,
upon any such consolidation, merger, sale or conveyance, the Subsidiary
Guarantee endorsed on the Senior Notes, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by such Guarantor, shall be expressly assumed (in the event that the
Guarantor is not the surviving corporation in the merger), by supplemental
indenture satisfactory in form and substance to the Trustee, executed and
delivered to the Trustee, by the corporation formed by such consolidation or
into which the Guarantor shall have been merged, or by the corporation which
shall have acquired such property and (ii) that
54
immediately after giving effect to such transaction, no Default or Event of
Default exists. In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form and substance to
the Trustee, of the Subsidiary Guarantee endorsed upon the Senior 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 corporation shall
succeed to and be substituted for the Guarantor with the same effect as if it
had been named herein as a Guarantor. Such successor corporation thereupon may
cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon
all of the Senior Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee. All the Subsidiary
Guarantees so issued shall in all respects have the same legal rank and benefit
under 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.
SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any Asset Sale (including, if applicable, all of the
capital stock of any Guarantor), any Liens in favor of the Trustee in the assets
sold thereby shall be released; provided that in the event of an Asset Sale, the
Net Proceeds of such sale or other disposition are applied in accordance with
the provisions of Section 4.10 hereof. If the assets sold in such sale or other
disposition include all or substantially all of the assets of any Guarantor or
all of the capital stock of any Guarantor, then such Guarantor (in the event of
a sale or other disposition of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of a Guarantor) shall be
released and relieved of its obligations under its Subsidiary Guarantee or
Section 10.03 hereof, as the case may be; provided that in the event of an Asset
Sale, the Net Proceeds from such sale or other disposition are treated in
accordance with the provisions of Section 4.10 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 shall execute any documents reasonably required
in order to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee. Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Senior Notes and for the other obligations of any Guarantor
under this Indenture as provided in this Article 10.
SECTION 10.05. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
55
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA s.318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company 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:
If to the Company:
Syratech Corporation
175 McClellan Highway
East Boston, Massachusetts 02128-9114
Telecopier No.: (617) 561-0275
Attention: Chief Financial Officer
With a copy to:
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
Telecopier No.: (617) 951-1295
Attention: James Westra
If to the Trustee:
State Street Bank and Trust Company
Corporate Trust Administration
225 Franklin Street
Boston, Massachusetts 02110
Telecopier No.: (617) ________
Attention: Patrick E. Thebado
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
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.
56
Any notice or communication to a Holder shall 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 shall also be so mailed to any
Person described in TIA s. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall 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 shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA s. 312(b) with other Holders
with respect to their rights under this Indenture or the Senior Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA s. 312(c).
SECTION 11.04. 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 shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 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
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 11.05. 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 s. 314(a)(4)) shall comply with the provisions of TIA s. 314(e)
and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
57
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied, provided, however that with
respect to matters of fact, an Opinion of Counsel may rely upon an
Officer's Certificate or a certificate of a public official.
SECTION 11.06. 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 11.07. 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, shall have any liability
for any obligations of the Company or the Guarantors under the Senior Notes,
this Indenture or the Subsidiary Guarantees, as applicable, or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Senior Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Senior
Notes.
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE SENIOR NOTES.
SECTION 11.09. 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 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Senior Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Senior Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
58
SECTION 11.13. 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 shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
59
SIGNATURES
Dated as _________ __, 1997 SYRATECH CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as _________ __, 1997 SYRATECH HOLDING CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 WALLACE INTERNATIONAL SILVERSMITHS, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
60
Dated as of _________ __, 1997 WALLACE INTERNATIONAL DE P.R., INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 INTERNATIONAL SILVER COMPANY
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 INTERNATIONAL SILVER DE P.R., INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
61
Dated as of _________ __, 1997 PMW SILVER DE P.R., INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as _________ __, 1997 TOWLE MANUFACTURING COMPANY
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 ROSEMAR SILVER COMPANY, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
62
Dated as of _________ __, 1997 TOWLE HOLLOWARE, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 FARBERWARE INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 SILVESTRI, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
63
Dated as of _________ __, 1997 SILVESTRI, INC. OF SOUTH CAROLINA
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as _________ __, 1997 RAUCH INDUSTRIES, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 ROCHARD, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
64
Dated as of _________ __, 1997 HOLIDAY PRODUCTS, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 NORTHSTAR SALES CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 LEONARD FLORENCE ASSOCIATES, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
65
Dated as of _________ __, 1997 CHI INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as _________ __, 1997 SYRATECH SECURITY CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 SYRATECH WEST COAST WAREHOUSE CORP.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
66
Dated as of _________ __, 1997 175 AMLEGION REVERE REALTY TRUST
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 SYRATECH SILVER SALES CORP.
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated as of _________ __, 1997 [STATE STREET BANK AND TRUST COMPANY]
Trustee
By:
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
67
================================================================================
EXHIBIT A
(Face of Senior Note)
___% Senior Note due 2007
No. $___________
SYRATECH CORPORATION
promise to pay to
or their registered assigns, the principal sum of
__________________________________ Dollars ($___________) on _______
__, 2007.
Interest Payment Dates: _____ __ and _______ __, commencing _____ _, 1997.
Record Dates: _____ __ and _________ __
Dated: _________ __, 1997
SYRATECH CORPORATION
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
This is one of the Senior Notes referred
to in the within-mentioned Indenture:
[State Street Bank and Trust Company]
as Trustee
By:__________________________________
Authorized Signature
================================================================================
(Back of Senior Note)
___% Senior Note due 2007
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Syratech Corporation, a Delaware corporation (the "Company")
promises to pay interest on the principal amount of this ___% Senior Note due
2007 (the "Senior Note") at the rate and in the manner specified below.
The Company shall pay interest on the principal amount of this Note in
cash at the rate per annum shown above. The Company shall pay interest
semi-annually on each _____ _ and _______ _, commencing _____ _, 1997, or if any
such day is not a Business Day (as defined in the Indenture referred to below),
on the next succeeding Business Day (each an "Interest Payment Date").
Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months for the actual number of days elapsed. Interest shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of the original issuance of this Note. To
the extent lawful, the Company shall pay interest on overdue principal and
premium at the rate of 1% per annum in excess of the then applicable interest
rate on this Note; it shall pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful. The rates of interest specified in the Indenture and this Senior Note
are nominal rates and all interest payments and computations are to be made
without allowance or deduction for deemed reinvestment of interest.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes to
the Persons who are registered Holders of Senior Notes at the close of business
on the _____ __ and _________ __ next preceding the Interest Payment Date, even
if such Senior Notes are cancelled after such record date and on or before such
Interest Payment Date. The Senior Notes will be payable as to principal,
premium, 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 may be made by check mailed to the
Holders at their addresses set forth in the register of Holders. Such payment
shall 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, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar or
co-registrar without prior notice to any Holder. The Company may act in any such
capacity.
4. INDENTURE. The Company issued the Senior Notes under an Indenture dated
as of _________ __, 1997 (the "Indenture") among the Company and each of
Syratech Holding Corporation, Wallace International Silversmiths, Inc., Wallace
International de P.R., Inc., International Silver Company, International Silver
de P.R., Inc., PMW Silver de P.R., Inc., Towle Manufacturing Company, Rosemar
Silver Company, Inc., Towle Holloware, Inc., Farberware Inc., Silvestri, Inc.,
Silvestri, Inc. of South Carolina, Rauch Industries, Inc.,
A-2
Rochard, Inc., Holiday Products, Inc., Northstar Sales Corporation, Leonard
Florence Associates, Inc., CHI International, Inc., Syratech Security
Corporation, Syratech West Coast Warehouse Corp., 175 Amlegion Revere Realty
Trust, and Syratech Silver Sales Corp. (collectively, the " Subsidiary
Guarantors") and the Trustee. The terms of the Senior 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 ss. 77aaa-77bbbb). The Senior
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. The terms of the Indenture shall
govern any inconsistencies between the Indenture and the Senior Notes. The
Senior Notes are general obligations of the Company limited to $160,000,000
million in aggregate principal amount at maturity.
5. OPTIONAL REDEMPTION.
On or after _______ _, 2002, the Company may redeem all or any portion
of the Senior Notes, at any time 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 thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on _______ _ of the years indicated below:
Year Percentage
2002...................................................______%
2003...................................................______%
2004...................................................______%
2005 and thereafter....................................100.00%
Notwithstanding the foregoing, at any time on or before _______ __,
2000, the Company may, at its option, also redeem up to 37 1/2% of the aggregate
principal amount of Senior Notes originally issued hereunder at a redemption
price of ____% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the redemption date, with the net cash proceeds of a public
offering of the common stock of the Company provided that at least $100.0
million in aggregate principal amount of Senior Notes remain outstanding
immediately after the occurrence of such redemption; and provided, further, that
such redemption shall occur within 45 days of the date of the closing such
public offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company is not required to
make mandatory, repurchase, redemption or sinking fund payments with respect to
the Senior Notes.
7. CHANGE OF CONTROL OFFER AND ASSET SALE OFFER.
(a) If there is a Change of Control, each Holder of Senior Notes will have
the right to require the Company to repurchase all or any part (equal to $1,000
in principal amount or an integral multiple thereof) of each Holder's Senior
Notes pursuant to the offer described in the Indenture (a "Change of Control
Offer") at an offer price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest thereon the date of purchase.
Within
A-3
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.
(b) If the Company or any of its Subsidiaries consummate any Asset Sales,
when the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company
will commence an offer to all Holders (an "Asset Sale Offer") to purchase the
maximum principal amount of Senior Notes that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest thereon to the date of purchase.
(c) In the event of either 7(a) or 7(b), Holders may elect to have all or a
portion of their Senior Notes purchased by completing the form entitled "Option
of Holder to Elect Purchase" appearing below.
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
Senior Notes are to be redeemed at his registered address. Senior Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior Notes may be registered and Senior 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 Registrar need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior 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 LEGAL OWNERS. The registered Holder of a Senior Note may
be treated as its legal owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Subsidiary Guarantees or the Senior Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Senior Notes (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Senior Notes), and any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, or
interest on, the Senior Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of the
Indenture, the Subsidiary Guarantees or the Senior Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Senior Notes. Without the consent of any Holder of a Senior Note, the Indenture
or the Senior Notes may be amended or supplemented to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Senior Notes in addition to or
in place of
A-4
certificated Senior Notes, to provide for the assumption of the Company's and
Guarantors' obligations to Holders in case of a merger, consolidation or sale of
all or substantially all of the Company's assets, to make any change that would
provide any additional rights or benefits to the Holders 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) default for 30
days in the payment when due of interest on the Senior Notes; (ii) default in
payment when due of the principal of, or premium, if any, on the Senior Notes;
(iii) failure by either of the Company to comply with any of the provisions of
Sections 4.07, 4.09, 4.10 or 4.14 of the Indenture; (iv) failure by the Company
for 60 days after notice to comply with any of its other agreements in the
Indenture or the Senior Notes; (v) default by the Company 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 Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Subsidiaries), whether such Indebtedness or Guarantee now exists, or is
created after the date hereof, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest 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 $10.0 million or more; (vi) failure
by the Company or any of its Subsidiaries to pay final judgments for the payment
of money entered by a court or courts of competent jurisdiction against the
Company or any of its Subsidiaries and such 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 $10.0 million; (vii) except as permitted by
the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Subsidiary Guarantee; and
(viii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Significant Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Senior Notes may declare all the Senior 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 Senior
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Senior Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Senior Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Senior Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest) if
it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Senior Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Senior Notes
waive any existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of
principal of, or interest on, the Senior Notes, except a payment default
resulting from an acceleration that has been rescinded. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture,
A-5
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. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Company or the Guarantors as such, shall not have any
liability for any obligations of the Company or the Guarantors under the Senior
Notes, the Indenture and the Subsidiary Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Senior Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Senior Notes.
15. SUBSIDIARY GUARANTEES. The Company's payment obligations under the
Senior Notes are jointly and severally unconditionally guaranteed by the
Guarantors.
16. AUTHENTICATION. This Senior Note shall 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. 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 Senior 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 Senior 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. Requests may be made to:
Syratech Corporation
175 McClellan Highway
East Boston, Massachusetts 02128-9114
Telecopier No.: (617) 561-0275
Attention: Chief Financial Officer
A-6
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
- --------------------------------------------------------------------------------
(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 Senior 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 Senior Note)
Signature Guarantee.
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Senior Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
---------------------- --------------------------------
(Sign exactly as your name appears
on this Senior Note)
Tax Identification No.:
-----------------------
Signature Guarantee.
A-8
================================================================================
EXHIBIT B
(Form of Subsidiary Guarantee)
SUBSIDIARY GUARANTEE
SYRATECH HOLDING CORPORATION WALLACE INTERNATIONAL SILVERSMITH, INC.
INTERNATIONAL SILVER COMPANY WALLACE INTERNATIONAL DE P.R., INC.
INTERNATIONAL SILVER DE P.R., INC. PMW SILVER DE P.R., INC.
TOWLE MANUFACTURING COMPANY ROSEMAR SILVER COMPANY, INC.
TOWLE HOLLOWARE, INC. FARBERWARE INC.
SILVESTRI, INC. SILVESTRI, INC. OF SOUTH CAROLINA
RAUCH INDUSTRIES, INC. ROCHARD, INC.
HOLIDAY PRODUCTS, INC. NORTHSTAR SALES CORPORATION
LEONARD FLORENCE ASSOCIATE, INC. CHI INTERNATIONAL, INC.
SYRATECH SECURITY CORPORATION SYRATECH WEST COAST WAREHOUSE CORP.
175 AMLEGION REVERE REALTY TRUST SYRATECH SILVER SALES CORP.
Each Guarantor, hereby, jointly and severally with the other Guarantors,
unconditionally guarantees to each Holder of Senior Notes authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Senior
Notes or the Obligations of the Company to the Holders or the Trustee under the
Senior Notes or under the Indenture, that: (a) the principal of, and premium, if
any, and interest on the Senior Notes shall be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
overdue principal of interest on the Senior Note, if any, if lawful and all
other Obligations of the Company to the Holders or the Trustee under the
Indenture or under the Senior Notes shall be promptly paid in full or performed,
all in accordance with the terms thereof; and (b) in case of any extension of
time of payment or renewal of any Senior Notes or any of such other Obligations,
the same will be promptly paid in full when due 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, for whatever
reason, the Guarantors will be jointly and severally obligated to pay the same
immediately.
The Obligations of the Guarantors to the Holders and to the Trustee
pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth
in Article 10 of the Indenture, and reference is hereby made to such Indenture
for the precise terms of this Subsidiary Guarantee. The terms of Article 10 of
the Indenture are incorporated herein by reference.
No director, officer, employee, incorporator or stockholder, as such, past,
present or future, of the Guarantor shall have any personal liability under this
Subsidiary Guarantee by reason of his or its status as such director, officer,
employee, incorporator or stockholder.
B-1
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company' Obligations under the Senior Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder of or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This a
Subsidiary Guarantee of payment and not a guarantee of collection.
In certain circumstances more fully described in the Indenture, any
Guarantor may be released from its liability under this Subsidiary Guarantee,
and any such release will be effective whether or not noted hereon.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Senior Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability will be that amount from
time to time equal to the aggregate liability of such Guarantor hereunder, but
shall be limited to the lesser of (i) the aggregate amount of the Obligations of
the Company under the Senior Notes and the Indenture and (ii) the amount, if
any, which would not have (A) rendered such Guarantor "insolvent" (as such term
is defined in the federal Bankruptcy Law and in the Debtor and Creditor Law of
the State of New York) or (B) left it with unreasonably small capital at the
time its Subsidiary Guarantee of the Senior Notes was entered into, after giving
effect to the incurrence of existing Indebtedness immediately prior to such
time; provided that, it shall be a presumption in any lawsuit or other
proceeding in which such Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Guarantor, or debtor
in possession or trustee in bankruptcy of such Guarantor, otherwise proves in
such a lawsuit that the aggregate liability of such Guarantor is limited to the
amount set forth in clause (ii). The Indenture provides that, in making any
determination as to the solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantor to
contribution from other Guarantors and any other rights such Guarantor may have,
contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the Indenture
unless otherwise indicated.
B-2
SYRATECH CORPORATION
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
SYRATECH HOLDING CORPORATION
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
WALLACE INTERNATIONAL SILVERSMITHS, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
WALLACE INTERNATIONAL DE P.R., INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
INTERNATIONAL SILVER COMPANY
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
INTERNATIONAL SILVER DE P.R., INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
B-3
PMW SILVER DE P.R., INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
TOWLE MANUFACTURING COMPANY
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
ROSEMAR SILVER COMPANY, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
TOWLE HOLLOWARE, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
FARBERWARE INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
SILVESTRI, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
B-4
SILVESTRI, INC. OF SOUTH CAROLINA
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
RAUCH INDUSTRIES, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
ROCHARD, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
HOLIDAY PRODUCTS, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
NORTHSTAR SALES CORPORATION
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
LEONARD FLORENCE ASSOCIATES, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
B-5
CHI INTERNATIONAL, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
SYRATECH SECURITY CORPORATION
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
SYRATECH WEST COAST WAREHOUSE CORP.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
175 AMLEGION REVERE REALTY TRUST
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
SYRATECH SILVER SALES CORP.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
B-6