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EXHIBIT 4.1
NSP HOLDINGS L.L.C.,
NSP HOLDINGS CAPITAL CORP.
as Issuers,
and
WILMINGTON TRUST COMPANY, as Trustee
----------
INDENTURE
Dated as of January 7, 2005
----------
11 3/4% Senior Pay in Kind Notes due 2012, Series A
11 3/4% Senior Pay in Kind Notes due 2012, Series B
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CROSS-REFERENCE TABLE
<Table>
<Caption>
TIA Indenture
Section Section
- ------- --------
310(a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A
(b)...................................................................... 7.08; 7.10
(c)...................................................................... N.A.
311(a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312(a)...................................................................... 2.05
(b)...................................................................... 13.03
(c)...................................................................... 13.03
313(a)...................................................................... 7.06
(b)...................................................................... 7.06
(c)...................................................................... 7.06; 13.02
(d)...................................................................... 7.06
314(a)...................................................................... 4.02; 13.02
(b)...................................................................... N.A.
(c)(1)................................................................... 13.04; 13.05
(c)(2)................................................................... 13.04; 13.05
(c)(3)................................................................... N.A.
(d)...................................................................... N.A.
(e)...................................................................... 13.05
(f)...................................................................... N.A.
315(a)...................................................................... 7.01; 7.02
(b)...................................................................... 7.05; 13.02
(c)...................................................................... 7.01
(d)...................................................................... 7.01; 7.02
(e)...................................................................... 6.11
316(a) (last sentence)...................................................... 2.09
(a)(1)(A)................................................................ 6.05
(a)(1)(B)................................................................ 6.04
(a)(2)................................................................... 8.02
(b)...................................................................... 6.07
(c)...................................................................... 8.04
317(a)(1)................................................................... 6.08
(a)(2)................................................................... 6.09
(b)...................................................................... 2.04
318(a)...................................................................... 13.01
</Table>
N.A. means Not Applicable
- ----------
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
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TABLE OF CONTENTS
<Table>
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.................................................................................1
Section 1.02. Other Definitions..........................................................................22
Section 1.03. Incorporation by Reference of Trust Indenture Act..........................................22
Section 1.04. Rules of Construction......................................................................23
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating............................................................................23
Section 2.02. Execution and Authentication...............................................................24
Section 2.03. Registrar and Paying Agent.................................................................24
Section 2.04. Paying Agent to Hold Assets in Trust.......................................................25
Section 2.05. Noteholder Lists...........................................................................25
Section 2.06. Transfer and Exchange......................................................................25
Section 2.07. Replacement Notes..........................................................................26
Section 2.08. Outstanding Notes..........................................................................26
Section 2.09. Treasury Notes.............................................................................26
Section 2.10. Temporary Notes............................................................................26
Section 2.11. Cancellation...............................................................................26
Section 2.12. Defaulted Interest.........................................................................27
Section 2.13. Deposit of Moneys..........................................................................27
Section 2.14. CUSIP Number...............................................................................27
Section 2.15. Book-Entry Provisions for Global Notes.....................................................27
Section 2.16. Registration of Transfers and Exchanges....................................................28
Section 2.17. Restrictive Legends........................................................................31
Section 2.18. Issuance of PIK Notes......................................................................32
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.........................................................................33
Section 3.02. Selection of Notes to Be Redeemed..........................................................33
Section 3.03. Notice of Redemption.......................................................................33
Section 3.04. Effect of Notice of Redemption.............................................................34
Section 3.05. Deposit of Redemption Price................................................................34
Section 3.06. Notes Redeemed in Part.....................................................................34
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes...........................................................................35
Section 4.02. Provision of Financial Statements and Other Information....................................35
Section 4.03. Waiver of Stay, Extension or Usury Laws....................................................36
Section 4.04. Compliance Certificate; Notice of Default; Tax Information.................................36
</Table>
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Section 4.05. Payment of Taxes and Other Claims..........................................................36
Section 4.06. Corporate Existence........................................................................37
Section 4.07. Maintenance of Office or Agency............................................................37
Section 4.08. [Reserved.]................................................................................37
Section 4.09. Maintenance of Properties and Insurance....................................................37
Section 4.10. Limitation on Additional Indebtedness......................................................38
Section 4.11. Limitation on Restricted Payments..........................................................38
Section 4.12. Limitation on Guarantees of Company Indebtedness...........................................41
Section 4.13. Limitation on Certain Asset Sales..........................................................41
Section 4.14. Limitation on Transactions with Affiliates.................................................43
Section 4.15. Limitation on Liens........................................................................44
Section 4.16. Change of Control..........................................................................45
Section 4.17. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries..........................................47
Section 4.18. Limitation on Conduct of Business..........................................................48
Section 4.19. Limitation on Preferred Stock of Restricted Subsidiaries...................................48
Section 4.20. [RESERVED].................................................................................48
Section 4.21. Limitation on Sale and Lease-Back Transactions.............................................48
Section 4.22. Payments for Consent.......................................................................49
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger and Sale of Assets.....................................49
Section 5.02. Successor Person Substituted...............................................................49
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..........................................................................50
Section 6.02. Acceleration...............................................................................51
Section 6.03. Other Remedies.............................................................................51
Section 6.04. Waiver of Past Defaults and Events of Default..............................................52
Section 6.05. Control by Majority........................................................................52
Section 6.06. Limitation on Suits........................................................................52
Section 6.07. Rights of Holders to Receive Payment.......................................................53
Section 6.08. Collection Suit by Trustee.................................................................53
Section 6.09. Trustee May File Proofs of Claim...........................................................53
Section 6.10. Priorities.................................................................................53
Section 6.11. Undertaking for Costs......................................................................54
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee..........................................................................54
Section 7.02. Rights of Trustee..........................................................................55
Section 7.03. Individual Rights of Trustee...............................................................55
Section 7.04. Trustee's Disclaimer.......................................................................55
Section 7.05. Notice of Defaults.........................................................................56
Section 7.06. Reports by Trustee to Holders..............................................................56
Section 7.07. Compensation and Indemnity.................................................................56
Section 7.08. Replacement of Trustee.....................................................................57
</Table>
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Section 7.09. Successor Trustee by Consolidation, Merger or Conversion...................................57
Section 7.10. Eligibility; Disqualification..............................................................58
Section 7.11. Preferential Collection of Claims Against Issuers..........................................58
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.................................................................58
Section 8.02. With Consent of Holders....................................................................58
Section 8.03. Compliance with TIA........................................................................60
Section 8.04. Revocation and Effect of Consents..........................................................60
Section 8.05. Notation on or Exchange of Notes...........................................................60
Section 8.06. Trustee to Sign Amendments, etc............................................................60
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Satisfaction and Discharge of Indenture....................................................61
Section 9.02. Legal Defeasance...........................................................................61
Section 9.03. Covenant Defeasance........................................................................62
Section 9.04. Conditions to Legal Defeasance or Covenant Defeasance......................................62
Section 9.05. Application of Trust Money.................................................................64
Section 9.06. Repayment to the Issuers...................................................................64
Section 9.07. Reinstatement..............................................................................64
ARTICLE 10
[RESERVED]
ARTICLE 11
[RESERVED]
ARTICLE 12
[RESERVED]
ARTICLE 13
MISCELLANEOUS
Section 13.01. TIA Controls...............................................................................65
Section 13.02. Notices....................................................................................65
Section 13.03. Communications by Holders with Other Holders...............................................66
Section 13.04. Certificate and Opinion as to Conditions Precedent.........................................66
Section 13.05. Statements Required in Officers' Certificate and Opinion...................................67
Section 13.06. Rules by Trustee and Agents................................................................67
Section 13.07. Business Days; Legal Holidays..............................................................67
Section 13.08. Governing Law..............................................................................67
Section 13.09. No Adverse Interpretation of Other Agreements..............................................67
Section 13.10. No Recourse Against Others.................................................................67
Section 13.11. Successors.................................................................................68
Section 13.12. Multiple Counterparts......................................................................68
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Section 13.13. Table of Contents, Headings, etc...........................................................68
Section 13.14. Separability...............................................................................68
EXHIBITS
Exhibit A. Form of Series A Note.....................................................................A-1
Exhibit B. Form of Series B Note.....................................................................B-1
Exhibit C. Form of Certificate to Be Delivered upon Exhange or Registration of Transfer of Notes.....C-1
Exhibit D. Form of Transferee Letter of Representaiton...............................................D-1
Exhibit E. Form of Certificate to Be Delivered in Connection with Regulation S Transfers.............E-1
</Table>
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INDENTURE, dated as of January 7, 2005 among NSP HOLDINGS L.L.C., a
Delaware limited liability company (the "COMPANY"), NSP HOLDINGS CAPITAL CORP.,
a Delaware corporation ("CAPITAL" and, together with the Company, the "ISSUERS")
and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Trustee (the
"TRUSTEE").
Each of the Issuers has duly authorized the creation of an issue of
Series A 11 3/4% Senior Pay in Kind Notes due 2012 (the "INITIAL NOTES") and
Series B 11 3/4% Senior Pay in Kind Notes due 2012 (together with any exchange
notes issued for Additional Notes, the "EXCHANGE NOTES") and, to provide
therefor, the Issuers have duly authorized the execution and delivery of this
Indenture. All things necessary to make the Notes, when duly issued and executed
by the Issuers, and authenticated and delivered hereunder, the valid obligations
of each of the Issuers, and to make this Indenture a valid and binding agreement
of each of the Issuers, have been done.
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person and, in each case, whether or not incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary through such merger, consolidation or acquisition.
"ADDITIONAL INTEREST" has the meaning provided to such term in the
Registration Rights Agreement.
"AFFILIATE" of any specified Person, means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
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, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.
"AGENT" means any Registrar, Paying Agent, co-Registrar,
Authenticating Agent or agent for service of notices and demands.
"ARGOSY" means Argosy Safety Products L.P. and its Affiliates.
"ASSET ACQUISITION" means:
(1) an Investment by the Company or any Restricted
Subsidiary of the Company in any other Person pursuant to which such Person
becomes a Restricted Subsidiary of the Company, or is merged with or into
the Company or any Restricted Subsidiary of the Company or
(2) the acquisition by the Company or any Restricted
Subsidiary of the Company of the assets of any Person (other than a
Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprise any division or
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line of business of such Person or any other Properties or assets of such
Person other than in the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
assignment, transfer, lease or other disposition (including any Sale and
Lease-Back Transaction), other than to the Company or any of its Restricted
Subsidiaries, in any single transaction or series of related transactions of
(1) any Capital Stock of or other equity interest in any
Restricted Subsidiary (other than any nominal interest required to be held
by a third party in order to satisfy a legal requirement);
(2) all or substantially all the assets of any division, business
segment or comparable line of business of the Company or any Restricted
Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary;
notwithstanding the foregoing, the term Asset Sale shall not include
(1) a transfer that constitutes a Permitted Investment or a
Restricted Payment permitted by Section 4.11;
(2) a transfer, sale or other disposition pursuant to any
foreclosure of assets or other remedy provided by applicable law by a
creditor of the Company or any Restricted Subsidiary with a Lien on such
assets, if such Lien is permitted under this Indenture;
(3) a transfer involving only Temporary Cash Investments or
inventory in the ordinary course of business;
(4) any transfer, sale or other disposition of inventory or
damaged, worn-out or obsolete equipment in the ordinary course of business;
(5) the lease or sublease of any real or personal property in the
ordinary course of business;
(6) any transfer, sale or other disposition of Capital Stock or
Indebtedness or other securities of an Unrestricted Subsidiary;
(7) a transfer, sale or other disposition of assets having a fair
market value and a sale price of less than $1.0 million; and
(8) the sale of North Safety Products (Africa) (Pty) Ltd. and its
Subsidiaries.
"ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
(1) cash received by the Company or any Restricted Subsidiary from
such Asset Sale (including cash received as consideration for the
assumption of liabilities incurred in connection with or in anticipation of
such Asset Sale), after
(a) provision for all income or other taxes measured by or
resulting from such Asset Sale (including the fees and expenses of
converting non-cash proceeds into cash),
(b) payment of all brokerage commissions, underwriting and
other fees and expenses related to such Asset Sale (including the fees
and expenses of converting non-cash proceeds into cash),
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(c) provision for minority interest holders in any
Restricted Subsidiary as a result of such Asset Sale, and
(d) deduction of appropriate amounts to be provided by the
Company or a Restricted Subsidiary as a reserve, in accordance with
GAAP, against any liabilities associated with the assets sold or
disposed of in such Asset Sale and retained by the Company or a
Restricted Subsidiary after such Asset Sale, including, without
limitation, severance, healthcare, pension and other post-employment
benefit liabilities and liabilities related to environmental matters
or against any indemnification obligations associated with the assets
sold or disposed of in such Asset Sale; and
(2) promissory notes and other non-cash consideration received by
the Company or any Restricted Subsidiary from such Asset Sale or other
disposition or cash proceeds placed in escrow from such Asset Sale or other
disposition upon the liquidation or conversion of such notes or non-cash
consideration into cash or release of the escrowed cash proceeds.
"ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale and Lease-Back
Transaction means, as at the time of determination, the present value of the
total obligations (discounted at the imputed interest rate in such transaction)
of the lessee for rental payments during the remaining term of the lease
included in such Sale and Lease-Back Transaction (including any period for which
such lease has been extended).
"AVAILABLE ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
the aggregate Asset Sale Proceeds from such Asset Sale that have not been
applied in accordance with clause (3)(a) or (3)(b) of Section 4.13(A) and that
have not been the basis for an Excess Proceeds Offer in accordance with Section
4.13.
"BOARD OF DIRECTORS" means:
(1) in the case of a Person that is a limited partnership, the
board of directors of its corporate general partner or any committee
authorized to act therefor (or, if the general partner is itself a limited
partnership, the board of directors of such general partner's corporate
general partner or any committee authorized to act therefor);
(2) in the case of a Person that is a corporation, the board of
directors of such Person or any committee authorized to act therefor; and
(3) in the case of any other Person, the board of directors, board
of managers, management committee or similar governing body or any
authorized committee thereof responsible for the management of the business
and affairs of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification and delivered to the
Trustee.
"CAPITAL" has the meaning provided in the preamble to this Indenture.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated and whether
or not voting) of capital stock, partnership interests or any other
participation, right or other interest in the nature of an equity interest in
such Person, or any option, warrant or other security convertible into or
exercisable for any of the foregoing; PROVIDED that Capital Stock shall not
include appreciation rights plans.
"CAPITALIZED LEASE OBLIGATIONS" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
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"CERTIFICATED NOTES" means one or more certificated Notes in
registered form.
A "CHANGE OF CONTROL" means the occurrence of one or more of the
following events:
(1) any Person (including a Person's Affiliates and associates),
other than a Permitted Holder, becomes the beneficial owner (directly or
indirectly) (as defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of 50% or more of the total
voting or economic power directly or indirectly of the Common Stock of the
Company; or
(2) any Person (including a Person's Affiliates and associates),
other than a Permitted Holder, becomes the beneficial owner (directly or
indirectly) of more than 35% of the total voting power of the Common Stock
of the Company; PROVIDED, that this clause (2) will not constitute a
"Change of Control" if (i) no Permitted Holder has sold, transferred or
otherwise disposed of more than 50% of the Common Stock of the Company
owned (directly or indirectly) by it on the Issue Date (other than to
another Permitted Holder), (ii) the Permitted Holders beneficially own in
the aggregate (directly or indirectly) a greater percentage of the total
voting power (directly or indirectly) of the Common Stock of the Company
than such other Person and (iii) the Permitted Holders have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the Company; or
(3) there shall be consummated any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation
or pursuant to which the Common Stock of the Company would be converted
into cash, securities or other property, other than a merger or
consolidation of such issuer in which the beneficial owners of the Common
Stock of the Company outstanding immediately prior to the consolidation or
merger hold, directly or indirectly, at least a majority of the Common
Stock of the surviving corporation immediately after such consolidation or
merger; or
(4) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company has been approved by a majority of the directors then still in
office who either were directors at the beginning of such period or whose
election or recommendation for election was previously so approved) cease
to constitute a majority of the Board of Directors of the Company; or
(5) the approval by the holders of Capital Stock of the Company of
any plan or proposal for the liquidation or dissolution of the Company
(whether or not otherwise in compliance with the provisions of this
Indenture); or
(6) to the extent there are any outstanding Existing Norcross
Notes, a "Change of Control" (as defined in the Existing Norcross
Indenture) shall have occurred; or
(7) the failure at any time by the Company to beneficially own (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, 100% of the Capital Stock of Norcross (except to the extent
Norcross is merged with and into the Company in accordance with the terms
of this Indenture).
"CIBC" means CIBC WMV Inc. and CIBC Co-Investment Merchant Fund 2,
L.L.C. and their respective Affiliates.
"CIBC/ARGOSY GROUP" means CIBC, Caravelle Private Investment
Corporation, Caravelle Norcross Investment Corporation and Argosy and their
respective Affiliates, collectively.
"CIVC" means CIVC Partners Fund, L.P. and its Affiliates.
"CIVC REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement dated as of January 7, 2005 among the Issuers and CIVC.
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"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON STOCK" of any Person means all Capital Stock of such Person
that is generally entitled to
(1) vote in the election of directors of such Person; or
(2) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or
others that will control the management and policies of such Person.
"COMPANY" means the party named as such in the first paragraph of this
Indenture until a successor replaces such party pursuant to Article 5 and
thereafter means the successor.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of EBITDA of such Person during the four full fiscal quarters
for which financial statements are available (the "FOUR QUARTER PERIOD") ending
on or prior to the date of the transaction giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio (the "TRANSACTION DATE") to
Consolidated Fixed Charges of such Person for the Four Quarter Period. In
addition to and without limitation of the foregoing, for purposes of this
definition, "EBITDA" and "CONSOLIDATED FIXED CHARGES" shall be calculated after
giving effect on a PRO FORMA basis for the period of such calculation to
(1) the incurrence or repayment of any Indebtedness of such Person
or any of its Restricted Subsidiaries or the issuance or redemption or
other repayment of Preferred Stock of any such Restricted Subsidiary (and
the application of the proceeds thereof) giving rise to the need to make
such calculation and any incurrence or repayment of other Indebtedness and,
in the case of any Restricted Subsidiary, the issuance or redemption or
other repayment of Preferred Stock (and the application of the proceeds
thereof), other than the incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to
working capital facilities, occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such incurrence or repayment or
issuance or redemption or other repayment, as the case may be (and the
application of the proceeds thereof), occurred on the first day of the Four
Quarter Period calculated on a basis consistent with Regulation S-X under
the Securities Act as in effect and applied as of the Issue Date; PROVIDED
that if such Indebtedness is revolving Indebtedness, the amount of
Indebtedness deemed to be outstanding for such period shall be the average
outstanding amount of such Indebtedness during such period; and
(2) any asset sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being
liable for Acquired Indebtedness and also including any EBITDA (PROVIDED
that such EBITDA shall be included only to the extent that Consolidated Net
Income would be includable pursuant to the definition of "Consolidated Net
Income") (including any PRO FORMA expense and cost reductions calculated on
a basis consistent with Regulation S-X of the Exchange Act) attributable to
the assets which are the subject of the Asset Acquisition or asset sale
during the Four Quarter Period) occurring during the Four Quarter Period or
at any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such asset sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period
calculated on a basis consistent with Regulation S-X under the Securities
Act as in effect and applied as of the Issue Date.
If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio,"
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(1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be
so determined thereafter shall be deemed to have accrued at a fixed rate
PER ANNUM equal to the rate of interest on such Indebtedness in effect on
the Transaction Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four Quarter Period;
and
(3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by one or more agreements in respect of Hedging Obligations, shall be
deemed to accrue at the rate PER ANNUM resulting after giving effect to the
operation of such agreements.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person, for
any period, the sum, without duplication, of
(1) Consolidated Interest Expense, plus
(2) the product of
(a) the amount of all cash dividend payments on any series
of Preferred Stock of such Person and its Restricted Subsidiaries
(other than (i) dividends paid or accumulated in Capital Stock (other
than Disqualified Capital Stock) and (ii) payments to the Company or a
Restricted Subsidiary) paid, accrued or scheduled to be paid or
accrued during such period, times
(b) (i) if such Person is not subject to U.S. federal
income tax, one or (ii) if such Person is so taxable, a fraction, the
numerator of which is one and the denominator of which is one minus
the then current effective consolidated federal, state and local tax
rate of such Person, expressed as a decimal.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person, for
any period, (a) the aggregate amount of interest that, in conformity with GAAP,
would be set forth opposite the caption "interest expense" or any like caption
on an income statement for such Person and its Subsidiaries on a consolidated
basis, including, but not limited to,
(1) imputed interest included in Capitalized Lease Obligations;
(2) all net commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
(3) the net effect of all payments made or received pursuant to
Hedging Obligations;
(4) amortization of other financing fees and expenses;
(5) the interest portion of any deferred payment obligation;
(6) amortization of discount or premium, if any; and
(7) all other non-cash interest expense (other than (A) interest
amortized to cost of sales, (B) one-time write-offs of debt issuance costs
and (C) accretion of any unpaid yield on the Company's Preferred Stock),
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plus, without duplication,
(b) all net capitalized interest for such period and all interest
incurred or paid under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, plus the amount
of all dividends or distributions paid on Disqualified Stock (other than
dividends paid or payable in shares of Capital Stock of the Company), less the
amortization of deferred financing costs associated therewith.
"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, HOWEVER, that
(1) the Net Income of any Person (the "other Person") in which the
Person in question or any of its Subsidiaries has less than a 100%
interest, if such interest does not cause the net income of such other
Person to be consolidated into the net income of the Person in question in
accordance with GAAP, shall be included only to the extent of the amount of
dividends or distributions paid to the Person in question or the
Subsidiary;
(2) the Net Income of any Subsidiary of the Person in question
that is subject to any restriction or limitation on the payment of
dividends or the making of other distributions, other than pursuant to the
Notes or this Indenture or as otherwise permitted under Section 4.17, shall
be excluded to the extent of such restriction or limitation (except that
(i) amounts actually paid to the Company prior to the effectiveness of the
restriction or limitation shall not be excluded and (ii) amounts that are
subject to restrictions that are permitted under Section 4.17(i) shall not
be excluded);
(3) any net gain or loss resulting from an Asset Sale (without
regard to the $1.0 million limitation set forth in the definition thereof)
by the Person in question or any of its Subsidiaries other than in the
ordinary course of business shall be excluded;
(4) extraordinary, unusual or nonrecurring gains and losses,
including any related tax effects on the Company, shall be excluded
(including, without limitation, (i) severance, relocation and other
non-recurring restructuring costs, (ii) any non-recurring costs and
expenses incurred in connection with the offering of the Notes and the
transactions contemplated in connection therewith and (iii) gains or losses
from the sale of North Safety Products (Africa) (Pty) Ltd. and its
Subsidiaries);
(5) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued) shall be
excluded;
(6) in the case of an acquiree of the referent Person by
consolidation or merger or as a transferee of the referent Person's assets,
any earnings of the successor corporation prior to such consolidation,
merger or transfer of assets shall be excluded;
(7) the cumulative effect of a change in GAAP shall be excluded;
(8) non-cash charges relating to employee benefit or other
management compensation plans of the Company or any of its Restricted
Subsidiaries or any non-cash compensation charge arising from any grant of
stock, stock options or other equity-based awards of the Company or any of
its Restricted Subsidiaries (excluding in each case any 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 incurred in a
prior period or any non-cash expense representing accrued unpaid yield on
the Company's Preferred Stock), in each case, to the extent that such
non-cash charges are deducted in computing such Consolidated Net Income
will be excluded;
(9) any reversal pursuant to GAAP of an accrual of or reserve for
cash expenses that were deducted in computing Consolidated Net Income under
clause (8) above will be included; and
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(10) the payments made to members of the Company's management as of
the Issue Date in an amount not to exceed $4.2 million will be excluded.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any particular time this Indenture shall be principally administered, which
office at the date of execution of this Indenture is located at Rodney Square
North, 1100 N. Market Street, Wilmington, Delaware 19890.
"DEFAULT" means any condition or event that is, or with the passing of
time or giving of any notice expressly required under this Indenture (or both),
would be, an Event of Default.
"DEPOSITARY" means, with respect to the Notes issued in the form of
one or more Global Notes, The Depository Trust Company or another Person
designated as Depositary by the Company, which Person must be a clearing agency
registered under the Exchange Act.
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock of the Company or
a Restricted Subsidiary thereof which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the Holder), or upon the happening of any event (1) matures on or
prior to the maturity date of the Notes for cash or securities constituting
Indebtedness; (2) is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, on or prior to the maturity date of the Notes, for cash
or securities constituting Indebtedness; or (3) is redeemable at the option of
the holder thereof, in whole or in part, on or prior to the maturity date of the
Notes, for cash or securities constituting Indebtedness; PROVIDED that Capital
Stock of the Company that is held by a current or former employee of the Company
subject to a put option and/or a call option with the Company triggered by the
termination of such employee's employment with the Company and/or the Company's
performance shall not be deemed to be Disqualified Capital Stock solely by
virtue of such call option and/or put option.
Without limitation of the foregoing, Disqualified Capital Stock shall
be deemed to include (i) any Preferred Stock of a Restricted Subsidiary and (ii)
any Preferred Stock of the Company, with respect to either of which, under the
terms of such Preferred Stock, by agreement or otherwise, such Restricted
Subsidiary or the Company is obligated to pay current dividends or distributions
in cash during the period prior to the maturity date of the Notes; PROVIDED,
HOWEVER, that Preferred Stock of the Company or any Restricted Subsidiary
thereof that is issued with the benefit of provisions requiring a change of
control offer to be made for such Preferred Stock in the event of a change of
control of the Company or such Restricted Subsidiary, which provisions have
substantially the same effect as the provisions described in Section 4.16, shall
not be deemed to be Disqualified Capital Stock solely by virtue of such
provisions.
"DOMESTIC" means, with respect to any entity, an entity incorporated
or otherwise organized or existing under the laws of the United States, any
state thereof or any territory or possession of the United States.
"EBITDA" means, for any Person, for any period, an amount equal to
(1) the sum of
(a) Consolidated Net Income for such period, plus
(b) the provision or benefit for taxes for such period
based on income or profits to the extent such income or profits were
included in computing Consolidated Net Income and any provision for
taxes utilized in computing net loss under clause (a) hereof, plus
(c) Consolidated Interest Expense for such period, plus
(d) depreciation for such period on a consolidated basis,
plus
(e) amortization of intangibles for such period on a
consolidated basis, plus
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(f) expenses associated with exploring strategic
alternatives prior to the Issue Date as reported in Norcross' reports
filed with the Commission, plus
(g) any other non-cash items reducing Consolidated Net
Income for such period, minus
(2) all non-cash items increasing Consolidated Net Income for such
period, all for such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP;
PROVIDED, HOWEVER, that, for the purposes of calculating EBITDA during any
fiscal quarter, cash income from a particular Investment, other than a
Subsidiary which under GAAP is consolidated, of such Person shall be included
only
(1) if cash income has been received by such Person with respect
to such Investment, or
(2) if the cash income derived from such Investment is
attributable to Temporary Cash Investments.
"EQUITY OFFERING" means an offering by the Company of shares of its
Capital Stock (other than Disqualified Capital Stock) (however designated and
whether voting or non-voting) and any and all rights, warrants or options to
acquire such Capital Stock (other than Disqualified Capital Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXCHANGE NOTES" has the meaning provided in the preamble to this
Indenture.
"EXISTING NORCROSS INDENTURE" means the indenture dated as of August
13, 2003 among Norcross, the guarantors named therein and Wilmington Trust
Company, as trustee.
"EXISTING NORCROSS NOTES" means the 9?% Senior Subordinated Notes due
2011 issued on August 13, 2003 pursuant to the Existing Norcross Indenture.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of
such Board of Directors.
"FOREIGN" means, with respect to any entity, an entity that is not
incorporated or otherwise organized or existing under the laws of the United
States, any state thereof or any territory or possession of the United States.
"GAAP" means generally accepted accounting principles consistently
applied as in effect in the United States on the date of this Indenture. For
purposes of this Indenture, the term "consolidated" with respect to any Person
shall mean such Person consolidated with its Restricted Subsidiaries and shall
not include any Unrestricted Subsidiary.
"GUARANTEE" means any guarantee of the obligations of the Company
under this Indenture and the Notes by a Guarantor in accordance with the
provisions of this Indenture. When used as a verb, "GUARANTEE" shall have a
corresponding meaning.
"GUARANTOR" means any Person that incurs a Guarantee of the notes;
PROVIDED that upon the release and discharge of such Person from its Guarantee
in accordance with this Indenture, such Person shall cease to be a Guarantor.
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"HEDGING OBLIGATIONS" shall mean any interest, foreign currency rate
or commodity price swap, cap, collar, option, hedge, forward rate or other
similar agreement or arrangement designed to fix or hedge interest rates,
currency exchange rates or commodity price risk, in each case, not for
speculative purposes.
"HOLDER" means a Person in whose name a Note is registered on the
Registrar's books.
"INCUR" means, with respect to any Indebtedness or other obligation of
any Person, without duplication, to create, issue, incur (by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "INCURRENCE," "INCURRED," "INCURRABLE," and
"INCURRING" shall have meanings correlative to the foregoing); PROVIDED that a
change in the accounting policies of the Company that are in accordance with
GAAP that result in an obligation of such Person that exists at such time
becoming Indebtedness shall not be deemed an incurrence of such Indebtedness.
"INDEBTEDNESS" means (without duplication), with respect to any
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding, without limitation, any balances that
constitute accounts payable or trade payables or liabilities arising from
advance payments or customer deposits for goods and services sold by the Company
and other accrued liabilities arising in the ordinary course of business) if and
to the extent any of the foregoing indebtedness would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, and shall also
include, to the extent not otherwise included:
(1) any Capitalized Lease Obligations;
(2) obligations secured by a Lien to which the property or assets
owned or held by such Person is subject, whether or not the obligation or
obligations secured thereby shall have been assumed; PROVIDED, HOWEVER,
that if such obligation or obligations shall not have been assumed, the
amount of such indebtedness shall be deemed to be the lesser of the
principal amount of the obligation or the fair market value of the pledged
property or assets;
(3) guarantees of (or obligations with respect to letters of
credit supporting) items of other Persons which would be included within
this definition for such other Persons (whether or not such items would
appear upon the balance sheet of the guarantor);
(4) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction;
PROVIDED that in the case of any such letters of credit, the items for
which such letters of credit provide credit support are those of other
Persons which would be included within this definition for such other
Persons;
(5) in the case of the Company, Disqualified Capital Stock of the
Company or any Restricted Subsidiary thereof; and
(6) obligations of any such Person under any Hedging Obligations
applicable to any of the foregoing, if and to the extent such Hedging
Obligations would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP.
The amount of Indebtedness of any Person at any date will be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability reasonably
expected to be incurred upon the occurrence of the contingency giving rise to
the obligation; PROVIDED that
(1) the amount outstanding at any time of any Indebtedness issued
with original issue discount is the principal amount of such Indebtedness
less the remaining unamortized portion of the original issue discount of
such Indebtedness at such time as determined in conformity with GAAP; and
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(2) Indebtedness shall not include any liability for federal,
state, local or other taxes.
For the avoidance of doubt, "Indebtedness" of any Person shall not include:
current trade payables incurred in the ordinary course of business and payable
in accordance with customary practices; deferred tax obligations; minority
interest; uncapitalized interest; non-interest bearing installment obligations
and accrued liabilities incurred in the ordinary course of business; and
obligations of the Company or any Restricted Subsidiary pursuant to contracts
for, or options, puts or similar arrangements relating to, the purchase of raw
materials or the sale of inventory at a time in the future entered into in the
ordinary course of business.
"INDENTURE" means this Indenture as amended, restated or supplemented
from time to time.
"INITIAL NOTES" has the meaning provided in the preamble to this
Indenture.
"INITIAL PURCHASER" refers to Credit Suisse First Boston LLC.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
promulgated under the Securities Act.
"INTEREST PAYMENT DATE" means January 1 and July 1, commencing July 1,
2005.
"INVESTMENTS" means, directly or indirectly, any advance (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of the lender), loan or capital
contribution to (by means of transfers of property to others, payments for
property or services for the account or use of others or otherwise), the
purchase of any stock, bonds, notes, debentures, partnership or joint venture
interests or other securities of, the acquisition, by purchase or otherwise, of
all or substantially all of the business or assets or stock or other evidence of
beneficial ownership of, any Person or the making of any investment in any
Person. Investments shall exclude
(1) extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices; and
(2) any acquisition or purchase of Indebtedness of the Company or
any of its Restricted Subsidiaries.
"ISSUE DATE" means January 7, 2005.
"JOHN HANCOCK" means John Hancock Life Insurance Company and Hancock
Mezzanine Partners, L.P. and their respective Affiliates.
"LIEN" means, with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement (other than advance payments or customer deposits for goods and
services sold by the Company in the ordinary course of business), security
interest, lien, charge, easement, encumbrance, preference, priority, or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including without limitation, any
Capitalized Lease Obligation, conditional sales, or other title retention
agreement having substantially the same economic effect as any of the
foregoing).
"MAKE WHOLE PREMIUM" means with respect to a note at any applicable
redemption date the greater of:
(i) 1.0% of the then-outstanding principal amount of such note;
and
(ii) the excess of
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(A) the present value of (1) the redemption price of such
note at July 1, 2006 PLUS (2) all required interest payments due on
such note through and including July 1, 2006, computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over
(B) the then-outstanding principal amount of such note.
"MANAGEMENT NOTES" means the promissory notes of certain current
officers of Norcross issued to the Company prior to the Issue Date for the sole
purpose of purchasing equity of the Company and not to exceed the principal
amount of $1,900,000 at any one time outstanding.
"MANAGEMENT SIDE LETTER AGREEMENTS" means the Letter Agreements dated
January 1, 2002 between the Company and each of David F. Myers, Jr. and Robert
A. Peterson, as in existence on the Issue Date with payments made thereunder not
to exceed in the aggregate $3,188,547 (subject to adjustment based upon
prevailing tax rates).
"MANDATORY PRINCIPAL REDEMPTION AMOUNT" has the meaning assigned to
such term in Section 5(d) of EXHIBIT A.
"MATURITY DATE" means January 1, 2012.
"NET INCOME" means, with respect to any Person, for any period, the
net income (loss) of such Person determined in accordance with GAAP and before
the reduction in respect of preferred stock dividends.
"NET PROCEEDS" means
(1) in the case of any sale of Capital Stock by or equity
contribution to any Person, the aggregate net proceeds received by such
issuer, after payment of expenses, commissions, taxes and the like incurred
in connection therewith, whether such proceeds are in cash or in property
(valued at the fair market value thereof at the time of receipt), and
(2) in the case of any exchange, exercise, conversion or surrender
of outstanding securities of any kind for or into shares of Capital Stock
of such Person which is not Disqualified Capital Stock, the fair market
value of such outstanding securities on the date of such exchange,
exercise, conversion or surrender (plus any additional amount required to
be paid by the holder to such Person upon such exchange, exercise,
conversion or surrender, less any and all payments made to the holders,
E.G., on account of fractional shares and less all expenses incurred by
such Person in connection therewith).
"NORCROSS" means Norcross Safety Products L.L.C.
"NOTES" means the Initial Notes, Additional Notes, including without
limitation, the PIK Notes, and the Exchange Notes treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms hereof, that are issued pursuant to this Indenture.
"OFFICER" means, with respect to any Person, the Chief Executive
Officer, the Chief Financial Officer, Chief Accounting Officer, Treasurer,
President or any Vice President of such Person.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any Vice
President and the Chief Financial Officer or any Treasurer of such Person that
shall comply with applicable provisions of this Indenture and delivered to the
Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who
and which is acceptable to the Trustee complying with the requirements of this
Indenture. Such legal counsel shall be outside counsel and not an employee of or
in-house counsel to the Company.
"PERMITTED HOLDERS" means the CIBC/Argosy Group, CIVC and John
Hancock.
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"PERMITTED INDEBTEDNESS" means
(1) Indebtedness of the Company or any Restricted Subsidiary of
the Company arising under or in connection with the Senior Credit Facility
in an amount at any time outstanding not to exceed $140.0 million in
aggregate principal amount, of which up to C$10.0 million in aggregate
principal amount may be in Canadian dollars, which amount shall be reduced
by any mandatory prepayments actually made thereunder required as a result
of any Asset Sale or similar sale of assets (to the extent, in the case of
payments of revolving credit indebtedness, that the corresponding
commitments have been permanently reduced) and any scheduled amortization
payments actually made thereunder;
(2) Indebtedness under the Notes in an aggregate principal amount
not to exceed the total of $100.0 million and the related Guarantees, if
any, (including the guarantees, if any, of the Exchange Notes) PLUS the
principal amount of PIK Notes issued pursuant to this Indenture, if any,
MINUS the amount of any Mandatory Principal Redemption Amount paid;
(3) Indebtedness other than pursuant to clauses (1) and (2) above
outstanding on the Issue Date, including the Existing Norcross Notes
outstanding on the Issue Date;
(4) Indebtedness of Norcross or any Subsidiary of Norcross to any
Wholly-Owned Restricted Subsidiary and Indebtedness of any Wholly-Owned
Restricted Subsidiary to the Company or another Restricted Subsidiary;
(5) Hedging Obligations;
(6) Refinancing Indebtedness;
(7) Indebtedness consisting of guarantees made in the ordinary
course of business by the Company or its Subsidiaries of Indebtedness of
the Company or any of its Subsidiaries, which Indebtedness is otherwise
permitted under this Indenture and which guarantees of Company Indebtedness
comply with Section 4.12;
(8) customary indemnification, adjustment of purchase price
earn-out or similar obligations, including title insurance, of the Company
or any Restricted Subsidiary, in each case, incurred in connection with the
acquisition or disposition of any business or assets of the Company or any
Restricted Subsidiary (other than guarantees of Indebtedness incurred by
any Person acquiring all or any portion of such assets for the purpose of
financing such acquisition);
(9) Purchase Money Indebtedness and Capitalized Lease Obligations
of the Company and its Subsidiaries incurred to acquire, lease or improve
property (real or personal) in the ordinary course of business and any
refinancings, renewals or replacements of any such Purchase Money
Indebtedness or Capitalized Lease Obligation (subject to the limitations on
the principal amount thereof set forth in this clause (9)), the principal
amount of which Purchase Money Indebtedness and Capitalized Lease
Obligations shall not in the aggregate at any one time outstanding exceed
the greater of $10.0 million and 5% of the Company's consolidated tangible
assets stated in accordance with GAAP as of the end of the last preceding
fiscal quarter for which financial statements are available;
(10) Indebtedness of the Company or any Restricted Subsidiary
(including letters of credit) in order to provide security for workers'
compensation claims, payment obligations in connection with self-insurance,
or similar requirements of the Company or any Subsidiary in the ordinary
course of business;
(11) obligations of the Company or any Restricted Subsidiary in
respect of performance bonds and completion, guarantee, surety and similar
bonds in the ordinary course of business;
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(12) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds;
(13) Indebtedness arising in connection with endorsement of
instruments for deposit in the ordinary course of business;
(14) Indebtedness consisting of take-or-pay obligations contained
in supply agreements entered into in the ordinary course of business; and
(15) additional Indebtedness of Norcross or any of its Restricted
Subsidiaries (other than Indebtedness specified in clauses (1) through (14)
above) not to exceed in the aggregate at any one time outstanding the total
of (A) $25.0 million MINUS (B) any Indebtedness specified in clause (9)
above up to $10.0 million.
For purposes of determining compliance with Section 4.10, in the event that an
item of Indebtedness meets the criteria of more than one of the categories of
Permitted Indebtedness described in clauses (1) through (15) above or is
entitled to be incurred pursuant to the Company Coverage Ratio Exception (or if
incurred by Norcross, the Norcross Coverage Ratio Exception), the Company shall
classify such item of Indebtedness on the date of its incurrence, or later
reclassify such item of Indebtedness, in any manner that complies with Section
4.10. Notwithstanding the foregoing, Indebtedness outstanding under the Senior
Credit Facility on the Issue Date shall be deemed to have been incurred under
clause (1) above. The maximum amount of Indebtedness that the Company or any
Restricted Subsidiary may incur pursuant to this definition will not be deemed
to be exceeded solely as the result of fluctuations in the exchange rates of
currencies. In determining the amount of Indebtedness outstanding under one of
the clauses above, the outstanding principal amount of any particular
Indebtedness of any Person shall be counted only once and any obligation of such
Person or any other Person arising under any guarantee, Lien, letter of credit
or similar instrument supporting such Indebtedness shall be disregarded so long
as it is permitted to be incurred by the Person or Persons incurring such
obligation. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Capital Stock in the form of additional shares of the same class of Disqualified
Capital Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Capital Stock for purposes of Section 4.10.
"PERMITTED INVESTMENTS" means, for any Person, Investments made on or
after the date of this Indenture consisting of
(1) Investments by the Company, or by a Restricted Subsidiary
thereof, in the Company (for any purpose permitted by this Indenture) or a
Restricted Subsidiary including any repurchase or acquisition of any Notes
issued under this Indenture;
(2) Temporary Cash Investments;
(3) Investments by the Company, or by a Restricted Subsidiary
thereof, in a Person, if as a result of such Investment
(a) such Person becomes a Restricted Subsidiary,
(b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or a Restricted Subsidiary
thereof, or
(c) such business or assets are owned by the Company or a
Restricted Subsidiary;
(4) an Investment that is made by the Company or a Restricted
Subsidiary thereof in the form of any stock, bonds, notes, debentures,
partnership or joint venture interests or other securities that are
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issued by a third party to the Company or a Restricted Subsidiary solely as
partial consideration for the consummation of an Asset Sale that is
otherwise permitted under Section 4.13;
(5) Investments consisting of (a) purchases and acquisitions of
inventory, supplies, materials and equipment, in each case in the ordinary
course of business, or (b) licenses or leases of intellectual property and
other assets, in each case in the ordinary course of business;
(6) Investments consisting of (i) loans and advances to employees
for travel, relocation and business expenses in the ordinary course of
business not to exceed $500,000 in the aggregate at any one time
outstanding and (ii) prepaid expenses incurred in the ordinary course of
business;
(7) without duplication, Investments consisting of Indebtedness
permitted pursuant to clause (4) under the definition of "Permitted
Indebtedness";
(8) Investments of the Company or any Restricted Subsidiary under
any Hedging Obligation;
(9) Investments consisting of endorsements for collection or
deposit in the ordinary course of business;
(10) Investments consisting of loans to officers and employees for
the sole purpose of purchasing equity of the Company, secured with the
equity purchased therewith and not to exceed $3.5 million at any time
outstanding;
(11) Investments existing on the Issue Date and any amendment,
modification, restatement, supplement, extension, renewal, refunding,
replacement or refinancing, in whole or in part thereof;
(12) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon
the bankruptcy or insolvency of such trade creditors or customers;
(13) any guarantees of any Permitted Indebtedness or any
Indebtedness incurred under the Company Coverage Ratio Exception or the
Norcross Coverage Ratio Exception, as applicable;
(14) Investments useful in businesses similar or ancillary to the
business of the Company acquired solely in exchange for the issuance of
Capital Stock (other than Disqualified Capital Stock) of the Company or
Norcross; or
(15) Investments in an aggregate amount, as valued at the time each
such Investment is made, not exceeding $10.0 million for all such
Investments from and after the Issue Date; PROVIDED that the amount
available for Investments to be made pursuant to this clause (15) shall be
increased from time to time to the extent any return on capital is received
by the Company or a Restricted Subsidiary on any Permitted Investment
previously made in reliance on this clause (15).
"PERMITTED LIENS" means
(1) Liens on property or assets of, or any equity interests in or
secured debt of, any Person existing at the time such Person becomes a
Restricted Subsidiary or at the time such Person is merged into the Company
or any of its Restricted Subsidiaries; PROVIDED that such Liens
(a) are not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary or
merging into the Company or any of its Restricted Subsidiaries, and
(b) do not extend to or cover any property, assets, Capital
Stock or Indebtedness other than those of such Person at the time such
Person becomes a Restricted Subsidiary or is merged into the Company
or any of its Restricted Subsidiaries;
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(2) Liens securing Refinancing Indebtedness that is incurred to
refinance any Indebtedness that has been secured by a Lien permitted under
this Indenture; PROVIDED that any such Lien does not extend to or cover any
Property, shares or debt other than the Property, shares or debt securing
the Indebtedness so refunded, refinanced or extended;
(3) Liens in favor of the Company or any of its Restricted
Subsidiaries;
(4) Liens to secure Purchase Money Indebtedness and Capitalized
Lease Obligations that are permitted under this Indenture; PROVIDED that
(a) with respect to any Purchase Money Indebtedness, any
such Lien is created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the cost
(including sales and excise taxes, installation and delivery charges
and other direct costs of, and other direct expenses paid or charged
in connection with, such purchase, construction or improvement) of
such Property,
(b) with respect to any Purchase Money Indebtedness, the
principal amount of the Indebtedness secured by such Lien does not
exceed 100% of such costs, and
(c) such Lien does not extend to or cover any Property
other than the item of Property that is the subject of such Purchase
Money Indebtedness or Capitalized Lease Obligation, as the case may
be, and any improvements on such item;
(5) Liens for taxes, assessments or governmental charges that are
not yet due or payable or are within any applicable grace period or that
are being contested in good faith by appropriate proceedings;
(6) Liens securing Indebtedness under the Senior Credit Facility
and Liens securing Indebtedness of Restricted Subsidiaries;
(7) Liens existing on the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date and any renewals or
extensions thereof on terms no more restrictive and secured by the same
collateral on the Issue Date;
(8) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of government insurance or benefits, or to secure the performance of
letters of credit, bids, tenders, statutory obligations, surety and appeal
bonds, leases, government contracts, rents and other similar obligations
(other than obligations for borrowed money) entered into in the ordinary
course of business;
(9) any attachment or judgment Lien not constituting an Event of
Default under this Indenture that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(10) Liens arising from the filing, for notice purposes only, of
financing statements in respect of operating leases;
(11) Liens consisting of restrictions on the transfer of
securities, pursuant to applicable federal and state securities laws;
(12) interests of lessors and licensors under leases and licenses
to which the Company or any of its Restricted Subsidiaries is a party;
(13) with respect to any real property occupied by the Company or
any of its Restricted Subsidiaries, all easements, rights of way, licenses
and similar encumbrances on or defects of title that do not materially
impair the use of such property for its intended purposes;
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(14) Liens imposed by law that are incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, mechanics', landlords', materialmen's,
employees', laborers', employers', suppliers', banks', repairmen's and
other like Liens incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made in respect thereof;
(15) terminable or short-term leases or permits for occupancy, in
each case entered into in the ordinary course of business, which leases or
permits expressly grant to the Company or any Restricted Subsidiary the
right to terminate them at any time on not more than six months' notice and
do not individually or in the aggregate interfere with the operation of the
business of the Company or any Restricted Subsidiary or individually or in
the aggregate impair the use (for its intended purpose) or the value of the
property subject thereto;
(16) bankers' Liens, rights of setoff and other similar Liens
existing solely with respect to cash and Temporary Cash Investments on
deposit in one or more accounts maintained by the Company or any Restricted
Subsidiary;
(17) Liens securing Hedging Obligations;
(18) pledges of or Liens on raw materials or on manufactured
products as security for any drafts or bills of exchange drawn in
connection with the importation of such raw materials or manufactured
products;
(19) Liens in favor of issuers of surety, performance, judgment,
appeal and like bonds or letters of credit issued in the ordinary course of
business;
(20) any obligations or duties affecting any property of the
Company or any Restricted Subsidiary to any municipality or public
authority with respect to any franchise, grant, license or permit that do
not materially impair the use of such property for the purposes for which
it is held;
(21) Liens on any property in favor of governmental bodies to
secure partial, progress, advance or other payments pursuant to any
contract or statute, not yet due and payable;
(22) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements; and
(23) Liens securing Indebtedness of Foreign Restricted Subsidiaries
permitted to be incurred in accordance with this Indenture.
"PERMITTED TAX DISTRIBUTIONS" means the payment of any Tax
Distributions (as defined in the limited liability agreement of the Company, as
in effect on the Issue Date), to permit direct or indirect beneficial owners of
shares of Capital Stock of the Company to pay federal, state or local income tax
liabilities arising from income of the Company and attributable to them solely
as a result of the Company and any intermediate entity through which the holder
owns such shares being a limited liability company, partnership or similar
entity for federal income tax purposes.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
"PIK NOTES" has the meaning assigned to it in EXHIBIT A.
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"PREFERRED STOCK" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"PROPERTY" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"PURCHASE MONEY INDEBTEDNESS" means any Indebtedness incurred by a
Person to finance, within 180 days from incurrence, the cost, including the cost
of construction, of an item of Property acquired or improved in the ordinary
course of business, the principal amount of which Indebtedness does not exceed
the sum of (a) 100% of such cost; and (b) reasonable fees and expenses of such
Person incurred in connection therewith.
"QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified in
Rule 144A promulgated under the Securities Act.
"RECORD DATE" for interest payable on any Interest Payment Date
(except a date for payment of default interest) means the December 15 and June
15 (whether or not a Business Day) as the case may be, immediately preceding
such Interest Payment Date.
"REDEMPTION DATE" when used with respect to any Note to be redeemed
means the date fixed for such redemption pursuant to this Indenture.
"REDEMPTION PRICE" when used with respect to any Note to be redeemed
means the price fixed for such redemption pursuant to this Indenture.
"REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances
or extends any Indebtedness of the Company or its Restricted Subsidiaries
(including Indebtedness that refinances Refinancing Indebtedness) permitted to
be incurred by the Company or its Restricted Subsidiaries pursuant to the terms
of this Indenture (other than pursuant to clauses (1), (4), (5), (7), (8) and
(10) through (15) of the definition of "Permitted Indebtedness"), but only to
the extent that
(1) the Refinancing Indebtedness is subordinated to the Notes to
at least the same extent as the Indebtedness being refunded, refinanced or
extended, if at all;
(2) either (a) the Refinancing Indebtedness is scheduled to mature
after the maturity date of the Notes; or (b) the Refinancing Indebtedness
has a weighted average life to maturity at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the weighted
average life to maturity of the portion of the Indebtedness being refunded,
refinanced or extended that is scheduled to mature on or prior to the
maturity date of the Notes;
(3) such Refinancing Indebtedness is in an aggregate principal
amount that is equal to or less than the sum of
(a) the aggregate principal amount then outstanding under
the Indebtedness being refunded, refinanced or extended,
(b) the amount of accrued and unpaid interest, if any, and
premiums owed, if any, not in excess of preexisting prepayment
provisions on such Indebtedness being refunded, refinanced or
extended, and
(c) the amount of fees, expenses and costs related to the
incurrence of such Refinancing Indebtedness; and
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(4) such Refinancing Indebtedness is incurred by a Person at the
same level in the corporate structure as the Person that initially incurred
the Indebtedness being refunded, refinanced or extended, except that the
Company may incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any Wholly-Owned Restricted Subsidiary.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of January 7, 2005 among the Issuers and the Initial
Purchaser.
"REGULATION S" means Regulation S promulgated under the Securities
Act.
"RESTRICTED PAYMENT" means any of the following:
(1) the declaration or payment of any dividend or any other
distribution or payment on Capital Stock of the Company or any Restricted
Subsidiary or any payment made to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Company or any Restricted
Subsidiary other than: (a) dividends or distributions payable solely in
Capital Stock (other than Disqualified Capital Stock) or in options,
warrants or other rights to purchase Capital Stock (other than Disqualified
Capital Stock), (b) in the case of Wholly-Owned Subsidiaries of the
Company, dividends or distributions payable to the Company or to a
Wholly-Owned Subsidiary of the Company and (c) in the case of
non-Wholly-Owned Subsidiaries of the Company, PRO RATA dividends or
distributions payable to the other holders of the same class of Capital
Stock of such non-Wholly-Owned Subsidiary;
(2) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company (other than Capital Stock
owned by the Company or a Wholly-Owned Subsidiary of the Company, excluding
Disqualified Capital Stock) or any option, warrants or other rights to
purchase such Capital Stock;
(3) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for
value, prior to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment, of any Indebtedness that is subordinate in right of
payment to the Notes other than subordinated Indebtedness acquired or
repaid in anticipation of satisfying a scheduled sinking fund obligation,
principal installment or final maturity (in each case due within one year
of the date of acquisition);
(4) the making of any Investment in any Person other than a
Permitted Investment;
(5) any designation of a Restricted Subsidiary as an Unrestricted
Subsidiary (valued at the fair market value of the net assets of such
Restricted Subsidiary on the date of designation); and
(6) forgiveness of any Indebtedness of an Affiliate of the Company
(other than a Restricted Subsidiary) to the Company or a Restricted
Subsidiary.
For purposes of determining the amount expended for Restricted
Payments, cash distributed or invested shall be valued at the face amount
thereof and property other than cash shall be valued at its fair market value.
"RESTRICTED SECURITY" has the meaning set forth in Rule 144(a)(3)
promulgated under the Securities Act; PROVIDED that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Note is a Restricted Security.
"RESTRICTED SUBSIDIARY" means a Subsidiary of the Company other than
an Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date. The Board of Directors of the Company may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having been
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incurred at the time of such action), the Company could have incurred at least
$1.00 of additional Indebtedness under the Company Coverage Ratio Exception.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"SALE AND LEASE-BACK TRANSACTION" means any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary of
any real or tangible personal Property, which Property has been or is to be sold
or transferred by the Company or such Restricted Subsidiary to such Person in
contemplation of such leasing.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SENIOR CREDIT FACILITY" means the Second Amended and Restated Credit
Agreement dated as of March 20, 2003, among Norcross, Norcross' Subsidiaries,
the lenders party thereto in their capacities as lenders thereunder, Fleet
National Bank, as administrative agent, and Canadian Imperial Bank of Commerce,
as Canadian Lender, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements and documents may be amended (including any amendment
and restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder, adding Restricted Subsidiaries of Norcross as additional borrowers
or guarantors thereunder or replacing or refinancing such Indebtedness with
notes, debentures or other securities issued under an indenture or similar
agreement) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"SIGNIFICANT SUBSIDIARY," with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.
"SUBSIDIARY" of any specified Person means any corporation,
partnership, limited liability company, joint venture, association or other
business entity, whether now existing or hereafter organized or acquired,
(1) in the case of a corporation, of which more than 50% of the
total voting power of the Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
officers or trustees thereof is held by such first-named Person or any of
its Subsidiaries; or
(2) in the case of a partnership, limited liability company, joint
venture, association or other business entity, with respect to which such
first-named Person or any of its Subsidiaries has the power to direct or
cause the direction of the management and policies of such entity by
contract or otherwise or if in accordance with GAAP such entity is
consolidated with the first-named Person for financial statement purposes.
"TEMPORARY CASH INVESTMENTS" means
(1) Investments in marketable, direct obligations issued or
guaranteed by the United States of America, or of any governmental agency
or political subdivision thereof, maturing within 365 days of the date of
purchase;
(2) Investments in certificates of deposit, eurodollar time
deposits, bankers' acceptances or overnight bank deposits issued by a bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia, in each case having capital, surplus
and undivided profits totaling more than $500.0 million and rated at least
A by Standard & Poor's Rating Agency and A-2 by Moody's Investors Service,
Inc., maturing within 365 days of purchase;
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(3) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (1) and (2)
above entered into with any financial institution meeting the
qualifications specified in clause (2) above;
(4) commercial paper having a rating no lower than "A-2" from
Moody's Investors Service, Inc. or "P2" from Standard & Poor's Rating
Services and in each case maturing within 12 months after the date of
acquisition;
(5) Investments not exceeding 365 days in duration in money market
funds that invest substantially all of such funds' assets in the
Investments described in the preceding clauses (1), (2), (3) and (4); or
(6) in the case of Foreign Subsidiaries, substantially similar
instruments to those set forth in (1) through (5) above.
"TREASURY RATE" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H. 15(519)
which has become publicly available at least two Business Days prior to the
redemption date or, if such Statistical Release is no longer published, any
publicly available source or similar market data) most nearly equal to the
period from the redemption date to July 1, 2006; PROVIDED, HOWEVER, that if the
period from the redemption date to July 1, 2006 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the redemption date to July 1, 2006 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939
(15 U.S. Code sections 77aaa-77bbbb) as in effect on the date of this Indenture
(except as provided in Section 8.03).
"TRUST OFFICER" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer trust accounts.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"UNRESTRICTED SUBSIDIARY" means
(1) any Subsidiary of an Unrestricted Subsidiary; and
(2) any Subsidiary of the Company which is classified after the
Issue Date as an Unrestricted Subsidiary by a resolution adopted by the
Board of Directors of the Company;
PROVIDED that a Subsidiary organized or acquired after the Issue Date may be so
classified as an Unrestricted Subsidiary only if such classification is in
compliance with Section 4.11.
The Trustee shall be given prompt notice by the Company of each Board Resolution
adopted by the Board of Directors of the Company under this provision, together
with a copy of each such Board Resolution adopted.
"U.S. GOVERNMENT OBLIGATIONS" means (a) securities that are direct
obligations of the United States of America for the payment of which its full
faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation
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held by such custodian for the account of the holder of such depositary receipt;
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or a specific payment of principal or interest on any such
U.S. Government Obligation held by such custodian for the account of the holder
of such depositary receipt.
"WHOLLY-OWNED" means, with respect to a Subsidiary of a specified
Person, any Subsidiary (or, if such specified Person is the Company, a
Restricted Subsidiary), all of the outstanding voting securities (other than
directors' qualifying shares) of which are owned, directly or indirectly, by
such Person.
Section 1.02. OTHER DEFINITIONS.
The definitions of the following terms may be found in the sections
indicated as follows:
<Table>
<Caption>
Term Defined in Section
---- ------------------
"ADDITIONAL NOTES"...................................................... 2.02
"AFFILIATE TRANSACTION"................................................. 4.14
"AGENT MEMBERS"......................................................... 2.15
"AUTHENTICATING AGENT".................................................. 2.02
"AUTHENTICATION ORDER".................................................. 2.02
"BANKRUPTCY LAW"........................................................ 6.01
"BUSINESS DAY".......................................................... 13.07
"CHANGE OF CONTROL OFFER"............................................... 4.16
"CHANGE OF CONTROL PAYMENT DATE"........................................ 4.16
"CHANGE OF CONTROL PURCHASE PRICE"...................................... 4.16
"COMPANY COVERAGE RATIO EXCEPTION"...................................... 4.10
"COVENANT DEFEASANCE"................................................... 9.03
"CUSTODIAN"............................................................. 6.01
"EVENT OF DEFAULT"...................................................... 6.01
"EXCESS PROCEEDS"....................................................... 4.13
"EXCESS PROCEEDS OFFER"................................................. 4.13
"EXCESS PROCEEDS PAYMENT DATE".......................................... 4.13
"GLOBAL NOTES".......................................................... 2.01
"LEGAL DEFEASANCE"...................................................... 9.02
"IAI GLOBAL NOTE" ...................................................... 2.01
"LEGAL HOLIDAY"......................................................... 13.07
"NORCROSS COVERAGE RATIO EXCEPTION...................................... 4.10
"PAYING AGENT".......................................................... 2.03
"PRIVATE PLACEMENT LEGEND".............................................. 2.17
"REGISTRAR"............................................................. 2.03
"REGULATION S GLOBAL NOTE".............................................. 2.01
"REINVESTMENT DATE"..................................................... 4.13
"RESALE RESTRICTION TERMINATION DATE"................................... 2.16
"RULE 144A GLOBAL NOTE"................................................. 2.01
</Table>
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the portion
of such provision required to be incorporated herein in order for this Indenture
to be qualified under the TIA is incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITYHOLDER" means a Holder.
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"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR ON THE INDENTURE SECURITIES" means the Issuers or any other
obligor on the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by Commission rule
have the meanings therein assigned to them.
Section 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether defined
expressly or by reference;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) words used herein implying any gender shall apply to every
gender.
ARTICLE 2
THE NOTES
Section 2.01. FORM AND DATING.
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A hereto. The Exchange Notes and
the Trustee's certificate of authentication shall be substantially in the form
of EXHIBIT B hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or Depositary rule or usage. The form of
the Notes and any notation, legend or endorsement on them shall be satisfactory
to both the Issuers and the Trustee. Each Note shall be dated the date of its
issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as
EXHIBITS A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Issuers and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The Notes shall be issued initially in the form of one or more
permanent global Notes (the "GLOBAL NOTES"). Notes offered and sold (i) in
reliance on Rule 144A shall be issued initially in the form of one or more
permanent Global Notes in registered form, substantially in the form set forth
in EXHIBIT A (the " RULE 144A GLOBAL NOTE"), (ii) in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
permanent Global Notes in registered form, substantially in the form set forth
in EXHIBIT A (the "REGULATION S GLOBAL NOTE") and (iii) to institutions that are
"accredited investors" as defined in Rule 501(a)(1),(2),(3) or (7) under the
Securities Act, which are not also Qualified Institutional Buyers shall be
issued initially in the form of one or more permanent Global Notes in registered
form, substantially in the form set forth in EXHIBIT A (the "IAI GLOBAL NOTE"),,
and in each case shall be deposited with the Trustee, as custodian for the
Depositary, duly executed by the Issuers and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of any Global
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Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary, as hereinafter
provided.
Section 2.02. EXECUTION AND AUTHENTICATION.
The Notes shall be executed on behalf of the Issuers by two Officers
of each of the Issuers or an Officer and the Secretary of each of the Issuers.
Such signature may be either manual or facsimile.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
signs the certificate of authentication on the Note. Such signature may be
either manual or facsimile. Such signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee or an authentication agent (the "AUTHENTICATING AGENT")
shall authenticate (i) Initial Notes for original issue on the date of this
Indenture in an aggregate principal amount not to exceed $100,000,000 and (ii)
Exchange Notes from time to time for issue only in exchange for a like principal
amount of Initial Notes, in each case upon written orders of the Issuers in the
form of an Officers' Certificate (an "AUTHENTICATION ORDER"). Subject to
compliance with Section 4.10, the Trustee may authenticate Notes thereafter for
issuance upon an Authentication Order in an aggregate principal amount as
specified by such Authentication Order (the "ADDITIONAL NOTES"). Any
Authentication Order shall specify the amount of Notes to be authenticated, the
date on which the Notes are to be authenticated and the aggregate principal
amount of Notes outstanding on the date of authentication, whether the Notes are
to be Initial Notes, Additional Notes or Exchange Notes, and shall further
specify the amount of such Notes to be issued as the Global Note or Certificated
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07. Notwithstanding the
foregoing, PIK Notes may be issued from time to time as payment of interest on
the Notes in accordance with the terms of the Notes.
Notwithstanding the foregoing, all Notes issued under this Indenture,
including any Additional Notes, shall vote and consent together on all matters
(as to which any of such Notes may vote or consent) as one class and no series
of Notes will have the right to vote or consent as a separate class on any
matter.
The Trustee may appoint an Authenticating Agent to authenticate Notes.
Any such appointment shall be evidenced by an instrument signed by a Trust
Officer, a copy of which shall be furnished to the Issuers. An Authenticating
Agent may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent. An Authenticating Agent has the same right as an Agent to
deal with the Issuers and Affiliates of the Issuers.
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and integral multiples thereof, PROVIDED,
HOWEVER, that PIK Notes issued in payment of interest or Additional Interest
will be issued in denominations of $1.00 and integral multiples of $1.00.
Payments to be made in the form of PIK Notes shall be rounded to the nearest
dollar.
Section 2.03. REGISTRAR AND PAYING AGENT.
The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") located in
the Borough of Manhattan, City of New York, State of New York where Notes may be
presented for payment ("PAYING AGENT") and an office or agency where notices and
demands to or upon the Issuers in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Registrar shall provide the Issuers a current copy of such
register from time to time upon request of the Issuers. The Issuers may have one
or more co-Registrars and one or more additional Paying Agents. The Company or
any of its Subsidiaries may act as Paying Agent or Registrar. The Issuers may
change any Paying Agent, Registrar or co-Registrar without notice to any Holder.
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The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuers shall notify
the Trustee of the name and address of any such Agent. If the Issuers fail to
maintain a Registrar or Paying Agent, or agent for service of notices and
demands, or fails to give the foregoing notice, the Trustee shall act as such.
The Issuers initially appoint the Trustee as Registrar, Paying Agent and agent
for service of notices and demands in connection with the Notes.
Section 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee (or if the Company is acting as Paying Agent,
segregate and hold in trust for the benefit of the Holders or the Trustee) all
assets held by the Paying Agent for the payment of principal of, premium, if
any, or interest on Notes (whether such assets have been distributed to it by
the Issuers or any other obligor on the Notes), and shall notify the Trustee in
writing of any Default in making any such payment. The Issuers at any time may
require a Paying Agent to distribute all assets held by it to the Trustee and
account for any assets disbursed and the Trustee may at any time during the
continuance of any Default in payment, upon written request to a Paying Agent,
require such Paying Agent to forthwith distribute to the Trustee all assets so
held in trust by such Paying Agent together with a complete accounting of such
sums. Upon distribution to the Trustee of all assets that shall have been
delivered by the Issuers to the Paying Agent, the Paying Agent shall have no
further liability for such assets.
Section 2.05. NOTEHOLDER 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
Holders. If the Trustee is not the Registrar, the Issuers shall furnish or cause
the Registrar to furnish to the Trustee, in writing at least five Business Days
before each Interest Payment Date, or 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
require of the names and addresses of Holders which list may be conclusively
relied on by the Trustee.
Section 2.06. TRANSFER AND EXCHANGE.
Subject to the provisions of Sections 2.15 and 2.16, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations of the same series, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; PROVIDED, HOWEVER, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Issuers and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Issuers shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Issuers may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge in connection therewith payable by the transferor of
such Notes (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.10, 3.06, 4.13, 4.16
or 9.06, in which event the Issuers shall be responsible for the payment of such
taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of 15 Business Days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article 3, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of a Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
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Section 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder
presents evidence to the satisfaction of the Issuers and the Trustee that the
Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and
the Trustee shall authenticate a replacement Note. An indemnity bond may be
required by the Issuers or the Trustee that is sufficient in the judgment of the
Issuers and the Trustee to protect the Issuers, the Trustee or any Agent from
any loss which any of them may suffer if a Note is replaced. In every case of
destruction, loss or theft, the applicant shall also furnish to the Issuers and
to the Trustee evidence to their satisfaction of the destruction, loss or the
theft of such Note and the ownership thereof. Each of the Issuers and the
Trustee may charge for its expenses in replacing a Note. The provisions of this
Section 2.07 are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to replacement or payment of mutilated, lost,
destroyed or wrongfully taken Notes.
Every replacement Note is an additional obligation of the Issuers.
Section 2.08. OUTSTANDING NOTES.
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding until the Issuers
and the Trustee receive proof satisfactory to each of them that the replaced
Note is held by a protected purchaser. A mutilated Note ceases to be outstanding
upon surrender of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date, the Paying Agent holds
U.S. legal tender sufficient to pay all of the principal and interest due on the
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.
Section 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Issuers or any of their Affiliates shall be considered as though they are
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
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so considered. The Issuers shall notify the Trustee, in writing, when they or
any of their Affiliates repurchases or otherwise acquires Notes, of the
aggregate principal amount of such Notes so repurchased or otherwise acquired.
Section 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Issuers may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Issuers in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Issuers consider appropriate for temporary Notes. Without unreasonable
delay, the Issuers shall prepare and the Trustee shall authenticate upon receipt
of a written order of the Issuers pursuant to Section 2.02 definitive Notes in
exchange for temporary Notes.
Section 2.11. CANCELLATION.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall
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cancel and dispose of, at the written direction of the Issuers and deliver
evidence of such disposal of all Notes surrendered for registration of transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Issuers may not
issue new Notes to replace Notes that they have paid or delivered to the Trustee
for cancellation. If the Issuers shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.11.
Section 2.12. DEFAULTED INTEREST.
The Issuers shall pay interest on overdue principal (including
post-petition interest in a proceeding under Bankruptcy Law) at the rate of
interest then borne by the Notes. The Issuers shall, to the extent lawful, pay
interest on overdue installments of interest (without regard to any applicable
grace periods) at the rate of interest then borne by the Notes.
If the Issuers default in a payment of interest on the Notes, they
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Issuers for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Issuers shall mail to each
Holder, as of a recent date selected by the Issuers, with a copy to the Trustee,
a notice that states the subsequent special record date, the payment date and
the amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(b) shall be paid to
Holders as of the Record Date for the Interest Payment Date for which interest
has not been paid.
Section 2.13. DEPOSIT OF MONEYS.
Prior to 10:00 a.m., New York City time, on each Interest Payment
Date, Redemption Date, Change of Control Payment Date, Excess Proceeds Payment
Date and Maturity Date, the Issuers shall have deposited with the Paying Agent
in immediately available funds U.S. legal tender sufficient to make payments, if
any, due on such Interest Payment Date, Redemption Date, Change of Control
Payment Date, Excess Proceeds Payment Date or Maturity Date, as the case may be,
in a timely manner which permits the Trustee to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Change of Control Payment Date,
Excess Proceeds Payment Date or Maturity Date, as the case may be. The principal
and interest on Global Notes shall be payable to the Depositary or its nominee,
as the case may be, as the sole registered owner and the sole Holder of the
Global Notes represented thereby. The principal and interest on Notes in
certificated form shall be payable at the office of the Paying Agent.
Section 2.14. CUSIP NUMBER.
The Issuers in issuing the Notes may use one or more "CUSIP" numbers,
and if so, the Trustee shall use such CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; PROVIDED that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
numbers printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Issuers shall
promptly notify the Trustee of any change in the CUSIP numbers.
Section 2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Global Notes initially shall (i) be registered in the name
of the Depositary or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set forth in
Section 2.17.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary or under the Global Note, and the Depositary may
be treated by the Issuers, the Trustee and any agent of the Issuers or the
Trustee as the absolute
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owner of the Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of
the Issuers or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder.
(b) Interests of beneficial owners in the Global Notes may be
transferred or exchanged for Certificated Notes in accordance with the rules and
procedures of the Depositary and the provisions of Section 2.16. In addition,
Certificated Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in Global Notes if (i) the Depositary (x) notifies
the Issuers that it is unwilling or unable to continue as Depositary for any
Global Note or (y) has ceased to be a clearing company registered under the
Exchange Act and, in each case, a successor depositary is not appointed by the
Issuers within 90 days of such notice or (ii) a Default or an Event of Default
has occurred and is continuing and the Registrar has received a written request
from the Depositary to issue Certificated Notes.
(c) In connection with the transfer of Global Notes as an entirety
to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed
to be surrendered to the Trustee for cancellation, and the Issuers shall
execute, and the Trustee shall, upon receipt of an authentication order from the
Issuers in the form of an Officers' Certificate, authenticate and deliver, to
each beneficial owner identified by the Depositary in writing in exchange for
its beneficial interest in the Global Notes, an equal aggregate principal amount
of Certificated Notes of authorized denominations.
(d) Any Certificated Note constituting a Restricted Security
delivered in exchange for an interest in a Global Note pursuant to paragraph (b)
or (c) shall, except as otherwise provided by Section 2.16, bear the Private
Placement Legend.
(e) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
Section 2.16. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF CERTIFICATED NOTES. When
Certificated Notes are presented to the Registrar or co-Registrar with a
request:
(i) to register the transfer of the Certificated Notes; or
(ii) to exchange such Certificated Notes for an equal principal
amount of Certificated Notes of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; PROVIDED, HOWEVER, that the
Certificated Notes presented or surrendered for registration of transfer or
exchange:
(I) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Registrar or co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(II) in the case of Certificated Notes the offer and sale of which
have not been registered under the Securities Act and are presented
for transfer or exchange prior to (x) the date which is two years
after the later of the date of original issue and the last date on
which the Issuers or any Affiliate of the Issuers was the owner of
such Note, or any predecessor thereto and (y) such later date, if any,
as may be required by any subsequent change in applicable law (the
"RESALE RESTRICTION TERMINATION DATE"), such Certificated Notes shall
be accompanied, in the sole discretion of the Issuers, by the
following additional information and documents, as applicable:
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(A) if such Certificated Note is being delivered to the
Registrar or co-Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification to that effect
(substantially in the form of EXHIBIT C hereto); or
(B) if such Certificated Note is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A, a
certification to that effect (substantially in the form of EXHIBIT C
hereto); or
(C) if such Certificated Note is being transferred in
reliance on Regulation S, delivery of a certification to that effect
(substantially in the form of EXHIBIT C hereto) and a transferor
certificate for Regulation S transfers substantially in the form of
EXHIBIT E hereto; or
(D) if such Certificated Note is being transferred to an
Institutional Accredited Investor, delivery of certification to that
effect (substantially in the form of EXHIBIT C hereto), certificates
of the transferee in substantially the form of EXHIBIT D and, at the
option of the Issuers, an Opinion of Counsel reasonably satisfactory
to the Issuers to the effect that such transfer is in compliance with
the Securities Act; or
(E) if such Certificated Note is being transferred in
reliance on Rule 144 under the Securities Act, delivery of a
certification to that effect substantially in the form of EXHIBIT C
hereto) and, at the option of the Issuers, an Opinion of Counsel
reasonably satisfactory to the Issuers to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Certificated Note is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (substantially in
the form of EXHIBIT C hereto) and, at the option of the Issuers, an
Opinion of Counsel reasonably satisfactory to the Issuers to the
effect that such transfer is in compliance with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A CERTIFICATED NOTE FOR A
BENEFICIAL INTEREST IN A GLOBAL NOTE. A Certificated Note may not be exchanged
for a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Certificated Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) in the case of Certificated Notes, the offer and sale of which
have not been registered under the Securities Act and which are presented
for transfer prior to the Resale Restriction Termination Date,
certification, substantially in the form of EXHIBIT C hereto, that such
Certificated Note is being transferred (I) to a Qualified Institutional
Buyer or (II) in an offshore transaction in reliance on Regulation S (and,
in the case of this clause II, the Issuers shall have received a transferor
certificate for Regulation S transfers substantially in the form of EXHIBIT
E hereto and, at the option of the Issuers, an Opinion of Counsel
reasonably satisfactory to the Issuers to the effect that such transaction
is in compliance with the Securities Act); and
(B) written instructions from the Holder thereof directing the
Registrar or co-Registrar to make, or to direct the Depositary to make, an
endorsement on the applicable Global Note to reflect an increase in the
aggregate amount of the Notes represented by the Global Note,
then the Registrar or co-Registrar shall cancel such Certificated Note and
cause, or direct the Depositary to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Registrar or
co-Registrar, the principal amount of Notes represented by the applicable Global
Note to be increased accordingly. If no Global Note representing Notes held by
Qualified Institutional Buyers or Persons acquiring Notes in offshore
transactions in reliance on Regulation S, as the case may be, is then
outstanding, the Issuers shall issue and the Trustee shall, upon receipt of an
authentication order in the form of an Officers' Certificate in accordance with
Section 2.02, authenticate such a Global Note in the appropriate principal
amount.
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(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor. Upon receipt by the Registrar or co-Registrar of written instructions,
or such other instruction as is customary for the Depositary, from the
Depositary or its nominee, requesting the registration of transfer of an
interest in a U.S. Global Note or Regulation S Global Note, as the case may be,
to another type of Global Note, together with the applicable Global Notes (or,
if the applicable type of Global Note required to represent the interest as
requested to be transferred is not then outstanding, only the Global Note
representing the interest being transferred), the Registrar or co-Registrar
shall cancel such Global Notes (or Global Note) and the Issuers shall issue and
the Trustee shall, upon receipt of an authentication order in the form of an
Officers' Certificate in accordance with Section 2.02, authenticate new Global
Notes of the types so cancelled (or the type so cancelled and applicable type
required to represent the interest as requested to be transferred) reflecting
the applicable increase and decrease of the principal amount of Notes
represented by such types of Global Notes, giving effect to such transfer. If
the applicable type of Global Note required to represent the interest as
requested to be transferred is not outstanding at the time of such request, the
Issuers shall issue and the Trustee shall, upon written instructions from the
Issuers in accordance with Section 2.02, authenticate a new Global Note of such
type in principal amount equal to the principal amount of the interest requested
to be transferred.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
CERTIFICATED NOTE. (i) Any Person having a beneficial interest in a Global Note
may upon request exchange such beneficial interest for a Certificated Note. Upon
receipt by the Registrar or co-Registrar of written instructions, or such other
form of instructions as is customary for the Depositary, from the Depositary or
its nominee on behalf of any Person having a beneficial interest in a Global
Note and upon receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a beneficial
interest in Notes the offer and sale of which have not been registered under the
Securities Act and which Notes are presented for transfer or exchange prior to
the Resale Restriction Termination Date, the following additional information
and documents:
(A) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a certification
from such Person to that effect (substantially in the form of EXHIBIT C
hereto); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule l44A, a certification
to that effect (substantially in the form of EXHIBIT C hereto); or
(C) if such beneficial interest is being transferred in reliance
on Regulation S, delivery of a certification to that effect (substantially
in the form of EXHIBIT C hereto) and a transferor certificate for
Regulation S transfers substantially in the form of EXHIBIT E hereto; or
(D) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of certification (substantially
in the form of EXHIBIT C hereto), a certificate of the transferee in
substantially the form of EXHIBIT D and, at the option of the Issuers, an
Opinion of Counsel reasonably satisfactory to the Issuers to the effect
that such transfer is in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a certification to that
effect (substantially in the form of EXHIBIT C hereto) and, at the option
of the Issuers, an Opinion of Counsel reasonably satisfactory to the
Issuers to the effect that such transfer is in compliance with the
Securities Act; or
(F) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the Securities
Act, a certification to that effect (substantially in the form of EXHIBIT C
hereto) and, at the option of the Issuers, an Opinion of Counsel reasonably
satisfactory to the Issuers to the effect that such transfer is in
compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Registrar or
co-Registrar, the aggregate principal amount of the applicable Global
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Note to be reduced and, following such reduction, the Issuers will execute and,
upon receipt of an authentication order in the form of an Officers' Certificate
in accordance with Section 2.02, the Trustee will authenticate and deliver to
the transferee a Certificated Note in the appropriate principal amount.
(ii) Certificated Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.16(d) shall be registered
in such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar or co-Registrar in writing. The Registrar or co-Registrar
shall deliver such Certificated Notes to the Persons in whose names such
Certificated Notes are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless, and the Trustee is hereby authorized
to deliver Notes without the Private Placement Legend if, (i) the Resale
Restriction Termination Date shall have occurred, (ii) there is delivered to the
Trustee an Opinion of Counsel reasonably satisfactory to the Issuers and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act or (iii) such Note has been sold pursuant to an effective
registration statement under the Securities Act.
(g) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members or
beneficial owners of interest in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Issuers shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
Section 2.17. RESTRICTIVE LEGENDS.
Each Global Note and Certificated Note that constitutes a Restricted
Security shall bear the following legend (the "PRIVATE PLACEMENT LEGEND") on the
face thereof until the Resale Restriction Termination Date, unless otherwise
agreed to by the Issuers and the Holder thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE ON WHICH THE ISSUERS,
OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF THIS NOTE), RESELL
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OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF
SUBPARAGRAPH 501(a)(1), (2), (3), or (7) UNDER THE SECURITIES ACT THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS NOTE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (2) WILL GIVE TO EACH PERSON TO WHOM THIS NOTE
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE RESALE RESTRICTION
TERMINATION DATE, IF THE PROPOSED TRANSFER IS BEING MADE PURSUANT TO CLAUSE
(C) OR (E) ABOVE, PRIOR TO SUCH TRANSFER, THE HOLDER WILL BE REQUIRED TO
FURNISH TO THE TRUSTEE AND THE ISSUERS SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Each Global Note shall also bear the following legend:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
Section 2.18. ISSUANCE OF PIK NOTES
The Issuers shall be entitled to issue PIK Notes under this Indenture
which shall have identical terms as the Notes issued on the Issue Date. The
Notes issued on the Issue Date and any PIK Notes shall be treated as a single
class for all purposes under this Indenture.
With respect to any PIK Notes, the Issuers shall deliver to the
Trustee and the Paying Agent:
(1) no later than the Record Date for the relevant Interest
Payment Date, a written notice setting forth the extent to which such
interest payment will be made in the form of cash, if an election is made
to pay in cash, and if no such election is made, such interest payment
shall otherwise be payable in PIK Notes; and
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(2) no later than two Business Days prior to the relevant Interest
Payment Date, (i) with respect to the Notes that are in definitive form,
the required amount of new definitive PIK Notes and an order to
authenticate and deliver such PIK Notes to the registered Holder of the
definitive Notes or (ii) with respect to Notes that are in global form, an
order to increase the principal amount of such Global Notes by the relevant
amount (or, if necessary, to authenticate a new Global Note executed by the
Issuers with such increased principal amounts).
Any PIK Notes shall, after being executed and authenticated pursuant
to Section 2.02, be (i) mailed to the person entitled thereto as shown on the
register for the definitive Notes as of the relevant Record Date or (ii)
deposited into the account specified by the Holder or Holders thereof as of the
relevant Record Date if the Notes are held in global form or otherwise according
to the procedures of the Depositary. Alternatively, the Issuers may direct the
Paying Agent to make the appropriate amendments to the schedule of principal
amounts of the relevant Notes outstanding and arrange for deposit into the
account specified by the Holder or Holders thereof as of the relevant Record
Date. Payment shall be made in such form and upon such terms as specified herein
and the Issuers shall and Paying Agent may take additional steps as is necessary
to effect such payment.
ARTICLE 3
REDEMPTION
Section 3.01. NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to paragraph 5 of the
Notes, at least 45 days prior to the Redemption Date or during such shorter
period as the Trustee may agree to, the Issuers shall notify the Trustee in
writing of the Redemption Date, the principal amount of Notes to be redeemed and
the Redemption Price, and deliver to the Trustee an Officers' Certificate
stating that such redemption will comply with the conditions contained herein
and in the Notes, as appropriate.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
In the event that less than all of the Notes are to be redeemed at any
time, selection of the Notes to be redeemed shall be made by the Trustee in
compliance with the requirements of the principal securities exchange, if any,
on which such Notes are listed or, on a PRO RATA basis, by lot or by such method
as the Trustee shall deem fair and appropriate; PROVIDED, HOWEVER, that no Notes
of a principal amount of $1,000 or less shall be redeemed in part; PROVIDED,
FURTHER, that if a partial redemption is made with the proceeds of any Equity
Offering, selection of the Notes or portions thereof for redemption shall be
made by the Trustee only on a PRO RATA basis or on as nearly a PRO RATA basis as
is practicable (subject to the procedures of the Depositary), unless such method
is otherwise prohibited. On and after the Redemption Date, interest will cease
to accrue on Notes or portions thereof called for redemption as long as the
Issuers have deposited with the Paying Agent U.S. legal tender in satisfaction
of the applicable Redemption Price pursuant to this Indenture.
Section 3.03. NOTICE OF REDEMPTION.
Notice of redemption shall be mailed by first class mail, facsimile
immediately followed by first class mail, or by overnight delivery at least 30
but not more than 60 days before the Redemption Date to each Holder to be
redeemed at its registered address. If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed.
The notice shall identify the Notes to be redeemed (including the
CUSIP number(s) thereof) and shall state:
(1) the Redemption Date;
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(2) the Redemption Price and the amount of accrued interest, if
any, to be paid;
(3) that, if any Note is being redeemed in part, the portion of
the principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be issued;
(4) the name, address and telephone number of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent at the address specified to collect the Redemption Price plus
accrued interest, if any;
(6) that, unless the Issuers default in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
(7) the subparagraph of the Notes pursuant to which the Notes
called for redemption are being redeemed; and
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once the notice of redemption described in Section 3.03 is mailed,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price, plus accrued interest to the Redemption Date, if any. Upon
surrender to the Paying Agent, such Notes shall be paid at the Redemption Price,
plus accrued interest to the Redemption Date, if any; PROVIDED that if the
Redemption Date is after a Record Date and on or prior to the Interest Payment
Date, the accrued interest shall be payable to the Holder of the redeemed Notes
registered on the relevant Record Date.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 a.m., New York City time, on each Redemption
Date, the Issuers shall have deposited with the Paying Agent in immediately
available funds U.S. legal tender sufficient to pay the Redemption Price of and
accrued interest on all Notes to be redeemed on that date.
On and after any Redemption Date, if U.S. legal tender sufficient to
pay the Redemption Price of and accrued interest on Notes called for redemption
shall have been made available in accordance with the preceding paragraph, the
Notes called for redemption will cease to accrue interest and the only right of
the Holders of such Notes will be to receive payment of the Redemption Price of
and, subject to the first proviso in Section 3.04, accrued and unpaid interest
on such Notes to the Redemption Date. If any Note called for redemption shall
not be so paid, interest will continue to accrue and be paid, from the
Redemption Date until such redemption payment is made, on the unpaid principal
of the Note and any interest not paid on such unpaid principal, in each case, at
the rate and in the manner provided for in Section 2.12.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
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ARTICLE 4
COVENANTS
Section 4.01. PAYMENT OF NOTES.
The Issuers shall pay the principal of and interest (including all
Additional Interest as provided in the Registration Rights Agreement) on the
Notes on the dates and in the manner provided in the Notes and this Indenture.
An installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds, for the benefit of the Holders, on
that date U.S. legal tender designated for and sufficient to pay such
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture.
The Issuers shall pay interest on overdue principal and interest on
overdue interest, to the extent lawful as provided for in Section 2.12.
Section 4.02. PROVISION OF FINANCIAL STATEMENTS AND OTHER INFORMATION.
(A) Whether or not required by the Commission, so long as any
Notes are outstanding, the Company will furnish to the Trustee and the Holders,
within the time periods specified in the Commission's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on
the annual financial statements by the Company's certified independent
accountants; and
(2) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such
reports;
PROVIDED, HOWEVER, that all information that has been posted to the
Commission's EDGAR system shall be deemed to have been provided to the Trustee
and Holders and; PROVIDED, FURTHER, that such requirement shall be satisfied
prior to commencement of the exchange offer or the effectiveness of the shelf
registration statement by the filing with the Commission of the exchange offer
registration statement and/or shelf registration statement, to the extent any
such registration statement contains substantially the same financial
information as would be required to be filed by the Issuers if they were subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(B) In addition, whether or not required by the Commission, the
Company will file a copy of all of the information and reports referred to in
clauses (A)(1) and (A)(2) above with the Commission for public availability
within the time periods specified in the Commission's rules and regulations
(unless the Commission will not accept such a filing and commencing with the
effectiveness of a registration statement relating to the Exchange Notes). The
Company will also furnish to Holders, securities analysts and prospective
investors upon request the information required to be delivered pursuant to Rule
144 and Rule 144A(d)(4) under the Securities Act. The Issuers shall also comply
with the provisions of TIA Section 314(a).
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Section 4.03. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Issuers covenant (to the extent that they may lawfully do so) that
they will not at any time insist upon, or plead (as a defense or otherwise) or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Issuers from paying all or any portion of the principal of, premium, if any,
and/or interest on the Notes as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that they may lawfully do so)
the Issuers hereby expressly waive all benefit or advantage of any such law, and
covenant that they will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 4.04. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT; TAX INFORMATION.
(a) The Issuers shall deliver to the Trustee, within 120 days
after the end of the Issuers' fiscal year an Officers' Certificate (one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Issuers) stating that a review of
the activities of the Company and its Subsidiaries during such fiscal year has
been made under the supervision of the signing Officers with a view to
determining whether the Issuers 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
Issuers have kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and, in the case of Restricted Payments, listing all
Restricted Payments for such fiscal year and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all or
such Defaults or Events of Default of which he or she may have knowledge and
what action each is taking or proposes to take with respect thereto) and that to
the best of his or her knowledge no event has occurred and remains in existence
by reason of which payments on account of the principal of or interest, if any,
on the Notes are prohibited or if such event has occurred, a description of the
event and what action the Issuers are taking or propose to take with respect
thereto. The Officers' Certificate shall also notify the Trustee should the
Issuers elect to change the manner in which they fix their fiscal year end.
(b) The annual financial statements delivered pursuant to Section
4.02 shall be accompanied by a written report addressed to the Trustee of the
Issuers' independent accountants (who shall be a firm of established national
reputation) that in conducting their audit of such financial statements nothing
has come to their attention that would lead them to believe that a Default or
Event of Default has occurred under this Indenture insofar as they relate to
accounting matters 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) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed default under this Indenture of the Notes, the Issuers
shall deliver to the Trustee, at its address set forth in Section 13.02, by
registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such Default or Event of Default, notice or other action, the status
thereof and what action the Issuers are taking or propose to take within five
Business Days of their becoming aware of such occurrence.
(d) The Issuers shall calculate and deliver to the Trustee all
original issue discount information to be reported by the Trustee to Holders as
required by applicable law.
Section 4.05. PAYMENT OF TAXES AND OTHER CLAIMS.
The Issuers shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon them or any of their Subsidiaries
or Properties of theirs or any of their Subsidiaries and (ii) all lawful claims
for labor, materials and supplies that, if unpaid, might by law become a Lien
upon the Property of theirs or any of their Subsidiaries; PROVIDED, HOWEVER,
that the Issuers shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose
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amount, applicability or validity is being contested in good faith by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders.
Section 4.06. CORPORATE EXISTENCE.
Subject to Article 5, the Issuers shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) their
corporate or limited liability company existence, as applicable, and the
corporate, partnership or limited liability company or other existence of each
Subsidiary, in accordance with the respective organizational documents (as the
same may be amended from time to time) of each Subsidiary and (ii) the material
rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries except where the failure to preserve and keep in full force and
effect any such rights, licenses and franchise shall not have a material adverse
effect on the financial condition, business, operations or prospects of the
Company and its Subsidiaries taken as a whole; and PROVIDED that the Issuers
shall not be required to preserve any such right, license or franchise, or the
corporate, limited liability company, partnership or other existence of any of
their Subsidiaries, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders.
Section 4.07. MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain an office or agency in the Borough of
Manhattan, The City of New York where Notes may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Issuers in respect of the Notes and this Indenture may be
served. The Issuers 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 Issuers 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 address of the
Trustee as set forth in Section 13.02.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Issuers shall give prompt written notice to the Trustee of such designation or
rescission and of any change in the location of any such other office or agency.
The Issuers hereby initially designate the Corporate Trust Office of
the Trustee as such office of the Issuers.
Section 4.08. [RESERVED.]
Section 4.09. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall cause all material Properties owned by or
leased by it or any of its Subsidiaries used or useful to the conduct of the
Company's business or the business of any of its Subsidiaries to be maintained
and kept in normal condition, repair and working order and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may
be necessary to actively conduct its business; PROVIDED, HOWEVER, that nothing
in this Section 4.09 shall prevent the Company or any of its Subsidiaries from
discontinuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Board of Directors of the Company or of the Board of Directors of any
Subsidiary of the Company concerned, or of an officer (or other agent employed
by the Company or of any of its Subsidiaries) of the Company or any of its
Subsidiaries having managerial responsibility for any such Property, desirable
in the conduct of the business of the Company or any Subsidiary of the Company,
and if such discontinuance or disposal is not adverse in any material respect to
the Holders.
(b) The Company shall maintain, and shall cause its respective
Subsidiaries to maintain, insurance with reputable carriers against such risks
and in such amounts, and with such deductibles, retentions, self-
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insured amounts and co-insurance provisions, as are customarily carried by
similar businesses of similar size, including property and casualty loss,
workers' compensation and interruption of business insurance.
Section 4.10. LIMITATION ON ADDITIONAL INDEBTEDNESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur (as defined) any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness; PROVIDED
that, if no Default or Event of Default has occurred and is continuing at the
time or as a consequence of the incurrence of such Indebtedness, (1) the Company
and any Restricted Subsidiary may incur Indebtedness (including Acquired
Indebtedness), if after giving effect to the incurrence of such Indebtedness and
the receipt and application of the proceeds thereof, the Consolidated Fixed
Charge Coverage Ratio of the Company is at least 2.0 to 1 (the "COMPANY COVERAGE
RATIO EXCEPTION") and (2) notwithstanding that the Company and its Restricted
Subsidiaries may not be entitled to incur Indebtedness pursuant to clause (1)
above, Norcross and any of its Restricted Subsidiaries will be entitled to incur
Indebtedness (including Acquired Indebtedness), if after giving effect to the
incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, the Consolidated Fixed Charge Coverage Ratio of Norcross is at least
2.0 to 1 (the "NORCROSS COVERAGE RATIO EXCEPTION").
Section 4.11. LIMITATION ON RESTRICTED PAYMENTS.
(A) The Company shall not make, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, make, any Restricted
Payment, unless:
(1) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(2) if the Restricted Payment is made by the Company or any of its
Restricted Subsidiaries (other than Norcross or any of its Restricted
Subsidiaries), immediately before and after giving effect to such
Restricted Payment, the Company could incur $1.00 of additional
Indebtedness under the Company Coverage Ratio Exception or, if the
Restricted Payment is made by Norcross or any of its Restricted
Subsidiaries, immediately before, and after giving effect to such
Restricted Payment, Norcross could incur $1.00 of additional Indebtedness
under the Norcross Coverage Ratio Exception; and
(3) immediately after giving effect to such Restricted Payment,
the aggregate of all Restricted Payments declared or made after the Issue
Date (excluding payments made pursuant to clauses (2), (3), (4), (5), (6),
(7) and (8) of paragraph (B) below and 50% of the payments made pursuant to
clause (9) of paragraph (B) below) does not exceed the sum of
(a) if the Restricted Payment is made by the Company or
any of its Restricted Subsidiaries (other than Norcross and its
Restricted Subsidiaries), 50% of the Consolidated Net Income of the
Company accrued during the period (treated as one accounting period)
from the Issue Date to the end of the most recent fiscal quarter prior
to the date of such Restricted Payment (or, in case such Consolidated
Net Income shall be a deficit, minus 100% of such deficit), or, if the
Restricted Payment is made by Norcross or any of its Restricted
Subsidiaries, 50% of the Consolidated Net Income of Norcross accrued
during the period (treated as one accounting period) from March 31,
2003 to the end of the most recent quarter prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income shall be
a deficit, minus 100% of such deficit), plus
(b) 100% of the aggregate Net Proceeds and the fair market
value of securities or other property received by the Company from the
issue or sale, after the Issue Date, of Capital Stock of the Company
(other than Disqualified Capital Stock or Capital Stock of the Company
issued to any Subsidiary of the Company) or any Indebtedness or other
securities of the Company that have been converted or exercised or
exchanged for Capital Stock of the Company (other than Disqualified
Capital Stock), plus
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(c) without duplication of any amounts included in clause
(3)(b) above, 100% of the aggregate net proceeds of any equity
contribution received by the Company from a holder of the Company's
Capital Stock (excluding, in the case of clauses (3)(b) and (c), any
net cash proceeds from an Equity Offering to the extent used to redeem
the Notes, in compliance with the provisions set forth in Article 3
and paragraph 5 of the Notes), plus
(d) to the extent not included in the calculation of
Consolidated Net Income referred to in clause (3)(a) above, an amount
equal to, without duplication:
(i) 100% of the cash return of capital with respect
to any Investment received by the Company or any Restricted
Subsidiary upon the sale or other disposition of any
Investment (other than a Permitted Investment) made by the
Company or any Restricted Subsidiary since the Issue Date,
plus
(ii) the net reduction in Investments (other than
Permitted Investments) in any Person resulting from dividends,
repayments of loans or advances or other transfers of assets
subsequent to the Issue Date, in each case to the Company or
any Restricted Subsidiary from such Person, plus
(iii) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the cash return of
capital in respect of the net assets of such Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is
designated, or liquidated or merged into, a Restricted
Subsidiary,
PROVIDED, HOWEVER, that the sum of clauses (d)(i), (d)(ii) and
(d)(iii) above shall not exceed the aggregate amount of all
such Investments made subsequent to the Issue Date.
For purposes of determining under clause (3) above, the amount
expended for Restricted Payments, cash distributed shall be valued at the face
amount thereof and property other than cash shall be valued at its fair market
value determined, in good faith, by the Board of Directors of the Company.
(B) The provisions of this Section 4.11 shall not prohibit
(1) the payment of any dividend or other distribution within 60
days after the date of declaration thereof, if at such date of declaration
such dividend or other distribution would comply with the provisions of
this Indenture;
(2) the repurchase, redemption or other acquisition or retirement
of any shares of Capital Stock of the Company or subordinated Indebtedness
by conversion into, or by or in exchange for, shares of Capital Stock
(other than Disqualified Capital Stock), or out of the Net Proceeds of a
capital contribution or sale (other than to a Subsidiary of the Company) of
other shares of Capital Stock of the Company within 30 days (other than
Disqualified Capital Stock);
(3) the redemption or retirement of Indebtedness of the Company
subordinated in right of payment to the Notes in exchange for, by
conversion into or out of the Net Proceeds of an incurrence of Indebtedness
(other than any Indebtedness owed to a Subsidiary) of the Company within 30
days that is contractually subordinate in right of payment to the Notes to
at least the same extent as the subordinated Indebtedness being redeemed or
retired;
(4) the retirement of any shares of Disqualified Capital Stock by
conversion into, or by exchange for, shares of Disqualified Capital Stock,
or out of the Net Proceeds of a sale (other than to a Subsidiary of the
Company) of other shares of Disqualified Capital Stock within 30 days;
(5) so long as no Default or Event of Default shall have occurred
and be continuing, at the time of or immediately after giving effect to
such payment, the purchase, redemption or other acquisition
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for value of shares of Capital Stock (other than Disqualified Capital
Stock) or options on such shares of Capital Stock of the Company held by
officers or employees or former officers or employees (or their estates or
beneficiaries under their estates) of the Company or any of its
Subsidiaries upon the death, disability, retirement or termination of
employment of such current or former officers or employees; PROVIDED that
the aggregate cash consideration paid, or distributions or payments made,
for all such repurchased, redeemed, acquired or retired Equity Interests
shall not exceed in any calendar year $2.0 million (with unused amounts in
any calendar year being carried over to succeeding calendar years (without
giving effect to the following proviso)) or $7.5 million in the aggregate
from and after the Issue Date; PROVIDED FURTHER that such amount in any
calendar year may be increased by (i) the amount of the cash proceeds from
the sale of Capital Stock of the Company (to the extent the proceeds are
contributed to the capital of the Company) to members of management,
directors, employees or consultants of the Company and its Subsidiaries
that occurs after the Issue Date and (ii) the cash proceeds of any "key
man" life insurance policies used to make such repurchases;
(6) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Restricted Subsidiary with
the net cash proceeds from an incurrence of Refinancing Indebtedness;
(7) repurchases of Capital Stock deemed to occur upon the cashless
exercise of stock options and warrants;
(8) Restricted Payments (including, for the avoidance of doubt,
any Restricted Payments made on the Issue Date) in an aggregate amount not
to exceed the net proceeds to the Company from the Notes issued on the
Issue Date;
(9) Permitted Tax Distributions by the Company;
(10) payments required under the Management Side Letter Agreements,
PROVIDED that each such officer shall, immediately following his receipt
thereof, utilize the portion of such payment remaining after deducting
therefrom the maximum amount of federal, state and local income taxes that
he would be required to pay with respect to such payment to repay to the
Company the principal amount of the Management Notes;
(11) payments to enable the Company to make payments to holders of
its Capital Stock in lieu of fractional shares of its Capital Stock;
(12) the declaration and payment of dividends to holders of any
class or series of Preferred Stock issued in compliance with Section 4.19;
and
(13) so long as no Default shall have occurred and be continuing or
would be caused thereby, other Restricted Payments in an aggregate amount
not to exceed $5.0 million since the date of this Indenture.
(C) Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that
(1) such Restricted Payment is permitted and setting forth the
basis upon which the calculations required by this Section 4.11 were
computed, which calculations may be based upon the Company's latest
available financial statements, and
(2) to the extent that the absence of a Default or an Event of
Default is a condition to the making of such Restricted Payment, that no
Default or Event of Default exists and is continuing and no Default or
Event of Default will occur immediately after giving effect to any
Restricted Payments.
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Section 4.12. LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS
The Company will not permit any of its Restricted Subsidiaries to
Guarantee any Indebtedness of the Company or to secure any Indebtedness of the
Company with a Lien on the assets of such Restricted Subsidiary, unless
contemporaneously therewith (or prior thereto) effective provision is made to
Guarantee or secure the Notes, as the case may be, on an equal and ratable basis
with such Guarantee or Lien for so long as such Guarantee or Lien remains
effective; PROVIDED, HOWEVER, that any Guarantee by a Restricted Subsidiary of
subordinated Indebtedness of the Company shall be subordinated and junior in
right of payment to the contemporaneous Guarantee of the Notes by such
Restricted Subsidiary; PROVIDED FURTHER, however, that the Company shall not
permit a Restricted Subsidiary to Guarantee any Capital Stock of the Company.
Section 4.13. LIMITATION ON CERTAIN ASSET SALES.
(A) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such sale or other disposition at
least equal to the fair market value thereof;
(2) not less than 75% of the consideration received by the Company
or its Subsidiaries, as the case may be, is in the form of cash or
Temporary Cash Investments; PROVIDED that the following shall be deemed to
be cash for purposes of this clause (2):
(a) the amount (without duplication) of any Indebtedness
(other than subordinated Indebtedness) of the Company or such
Restricted Subsidiary that is either (i) expressly assumed by the
transferee in such Asset Sale and with respect to which the Company or
such Restricted Subsidiary, as the case may be, is unconditionally
released by the holder of such Indebtedness or (ii) in respect of
which the Company or any Restricted Subsidiary is otherwise released
from further liability by operation of law;
(b) the amount of any obligations received from such
transferee that are within 90 days repaid, converted into or sold or
otherwise disposed of for cash or Temporary Cash Investments (to the
extent of the cash or Temporary Cash Investments actually so
received); and
(c) any combination thereof.
(3) the Asset Sale Proceeds received by the Company or such
Restricted Subsidiary are applied no later than 435 days following the
consummation thereof, in an amount equal to all or any of the Asset Sale
Proceeds therefrom as follows:
(a) to repay Indebtedness of Norcross or any Restricted
Subsidiary, PROVIDED, HOWEVER that any such repayment shall result in
a permanent reduction of the commitments thereunder in an amount equal
to the principal amount so repaid; and/or
(b) to repay Indebtedness of a Wholly-Owned Foreign
Restricted Subsidiary from the proceeds of an Asset Sale by such
Wholly-Owned Foreign Restricted Subsidiary; and/or
(c) to acquire assets, including Capital Stock or other
securities purchased in connection with the acquisition of Capital
Stock, or property of another Person used or useful in businesses
similar or ancillary to the business of the Company or such Restricted
Subsidiary as conducted at the time of such Asset Sale, PROVIDED that
such acquisition of assets occurs prior to the 436th day following
receipt of such Asset Sale Proceeds (the "REINVESTMENT DATE").
(B) The amount of Available Asset Sale Proceeds not applied or
invested as provided in (A)(3) above will constitute "EXCESS PROCEEDS." When the
aggregate amount of Excess Proceeds equals or exceeds
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$10.0 million (at which time, the entire unutilized Excess Proceeds, and not
just the amount in excess of $10.0 million, shall be applied as required by this
clause (B)), the Company will be required to make an offer to purchase at a
purchase price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest from all Holders an aggregate principal amount of
Notes equal to the amount of such Excess Proceeds (an "EXCESS PROCEEDS OFFER")
in accordance with the procedures set forth in this Indenture.
Notwithstanding the foregoing provisions of this Section 4.13, if at
the time the Company would be required to make an Excess Proceeds Offer the
Company does not have access to the applicable Excess Proceeds as a result of a
restriction permitted under Section 4.17, then the Company shall have no
obligation to make the Excess Proceeds Offer to Holders.
(C) If the Company is required to make an Excess Proceeds Offer,
the Company shall mail, within 10 days following the Reinvestment Date, a notice
to the Holders. Such notice shall be sent by first-class mail, postage prepaid,
to the Trustee and to each Holder, at the address appearing in the register
maintained by the Registrar of the Notes, and shall state:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.13;
(2) that such Holders have the right to require the Company to
apply the Excess Proceeds to repurchase such Notes at a purchase price in
cash equal to 100% of the aggregate principal amount thereof plus accrued
and unpaid interest, if any, thereon to the date of purchase which shall be
no earlier than 30 days and not later than 60 days from the date such
notice is mailed (the "EXCESS PROCEEDS PAYMENT DATE");
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that any Notes accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest after the Excess Proceeds
Payment Date;
(5) that Holders accepting the offer to have their Notes purchased
pursuant to an Excess Proceeds Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day preceding
the Excess Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their acceptance of
the Excess Proceeds Offer if the Paying Agent receives, not later than the
close of business on the third Business Day preceding the Excess Proceeds
Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Notes delivered
for purchase, and a statement that such Holder is withdrawing his election
to have such Notes purchased;
(7) that if the aggregate principal amount of Notes surrendered by
Holders exceeds the amount of Excess Proceeds, Company shall select the
Notes to be purchased on a PRO RATA basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of
$1,000 or integral multiples thereof, shall be purchased);
(8) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, PROVIDED that each Note purchased and each such new
Note issued shall be in an original principal amount in denominations of
$1,000 and integral multiples thereof;
(9) the calculations used in determining the amount of Excess
Proceeds to be applied to the repurchase of such Notes;
(10) any other procedures that a Holder must follow to accept an
Excess Proceeds Offer or effect withdrawal of such acceptance; and
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(11) the name and address of the Paying Agent.
On the Excess Proceeds Payment Date, the Company shall, to the extent
lawful, (1) accept for payment, on a PRO RATA basis to the extent necessary,
Notes or portions thereof tendered pursuant to the Excess Proceeds Offer, (2) by
10:00 a.m., New York City time deposit with the Paying Agent U.S. legal tender
sufficient to pay the purchase price plus accrued and unpaid interest, if any,
on the Notes to be purchased or portions thereof and (3) deliver or cause to be
delivered to the Trustee, Notes so accepted together with an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 4.13. The
Paying Agent shall promptly mail or wire transfer to each Holder so accepted
payment in an amount equal to the purchase price for such Notes, and the Company
shall execute and issue, and the Trustee shall promptly authenticate and make
available for delivery to such Holder, a new Note equal in principal amount to
any unpurchased portion of the Notes surrendered; PROVIDED that each such new
Note shall be issued in an original principal amount in denominations of $1,000
and integral multiples thereof. The Company shall publicly announce the results
of the Excess Proceeds Offer on the Excess Proceeds Payment Date.
If an Excess Proceeds Offer is not fully subscribed, the Company may
retain the portion of the Excess Proceeds not required to repurchase Notes and
use such portion for general corporate purposes not otherwise prohibited by this
Indenture, and such retained portion will not be considered in the calculation
of Excess Proceeds with respect to any subsequent offer to purchase Notes. Upon
completion of each such Excess Proceeds Offer, the amount of Excess Proceeds
will be reset at zero.
(D) In the event of the transfer of substantially all of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor Person shall be deemed to have sold the properties and assets of the
Company and its Restricted Subsidiaries not so transferred for purposes of this
Section 4.13, and must comply with the provisions of this Section 4.13 with
respect to such deemed sale as if it were an Asset Sale.
(E) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an Excess Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.13, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.13 by virtue thereof.
Section 4.14. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(A) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into, amend or suffer
to exist any transaction or series of related transactions that are similar or
part of a common plan (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate (each, an
"AFFILIATE TRANSACTION") or extend, renew, waive or otherwise materially amend
or modify the terms of any Affiliate Transaction entered into prior to the Issue
Date unless:
(1) such Affiliate Transaction is between or among the Company
and/or its Restricted Subsidiaries, or
(2) the terms of such Affiliate Transaction are at least as
favorable as the terms that could be obtained by the Company or such
Restricted Subsidiary, as the case may be, in a comparable transaction made
on an arm's-length basis between unaffiliated parties.
In any Affiliate Transaction involving an amount or having a fair
market value in excess of $2.5 million that is not permitted under clause (1)
above, the Company must obtain a Board Resolution of the Board of Directors of
the Company certifying that such Affiliate Transaction complies with clause (2)
above. In any Affiliate Transaction involving an amount or having a fair market
value in excess of $7.5 million that is not permitted under clause (1) above
(other than any sale by the Company of its Capital
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Stock that is not Disqualified Capital Stock), the Company must obtain a written
opinion as to the fairness of such a transaction from an independent accounting,
appraisal or investment banking firm of national reputation in the United
States.
(B) The foregoing provisions shall not apply to
(1) any Restricted Payment that is not prohibited by Section 4.11;
(2) fees and compensation paid to, the reimbursement of expense
incurred by, and indemnity provided on behalf of, officers, directors,
employees or consultants of the Company, any Restricted Subsidiary as
determined in good faith by the Company's Board of Directors or senior
management and any employment agreement or other compensation arrangements
or agreements involving such persons;
(3) any agreement as in effect as of the Issue Date or any
amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) or in any replacement agreement thereto
so long as any such amendment or replacement agreement is not more
disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date;
(4) any transaction permitted under Section 5.01;
(5) any commercial banking, lending or investment banking
arrangements made with the Permitted Holders or Affiliates of the Permitted
Holders on arm's-length terms, including the purchase of $8.0 million of
Notes from the Issuers by CIVC and the receipt by CIVC of an advisory fee
on the Issue Date;
(6) the payment of reasonable and customary management, consulting
and advisory fees and related expenses up to a maximum of $1.0 million per
year;
(7) the payment of reasonable and customary advisory, closing and
transaction fees and related expenses (excluding the management fee
referred to in clause (6) above) including, but not limited to, in
connection with acquisitions, divestitures and financings by the Company or
any Restricted Subsidiary and approved by the Board of Directors, in good
faith;
(8) transactions with suppliers or other purchasers for the sale
or purchase of goods in the ordinary course of business that, in the
judgment of the Board of Directors, are on terms at least as favorable as
might reasonably have been obtained from an unaffiliated third party;
(9) issuance of Capital Stock or Indebtedness for cash or non-cash
consideration that is otherwise permitted under this Indenture to any
Person; and
(10) transactions with a Person that is an Affiliate of the Company
solely because the Company or any of its Restricted Subsidiaries owns
Capital Stock in such Person; PROVIDED that no Affiliate of the Company
(other than a Restricted Subsidiary) owns Capital Stock in such Person.
Section 4.15. LIMITATION ON LIENS.
The Company shall not create, incur or otherwise cause or suffer to
exist or become effective any Liens of any kind, other than Permitted Liens,
upon any property or asset of the Company (including any shares of stock or debt
of any Restricted Subsidiary), now owned or hereafter acquired, unless:
(1) if such Lien secures Indebtedness that is PARI PASSU with the
Notes, then the Notes are secured on an equal and ratable basis with the
obligations so secured until such time as such obligation is no longer
secured by a Lien; or
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(2) if such Lien secures Indebtedness that is subordinated to the
Notes, then the Notes are secured on a senior basis to the obligations so
secured until such time as such subordinated obligation is no longer
secured by a Lien.
Section 4.16. CHANGE OF CONTROL.
(A) If a Change of Control occurs, the Company shall be obligated
to make an offer to purchase (the "CHANGE OF CONTROL OFFER") each Holder's
outstanding Notes at a purchase price (the "CHANGE OF CONTROL PURCHASE PRICE")
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the Change of Control Payment Date in accordance with the procedures
set forth below; PROVIDED, HOWEVER, that notwithstanding the Change of Control,
the Company will not be obligated to offer to purchase the Notes pursuant to
this Section 4.16 if, prior to the time the Company would be required to offer
to purchase the Notes as a result of the Change of Control, the Company has
mailed the requisite irrevocable notice to redeem all of the outstanding Notes
pursuant to the provision described under Section 5(a) of the Notes.
(B) Within 30 days of the occurrence of a Change of Control, the
Company shall (i) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Jones News Service or similar business news service in the
United States, and (ii) send by first-class mail, postage prepaid, to the
Trustee and to each Holder, at the address appearing in the register maintained
by the Registrar of the Notes, a notice stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.16 and that all Notes tendered will be accepted for payment
and otherwise subject to the terms and conditions set forth in this Section
4.16;
(2) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "CHANGE OF CONTROL PAYMENT
DATE"));
(3) that any Note not tendered will remain outstanding and
continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change
of Control Purchase Price, any 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 accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their acceptance if
the Paying Agent receives, not later than the close of business on the
third 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 the Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have such Notes
purchased;
(7) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, PROVIDED that each Note purchased and each such new
Note issued shall be in an original principal amount in denominations in
integral multiples of $1.00;
(8) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
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On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustee Notes so
accepted together with an Officers' Certificate stating the Notes or portions
thereof tendered to the Company. The Paying Agent shall promptly mail or wire
transfer to each Holder so accepted payment in an amount equal to the purchase
price for such Notes, and the Company shall execute and issue and the Trustee
shall promptly authenticate and mail to such Holder, a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered; PROVIDED
that each such new Note shall be issued in an original principal amount in
denominations in integral multiples of $1.00.
(C) Prior to the mailing of the notice to Holders described in
clause (B) above, the Company covenants to
(1) repay in full all obligations and terminate all commitments
under or in respect of all senior Indebtedness or any Indebtedness of a
Restricted Subsidiary the terms of which prohibit the purchase by the
Company of the Notes upon a Change of Control in compliance with the terms
of this Section 4.16 or offer to repay in full all obligations and
terminate all commitments under or in respect of all such Indebtedness and
repay the Indebtedness owed to each such lender who has accepted such
offer; or
(2) obtain the requisite consents under all such senior
Indebtedness or any Indebtedness of a Restricted Subsidiary to permit the
repurchase of the Notes pursuant to this Section 4.16.
The Company must first comply with the covenant described in the
preceding sentence before it shall be required to purchase Notes in the event of
a Change of Control; PROVIDED that the Company's failure to comply with the
covenant described in the preceding sentence will constitute an Event of Default
described in Section 6.01(c) if not cured within 60 days after the notice
required by Section 6.01(c).
(D) (1) If the Company or any Subsidiary thereof has issued any
outstanding (i) Indebtedness that is subordinate in right of payment to the
Notes or (ii) Preferred Stock, and the Company or any Subsidiary is required to
make a change of control offer or to make a distribution with respect to such
subordinated Indebtedness or Preferred Stock in the event of a change of
control, the Company shall not consummate any such offer or distribution with
respect to such subordinated Indebtedness or Preferred Stock until such time as
the Company shall have paid the Change of Control Purchase Price in full to the
Holders that have accepted the Company's Change of Control Offer and shall
otherwise have consummated the Change of Control Offer made to Holders and (2)
the Company will not issue Indebtedness that is subordinated in right of payment
to the Notes or Preferred Stock with change of control provisions requiring the
payment of such Indebtedness or Preferred Stock prior to the payment of the
Notes in the event of a Change in Control under this Indenture.
(E) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
(F) The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes a Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in the Indenture applicable to a Change of Control Offer by the
Company and purchases all of the Notes validly tendered and not withdrawn under
such Change of Control Offer.
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Section 4.17. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
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
Restricted Subsidiary to
(1) pay dividends or make any other distributions to the Company
or any Restricted Subsidiary
(a) on its Capital Stock, or
(b) with respect to any other interest or participation in,
or measured by, its profits, or;
(2) repay any Indebtedness or any other obligation owed to the
Company or any Restricted Subsidiary;
(3) make loans or advances or capital contributions to the Company
or any of its Restricted Subsidiaries; or
(4) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries;
except for such encumbrances or restrictions existing under or by reason of:
(i) encumbrances or restrictions existing on the
Issue Date to the extent and in the manner such encumbrances
and restrictions were in effect on the Issue Date, including
without limitation pursuant to the Senior Credit Facility and
the Existing Norcross Indenture and any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof; PROVIDED
that any of the foregoing are not materially more restrictive
than those in effect on the Issue Date,
(ii) this Indenture and the Notes;
(iii) applicable law, rules or regulations;
(iv) any instrument governing Acquired Indebtedness,
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 (including
any Subsidiary of the Person), so acquired;
(v) customary provisions in leases or other
agreements entered in the ordinary course of business;
(vi) Refinancing Indebtedness; PROVIDED that such
restrictions are not materially more restrictive than those
contained in the agreements governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;
(vii) customary restrictions in security agreements or
mortgages securing Indebtedness of the Company or a Restricted
Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements
and mortgages;
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(viii) customary restrictions with respect to a
Restricted Subsidiary pursuant to an agreement that has been
entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such
Restricted Subsidiary;
(ix) any agreement relating to a Sale and
Lease-Back Transaction, a Capitalized Lease Obligation or
Purchase Money Indebtedness, but only on the property subject
to such Sale and Lease-Back Transaction, Capitalized Lease
Obligation or Purchase Money Indebtedness and only to the
extent that such restrictions or encumbrances are customary
with respect to a Sale and Lease-Back Transaction, Capitalized
Lease Obligation or Purchase Money Indebtedness;
(x) any other agreement, instrument or document
relating to senior Indebtedness hereafter in effect, PROVIDED
that the terms and conditions of such encumbrances or
restrictions are not materially more restrictive taken as a
whole than those encumbrances or restrictions imposed in
connection with the Senior Credit Facility as in effect on the
date of this Indenture (which may result in encumbrances or
restrictions that are not more restrictive than those
applicable to the Company at a Restricted Subsidiary); or
(xi) encumbrances or restrictions contained in any
Indebtedness incurred by a Foreign Subsidiary that apply only
to such Foreign Subsidiary.
Section 4.18. LIMITATION ON CONDUCT OF BUSINESS.
The Company and its Restricted Subsidiaries shall not engage in any
businesses which are not the same, similar, ancillary, related to or constitute
a reasonable extension of the businesses in which the Company and its Restricted
Subsidiaries are engaged in on the Issue Date. The Company shall at all times
directly or indirectly own 100% of the Capital Stock of Norcross.
Capital will not engage in any business or activities other than as
necessary to (1) maintain its corporate existence and (2) perform its
obligations under the Notes, the Exchange Notes, this Indenture, the
Registration Rights Agreement and the CIVC Registration Rights Agreement.
Section 4.19. LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES.
The Company shall not permit any Restricted Subsidiary that is not a
Guarantor to issue any Preferred Stock (except Preferred Stock issued to the
Company or a Wholly-Owned Restricted Subsidiary) or permit any Person (other
than the Company or a Wholly-Owned Restricted Subsidiary) to hold any such
Preferred Stock unless the Company or such Restricted Subsidiary would be
entitled to incur or assume Indebtedness under Section 4.10 (other than
Permitted Indebtedness) in an aggregate principal amount equal to the aggregate
liquidation value of the Preferred Stock to be issued.
Section 4.20. [RESERVED].
Section 4.21. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into any Sale and Lease-Back Transaction unless:
(1) the consideration received in such Sale and Lease-Back
Transaction is at least equal to the fair market value of the property
sold,
(2) the Company or such Restricted Subsidiary, as applicable,
could incur the Attributable Indebtedness in respect of such Sale and
Lease-Back Transaction in compliance with Section 4.10, and
(3) any proceeds are applied in accordance with Section 4.13.
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Section 4.22. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or agreed to be paid to all Holders which so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or amendment.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. LIMITATION ON CONSOLIDATION, MERGER AND SALE OF ASSETS.
The Company shall not consolidate with, merge with or into, or
transfer all or substantially all of its assets (as an entirety or substantially
as an entirety in one transaction or a series of related transactions) to, any
Person unless:
(a) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the
Company is merged or to which the properties and assets of the Company are
transferred shall be a corporation, limited liability company or limited
partnership organized and existing under the laws of the United States or
any State thereof or the District of Columbia and shall expressly assume,
by a supplemental Indenture, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all of the obligations of the
Company under this Indenture, the Notes and the obligations under this
Indenture shall remain in full force and effect; PROVIDED, that at any time
the Company or its successor is a limited partnership or a limited
liability company, there shall be a co-issuer of the Notes that is a
corporation;
(b) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and
(c) immediately after giving effect to such transaction and the
use of any net proceeds therefrom, the Company or such Person shall be able
to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Company Coverage Ratio Exception;
PROVIDED that this Section 5.01 shall not prohibit a Restricted Subsidiary from
merging into or transferring all or parts of its properties and assets to the
Company or another Restricted Subsidiary.
In connection with any consolidation, merger or transfer of assets
contemplated by this provision, the Issuers shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and the supplemental Indenture in respect
thereof comply with this provision and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
Section 5.02. SUCCESSOR PERSON SUBSTITUTED.
Upon any consolidation, merger, conveyance or any transfer of all or
substantially all of the assets of either of the Issuers in accordance with
Section 5.01 above, the successor entity formed by such consolidation or into
which either of the Issuers or any such Restricted Subsidiary is merged or to
which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuers or such Restricted Subsidiary, as
the case may be, under this Indenture with the same effect as if such successor
entity had been named as either of the Issuers or such Restricted Subsidiary, as
the case may be herein, and thereafter the predecessor entity shall be relieved
of all obligations and covenants under this Indenture and the Notes.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if
(a) there is a default in the payment of any principal of, or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon acceleration or redemption or otherwise;
(b) there is a default in the payment of any interest on any Note
when the same becomes due and payable and the default continues for a
period of 30 days;
(c) there is a default by the Issuers or a Guarantor, if any, in
the observance or performance of any other covenant in the Notes or this
Indenture for 30 days after written notice from the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Notes then
outstanding (except in the case of a default with respect to Section 4.16
or 5.01 which shall constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(d) there is a default in the payment at final maturity (after
giving effect to any applicable grace periods) of principal in the
aggregate amount of $10.0 million or more with respect to any Indebtedness
of the Company or any Restricted Subsidiary thereof or the acceleration of
any such Indebtedness aggregating $10.0 million or more, which default
shall not be cured, waived or postponed pursuant to an agreement with the
holders of such Indebtedness within 30 days after written notice as
provided in this Indenture, or such acceleration shall not be rescinded or
annulled within 15 days after written notice as provided in this Indenture;
(e) any final judgment or judgments that can no longer be appealed
for the payment of money in excess of $10.0 million shall be rendered
against the Company or any Restricted Subsidiary thereof, and shall not be
discharged for any period of 60 consecutive days during which a stay of
enforcement shall not be in effect;
(f) either of the Issuers or any of their Significant Subsidiaries
or any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary thereof pursuant to or within the
meaning of any 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,
(E) generally is not able to pay its debts as they become
due, or
(F) takes any corporate action to authorize or effect any
of the foregoing;
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
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(A) is for relief against the Issuers or any Restricted
Subsidiary in an involuntary case,
(B) appoints a Custodian of either of the Issuers or any
Restricted Subsidiary or for all or substantially all of the Property
of the Issuers or any Restricted Subsidiary, or
(C) orders the liquidation of either of the Issuers or any
Restricted Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; and
(h) any of the Guarantees, if any exist (other than a Guarantee
issued by a Subsidiary that is not a Significant Subsidiary) ceases to be
in full force and effect or any of the Guarantees (other than a Guarantee
issued by a Subsidiary that is not a Significant Subsidiary) is declared to
be null and void and unenforceable or any of the Guarantees is found to be
invalid or any of the Guarantors denies in writing its liability under its
Guarantee (other than by reason of release of a Guarantor in accordance
with the terms of this Indenture).
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default of the type
described in Section 6.01(f) or (g)) shall have occurred and be continuing, then
the Trustee, by written notice to the Company, or the Holders of not less than
25% in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and the Trustee, may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued and unpaid interest, if any, to the date of acceleration, PROVIDED, that
after such acceleration but before a judgment or decree based on such
acceleration is obtained by the Trustee, the Holders of a majority in aggregate
principal amount of outstanding Notes may rescind and annul such acceleration if
(1) all Events of Default, other than nonpayment of accelerated
principal, premium, if any, or interest that has become due solely because
of the acceleration, have been cured or waived;
(2) to the extent the payment of such interest is lawful, interest
on overdue installments of interest and overdue principal, which has become
due otherwise than by such declaration of acceleration, has been paid;
(3) the Issuers have paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances;
and
(4) in the event of the cure or waiver of an Event of Default of
the type described in Section 6.01(f) or (g) above, the Trustee shall have
received an Officers' Certificate and an Opinion of Counsel that such Event
of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto. In case an Event of Default of the type described in Section
6.01(f) or (g) above shall occur, the principal, premium and interest amount
with respect to all of the Notes shall be due and payable immediately without
any declaration or other act on the part of the Trustee or the Holders.
Section 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or premium, if any, and interest on the Notes or
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to enforce the performance of any provision of the Notes or this Indenture and
may take any necessary action requested of it as Trustee to settle, compromise,
adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
Section 6.04. WAIVER OF PAST DEFAULTS AND EVENTS OF DEFAULT.
Subject to Sections 2.09, 6.02, 6.07 and 8.02, the Holders of a
majority in principal amount of the Notes then outstanding have the right to
waive past Defaults under this Indenture EXCEPT a Default in the payment of the
principal of, or interest or premium, if any, on any Note as specified in
clauses (a) and (b) of Section 6.01 or in respect of a covenant or a provision
which cannot be modified or amended without the consent of all Holders as
provided for in Section 8.02. The Issuers shall deliver to the Trustee an
Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Issuers, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Notes, respectively. This
paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Notes, as permitted by the TIA.
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 Event of Default or impair any right consequent thereto.
Section 6.05. CONTROL BY MAJORITY.
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Notes have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee by this Indenture. The Trustee,
however, may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines may be unduly prejudicial to the rights
of another Holder not taking part in such direction, and the Trustee shall have
the right to decline to follow any such direction if the Trustee, being advised
by counsel, determines that the action so directed may not lawfully be taken or
if the Trustee in good faith shall, by a Trust Officer, determine that the
proceedings so directed may involve it in personal liability; PROVIDED that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any action or
follows any direction pursuant to this Indenture, the Trustee shall be entitled
to indemnification reasonably satisfactory to it against any loss or expense
caused by taking such action or following such direction. This Section 6.05
shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
Section 6.06. LIMITATION ON SUITS.
Subject to Section 6.07 below, no Holder shall have any right to
institute any proceeding with respect to this Indenture or any remedy thereunder
unless:
(1) such Holder has given the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of
the outstanding Notes have made a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
reasonably satisfactory to the Trustee against any loss, liability or
expense which may be incurred in compliance with such request;
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(4) the Trustee fails to institute such proceeding within 60 days
after receipt of such notice and the offer of indemnity; and
(5) the Trustee has not received directions inconsistent with such
written request during such 60-day period by the Holders of a majority in
aggregate principal amount of the outstanding Notes.
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 of, or premium, if any, or accrued
interest of any Note held by such Holder on or after the respective due dates
expressed in such Note, or to bring suit for the enforcement of any such payment
on or after such respective dates, is absolute and unconditional and shall not
be impaired or affected without the consent of the Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuers for the whole amount of unpaid principal, premium and accrued interest
remaining unpaid, together with, to the extent that payment of such interest is
lawful, interest on overdue principal and interest on overdue installments of
interest, in each case at the rate set forth in Section 4.01, and such further
amounts 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 may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuers (or any
other obligor upon the Notes), their creditors or their property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent that any such charges and
expenses are not paid out of the estate in any such proceedings 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.
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 or
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceedings.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: if the Holders are forced to proceed against the Issuers or
any Guarantor directly without the Trustee, to Holders for their collection
costs;
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THIRD: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes; and
FOURTH: to the Issuers or, to the extent the Trustee collects any
amounts from any Guarantor, to such Guarantor.
The Trustee, upon prior written notice to the Issuers, 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 Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in principal
amount of the Notes then outstanding.
ARTICLE 7
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) 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.
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(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have grounds in its sole discretion for believing that repayment of
such funds is not assured to it or it does not receive from such Holders an
indemnity or security satisfactory to it against such risk, liability, loss, fee
or expense which might be incurred by it in compliance with such request or
direction.
(e) Whether or not herein expressly provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Issuers. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely on any document reasonably 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 with respect
to any matters contemplated by this Indenture or the Notes it may consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, or both, which shall conform to the provisions of Section 13.05.
The Trustee shall be protected and shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or
opinion.
(c) The Trustee may act through attorneys and agents and shall not
be responsible for the misconduct or negligence of any attorney or agent
(other than an agent who is an employee of the Trustee) so long as the
appointment of such agent was made with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may make loans to, accept deposits from, perform
services for or otherwise deal with the Issuers, or any Affiliates thereof, with
the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. The Trustee, however, shall be subject to Sections 7.10 and
7.11.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the sale of Notes or any
money paid to the Issuers pursuant to the terms of this Indenture and it shall
not be responsible for any statement of the Issuers in this Indenture or the
Notes other than the Trustee's certificate of authentication.
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Section 7.05. NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing and if a
Trust Officer of the Trustee has actual knowledge of such Default or Event of
Default, the Trustee shall mail to each Holder notice of the uncured Default or
Event of Default within 30 days after such Default or Event of Default occurs.
Except in the case of a Default or an Event of Default in payment of principal
of, premium or interest on, any Note, including an accelerated payment and the
failure to make payment on the Change of Control Payment Date pursuant to a
Change of Control Offer or on the Excess Proceeds Payment Date pursuant to an
Excess Proceeds Offer and, except in the case of a failure to comply with
Article 5, the Trustee may withhold the notice if and so long as its Board of
Directors, the executive committee of its Board of Directors or a committee of
its directors and/or Trust Officers in good faith determines that withholding
the notice is in the interest of the Holders. This Section 7.05 shall be in lieu
of the proviso to Section 315(b) of the TIA, and such proviso of Section 315(b)
of the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS.
If required by TIA Section 313(a), within 60 days after May 15 of any
year, commencing the May 15 following the date of this Indenture, the Trustee
shall mail to each Holder a brief report dated as of such May 15 that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b),
(c) and (d).
Reports pursuant to this Section 7.06 shall be transmitted by mail:
(1) to all registered Holders, as the names and addresses of such
Holders appear on the Registrar's books; and
(2) to such Holders as have, within the two years preceding such
transmission, filed their names and addresses with the Trustee for that
purpose.
A copy of each report at the time of its mailing to Holders shall be
filed with the Commission and each stock exchange, if any, on which the Notes
are listed. The Issuers shall promptly notify the Trustee when the Notes are
listed on any stock exchange or of any delisting thereof.
Section 7.07. COMPENSATION AND INDEMNITY.
The Issuers shall pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Issuers and the Trustee
for the Trustee's services. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuers shall
reimburse the Trustee upon request for all reasonable fees and expenses,
including out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under this Indenture or in connection with the
collection of any funds. Such expenses shall include the reasonable fees and
expenses of the Trustee's agents and counsel.
The Issuers shall indemnify each of the Trustee and its agents,
employees, stockholders and directors and officers for, and hold them harmless
against, any loss, liability or expense incurred by them except for such actions
to the extent caused by any gross negligence, bad faith or willful misconduct on
their part, arising out of or in connection with the administration of this
trust including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance of
any of their rights, powers or duties hereunder. The Trustee shall notify the
Issuers promptly, in writing, of any claim asserted against the Trustee for
which it may seek indemnity. At the Trustee's sole discretion, the Issuers may
defend the claim and the Trustee shall cooperate and may participate in the
defense; PROVIDED that any settlement of a claim shall be approved in writing by
the Trustee. The Issuers need not pay for any settlement made without their
written consent, which consent shall not be unreasonably withheld. The Issuers
need not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its gross negligence, bad faith or
willful misconduct.
To secure the Issuers' payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or
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money held in trust to pay principal of, premium or interest on particular
Notes. The obligations of the Issuers and the Guarantors, if any, under this
Section 7.07 shall not be subordinated to the payment of senior Indebtedness.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The obligations of the Issuers under this Section 7.07 shall survive
the resignation or removal of the Trustee and the satisfaction and discharge of
this Indenture.
Section 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Issuers in
writing. The Holders of a majority in principal amount of the outstanding Notes
may remove the Trustee by so notifying the Trustee and the Issuers in writing
and may appoint a successor Trustee. The Issuers may remove the Trustee at their
election if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee otherwise 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 Trustee in such event being referred to
herein as the retiring Trustee), the Issuers 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 Notes may appoint a successor Trustee
to replace the successor Trustee appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition, at the expense of the Issuers, any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 shall continue for the benefit
of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY CONSOLIDATION, MERGER OR CONVERSION.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, subject to this Article 7, the successor corporation without any
further act shall be the successor Trustee.
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Section 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The Trustee shall
have a combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of TIA Section 310(b), the
Trustee and the Issuers shall comply with the provisions of TIA Section 310(b);
PROVIDED, HOWEVER, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Issuers are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, the Trustee shall resign
immediately in the manner and with the effect hereinbefore specified in this
Article 7.
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Issuers as
obligors of the Notes.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. WITHOUT CONSENT OF HOLDERS.
The Issuers, when authorized by a Board Resolution, and the Trustee
may amend or supplement this Indenture, the Notes or the Guarantees, if any,
without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; PROVIDED that
such amendment or supplement does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to provide for uncertificated Notes in addition to or in place
of Certificated Notes;
(3) to comply with Article 5;
(4) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit
or rights to the Holders;
(6) to add to the covenants of the Issuers for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Issuers;
(7) to secure the Notes pursuant to the requirements of Section
4.15 or otherwise; or
(8) to make any other change that does not adversely affect the
rights of any Holder under this Indenture.
Section 8.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, the Issuers, when each is authorized by a
Board Resolution of their respective Boards of Directors, and the Trustee may
amend or supplement this Indenture or the Notes with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes.
Subject to Section 6.07,
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the Holders of a majority in principal amount of the outstanding Notes may waive
compliance by the Issuers, with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver to this Indenture or the Notes;
(2) reduce the rate of or change the time for payment of interest,
including Additional Interest and defaulted interest, on any Note;
(3) reduce the principal of or premium on or change the stated
maturity of any Note;
(4) make any Note payable in money other than that stated in the
Note or change the place of payment from New York, New York;
(5) change the amount or time of any payment required by the Notes
or reduce the premium payable upon any redemption of Notes, or change the
time before which no such redemption may be made;
(6) waive a default in the payment of the principal of, or
interest on or redemption payment with respect to any Note;
(7) after the Issuers' obligation to purchase Notes arises
thereunder, amend, change, or modify in any material respect the obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate an Excess Proceeds
Offer with respect to any Asset Sale that has been consummated or modify
any of the provisions of the definitions with respect thereto;
(8) take any other action otherwise prohibited by this Indenture
to be taken without the consent of each Holder affected thereby;
(9) affect the ranking of the Notes or the Guarantees, if any, in
a manner adverse to the Holders; or
(10) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of
this Indenture.
After an amendment, supplement or waiver under this Section 8.02
becomes effective, the Issuers shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver. Any failure of the Issuers to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
Upon the request of the Issuers, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
receipt by 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 8.06, the Trustee shall join with the Issuers and
Guarantors, if any, in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture, in which case the Trustee may in its discretion, but shall
not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 8.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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Section 8.03. COMPLIANCE WITH TIA.
Every amendment to or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
Section 8.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Issuers received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Issuers may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (9) of Section 8.02, in which case, the amendment, supplement or waiver
shall bind only each Holder who has consented to it and every subsequent Holder
of a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note; PROVIDED that any such waiver shall not impair or affect the
right of any Holder to receive payment of principal of and interest on a Note,
on or after the respective due dates expressed in such Note, or to bring suit
for the enforcement of any such payment on or after such respective dates
without the consent of such Holder.
Section 8.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement, or waiver changes the terms of a Note,
the Trustee may request the Holder to deliver it to the Trustee. In such case,
the Trustee shall place an appropriate notation on the Note about the changed
terms and return it to the Holder. Alternatively, if the Issuers or the Trustee
so determine, in exchange for the Note the Issuers shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment supplement or waiver.
Section 8.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article 8 is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Issuers
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
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ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and shall cease to be of further
effect (except those obligations referred to in the penultimate paragraph of
this Section 9.01) as to all outstanding Notes and the Trustee, on written
demand of and at the expense of the Issuers, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when either:
(a) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.07 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuers and thereafter repaid to the Issuers or
discharged from such trust) have been delivered to the Trustee for
cancellation; or
(b) (i) either (A) pursuant to Article 3, the Issuers shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Notes under arrangements
satisfactory to the Trustee for the giving of such notice or (B) all Notes
not theretofore delivered to the Trustee for cancellation have become due
and payable; (ii) the Issuers have irrevocably deposited or caused to be
deposited with the Trustee in trust an amount of U.S. legal tender or U.S.
Government Obligations sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and interest on the
Notes to the date of such deposit; (iii) no Default or Event of Default
with respect to this Indenture or the Notes shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Issuers are a
party or by which they are bound; (iv) the Issuers have paid or caused to
be paid all other sums payable hereunder by the Issuers; (v) the Issuers
have delivered to the Trustee (A) irrevocable instructions to apply the
deposited money toward payment of the Notes at the maturity or redemption
thereof, and (B) an Officers' Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with; and
(vi) that from and after the time of deposit, the money deposited shall not
be subject to the rights of holders of Indebtedness including, without
limitation, those arising under this Indenture.
Notwithstanding the foregoing paragraph, the Issuers' obligations in
Article 2 and Sections 4.01, 4.07, 7.07, 9.06 and 9.07 shall survive until the
Notes are no longer outstanding pursuant to the last paragraph of Section 2.08.
After the Notes are no longer outstanding, the Issuers' obligations in Sections
7.07, 9.06 and 9.07 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Issuers' obligations under the
Notes and this Indenture except for those surviving obligations specified above.
Section 9.02. LEGAL DEFEASANCE.
(a) The Issuers may, at their option by Board Resolution of the
Board of Directors of the Issuers, at any time, elect to have this section be
applied to all outstanding Notes upon compliance with the conditions set forth
in Section 9.04.
(b) Upon the Issuers' exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 9.04, be deemed to have been
discharged from their respective obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that
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the Issuers shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 9.05 and the other Sections of
this Indenture referred to in (i) and (ii) below, and to have satisfied all
their other respective obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), and Holders and any amounts deposited under
Section 9.04 shall cease to be subject to any obligations to, or the rights of,
any holder of Indebtedness including, without limitation, those arising under
this Indenture, except for the following provisions, which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
9.05, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments are
due, (ii) the Issuers' obligations with respect to such Notes under Article 2
and Section 4.07, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuers' obligations in connection therewith and (iv)
this Article 9. Subject to compliance with this Article 9, the Issuers may
exercise their option under this Section 9.02 notwithstanding the prior exercise
of its option under Section 9.03 below with respect to the Notes.
Section 9.03. COVENANT DEFEASANCE.
(a) The Issuers may, at their option by Board Resolution of the
Board of Directors of the Issuers, at any time, elect to have this Section be
applied to all outstanding Notes upon compliance with the conditions set forth
in Section 9.04.
(b) Upon the Issuers' exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 9.04, be released from their
respective obligations under the covenants contained in Sections 4.05, 4.08,
4.09 and 4.10 through 4.22, inclusive, and Article 5 with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "COVENANT DEFEASANCE"), and the 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 and Holders and any amounts deposited under
Section 9.04 shall cease to be subject to any obligations to the rights of, any
holder of Indebtedness including, without limitation, those arising under this
Indenture or otherwise. For this purpose, such Covenant Defeasance means that,
with respect to the outstanding Notes, the Issuers 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 or Default
under Section 6.01(c), but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Issuers exercise under paragraph (a) hereof of the option applicable to this
paragraph (b), subject to the satisfaction of the conditions set forth in
Section 9.04, Sections 6.01(c), 6.01(d) and 6.01(e) shall not constitute Events
of Default.
Section 9.04. CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 9.02 or 9.03 to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee (or
other qualifying trustee), in trust, for the benefit of the Holders, U.S.
legal tender or U.S. Government Obligations, 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 Notes on the scheduled due dates or on
the applicable Redemption Date, as the case may be, PROVIDED that the
Trustee shall have received an irrevocable written order from the Issuers
instructing the Trustee to apply such U.S. legal tender or the proceeds of
such U.S. Government Obligations to said payments with respect to the
Notes;
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(b) in the case of an election under Section 9.02, the Issuers
shall have delivered to the Trustee an Opinion of Counsel acceptable to the
Trustee confirming that (i) the Issuers have received from, or there has
been published by, the Internal Revenue Service a ruling or (ii) since the
date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, Legal Defeasance and discharge 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 deposit, Legal Defeasance and discharge
had not occurred;
(c) in the case of an election under Section 9.03, the Issuers
shall have delivered to the Trustee an Opinion of Counsel confirming that
the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, Covenant Defeasance and discharge 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 deposit,
Covenant Defeasance and discharge had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 6.01(f) and
6.01(g) are concerned, at any time in the period ending on the 91st day
after the date of such deposit or, if longer, ending on the day following
the expiration of the longest preference period under any Bankruptcy Law
(it being understood that this condition shall not be deemed to be
satisfied until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the
intent of preferring the Holders over any other creditors of the Issuers or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(g) the Issuers 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;
(h) the Issuers shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Indebtedness of the Issuers, including, without
limitation, those arising under this Indenture, and (ii) assuming no
intervening event of the type described in Sections 6.01(f) and 6.01(g)
between the date of deposit and the 91st day following the deposit or, if
longer, ending on the day following the expiration of the longest
preference period under any Bankruptcy Law (it being understood that this
condition should not be deemed to be satisfied until the expiration of such
period) and further assuming that no Holder is an insider of either of the
Issuers, after the 91st day following the deposit or, if longer, ending on
the day following the expiration of the longest preference period under any
Bankruptcy Law (it being understood that this condition should not be
deemed to be satisfied until the expiration of such period), the trust
funds will not be subject to the effect of any applicable Bankruptcy Law;
(i) such Legal Defeasance or Covenant Defeasance shall not cause
the Trustee to have a conflicting interest for purposes of the TIA with
respect to any securities of the Issuers; and
(j) the Issuers shall have delivered to the Trustee an Opinion of
Counsel stating that, as a result of such Legal Defeasance or Covenant
Defeasance, neither the trust nor the Trustee will be required to register
as an investment company under the Investment Company Act of 1940, as
amended.
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Section 9.05. APPLICATION OF TRUST MONEY.
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 9.01 or 9.04 in respect
of the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent as the Trustee may determine, to the
Holders of such Notes, of all sums due and to become due thereon in respect of
principal, premium, if any, and accrued interest, but such money need not be
segregated from other funds except to the extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 9.01 or 9.04 or the principal, premium, if any,
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.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon a written
request of the Issuers in the form of an Officers' Certificate any money or U.S.
Government Obligations held by it as provided in Section 9.01 or 9.04 which, in
the opinion of a nationally-recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.06. REPAYMENT TO THE ISSUERS.
Subject to Sections 9.01, 9.02, 9.03, 9.04, 9.05 and 9.07, the Trustee
and the Paying Agent shall promptly pay to the Issuers upon request any excess
U.S. legal tender or U.S. Government Obligations held by them at any time and
thereupon shall be relieved from all liability with respect to such money. The
Trustee and the Paying Agent shall pay to the Issuers upon request any money
held by them for the payment of principal, premium, if any, or interest that
remains unclaimed for two years; PROVIDED that the Trustee or such Paying Agent,
before being required to make any payment, may at the expense of the Issuers
cause to be published once in a newspaper of general circulation in the City of
New York or mail to each Holder entitled to such money notice that such money
remains unclaimed, and that after a date specified therein which shall be at
least 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Issuers. After
payment to the Issuers, Holders entitled to such money must look to the Issuers
for payment as general creditors unless an applicable law designates another
Person.
Section 9.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. legal
tender or U.S. Government Obligations in accordance with Section 9.01, 9.02 or
9.03 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuers' obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 9 until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. legal tender or U.S. Government Obligations in
accordance with Section 9.01; PROVIDED, HOWEVER, that if the Issuers have made
any payment of principal of, premium, if any, or accrued interest on any Notes
because of the reinstatement of their obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
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ARTICLE 10
[RESERVED]
ARTICLE 11
[RESERVED]
ARTICLE 12
[RESERVED]
ARTICLE 13
MISCELLANEOUS
Section 13.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 13.02. NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Issuers:
NSP Holdings L.L.C.
2211 York Road
Suite 215
Oak Brook, Illinois 60521
Tel: (630) 572-5715
Fax: (630) 572-8518
Copy to:
Kirkland & Ellis LLP
200 E. Randolph Drive
Chicago, Illinois 60601
Attention: Dennis M. Myers, Esq., P.C.
Tel: (312) 861-2000
Fax: (312) 861-2200
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If to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890
Attention: Corporate Capital Markets
Tel: (302) 636-6016
Fax: (302) 636-4145
Or, in the case of surrender for registration of transfer or exchange
or for presentation for payment and where notices and demands to
or upon the Trustee in respect of the Notes and this Indenture
may be served, to the Trustee:
Computershare Trust Company of New York
88 Pine Street
New York, New York 10005
Attention: Mary Ann Louisi
Tel: (212) 701-7673
The Issuers or the Trustee by written notice to the others may
designate additional or different addresses for subsequent notices or
communications. Any notice or communication to the Issuers or the Trustee, shall
be deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five (5) days after mailing if sent by registered or certified
mail, postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee); PROVIDED,
HOWEVER, that notices to the Trustee shall be deemed given upon receipt.
Any notice or communication mailed to a Holder shall be mailed to him
by first-class mail, postage prepaid, at his address shown on the register kept
by the Registrar.
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 to a Holder is mailed in the manner provided above, it shall be
deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 13.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers to the Trustee to take
any action under this Indenture, the Issuers shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 13.05 below) stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
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(2) an Opinion of Counsel (which shall include the statements set
forth in Section 13.05 below) stating that, in the opinion of such counsel,
all such conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with.
Section 13.05. STATEMENTS REQUIRED IN OFFICERS' CERTIFICATE AND OPINION.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, it or he has
made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such covenant or condition has been complied with.
Section 13.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at meetings of
Holders. The Registrar and Paying Agent may make reasonable rules for their
functions.
Section 13.07. BUSINESS DAYS; LEGAL HOLIDAYS.
A "BUSINESS DAY" is a day that is not a Legal Holiday. A "LEGAL
HOLIDAY" is a Saturday, a Sunday, a federally-recognized holiday or a day on
which banking institutions are not required to be open in the State of New York,
the State of Illinois or the State of Delaware. 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.
Section 13.08. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Company or any Subsidiary thereof. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 13.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such,
of the Issuers or a Guarantor, if any, shall not have any liability for any
obligations of the Issuers and the Guarantors, if any, under the Notes, the
Guarantees, if any, or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their
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creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
Section 13.11. SUCCESSORS.
All agreements of each of the Issuers in this Indenture and the Notes
shall bind their respective successors. All agreements of the Trustee, any
additional trustee and any Paying Agents in this Indenture shall bind its
successor.
Section 13.12. MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
Section 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 13.14. SEPARABILITY.
Each provision of this Indenture shall be considered separable and if
for any reason any provision which is not essential to the effectuation of the
basic purpose of this Indenture or the 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.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed all as of the date and year first written above.
NSP HOLDINGS L.L.C.
By: /s/ ROBERT A. PETERSON
---------------------------------
Name: Robert A. Peterson
Title: President and Chief
Executive Officer
NSP HOLDINGS CAPITAL CORP.
By: /s/ ROBERT A. PETERSON
---------------------------------
Name: Robert A. Peterson
Title: President
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WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ JAMES J. MCGINLEY
---------------------------------
Name: James J. McGinley
Title: Authorized Signer
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EXHIBIT A
CUSIP No.:
11 3/4% SENIOR PAY IN KIND NOTES DUE 2012
No. $
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS
NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000
PRINCIPAL AMOUNT OF THIS NOTE, (1) THE ISSUE PRICE IS $1,000; (2) THE
AMOUNT OF THE ORIGINAL ISSUE DISCOUNT IS $820.54; (3) THE ISSUE DATE IS
JANUARY 7, 2005; AND (4) THE YIELD TO MATURITY IS 11.75% (COMPOUNDED
SEMI-ANNUALLY).
NSP HOLDINGS L.L.C., a Delaware limited liability company (the
"COMPANY") and NSP HOLDINGS CAPITAL CORP., a Delaware corporation
("CAPITAL" and, together with the Company, the "ISSUERS," which term
includes any successor entity), for value received promise to pay to CEDE &
CO. or registered assigns, the sum indicated on Schedule A hereof on
January 1, 2012.
Interest Payment Dates: January 1 and July 1, commencing July 1, 2005.
Record Dates: June 15 and December 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
A-1
<Page>
IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by their respective duly authorized officers and a
facsimile of their corporate seals to be affixed hereto or imprinted hereon.
NSP HOLDINGS L.L.C.
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
NSP HOLDINGS CAPITAL CORP.
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
A-2
<Page>
CERTIFICATE OF AUTHENTICATION
This is one of the 11 3/4% Senior Pay in Kind Notes due 2012 referred
to in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By:
---------------------------------
Authorized Signatory
A-3
<Page>
(REVERSE OF SECURITY)
11 3/4% SENIOR PAY IN KIND NOTE DUE 2012
1. INTEREST. NSP Holdings L.L.C., a Delaware limited liability
company (the "COMPANY") and NSP Holdings Capital Corp., a Delaware corporation
("CAPITAL" and, together with the Company, the "ISSUERS"), promise to pay
interest on the principal amount of this Note at the rate PER ANNUM shown above.
Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from the date of the original
issuance of the Notes. The Issuers will pay interest semi-annually in arrears on
each Interest Payment Date, commencing July 1, 2005. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Through and including
the interest payment date of January 1, 2010, accrued interest on all notes then
outstanding will be payable, at the Company's option, in cash or in the form of
additional notes (when issued in payment of interest or Additional Interest,
"PIK NOTES"). On and after the interest payment to be made on July 1, 2010,
accrued interest will be payable solely in cash. The PIK Notes will be identical
to the originally issued Notes, except that interest will begin to accrue from
the date they are issued rather than the Issue Date.
The Notes will be issued in denominations of $1,000 and integral
multiples of $1,000; PROVIDED, HOWEVER, that PIK Notes will be issued in
denominations of $1.00 and integral multiples of $1.00.
2. METHOD OF PAYMENT. The Issuers shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on June 15 or December 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
cancelled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that the Issuers may pay principal, premium,
if any, and interest (other than interest payable in PIK Notes) by check payable
in such money. The Issuers may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust
Company, a Delaware banking corporation (the "TRUSTEE"), will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
4. INDENTURE. The Issuers issued this Note under an Indenture,
dated as of January 7, 2005 (the "INDENTURE"), by and among the Issuers and the
Trustee. This Note is one of a duly authorized issue of Initial Notes of the
Issuers designated as their 11 3/4% Senior Pay in Kind Notes due 2012 (the
"NOTES"). The Notes include the Initial Notes, the Additional Notes and the
Exchange Notes (as defined below) issued in exchange for the Initial Notes and
Additional Notes pursuant to the Indenture. The Initial Notes, the Additional
Notes and the Exchange Notes are treated as a single class of securities under
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Notes are general unsecured
obligations of the Issuers.
5. REDEMPTION.
(a) OPTIONAL REDEMPTION WITH MAKE WHOLE PAYMENT. At any time prior
to July 1, 2006, the notes may be redeemed in whole or in part at the option of
the Company, upon not less than 30 or more than 60 days' prior notice, at a
redemption price equal to 100% of the principal amount thereof, plus the Make
Whole Premium and any accrued and unpaid interest thereon to the applicable
redemption date.
A-4
<Page>
(b) OPTIONAL REDEMPTION. The Issuers may redeem the Notes, at
their option, in whole at any time or in part from time to time, on and after
July 1, 2006 at the following Redemption Prices (expressed as percentages of the
principal amount thereof) if redeemed during the periods set forth below, plus,
in each case, accrued and unpaid interest thereon, if any, to the date of
redemption.
<Table>
<Caption>
Year Percentage
---- ----------
July 1, 2006 - June 30, 2007.............................. 103%
July 1, 2007 - June 30, 2008.............................. 102%
Thereafter................................................ 100%
</Table>
(c) OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. Notwithstanding the
foregoing, the Issuers may redeem in the aggregate up to 35% of the principal
amount of Notes at any time and from time to time prior to July 1, 2006 at a
Redemption Price equal to 111.75% of the aggregate principal amount so redeemed,
plus accrued and unpaid interest in cash, if any, to the Redemption Date out of
the Net Proceeds of one or more Equity Offerings; PROVIDED that
(1) at least 65% of the principal amount of Notes originally
issued remains outstanding immediately after the occurrence of any such
redemption and
(2) any such redemption occurs within 90 days following the
closing of such Equity Offering.
(d) MANDATORY PARTIAL REDEMPTION. On July 1, 2010, if any notes
are outstanding, the Company will be required to redeem, at a redemption price
of 100% of the principal amount of the notes so redeemed, a principal amount of
notes (the "MANDATORY PRINCIPAL REDEMPTION AMOUNT") sufficient to ensure that
the notes are not treated under the Code as "Applicable High Yield Discount
Obligations" for the ongoing deductibility of interest by the Company. The
Mandatory Principal Redemption Amount will be calculated as (i) the excess of
the aggregate principal amount of all notes outstanding on July 1, 2010, over
the original principal amount of notes issued on the Issue Date, less (ii) an
amount equal to one year's simple uncompounded interest on the aggregate
original principal amount of notes issued on the Issue Date. The Mandatory
Principal Redemption Amount will be applied as a partial redemption of each note
outstanding.
6. NOTICE OF REDEMPTION. Notice of redemption under paragraphs
5(a), (b), (c) and (d) of this Note will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder to be redeemed at such
Holder's registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Issuers default in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
7. OFFERS TO PURCHASE. The Indenture provides that, after certain
Asset Sales (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Issuers will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
8. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement by and among the Issuers and the Initial Purchasers, the Issuers will
be obligated to consummate an exchange offer pursuant to which the Holder of
this Note shall have the right to exchange this Note for the Issuers' Series B
11 3/4% Senior Pay in Kind Notes due 2012 (the "EXCHANGE NOTES"), which have
been registered under the Securities Act, in like principal amount and having
terms identical in all material respects to the Initial Notes. The Holders of
the Initial Notes shall be entitled to receive certain Additional Interest
payments in the event such exchange offer is not consummated and
A-5
<Page>
upon certain other conditions, all pursuant to and in accordance with the terms
of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Initial Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof , PROVIDED, HOWEVER, that the PIK Notes will be issued in
denominations of $1.00 and integral multiples of $1.00. A Holder shall register
the transfer or exchange of Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered holder of a Note shall
be treated as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Issuers. After that, Holders entitled to money must
look to the Issuers for payment as general creditors unless an "abandoned
property" law designates another person.
12. LEGAL DEFEASANCE AND COVENANT DEFEASANCE. If the Issuers at
any time deposit with the Trustee U.S. legal tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating to defeasance, the Issuers will be discharged from certain provisions
of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
13. AMENDMENTS, SUPPLEMENTS, AND WAIVERS. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change
that does not adversely affect in any material respect the rights of any Holder.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock, enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, sell assets, create liens, issue
capital stock, enter into sale and lease-back transactions, make certain
Investments, merge or consolidate with any other Person, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets. Such limitations are subject to a number of important qualifications and
exceptions. The Issuers must annually report to the Trustee on compliance with
such limitations.
15. SUCCESSOR ENTITY. When a successor entity assumes, in
accordance with the Indenture, all the obligations of its predecessor under the
Notes and the Indenture, and immediately before and thereafter no Default or
Event of Default exists and certain other conditions are satisfied, the
predecessor entity will be released from those obligations.
16. DEFAULTS AND REMEDIES. Events of Default are set forth in the
Indenture. If an Event of Default (other than an Event of Default pursuant to
Section 6.01(f) or (g) of the Indenture) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding, may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration; PROVIDED, HOWEVER, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due
A-6
<Page>
solely because of the acceleration, have been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto. In case an Event of Default specified in Section 6.01(f) or (g) of the
Indenture occurs, such principal amount, together with premium, if any, and
interest with respect to all of the Notes, shall be due and payable immediately
without any declaration or other act on the part of the Trustee or the Holders.
The Trustee is not obligated to enforce the Indenture or the Notes unless it has
received indemnity reasonably satisfactory to it.
17. TRUSTEE DEALINGS WITH ISSUERS. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Issuers, and may otherwise deal with
the Company, its Subsidiaries or their respective Affiliates as if it were not
the Trustee.
18. NO RECOURSE AGAINST OTHERS. As more fully described in the
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Issuers shall have any liability for any obligation of the Issuers under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
19. AUTHENTICATION. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
21. ABBREVIATIONS AND DEFINED TERMS. 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).
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. INDENTURE. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture which has the text of this Note in larger
type. Requests may be made to: NSP Holdings L.L.C., 2211 York Road, Suite 215,
Oak Brook, Illinois 60523, Attention: Chief Financial Officer.
A-7
<Page>
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount at maturity of this Note shall be $__________. The
following decreases/increases in the principal amount at maturity of this Note
have been made:
<Table>
<Caption>
Total Principal
Decrease in Principal Amount at Maturity
Date of Increase/ Amount at Increase in Principal Following such Notation Made by or
Decrease Maturity Amount at Maturity Increase/ Decrease on Behalf of Trustee
- --------------------------------------------------------------------------------------------------------------------
</Table>
A-8
<Page>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________________________,
agent to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.
Date: Signed:
---------- --------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Note)
Medallion Guarantee:
----------------------------
A-9
<Page>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.13 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.13 / /
Section 4.16 / /
If you want to elect to have only part of this Note purchased by the
Issuers pursuant to Section 4.13 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$ _______________
<Table>
Date:
------------------------- --------------------------------------------------------
NOTICE: The signature on this assignment must correspond
with the name as it appears upon the face of the within Note in
every particular without alteration or enlargement or any
change whatsoever and be guaranteed by the endorser's bank
or broker.
</Table>
Medallion Guarantee:
----------------------------------------
A-10
<Page>
EXHIBIT B
CUSIP No.:
11 3/4% SENIOR PAY IN KIND NOTES DUE 2012
No. $
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS
NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000
PRINCIPAL AMOUNT OF THIS NOTE, (1) THE ISSUE PRICE IS $1,000; (2) THE
AMOUNT OF THE ORIGINAL ISSUE DISCOUNT IS $820.54; (3) THE ISSUE DATE IS
JANUARY 7, 2005; AND (4) THE YIELD TO MATURITY IS 11.75% (COMPOUNDED
SEMI-ANNUALLY).
NSP HOLDINGS L.L.C., a Delaware limited liability company (the
"COMPANY") and NSP CAPITAL HOLDINGS CORP., a Delaware corporation ("CAPITAL"
and, together with the Company, the "ISSUERS," which term includes any successor
entity), for value received promise to pay to CEDE & CO. or registered assigns,
the sum indicated on Schedule A hereof on January 1, 2012.
Interest Payment Dates: January 1 and July 1, commencing July 1,
2005.
Record Dates: June 15 and December 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
B-1
<Page>
IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by their respective duly authorized officers and a
facsimile of their corporate seals to be affixed hereto or imprinted hereon.
NSP HOLDINGS L.L.C.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
NSP HOLDINGS CAPITAL CORP.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
B-2
<Page>
CERTIFICATE OF AUTHENTICATION
This is one of the 11 3/4% Senior Pay in Kind Notes due 2012 referred
to in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By:
------------------------------------
Authorized Signatory
B-3
<Page>
(REVERSE OF SECURITY)
11 3/4% SENIOR PAY IN KIND NOTE DUE 2012
1. INTEREST. NSP Holdings L.L.C., a Delaware limited liability
company (the "COMPANY") and NSP Holdings Capital Corp., a Delaware corporation
("CAPITAL" and, together with the Company, the "ISSUERS"), promise to pay
interest on the principal amount of this Note at the rate PER ANNUM shown above.
Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from the date of the original
issuance of the Notes. The Issuers will pay interest semi-annually in arrears on
each Interest Payment Date, commencing July 1, 2005. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Through and including
the interest payment date of January 1, 2010, accrued interest on all notes then
outstanding will be payable, at the Company's option, in cash or in the form of
additional notes (when issued in payment of interest, "PIK NOTES"). On and after
the interest payment to be made on July 1, 2010, accrued interest will be
payable solely in cash. The PIK Notes will be identical to the originally issued
Notes, except that interest will begin to accrue from the date they are issued
rather than the Issue Date.
The Notes will be issued in denominations of $1,000 and integral
multiples of $1,000; PROVIDED, HOWEVER, that PIK Notes will be issued in
denominations of $1.00 and integral multiples of $1.00.
2. METHOD OF PAYMENT. The Issuers shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on June 15 or December 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
cancelled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that the Issuers may pay principal, premium,
if any, and interest (other than interest payable in PIK Notes) by check payable
in such money. The Issuers may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust
Company, a Delaware banking corporation (the "TRUSTEE"), will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders. The Issuers or any of their
Subsidiaries may act as Paying Agent or Registrar.
4. INDENTURE. The Issuers issued this Note under an Indenture,
dated as of January 7, 2005 (the "INDENTURE"), by and among the Issuers and the
Trustee. This Note is one of a duly authorized issue of Initial Notes of the
Issuers designated as their 11 3/4% Senior Pay in Kind Notes due 2012 (the
"NOTES"). The Notes include the Initial Notes, the Additional Notes and the
Exchange Notes (as defined below) issued in exchange for the Initial Notes and
Additional Notes pursuant to the Indenture. The Initial Notes, the Additional
Notes and the Exchange Notes are treated as a single class of securities under
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Notes are general unsecured
obligations of the Issuers.
5. REDEMPTION.
(a) OPTIONAL REDEMPTION WITH MAKE WHOLE PAYMENT. At any time prior
to July 1, 2006, the notes may be redeemed in whole or in part at the option of
the Company, upon not less than 30 or more than 60 days' prior notice, at a
redemption price equal to 100% of the principal amount thereof, plus the Make
Whole Premium and any accrued and unpaid interest thereon to the applicable
redemption date.
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<Page>
(b) OPTIONAL REDEMPTION. The Issuers may redeem the Notes, at
their option, in whole at any time or in part from time to time, on and after
July 1, 2006 at the following Redemption Prices (expressed as percentages of the
principal amount thereof) if redeemed during the periods set forth below, plus,
in each case, accrued and unpaid interest thereon, if any, to the date of
redemption.
<Table>
<Caption>
Year Percentage
---- ----------
July 1, 2006 - June 30, 2007................. 103%
July 1, 2007 - June 30, 2008................. 102%
Thereafter................................... 100%
</Table>
(c) OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. Notwithstanding the
foregoing, the Issuers may redeem in the aggregate up to 35% of the principal
amount of Notes at any time and from time to time prior to July 1, 2006 at a
Redemption Price equal to 111.75% of the aggregate principal amount so redeemed,
plus accrued and unpaid interest in cash, if any, to the Redemption Date out of
the Net Proceeds of one or more Equity Offerings; PROVIDED that
(1) at least 65% of the principal amount of Notes originally
issued remains outstanding immediately after the occurrence of any such
redemption and
(2) any such redemption occurs within 90 days following the
closing of such Equity Offering.
(d) MANDATORY PARTIAL REDEMPTION. On July 1, 2010, if any notes
are outstanding, the Company will be required to redeem, at a redemption price
of 100% of the principal amount of the notes so redeemed, a principal amount of
notes (the "MANDATORY PRINCIPAL REDEMPTION AMOUNT") sufficient to ensure that
the notes are not treated under the Code as "Applicable High Yield Discount
Obligations" for the ongoing deductibility of interest by the Company. The
Mandatory Principal Redemption Amount will be calculated as (i) the excess of
the aggregate principal amount of all notes outstanding on July 1, 2010, over
the original principal amount of notes issued on the Issue Date, less (ii) an
amount equal to one year's simple uncompounded interest on the aggregate
original principal amount of notes issued on the Issue Date. The Mandatory
Principal Redemption Amount will be applied as a partial redemption of each note
outstanding.
6. NOTICE OF REDEMPTION. Notice of redemption under paragraphs
5(a), (b), (c) (d) of this Note will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder to be redeemed
at such Holder's registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Issuers default in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
7. OFFERS TO PURCHASE. The Indenture provides that, after certain
Asset Sales (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Issuers will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
8. DENOMINATIONS; TRANSFER; EXCHANGE. The Initial Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof , PROVIDED, HOWEVER, that the PIK Notes will be issued in
denominations of $1.00 and integral multiples of $1.00. A Holder shall register
the transfer or exchange of Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges pay-
B-5
<Page>
able in connection therewith as permitted by the Indenture. The Registrar need
not register the transfer of or exchange of any Notes or portions thereof
selected for redemption.
9. PERSONS DEEMED OWNERS. The registered holder of a Note shall
be treated as the owner of it for all purposes.
10. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Issuers. After that, Holders entitled to money must
look to the Issuers for payment as general creditors unless an "abandoned
property" law designates another person.
11. LEGAL DEFEASANCE AND COVENANT DEFEASANCE. If the Issuers at
any time deposit with the Trustee U.S. legal tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating to defeasance, the Issuers will be discharged from certain provisions
of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
12. AMENDMENTS, SUPPLEMENTS, AND WAIVERS. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change
that does not adversely affect in any material respect the rights of any Holder.
13. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock, enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, sell assets, create liens, issue
capital stock, enter into sale and lease-back transactions, make certain
Investments, merge or consolidate with any other Person, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets. Such limitations are subject to a number of important qualifications and
exceptions. The Issuers must annually report to the Trustee on compliance with
such limitations.
14. SUCCESSOR ENTITY. When a successor entity assumes, in
accordance with the Indenture, all the obligations of its predecessor under the
Notes and the Indenture, and immediately before and thereafter no Default or
Event of Default exists and certain other conditions are satisfied, the
predecessor entity will be released from those obligations.
15. DEFAULTS AND REMEDIES. Events of Default are set forth in the
Indenture. If an Event of Default (other than an Event of Default pursuant to
Section 6.01(f) or (g) of the Indenture) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding, may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration; PROVIDED, HOWEVER, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default specified in Section 6.01(f) or (g) of the Indenture occurs, such
principal amount, together with premium, if any, and interest with respect to
all of the Notes, shall be due and payable immediately without any declaration
or other act on the part of the Trustee or the Holders. The Trustee is not
obligated to enforce the Indenture or the Notes unless it has received indemnity
reasonably satisfactory to it.
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16. TRUSTEE DEALINGS WITH ISSUERS. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Issuers, and may otherwise deal with
the Company, its Subsidiaries or their respective Affiliates as if it were not
the Trustee.
17. NO RECOURSE AGAINST OTHERS. As more fully described in the
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Issuers shall have any liability for any obligation of the Issuers under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
18. AUTHENTICATION. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
19. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
20. ABBREVIATIONS AND DEFINED TERMS. 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).
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
22. INDENTURE. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture which has the text of this Note in larger
type. Requests may be made to: NSP Holdings L.L.C., 2211 York Road, Suite 215,
Oak Brook, Illinois 60523, Attention: Chief Financial Officer.
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SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount at maturity of this Note shall be $______. The
following decreases/increases in the principal amount at maturity of this Note
have been made:
<Table>
<Caption>
Total Principal
Decrease in Amount at Maturity
Date of Increase/ Principal Amount at Increase in Principal Following such Notation Made by or
Decrease Maturity Amount at Maturity Increase/ Decrease on Behalf of Trustee
- --------------------------------------------------------------------------------------------------------------------
</Table>
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ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________________________,
agent to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.
Date: Signed:
--------------------- -----------------------------------------------
(Sign exactly as your name appears on the
other side of this Note)
Medallion Guarantee:
---------------------------------
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[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.13 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.13 / /
Section 4.16 / /
If you want to elect to have only part of this Note purchased by the
Issuers pursuant to Section 4.13 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$ ______________
Date:
------------------------- ----------------------------------------
NOTICE: The signature on this assignment
must correspond with the name as it
appears upon the face of the within Note
in every particular without alteration
or enlargement or any change whatsoever
and be guaranteed by the endorser's bank
or broker.
Medallion Guarantee:
---------------------------
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EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: NSP Holdings L.L.C. and NSP Holdings Capital Corp.(the "ISSUERS")
11 3/4% Senior Pay in Kind Notes due 2012 (the "Notes")
This Certificate relates to $_____ principal amount of Notes held in
the form of*______ a beneficial interest in a Global Note or*______Certificated
Notes by _______(the "TRANSFEROR").
The Transferor:
/ / has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Note held by the Depositary a
Certificated Note or Certificated Notes in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Note (or the portion thereof indicated above); or
/ / has requested by written order that the Registrar exchange or
register the transfer of a Certificated Note or Certificated Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes does not require registration under the Securities Act of
1933, as amended (the "SECURITIES ACT"), because*:
/ / Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
/ / Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act), in reliance on Rule
144A.
/ / Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Securities Act) which delivers a certificate to the Trustee in the
form of EXHIBIT D to the Indenture.
/ / Such Note is being transferred in reliance on Regulation S
under the Securities Act and a transfer certificate for Regulation S transfers
in the form of EXHIBIT E to the Indenture accompanies this certification. An
Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this certification.
/ / Such Note is being transferred in reliance on Rule 144 under
the Securities Act. An Opinion of Counsel to the effect that such transfer does
not require registration under the Securities Act accompanies this
certification.
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/ / Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144A or Rule 144 under the Securities Act to a
person other than an institutional "accredited investor." An Opinion of Counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.
----------------------------------------
[INSERT NAME OF TRANSFEROR]
By: ------------------------------------
[Authorized Signatory]
Date:
----------------------------
*Check applicable box.
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EXHIBIT D
FORM OF TRANSFEREE LETTER OF REPRESENTATION
[ ]
Attention: Corporate Trust Division
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $ _______
principal amount of the 11 3/4% Senior Pay in Kind Notes due 2012 of NSP
Holdings L.L.C. and NSP Holdings Capital Corp. (the "ISSUERS") and any guarantee
thereof (the "NOTES"). Upon transfer, the Notes would be registered in the name
of the new beneficial owner as follows:
Name:
---------------------------------------------
Address:
------------------------------------------
Taxpayer ID Number:
-------------------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"SECURITIES ACT")) purchasing Notes for our own account or for the account of
such an institutional "accredited investor" and we are acquiring the Notes not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of our investment in the Notes and we invest in or purchase securities
similar to the Notes in the normal course of our business. We and any accounts
for which we are acting are each able to bear the economic risk of our or its
investment.
2. We acknowledge that we have had access to such financial and
other information, and have been afforded the opportunity to ask such questions
of representatives of the Issuers and receive answers thereto, as we deem
necessary.
3. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes that we will not prior to
the date (the "RESALE RESTRICTION TERMINATION DATE") that is two years after the
later of the original issuance of the Notes and the last date on which the
Issuers or any affiliate of the Issuers was the owner of such Notes (or any
predecessor thereto) offer, sell or otherwise transfer such Notes except (a) to
the Issuers or any subsidiary of the Issuers, (b) inside the United States to a
"qualified institutional buyer" in compliance with Rule 144A under the
Securities Act (c) inside the United States to an "institutional accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to the Trustee a signed letter substantially in the form of
this letter (d) outside the United States in an offshore transaction in
compliance with Rule 904 under the Securities Act (e) pursuant to any other
available exemption from the registration requirements of the Securities Act or
(f) pursuant to an effective registration statement under the Securities Act. We
acknowledge that the Issuers and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the applicable Notes pursuant to clause (c) or (e) above to require the
delivery of an opinion of counsel, certification and/or other information
satisfactory to the Issuers and the Trustee.
We understand that the Trustee will not be required to accept for
registration of transfer any Notes acquired by us, except upon presentation of
evidence satisfactory to the Issuers and the Trustee that the foregoing
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restrictions on transfer have been complied with. We further understand that any
Notes purchased by us will be in the form of definitive physical certificates
and that such certificates will bear a legend reflecting the substance of
paragraph 3 of this letter. We further agree to provide to any person acquiring
any of the Notes from us a notice advising such person that transfers of such
Notes are restricted as stated herein and that certificates representing such
Notes will bear a legend to that effect.
We represent that the Issuers and the Trustee and others are entitled
to rely upon the truth and accuracy of our acknowledgments, representations and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our acknowledgments, representations or agreements herein cease to be
accurate and complete. You are also irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States" and
"U.S. person" have the respective meanings given to them in Regulation S under
the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
Dated: TRANSFEREE:
------------
By:
------------------------------------
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EXHIBIT E
Form of Certificate to Be
Delivered in Connection
with Regulation S Transfers
___________,_______
[ ]
Attention: Corporate Trust Division
Re: NSP Holdings L.L.C. and NSP Holdings Capital Corp.
11 3/4% Senior Pay in Kind Notes due 2012 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $_______ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(a) or Rule 904(a)
of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------------
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