Exhibit 4.8
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PRIMEDIA INC.
$
8 5/8% Subordinated Exchange Debentures due 2010
Class G and Class H
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INDENTURE
Dated as of _______ __, ____
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THE BANK OF NEW YORK
Subordinated Debenture Trustee
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.............................................. 1
Section 1.02 Other Definitions........................................ 9
Section 1.03 Incorporation by Reference of Trust Indenture Act........ 9
Section 1.04 Rules of Construction.................................... 10
ARTICLE 2
THE SECURITIES
Section 2.01 Form and Dating.......................................... 10
Section 2.02 Execution and Authentication............................. 11
Section 2.03 Registrar and Paying Agent............................... 12
Section 2.04 Paying Agent to Hold Money in Trust...................... 12
Section 2.05 Holder Lists............................................. 12
Section 2.06 Transfer and Exchange.................................... 13
Section 2.07 Replacement Securities................................... 24
Section 2.08 Outstanding Securities................................... 25
Section 2.09 Treasury Securities...................................... 25
Section 2.10 Temporary Securities..................................... 25
Section 2.11 Cancellation............................................. 26
Section 2.12 Defaulted Interest....................................... 26
Section 2.13 CUSIP Numbers............................................ 26
ARTICLE 3
OPTIONAL REDEMPTION, OPTIONAL REDEMPTION UPON CHANGE OF
CONTROL AND OPTIONAL REDEMPTION UPON A PUBLIC EQUITY OFFERING
Section 3.01 Notices to Subordinated Debenture Trustee................ 26
Section 3.02 Selection of Securities to Be Redeemed................... 27
Section 3.03 Notices to Holders....................................... 27
Section 3.04 Effect of Notice of Redemption........................... 28
Section 3.05 Deposit of Redemption Price or Purchase Price............ 28
Section 3.06 Securities Redeemed in Part.............................. 29
Section 3.07 Optional Redemption...................................... 29
Section 3.08 Optional Redemption Upon Change of Control............... 30
ARTICLE 4
COVENANTS
Section 4.01 Payment of Securities.................................... 30
Section 4.02 Maintenance of Office or Agency.......................... 30
Section 4.03 SEC Reports; Financial Statements........................ 31
Section 4.04 Compliance Certificate................................... 31
Section 4.05 Compliance With Laws, Taxes.............................. 32
Section 4.06 Stay, Extension and Usury Laws........................... 33
i
Section 4.07 Limitations on Restricted Payments....................... 33
Section 4.08 Change of Control........................................ 33
Section 4.09 Transactions With Affiliates............................. 35
Section 4.10 Corporate Existence...................................... 35
Section 4.11 Rule 144A Information Requirement........................ 36
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets................. 36
Section 5.02 Successor Corporation Substituted........................ 36
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default........................................ 37
Section 6.02 Acceleration ............................................ 38
Section 6.03 Other Remedies........................................... 39
Section 6.04 Waiver of Past Defaults.................................. 39
Section 6.05 Control by Majority...................................... 40
Section 6.06 Limitations on Suits..................................... 40
Section 6.07 Rights of Holders to Receive Payment..................... 40
Section 6.08 Collection Suit by Subordinated Debenture Trustee........ 41
Section 6.09 Subordinated Debenture Trustee May File Proofs of Claim.. 41
Section 6.10 Priorities............................................... 41
Section 6.11 Undertaking for Costs.................................... 42
ARTICLE 7
SUBORDINATED DEBENTURE TRUSTEE
Section 7.01 Duties of Subordinated Debenture Trustee................. 42
Section 7.02 Rights of Subordinated Debenture Trustee................. 43
Section 7.03 Individual Rights of Subordinated Debenture Trustee...... 44
Section 7.04 Subordinated Debenture Trustee's Disclaimer.............. 44
Section 7.05 Notice of Defaults....................................... 44
Section 7.06 Reports by Subordinated Debenture Trustee to Holders..... 44
Section 7.07 Compensation and Indemnity............................... 45
Section 7.08 Replacement of Subordinated Debenture Trustee............ 46
Section 7.09 Successor Subordinated Debenture Trustee by Merger, etc.. 47
Section 7.10 Eligibility; Disqualification............................ 47
Section 7.11 Preferential Collection of Claims Against Company........ 47
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01 Termination of Company's Obligations..................... 47
Section 8.02 Application of Trust Money............................... 49
Section 8.03 Repayment to Company..................................... 49
ii
Section 8.04 Reinstatement............................................ 49
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent of Holders............................... 50
Section 9.02 With Consent of Holders.................................. 50
Section 9.03 Compliance with Trust Indenture Act...................... 52
Section 9.04 Revocation and Effect of Consents........................ 52
Section 9.05 Notation on or Exchange of Securities.................... 52
Section 9.06 Subordinated Debenture Trustee to Sign Amendments, etc... 53
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate................................ 53
Section 10.02 Certain Definitions..................................... 53
Section 10.03 Liquidation; Dissolution; Bankruptcy.................... 54
Section 10.04 Default on Senior Debt.................................. 54
Section 10.05 Acceleration of Securities.............................. 54
Section 10.06 When Distribution Must Be Paid Over..................... 54
Section 10.07 Notice by Company....................................... 55
Section 10.08 Subrogation............................................. 55
Section 10.09 Relative Rights......................................... 56
Section 10.10 Subordination May Not Be Impaired by Company............ 56
Section 10.11 Distribution or Notice to Representative................ 56
Section 10.12 Rights of Subordinated Debenture Trustee and
Paying Agent .......................................... 56
Section 10.13 Authorization to Effect Subordination................... 57
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls............................ 57
Section 11.02 Notices................................................. 57
Section 11.03 Communication by Holders with Other Holders............. 59
Section 11.04 Certificate and Opinion as to Conditions Precedent...... 59
Section 11.05 Statements Required in Certificate or Opinion........... 59
Section 11.06 Rules by Subordinated Debenture Trustee and Agents...... 60
Section 11.07 Legal Holidays.......................................... 60
Section 11.08 No Recourse Against Others.............................. 60
Section 11.09 Governing Law........................................... 60
Section 11.10 No Adverse Interpretation of Other Agreements........... 60
Section 11.11 Successors.............................................. 60
Section 11.12 Severability............................................ 61
Section 11.13 Counterpart Originals................................... 61
Section 11.14 Subordinated Debenture Trustee as Paying Agent and
Registrar ............................................. 61
Section 11.15 Table of Contents, Headings, etc........................ 61
Section 11.16 The Bank of New York Not Acting in Individual Capacity.. 61
iii
Section 11.17 Additional Rights of Holders of Transfer Restricted
Securities ............................................ 61
SIGNATURES ............................................................ 47
Exhibit A Form of Security
Exhibit B Certificate to be Delivered Upon Exchange or Registration of Transfer
of Securities
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate from Acquiring Institutional Accredited Investor
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Exhibit 4.8
INDENTURE, dated as of _______ __, ____, between PRIMEDIA Inc. (the
"Company"), a Delaware corporation, and The Bank of New York, a New York banking
corporation, (the Subordinated Debenture Trustee).
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders (as defined below) of 85/8% Class G
Subordinated Exchange Debentures due 2010 and 85/8% Class H Subordinated
Debentures due 2010 (collectively, the "Securities" or the "Notes") issued by
the Company (as defined below):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS
"144A Global Note" means the global note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with and registered in the name of the Depositary or its nominee that will be
issued in a denomination equal to the outstanding principal amount of the
Securities sold in reliance on Rule 144A.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. A Person shall be deemed to "control"
(including the correlative meanings, the terms "controlling," "controlled by,"
and "under common control with") another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies, of the controlled person, whether through ownership
of voting securities, by agreement or otherwise.
"Agent" means any Registrar or Paying Agent.
"Applicable Change of Control Premium" with respect to any Security is
defined as the greater of (i) 1.0% of the then outstanding principal amount
thereof and (ii) the excess of (A) the present value of the required interest
and principal payments due thereon, computed using a discount rate equal to the
Treasury Rate plus 75 basis points, over (B) the then outstanding principal
amount of thereof.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Average Life" means, as of the date of determination, with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
the numbers of years from the date of determination to the dates of each
successive scheduled principal payment (assuming the exercise by the obligor of
such debt security of all unconditional (other than as to the giving of notice)
extension options of each such scheduled payment date) of such debt security
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
"Average Life to Redemption" means, as of the date of determination, with
respect to any preferred security, the number of years (including any portion
thereof) remaining to the mandatory redemption date thereof.
"Bank Credit Facility" means the $1.5 billion credit facilities with The
Chase Manhattan Bank, The Bank of New York, Bankers Trust Company and The Bank
of Nova Scotia, as agents.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors of the Company.
"Business Day" means any day other than a Legal Holiday (as defined
below).
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease which
would at such time be required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means such time as (i) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than KKR
and its Affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of more than (A) 35 percent (35%) of the total voting
power of the then outstanding voting stock of the Company and (B) the total
voting power of the then outstanding voting stock of the Company beneficially
owned by KKR and its Affiliates or (ii) during any period of two consecutive
calendar years, individuals who at the beginning of such period constituted the
Company's Board of Directors (together with any new directors whose election by
the Company's Board of Directors or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
Directors then still in office who either were Directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the directors then in
office.
"Class D Subordinated Exchange Debentures" means the 10% Class D
Subordinated Exchange Debentures due 2008 issuable upon exchange of the Series D
Preferred Stock.
"Class E Subordinated Exchange Debentures" means the 9.20% Class E
Subordinated Exchange Debentures due 2009 issuable upon exchange of the Series E
Preferred Stock.
"Class F Subordinated Exchange Debentures" means the 9.20% Class F
Subordinated Exchange Debentures due 2009 issuable upon exchange of the Series F
Preferred Stock.
"Class G Subordinated Exchange Debentures" means the 85/8% Class G
Subordinated Exchange Debentures due 2010 described above and issued under this
Indenture.
"Class H Subordinated Exchange Debentures" means the 85/8% Class H
Subordinated Exchange Debentures due 2010 that may be issued in the Exchange
Offer.
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
"Company" means (i) PRIMEDIA Inc., a Delaware corporation and (ii) any
successor of PRIMEDIA Inc. pursuant to Article 5 hereof.
2
"Corporate Trust Office of the Subordinated Debenture Trustee" shall be at
either the address of the Subordinated Debenture Trustee specified in Section
11.02 or such other address as the Subordinated Debenture Trustee may give
notice to the Company.
"Credit Facilities" means, collectively, the Bank Credit Facility and the
New Credit Facility, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, in each
case as amended, modified, renewed, refunded or refinanced from time to time.
"Currency Agreement" means the obligations of any Person pursuant to any
foreign exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person or any of its subsidiaries against
fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in the form of
Exhibit A hereto except that such Note shall not bear the Global Note Legend and
shall not have the "Schedule of Exchanges of Interests in the Global Note"
attached thereto.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Securities, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Equity Interests" means Capital Stock, warrants, options or other rights
to acquire Capital Stock (but excluding any debt security which is convertible
into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer which may be made by the Company pursuant
to the Registration Rights Agreement to exchange Class H Subordinated Exchange
Debentures for then outstanding Class G Subordinated Exchange Debentures.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of this Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
3
"Holder" means a Person in whose name a Security is registered.
"IAI Global Note" means the global Note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold to Institutional Accredited Investors.
"Indebtedness" of any Person means any indebtedness, contingent or
otherwise, in respect of 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
letters of credit (or reimbursement obligations with respect thereto) or
representing the balance deferred and unpaid of the purchase price of any
property (including pursuant to financing leases), 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 (except that any such balance that
constitutes a trade payable and/or an accrued liability arising in the ordinary
course of business shall not be considered Indebtedness), and shall also
include, to the extent not otherwise included, any Capital Lease Obligations,
the maximum fixed repurchase price of any Redeemable Stock, indebtedness secured
by a Lien to which the property or assets owned or held by such Person is
subject, whether or not the obligations secured thereby shall have been assumed,
guarantees of items that would be included within this definition to the extent
of such guarantees (exclusive of whether such items would appear upon such
balance sheet), and net liabilities in respect of Currency Agreements and
Interest Rate Agreements. For purposes of the preceding sentence, the maximum
fixed repurchase price of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture, provided that if such Redeemable Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Redeemable
Stock. The amount of Indebtedness of any Person at any date shall be without
duplication (i) the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any such contingent
obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of Indebtedness
secured. For the purpose of determining the aggregate Indebtedness of the
Company and its Restricted Subsidiaries, such Indebtedness shall exclude the
Indebtedness of any Unrestricted Subsidiary of the Company or any Unrestricted
Subsidiary of a Restricted Subsidiary.
"Indenture" means this Indenture as amended from time to time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Purchasers" means Salomon Brothers Inc and Morgan Stanley & Co.
Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Interest Payment Date" has the meaning assigned to such term in the
Security.
"Interest Rate Agreements" means the obligations of any Person pursuant to
any interest rate swap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in interest rates.
"KKR" means Kohlberg Kravis Roberts & Co., L.P.
4
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give any security interest in and any filing or other agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Securities for use by such Holders in
connection with the Exchange Offer.
"Liquidated Damages" means all unpaid liquidated damages owing by the
Company pursuant to Section 5 of the Registration Rights Agreement.
"New Credit Facility" means the $150 million credit facility with The
Chase Manhattan Bank, The Bank of New York, Bankers Trust Company and The Bank
of Nova Scotia, as agents.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers" means the President, the Treasurer, any Assistant Treasurer,
Controller, Secretary or any Vice President of the Company, as applicable.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the Company's principal executive officer, principal financial
officer or principal accounting officer.
"Opinion of Counsel" means a written opinion prepared in accordance with
Section 11.05 hereof, from legal counsel who is acceptable to the Subordinated
Debenture Trustee. The counsel may be an employee of or counsel to the Company,
if applicable, or the Subordinated Debenture Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person who
has an account with DTC, Euroclear or Cedel, respectively (and, with respect to
DTC, shall include Euroclear and Cedel).
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Securities issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"Public Equity Offering" means an underwritten public offering of primary
shares of the Company's common stock (or any other class of common stock
hereinafter duly authorized by the Company) pursuant to a registration statement
(other than a registration statement on form S-8 or S-4 or successor forms)
filed with the SEC in accordance with the Securities Act.
"Redeemable Stock" means any Equity Interest issued after February __,
1998 which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable before the stated maturity of the
Securities), or upon the happening of any event, matures or is mandatorily
redeemable, in whole or in part, prior to the stated maturity of the Securities,
or is, by its terms or upon the happening of any event, redeemable at the option
of the holder thereof, in whole or in part, at any time prior to the stated
maturity of the Securities.
5
"Registration Rights Agreement" means the Registration Rights Agreement
dated February 17, 1998, between the Initial Purchasers, the Company and the
Guarantors, as such agreement may be amended, modified or supplemented from time
to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Securities
initially sold in reliance on Rule 903 of Regulation S.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means, for the purposes of this Indenture, a
Subsidiary of the Company which at the time of determination is not an
Unrestricted Subsidiary. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"7 5/8% Senior Notes" means the 7 5/8% Senior Notes due 2008 of the
Company issued under the 7 5/8% Senior Indenture.
"7 5/8% Senior Note Indenture" means that certain indenture, dated
February 17, 1998, among the Company, the corporations listed on Schedule I
thereto and The Bank of New York, as Trustee, as amended from time to time.
"8 1/2% Senior Notes" means the 8 1/2% Senior Notes due 2006 of the
Company issued under the 8 1/2% Senior Note Indenture.
"8 1/2% Senior Note Indenture" means that certain indenture, dated as of
January 24, 1996, among the Company, the corporations listed on Schedule I
thereto and The Bank of New York, as Trustee, as amended or modified from time
to time.
"10 1/4% Senior Notes" means the 10 1/4% Senior Notes due 2004 of the
Company issued under the 10 1/4% Senior Note Indenture.
"10 1/4% Senior Note Indenture" means that certain indenture, dated as of
May 31, 1994, among the Company, the corporations listed on Schedule I thereto
and Bankers Trust Company, as Trustee, as amended or modified from time to time.
"Senior Notes" means the 8 1/2% Senior Notes, the 10 1/4% Senior Notes and
the 7 5/8% Senior Notes.
"Senior Note Indentures" means the 8 1/2% Senior Note Indenture, the 10
1/4% Senior Note Indenture and the 7 5/8% Senior Note Indenture.
6
"Series D Preferred Stock" means the Company's $10.00 Series D
Exchangeable Preferred Stock Redeemable 2008, par value $.01 per share.
"Series E Preferred Stock" means the Company's $9.20 Series E Exchangeable
Preferred Stock Redeemable 2009, par value $.01 per share.
"Series F Preferred Stock" means the Company's $9.20 Series F Exchangeable
Preferred Stock Redeemable 2009, issuable in exchange for the Series E Preferred
Stock and containing terms identical to the Series E Preferred Stock.
"Series G Preferred Stock" means the Company's $8.625 Series G
Exchangeable Preferred Stock Redeemable 2010, par value $.01 per share.
"Series H Preferred Stock" means the Company's $8.625 Series H
Exchangeable Preferred Stock Redeemable 2010 issuable in exchange for the Series
G Preferred Stock and containing terms identical to the Series G Preferred
Stock.
"Subordinated Debenture Trustee" means the party named as such above until
a successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Subsidiary" means any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. ss.ss.
77aaa-77bbbb).
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.06(b) hereof.
"Treasury Rate," for the purposes of this Indenture, is defined as the
yield to maturity at the time of computation of United States Treasury
securities with a constant maturity (as compiled by and published in the most
recent Federal Reserve Statistical Release H.15 (519) which has become publicly
available at least two Business Days prior to the date fixed for prepayment (or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the then remaining Average
Life of the Securities; provided that if the Average Life of the Securities 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.
"Trust Officer" means any officer or assistant officer of the Subordinated
Debenture Trustee assigned by the Subordinated Debenture Trustee to administer
this Indenture.
"Unrestricted Global Note" means a permanent Global Note in the form of
Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Securities that do not bear the Private
Placement Legend.
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"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means, for the purposes of this Indenture, (i)
any Subsidiary of the Company which at the time of determination is an
Unrestricted Subsidiary (as designated by the Board of Directors, as provided
below) and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns, or holds any Lien on, any
property of, any other Subsidiary of the Company which is not a Subsidiary of
the Subsidiary to be so designated; provided that the Subsidiary to be so
designated has not at the time of designation, and does not thereafter, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness pursuant to which the lender has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary.
"U.S. Government Obligations" means direct noncallable obligations of or
guaranteed by the United States of America.
SECTION 1.02 OTHER DEFINITIONS
Defined in
Term Section
---- -------
"Affiliate Transaction".......................................... 4.09
"Change of Control Offer"........................................ 4.08
"Change of Control Payment"...................................... 4.08
"Change of Control Payment Date"................................. 4.08
"Legal Holiday".................................................. 11.07
"Paying Agent"................................................... 2.03
"Registrar"...................................................... 2.03
"Representative"................................................. 10.02
"Restricted Payments"............................................ 4.07
"Senior Debt".................................................... 10.02
"Successor"...................................................... 5.01
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Security;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Subordinated
Debenture Trustee;
8
"obligor" on the Security means the Company, any other obligor upon the
Security or any successor obligor upon the Security.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the
Subordinated Debenture Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the Note
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
9
(c) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel Bank.
SECTION 2.02 EXECUTION AND AUTHENTICATION
One Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal may be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Subordinated Debenture Trustee. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The Subordinated Debenture Trustee shall, upon a written order of the
Company signed by two Officers (an "Authentication Order"), authenticate Notes
for original issue up to the aggregate principal amount stated in paragraph 4 of
the Notes. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 2.07 hereof.
The Subordinated Debenture Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. An authenticating agent may
authenticate Notes whenever the Subordinated Debenture Trustee may do so. Each
reference in this Indenture to authentication by the Subordinated Debenture
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
SECTION 2.03 REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Subordinated Debenture Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Company initially appoints the Subordinated Debenture Trustee to act
as the Registrar and Paying Agent and to act as Note Custodian with respect to
the Global Notes.
10
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST
11
The Company shall require each Paying Agent other than the Subordinated
Debenture Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Subordinated Debenture Trustee all money held
by the Paying Agent for the payment of principal, premium or Liquidated Damages,
if any, or interest on the Notes, and will notify the Subordinated Debenture
Trustee of any default by the Company in making any such payment. While any such
default continues, the Subordinated Debenture Trustee may require a Paying Agent
to pay all money held by it to the Subordinated Debenture Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Subordinated Debenture Trustee. Upon payment over to the Subordinated Debenture
Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Subordinated
Debenture Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05 HOLDER LISTS
The Subordinated Debenture 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 and shall otherwise comply with TIA ss. 312(a). If the
Subordinated Debenture Trustee is not the Registrar, the Company shall furnish
to the Subordinated Debenture Trustee at least seven Business Days before each
Interest Payment Date and, at such other times as the Subordinated Debenture
Trustee may request in writing, a list in such form and as of such date as the
Subordinated Debenture Trustee may reasonably require of the names and addresses
of Holders, and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06 TRANSFER AND EXCHANGE
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Notes will be exchanged by the Company for Definitive Notes if (i) the
Company delivers to the Subordinated Debenture Trustee notice from the
Depositary that it is unwilling or unable to continue to act as Depositary
or that it is no longer a clearing agency registered under the Exchange
Act and, in either case, a successor Depositary is not appointed by the
Company within 90 days after the date of such notice from the Depositary
or (ii) the Company in its sole discretion determines that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes
and delivers a written notice to such effect to the Subordinated Debenture
Trustee. Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Subordinated Debenture Trustee. Global Notes
also may be exchanged or replaced, in whole or in part, as provided in
Sections 2.07 and 2.11 hereof. Every Security authenticated and delivered
in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may
not be exchanged for another Security other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f)
hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs as
applicable:
12
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, that
prior to the expiration of the Restricted Period transfers of beneficial
interests in the Regulation S Global Note may not be made to a U.S. Person
or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Beneficial interests in any Unrestricted Global Note may be
transferred only to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests (other than a transfer of a beneficial interest in a Global Note
to a Person who takes delivery thereof in the form of a beneficial
interest in the same Global Note), the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a written order from
a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided, that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Global Note prior to (x) the expiration of
the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities Act. Upon
an Exchange Offer by the Company in accordance with Section 2.06(f)
hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to
have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests
in Global Notes contained in this Indenture, the Securities and otherwise
applicable under the Securities Act, the Subordinated Debenture Trustee
shall adjust the principal amount of the relevant Global Note(s) pursuant
to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then (x) the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications and certificates and Opinion of Counsel
required by item (3) thereof, if applicable, and (y) the transferee
must deliver a certificate in the form of Exhibit D hereto.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form
13
of a beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Class H Subordinated Indentures or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item (1)(a)
thereof;
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Subordinated Debenture Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon receipt by
the Registrar of the following documentation:
14
(A) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note,
a certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable, and a
certificate in the form of Exhibit D hereto;
(F) if such beneficial interest is being transferred to the Company
or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof,
the Subordinated Debenture Trustee shall cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company shall execute and the Subordinated Debenture Trustee
shall authenticate and make available for delivery to the Person designated in
the instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Subordinated
Debenture Trustee shall make available for delivery such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
15
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend, a certificate from
such holder in the form of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a Definitive Note that does not
bear the Private Placement Legend, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Subordinated Debenture Trustee shall
cause the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute
and the Subordinated Debenture Trustee shall authenticate and make available for
delivery to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Subordinated Debenture Trustee shall make available for delivery such
Definitive Notes to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
section 2.06(c)(iii) shall not bear the Private Placement Legend. A beneficial
interest in an Unrestricted Global Note cannot be exchanged for a Definitive
Note bearing the Private Placement Legend or transferred to a Person who takes
delivery thereof in the form of a Definitive Note bearing the Private Placement
Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
16
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note,
a certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (2)(b) thereof;
(B) if such Definitive Note is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (2) thereof;
(D) if such Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Definitive Note is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(b) thereof;
(F) if such Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof; or
(G) if such Definitive Note is being transferred to an Institutional
Accredited Investor pursuant to an exemption from the registration
requirements of the Securities Act, a certificate in the Form of Exhibit D
hereto,
the Subordinated Debenture Trustee shall cancel the Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause (B)
above, the 144A Global Note, in the case of clause (C) above, the Regulation S
Global Note and, in the case of clause (G) above,the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
is not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
17
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof;
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act, and such Definitive
Notes are being exchanged or transferred in compliance with any
applicable blue sky securities laws of any State of the United
States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Subordinated Debenture Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or
transfer, the Subordinated Debenture Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Subordinated Debenture Trustee shall authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Restricted Definitive Notes may be transferred to and registered in the
name of Persons who take delivery thereof if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
18
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver (x) a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in
compliance with the Securities Act, that the restrictions on
transfer contained herein and in the Private Placement Legend are
not required in order to maintain compliance with the Securities
Act, and such Restricted Definitive Note is being exchanged or
transferred in compliance with any applicable blue sky securities
laws of any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof. Unrestricted
Definitive Notes cannot be exchanged for or transferred to Persons who
take delivery thereof in the form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an authentication order in accordance with Section 2.02, the
Subordinated Debenture Trustee shall authenticate (i) one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
the beneficial interests in the Restricted Global Notes tendered for acceptance
by persons that are not (x) broker-dealers, (y) Persons participating in the
distribution of the Exchange Notes or (z) Persons who are affiliates (as defined
in Rule 144) of the Company and accepted for exchange
19
in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrent with the issuance of such Notes, the
Subordinated Debenture Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly, and the Company
shall execute and the Subordinated Debenture Trustee shall authenticate and make
available for delivery to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (b) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR
REGULATION S THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $100,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2 .06 (and all Notes
issued in exchange therefor or substitution thereof) shall not bear the
Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE SUBORDINATED DEBENTURE TRUSTEE MAY
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MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE SUBORDINATED DEBENTURE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Subordinated Debenture Trustee in accordance
with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Gl obal Note shall be reduced accordingly and an endorsement shall be
made on such Global Note, by th e Subordinated Debenture Trustee or by the
Depositary at the direction of the Subordinated Debenture Trustee, to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred t o a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note, by
the Subordinated Debenture Trustee or by the Depositary at the direction of the
Subordinated Debenture Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company shall
execute and the Subordinated Debenture Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial interest
in a Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.08, and
9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of or
exchange any Security selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration of
transfer or exchange of Global Notes or Definitive Notes shall be the valid
obligations of the Company, evidencing th e same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Securities during a period beginning at the opening
of business 15 days before the day of mailing of a notice of redemption under
Section 3.02 hereof and ending at the close of business on the day of mailing,
(B) to register the transfer of or to exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part or (C) to register the transfer of or to exchange a
Security between a record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Security, the Subordin ated Debenture Trustee, any Agent and the Company may
deem and treat the Person in whose na me any Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Securities and for all other purposes, and
none of th e Subordinated Debenture Trustee, any Agent or the Company shall be
affected by notice to the contrary.
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(vii) The Subordinated Debenture Trustee shall authenticate Global Notes
and Definitive Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
transfer or exchange may be submitted by facsimile.
SECTION 2.07 REPLACEMENT SECURITIES
If any mutilated Security is surrendered to the Subordinated Debenture
Trustee, or the Company and the Subordinated Debenture Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, the
Company shall issue and the Subordinated Debenture Trustee, upon the written
order of the Company signed by an Officer, shall authenticate a replacement
Security if the Subordinated Debenture Trustee's requirements are met. An
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Subordinated Debenture Trustee and the Company to protect the Company,
the Subordinated Debenture Trustee, any Agent or any authenticating agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company and
shall be entitled t o all benefits of this Indenture equally and proportionately
with all other Securities duly issued hereunder.
SECTION 2.08 OUTSTANDING SECURITIES
The Securities outstanding at any time are all the Securities
authenticated by the Subordinate d Debenture Trustee except for those cancelled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Subordinated Debenture Trustee receives proof
satisfactory to it that the replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Securities payable on that date, then on and after that date such
Securities shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Except as set forth in Section 2.09 hereof, a Security does not cease to
be outstanding because the Company or an Affiliate holds the Security.
SECTION 2.09 TREASURY SECURITIES
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Subordinated Debenture Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which a Trust
Officer of the Subordinated Debenture Trustee knows are so owned shall be so
disregarded.
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SECTION 2.10 TEMPORARY SECURITIES
Until definitive Securities are ready for delivery, the Company may
prepare and the Subordinated Debenture Trustee shall authenticate temporary
securities upon a written order of the Company signed by an Officer and
delivered or caused to be delivered to a Trust Officer. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Subordinated
Debenture Trustee shall authenticate definitive Securities in exchange for
temporary Securities.
Holders of temporary Securities shall be entitled to all benefits of this
Indenture.
SECTION 2.11 CANCELLATION
The Company at any time may deliver Securities to the Subordinated
Debenture Trustee for cancellation. The Registrar and Paying Agent shall forward
to the Subordinated Debenture Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Subordinated Debenture
Trustee and no one else shall cancel all Securities surrendered for registration
of transfer, exchange, payment, replacement or cancellation. The Company may not
issue new Securities to replace Securities that it has paid or that have been
delivered to the Subordinated Debenture Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Securities and in Section 4.01 hereof. The Company shall, with the
consent of the Subordinated Debenture Trustee, fix each such special record date
and payment date. At least 15 days before the record date, the Company (or the
Subordinated Debenture Trustee, in the name of and at the expense of the
Company) shall mail to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
SECTION 2.13 CUSIP NUMBERS
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Subordinated Debenture Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Subordinated Debenture Trustee of any change in the "CUSIP"
numbers.
ARTICLE 3
OPTIONAL REDEMPTION, OPTIONAL REDEMPTION UPON CHANGE OF
CONTROL AND OPTIONAL REDEMPTION UPON A PUBLIC EQUITY OFFERING
SECTION 3.01 NOTICES TO SUBORDINATED DEBENTURE TRUSTEE
(a) If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the
Subordinated Debenture Trustee, at least 45 days but not more than 60 days
before a redemption date, an
23
Officers' Certificate stating that such redemption shall occur pursuant to
Section 3.07 hereof and stating the redemption date, the principal amount
of Securities to be redeemed and the redemption price.
(b) If the Company elects to redeem Securities pursuant to the provisions
of Section 3.08 hereof, it shall furnish to the Subordinated Debenture
Trustee, at least 45 days but not more than 60 days before the redemption
date, an Officers' Certificate stating that a Change of Control has
occurred, the date of such Change of Control and that such redemption
shall occur pursuant to Section 3.08 hereof, and further stating the
principal amount of Securities to be redeemed, the redemption price of
such Securities and the intended redemption date.
SECTION 3.02 SELECTION OF SECURITIES TO BE REDEEMED
If less than all of the Securities are to be redeemed at any time,
selection of the Securities for redemption will be made by the Subordinated
Debenture Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed, or, if the
Securities are not listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Subordinated Debenture Trustee shall deem
fair and appropriate; provided that no Securities of $1,000 or less shall be
redeemed in part. The Subordinated Debenture Trustee may select for redemption
any portion (equal to $1,000 or any integral multiple thereof) of the principal
of Securities that have denominations larger than $1,000. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption.
The Subordinated Debenture Trustee shall promptly notify the Company in
writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. The particular Securities to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Subordinated Debenture Trustee from the outstanding
Securities not previously called for redemption.
SECTION 3.03 NOTICES TO HOLDERS
(a) If the Company elects to redeem Securities pursuant to either Section
3.07 or 3.08 hereof, notice of redemption shall be mailed by first class
mail at least 30 days but not more than 60 days before the redemption date
to each Holder of Securities that are to be redeemed at its registered
address.
The notice shall identify the Securities to be redeemed (including CUSIP
number) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will
be issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the
redemption price;
24
(6) that interest on Securities or portions of them called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
are being redeemed; and
(8) the aggregate principal amount of Securities that are being
redeemed.
(b) At the Company's request, the Subordinated Debenture Trustee shall
give the notice required in Section 3.03(a) hereof in the Company's name
and at its expense and setting forth the information to be stated in such
notice as provided in Section 3.03(a) hereof.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed (after the Subordinated Debenture
Trustee has received the notice provided for in Section 3.01 hereof), Securities
called for redemption become due and payable on the redemption date at the
redemption price and shall cease to bear interest from and after the redemption
date (unless the Company shall fail to make payment of the redemption price or
accrued interest on the redemption date). Upon surrender to the Paying Agent,
such Securities shall be paid at the redemption price, plus premium and
Liquidated Damages, if any, plus accrued interest, if any, to the redemption
date, but interest installments whose maturity is on the redemption date and
Liquidated Damages which become payable on the redemption date will be payable
to the Holder of record at the close of business on the relevant record dates
referred to in the Securities.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE OR PURCHASE PRICE
One Business Day prior to the redemption date, the Company shall deposit
with the Subordinated Debenture Trustee or with the Paying Agent money (in
same-day funds) sufficient to pay the redemption price of, premium and
Liquidated Damages, if any, and accrued interest on, all Securities to be
redeemed on that date other than Securities or portions thereof called for
redemption on that date which previously have been delivered by the Company to
the Subordinated Debenture Trustee for cancellation. The Subordinated Debenture
Trustee or the Paying Agent shall return to the Company any such money not
required for that purpose.
If the Company complies with the preceding paragraph, interest on the
Securities or portions thereof to be redeemed, whether or not such Securities
are presented for payment, will cease to accrue on the applicable redemption
date. If any Security called for redemption shall not be so paid upon surrender
for redemption because of the failure of the Company to comply with the
preceding paragraph, then interest will be paid on the unpaid principal from the
redemption date until such principal is paid and on any interest not paid on
such unpaid principal, in each case, at the rate provided in the Securities and
in Section 4.01 hereof.
SECTION 3.06 SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part, the Company shall
issue and the Subordinated Debenture Trustee shall authenticate for the Holder
at the expense of the Company a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
25
SECTION 3.07 OPTIONAL REDEMPTION
Except as otherwise provided herein, prior to April 1, 2003, the Company
may not redeem the Securities, in whole or in part. At any time on or after
April 1, 2003, the Company may redeem all or any of the Securities, in whole or
in part, at a redemption price equal to a percentage of the principal amount
thereof, as set forth in the immediately succeeding paragraph, plus Liquidated
Damages, if any, plus accrued and unpaid interest to the redemption date.
The redemption price as a percentage of the principal amount shall be as
follows, if the Securities are redeemed during the 12 month period beginning
April 1 of the following years:
Year Percentage
---- ----------
2003 .................................... 104.313%
2004 .................................... 102.875%
2005 .................................... 101.438%
2006 and thereafter...................... 100.000%
Notwithstanding the foregoing,
(1) at any time prior to April 1, 2001, the Company may redeem up to
$125.0 million of the Securities at a redemption price of 108.625% of the
principal amount thereof, plus accrued and unpaid interest to the redemption
date, out of the net proceeds of one or more Public Equity Offerings, provided
that any such redemption shall occur within 180 days of such Public Equity
Offering; and
(2) upon the occurrence at any time of a Change in Control, the Securities
will be redeemable, at the option of the Company, in whole or in part, pursuant
to the provisions of Section 3.08 hereof.
Any redemption pursuant to this Section 3.07 shall be made, to the extent
applicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08 OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
In addition to any redemption pursuant to Section 3.07 hereof, the
Securities will be redeemable, at the option of the Holders, in whole or in
part, at any time within 160 days after a Change of Control at a redemption
price equal to the sum of (i) the then outstanding principal amount thereof plus
(ii) accrued and unpaid interest, if any, to the redemption date plus (iii) the
Applicable Change of Control Premium.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF SECURITIES
The Company shall pay the principal of and interest on the Securities on
the dates and in the manner provided in the Securities, and shall pay Liquidated
Damages, if any, on the dates and in the manner provided in the Registration
Rights Agreement. Principal and interest shall be considered paid on the date
due if the Paying Agent, other than the Company or a Subsidiary of the Company,
holds on that date money deposited by the Company in available funds and
designated for and sufficient to pay all principal and interest then due.
26
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
at the same rate per annum on the Securities to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain, in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Subordinated Debenture
Trustee or the Registrar) where Securities may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company shall
give prompt written notice to the Subordinated Debenture Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Subordinated Debenture Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Subordinated Debenture Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Subordinated Debenture Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Subordinated Debenture Trustee as one such office or agency of the Company in
accordance with Section 2.03 hereof.
SECTION 4.03 SEC REPORTS; FINANCIAL STATEMENTS
(a) The Company shall file with the Subordinated Debenture Trustee, within
15 days after it files the same with the SEC, copies of the annual reports
and the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. If the Company is not subject to
the requirements of such Section 13 or 15(d), the Company shall file with
the Subordinated Debenture Trustee, within 15 days after it would have
been required to file the same with the SEC, financial statements,
including any notes thereto (and with respect to annual reports, an
auditors' report by a firm of established national reputation), and a
"Management's Discussion and Analysis of Financial Condition and Results
of Operations," both comparable to that which the Company would have been
required to include in such annual reports, information, documents or
other reports if the Company had been subject to the requirements of such
Section 13 or 15(d). The Company shall also comply with the other
provisions of TIA ss.314(a).
(b) If the Company is required to furnish annual or quarterly reports to
its stockholders pursuant to the Exchange Act, the Company shall cause any
annual report furnished to its stockholders generally and any quarterly or
other financial reports furnished by it to its stockholders generally to
be filed with the Subordinated Debenture Trustee and mailed to the Holders
at their addresses appearing in the register of Securities maintained by
the Registrar. If the Company is not required to furnish annual or
quarterly reports to its stockholders pursuant to the Exchange Act, so
long as at least 5% of the original principal amount of the Securities
remain outstanding, the Company shall cause its financial statements
referred to in Section 4.03(a) hereof, including any notes thereto (and
with respect to annual reports, an auditors' report by a firm of
established national reputation), and a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" to be so mailed
27
to the Holders within 90 days after the end of each of the Company's
fiscal years and within 60 days after the end of each of the Company's
first three fiscal quarters. As of the date hereof, the Company's fiscal
year ends on December 31.
Delivery of such reports, information and documents to the Subordinated
Debenture Trustee is for informational purposes only and the Subordinated
Debenture Trustee's receipt of such shall not constitute constructive
notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any
of its covenants hereunder (as to which the Subordinated Debenture Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION 4.04 COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Subordinated Debenture Trustee,
within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the
Company and its Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his
knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions
hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he may have
knowledge and what action the Company is taking or proposes to take with
respect thereto) and that to the best of his 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 Securities are prohibited
or, if such event has occurred, a description of the event and what action
the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 hereof shall be accompanied
by a written statement of the Company's independent public accountants
(who shall be a firm of established national reputation) that in making
the examination necessary for certification of such financial statements
nothing has come to their attention that would lead them to believe that
the Company has violated any provisions of Articles 4 or 5 of this
Indenture or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for any failure
to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Securities are outstanding,
(i) deliver to the Subordinated Debenture Trustee, forthwith upon any
Officer becoming aware of any Default or Event of Default under this
Indenture, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with
respect thereto and (ii) promptly notify the Subordinated Debenture
Trustee of any Change of Control.
SECTION 4.05 COMPLIANCE WITH LAWS, TAXES
The Company shall, and shall cause each of its Subsidiaries to, comply
with all statutes, laws, ordinances, or government rules and regulations to
which it is subject, noncompliance with which would materially adversely affect
the business, earnings, properties, assets or condition, financial or otherwise,
of the Company and its Subsidiaries taken as a whole.
The Company shall, and shall cause each of its Subsidiaries to, pay prior
to delinquency all taxes, assessments, and governmental levies except as
contested in good faith and by appropriate proceedings.
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SECTION 4.06 STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the Company's
obligation to pay the Securities; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
insofar as such law applies to the Securities, and covenants that it shall not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Subordinated Debenture Trustee, but will suffer and permit
the execution of every such power as though no such law has been enacted.
SECTION 4.07 LIMITATIONS ON RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Capital Stock or other Equity Interests (other than (A) dividends
or distributions payable in Equity Interests of the Company or such Restricted
Subsidiary or (B) dividends or distributions payable to the Company or any of
its Restricted Subsidiaries) or (ii) purchase, redeem or otherwise acquire or
retire for value any Equity Interests of the Company or any Restricted
Subsidiary (other than any such Equity Interests owned by the Company or any of
its Restricted Subsidiaries) (the foregoing actions set forth in clauses (i) and
(ii) being referred to as "Restricted Payments"), if, at the time of such
Restricted Payment, a Default or Event of Default under the Securities shall
have occurred and be continuing or shall occur as a consequence thereof.
SECTION 4.08 CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have the
right to require the repurchase of such Holder's Securities pursuant to the
offer described below (the "Change of Control Offer") at a purchase price equal
to 101% of the aggregate principal amount of such Securities plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"). Prior to the mailing of the notice to holders provided for in the
paragraph below, the Company hereby covenants (i) (A) to repay in full all
Obligations under the Credit Facilities or to offer to repay in full all such
Obligations and to repay the Obligations of each lender who has accepted such
offer or (B) to obtain the requisite consent under the Credit Facilities to
permit the repurchase of Securities pursuant to the Change of Control Offer;
(ii) (A) to commence an offer (the "Exchange Debenture Offer") to repurchase all
and to purchase (upon termination of the Exchange Debenture Offer) all Exchange
Debentures tendered pursuant to such offer or (B) to obtain the requisite
consent under the Exchange Debenture Indenture to permit the repurchase of
Securities pursuant to the Change of Control Offer and (iii) with respect to all
other Senior Debt (as defined below) to (A) repay such Senior Debt to the extent
required by the terms thereof to permit repurchase of the Securities pursuant to
the Change of Control Offer or (B) to obtain the requisite consents, if any,
under all agreements governing all such Senior Debt to permit the repurchase of
Securities pursuant to the Change of Control Offer. In no event shall the
Company be required to offer to repurchase or repurchase the Securities unless
it shall have either repaid the outstanding Senior Debt to the extent required
by the terms thereof or obtained the requisite consents thereunder, if any, to
permit the repurchase of the Securities pursuant to the Change of Control Offer.
Within the later of (a) 40 days following any Change of Control and (b)
the date that the foregoing conditions are satisfied, the Company shall mail a
notice to each Holder stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.08 and that all Securities tendered will be accepted for
payment;
29
(2) the purchase price and the purchase date (which shall be no earlier
than 30 days nor later than 40 days from the date such notice is
mailed)(the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Securities accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have any of their Securities purchased
pursuant to a Change of Control Offer will be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Security 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 election if the Paying
Agent receives, not later than the close of business on the third Business
Day preceding the Change of Control Payment Date, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Securities delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Securities purchased; and
(7) that Holders whose Securities are being purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion
of the Securities surrendered; provided that each Security purchased and
each such new Security issued by the Company shall be in a principal
amount of $1,000 or integral multiples thereof.
The Change of Control Offer shall be deemed to have commenced upon mailing
of the notice described in this paragraph and shall terminate 20 Business Days
after its commencement, unless a longer offering period is required by law. If
the Change of Control Payment Date is on the related interest payment date, any
accrued interest will be paid to the person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Securities pursuant to the Change
of Control Offer.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment Securities or portions thereof tendered pursuant
to the Change of Control Offer, (2) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Securities or portions
thereof so tendered and (3) deliver or cause to be delivered to the Subordinated
Debenture Trustee, the Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof tendered to the Company.
The Paying Agent shall promptly mail to each holder of Securities so accepted,
payment in an amount equal to the purchase price for such Securities, and the
Subordinated Debenture Trustee shall promptly authenticate and make available
for delivery to such holder a new Security equal in principal amount to any
unpurchased portion of the Securities surrendered; provided that each such new
Security shall be in a principal amount of $1,000 or integral multiples thereof.
The Company will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
SECTION 4.09 TRANSACTIONS WITH AFFILIATES
Neither the Company nor any of its Restricted Subsidiaries shall make any
loan, advance, guarantee or capital contribution to, or for the benefit of, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or for the benefit of, or purchase or lease any property or assets from, or
enter into or amend any contract, agreement or understanding with, or for the
benefit of, (i) any Person (or any Affiliate of such Person) holding 10% or more
of any class of Capital Stock of the Company or any of its Restricted
30
Subsidiaries or (ii) any Affiliate of the Company or any of its Restricted
Subsidiaries (each an "Affiliate Transaction"), involving aggregate payments of
consideration in excess of $5.0 million, unless (a) such Affiliate Transaction
is on terms that are not materially less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (b) the Company delivers to the Trustee with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution adopted by the
majority of the Board of Directors approving such Affiliate Transaction and set
forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (a) above; and provided, further, that, the foregoing
restriction shall not apply to (i) the payment of an annual fee to KKR for the
rendering of management consulting and financial services to the Company and its
Restricted Subsidiaries in an aggregate amount which is reasonable in relation
thereto, (ii) the payment of transaction fees to KKR in amounts which are in
accordance with past practices for the rendering of financial advice and
services in connection with acquisitions, dispositions and financings by the
Company and its Subsidiaries, (iii) the payment of reasonable and customary fees
paid to, and indemnity provided on behalf of, officers, directors, employees or
consultants of the Company or any Restricted Subsidiary, (iv) loans to officers,
directors and employees of the Company and its Subsidiaries for business or
personal purposes and other loans and advances to such officers, directors and
employees for travel, entertainment, moving and other relocation expenses made
in the ordinary course of business of the Company and its Subsidiaries, (v) any
Restricted Payments (as defined in the referent indenture) not prohibited by the
RESTRICTED PAYMENTS covenant in the Senior Note Indentures, the Exchange
Debenture Indenture, the Class B Debenture Indenture, the Class D Debenture
Indenture, Class E Debenture Indenture of the Class F Debenture Indenture or any
Investment (as defined in the referent indenture) not prohibited by the
INVESTMENTS IN UNRESTRICTED SUBSIDIARIES covenant in the Senior Note Indentures,
(vi) transactions between or among any of the Company and its Restricted
Subsidiaries or (vii) allocation of corporate overhead to Unrestricted
Subsidiaries on a basis no less favorable to the Company than such allocations
to Restricted Subsidiaries.
SECTION 4.10 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Restricted
Subsidiary in accordance with the respective organizational documents of each
Restricted Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Restricted Subsidiaries; provided that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any Restricted Subsidiary,
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.11 RULE 144A INFORMATION REQUIREMENT.
The Company will furnish to the Holders or beneficial holders of the
Securities and prospective purchasers of the Securities designated by the
holders of Transfer Restricted Securities, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
until such time as the Company consummates the Exchange Offer or has registered
the Securities for resale under the Securities Act.
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ARTICLE 5
SUCCESSORS
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Company may 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
or permit any Person to merge with or into it unless:
(1) 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 (collectively the "Successor") shall be a corporation
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 Subordinated
Debenture Trustee, in form satisfactory to the Subordinated Debenture
Trustee, all the obligations of the Company under the Securities and this
Indenture; and
(2) immediately after giving effect to such transaction, no Default and no
Event of Default under this Indenture shall have occurred and be
continuing.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company or any
assignment of its obligations under this Indenture or the Securities in
accordance with Section 5.01 hereof, the successor formed by such consolidation
or into or with which the Company is merged or to which such sale, lease,
conveyance or other disposition or assignment is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such Successor has been named as the
Company herein and the predecessor Company, in the case of a sale, lease,
conveyance or other disposition or assignment, shall be released from all
obligations under this Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT
An "Event of Default" occurs if:
(1) the Company fails to make any payment of interest or Liquidated
Damages on any Security when the same shall become due and payable and
such default continues for a period of 30 days and for five days after
written notice of such default is given to the Company by the Holders of
at least 51% in principal amount of the Securities following the
expiration of such 30-day period;
(2) the Company fails to make any payment of the principal of or premium
on any Security when the same shall become due and payable, whether at
maturity or upon acceleration, redemption or otherwise, and such default
continues for a period of ten days;
32
(3) the Company fails to comply with any of its other agreements or
covenants in, or provisions of, the Securities or this Indenture and such
failure continues for the period and after the notice specified below;
(4) an event of default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such Indebtedness
or guarantee is now existing or thereafter created in the future, if as a
result of such event of default the maturity of such Indebtedness has been
accelerated prior to its express maturity and the principal amount of such
Indebtedness is $22.5 million or more or the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which as been accelerated, aggregates $45
million or more, provided that an Event of Default shall not be deemed to
occur with respect to any accelerated Indebtedness which is repaid or
prepaid, or the acceleration of which is rescinded, within 60 days after
such declaration;
(5) the Company, or any of the Restricted Subsidiaries 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, or
(d) makes a general assignment for the benefit of its creditors; or
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(a) is for relief against the Company, or any of its Restricted
Subsidiaries as debtor in an involuntary case,
(b) appoints a Custodian of the Company, or any of its Restricted
Subsidiaries or a Custodian for all or substantially all of the
property of the Company, or any of its Restricted Subsidiaries, or
(c) orders the liquidation of the Company, or any of its Restricted
Subsidiaries, and the order or decree remains unstayed and in effect
for 60 days.
The Company is required pursuant to Section 4.04(a) hereof to deliver to
the Subordinated Debenture Trustee annually a statement regarding compliance
with the provisions of this Indenture, and the Company is required pursuant to
Section 4.04(c) hereof upon becoming aware of any Default or Event of Default to
deliver a statement to the Subordinated Debenture Trustee specifying such
Default or Event of Default. The Subordinated Debenture Trustee shall not be
deemed to know of a Default unless a Trust Officer has actual knowledge of such
Default or receives written notice of such Default with specific reference to
such Default.
In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding payment
of the premium, if any, which the Company would have had to pay if the Company
then had elected to redeem the Securities pursuant to Section 3.07 hereof, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law, anything contained in this Indenture or in the
Securities to the contrary notwithstanding.
33
A Default under clause (3) is not an Event of Default until the
Subordinated Debenture Trustee notifies the Company, or the Holders of at least
51% in principal amount of the then outstanding Securities notify the Company
and the Subordinated Debenture Trustee in writing, of the Default and the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default."
SECTION 6.02 ACCELERATION
If an Event of Default (other than an Event of Default with respect to the
Company specified in clauses (5) and (6) of Section 6.01 hereof) occurs and is
continuing, the Subordinated Debenture Trustee or the Holders of at least 51% in
principal amount of the then outstanding Securities, by written notice to the
Company and to the agents under the Credit Facilities, the trustees under the
Senior Note Indentures and the Exchange Debenture Indenture (and to the
Subordinated Debenture Trustee if such notice is given by the Holders) may, and
the Subordinated Debenture Trustee at the request of such Holders shall, declare
all unpaid principal of, premium and Liquidated Damages, if any, and accrued
interest on the Securities to be due and payable upon the first to occur of an
acceleration under any of the Credit Facilities, any of the Senior Notes or
Exchange Debentures or 15 Business Days after receipt by the Company, such agent
and such trustees of such written notice to the extent that the Event of Default
is continuing. If an Event of Default with respect to the Company specified in
clause (5) or (6) of Section 6.01 hereof occurs, all unpaid principal of,
premium and Liquidated Damages, if any, and accrued interest on the Securities
then outstanding shall ipso facto become and be immediately due and payable
without any declaration, notice or other act on the part of the Subordinated
Debenture Trustee or any Holder. The Holders of at least 51% in aggregate
principal amount of the then outstanding Securities by written notice to the
Subordinated Debenture Trustee may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, premium and
Liquidated Damages, if any, or interest on the Securities that has become due
solely as a result of such acceleration) have been cured or waived.
In the event that the maturity of the Securities is accelerated pursuant
to this Section 6.02, 100% of the principal amount thereof and premium and
Liquidated Damages, if any, and accrued interest to the date of payment shall
become due and payable.
SECTION 6.03 OTHER REMEDIES
If an Event of Default occurs and is continuing, the Subordinated
Debenture Trustee may pursue any available remedy to collect the payment of
principal, premium and Liquidated Damages, if any, or interest then due on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Subordinated Debenture Trustee may maintain a proceeding even if it
does not possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Subordinated Debenture Trustee or any
Holder in exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04 WAIVER OF PAST DEFAULTS
The Holders of at least 51% in principal amount of the then outstanding
Securities by notice to the Subordinated Debenture Trustee may waive an existing
Default or Event of Default and its consequences (including waivers obtained in
connection with a tender offer or exchange offer for Securities), except a
continuing Default or Event of Default in the payment of the principal of,
premium or Liquidated Damages, if any, or interest on, such Security (including,
without limitation, pursuant to any mandatory or optional redemption obligation
hereunder) or that resulted from the failure to comply with Section 4.08 hereof.
Upon any such waiver, such Default shall cease
34
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 CONTROL BY MAJORITY
The Holders of at least 51% in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Subordinated Debenture Trustee or exercising any
trust or power conferred on it. However, the Subordinated Debenture Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
the Subordinated Debenture Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Subordinated Debenture Trustee
in personal liability.
SECTION 6.06 LIMITATIONS ON SUITS
A Holder may not pursue a remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Subordinated Debenture Trustee written notice
of a continuing Event of Default;
(2) the Holders of at least 51% in principal amount of the then
outstanding Securities make a written request to the Subordinated Debenture
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Subordinated Debenture Trustee
indemnity satisfactory to the Subordinated Debenture Trustee against any loss,
liability or expense (including, without limitation, fees and expenses of
counsel);
(4) the Subordinated Debenture Trustee does not comply with the request
within 30 days after receipt of the request and the offer of indemnity; and
(5) during such 30-day period the Holders of at least 51% in principal
amount of the then outstanding Securities do not give the Subordinated Debenture
Trustee a direction which is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of, premium and Liquidated
Damages, if any, and interest on the Security, on or after the respective due
dates expressed in the Security or the Registration Rights Agreement, as the
case may be, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of the Holder.
SECTION 6.08 COLLECTION SUIT BY SUBORDINATED DEBENTURE TRUSTEE
If an Event of Default specified in Section 6.01(1), (2) or (3) (with
respect to the Company's obligations under Section 4.08 hereof) hereof occurs
and is continuing, the Subordinated Debenture Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the Company
for the amount of principal, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Securities, determined in accordance with
Section 6.02 hereof and interest on overdue principal, premium, if any,
35
and, to the extent lawful, interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Subordinated Debenture Trustee, its agents and counsel.
SECTION 6.09 SUBORDINATED DEBENTURE TRUSTEE MAY FILE PROOFS OF CLAIM
The Subordinated Debenture Trustee is authorized to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Subordinated Debenture Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Subordinated Debenture Trustee, its agents and counsel) and the Holders allowed
in any judicial proceedings relative to the Company, its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Subordinated Debenture Trustee, and in the event that
the Subordinated Debenture Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Subordinated Debenture Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Subordinated Debenture Trustee, its agents and counsel, and any other
amounts due the Subordinated Debenture Trustee under Section 7.07 hereof. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Subordinated Debenture Trustee, its agents and counsel, and any
other amounts due the Subordinated Debenture Trustee under Section 7.07 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties which
the Holders of the Securities may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the
Subordinated Debenture Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Subordinated Debenture Trustee to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 6.10 PRIORITIES
If the Subordinated Debenture Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:
First: to the Subordinated Debenture Trustee for amounts due under Section
7.07 hereof;
Second: subject to Article 10 hereof, to Holders for amounts due and
unpaid on the Securities for principal, premium and Liquidated Damages, if
any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal,
premium and Liquidated Damages, if any, and interest, respectively; and
Third: to the Company.
The Subordinated Debenture Trustee may fix a record date and payment date
for any payment to Holders pursuant to this Article 6.
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 Subordinated Debenture Trustee for any
action taken or omitted by it as a Subordinated Debenture Trustee, a court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims
36
or defenses made by the party litigant. This Section 6.11 does not apply to a
suit by the Subordinated Debenture Trustee, a suit by a Holder pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Securities.
ARTICLE 7
SUBORDINATED DEBENTURE TRUSTEE
SECTION 7.01 DUTIES OF SUBORDINATED DEBENTURE TRUSTEE
(1) If an Event of Default has occurred and is continuing, the
Subordinated Debenture 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 such exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Subordinated Debenture Trustee need perform only those
duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Subordinated Debenture Trustee; and
(b) in the absence of bad faith on its part, the Subordinated
Debenture 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 Subordinated
Debenture Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be
furnished to the Subordinated Debenture Trustee, the Subordinated
Debenture Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(3) The Subordinated Debenture 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:
(a) this paragraph does not limit the effect of paragraph (2) of
this Section 7.01;
(b) the Subordinated Debenture Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, unless it
is proved that the Subordinated Debenture Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Subordinated Debenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.05
hereof.
(4) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Subordinated Debenture Trustee is
subject to paragraphs (1), (2) and (3) of this Section 7.01.
(5) No provision of this Indenture shall require the Subordinated
Debenture Trustee to expend or risk its own funds or incur any liability.
The Subordinated Debenture Trustee is not obligated to perform any duty or
exercise any right or power under
37
this Indenture at the request of the Holders of the Securities unless it
receives an offer from such Holders of security and indemnity satisfactory
to it against any loss, liability or expense (including, without
limitation, fees of counsel).
(6) The Subordinated Debenture Trustee shall not be liable for interest on
any money received by it except as the Subordinated Debenture Trustee may
agree in writing with the Company. Money held in trust by the Subordinated
Debenture Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02 RIGHTS OF SUBORDINATED DEBENTURE TRUSTEE
(1) The Subordinated Debenture Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper
Person. The Subordinated Debenture Trustee need not investigate any fact
or matter stated in the document.
(2) Before the Subordinated Debenture Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opinion of Counsel
or both. The Subordinated Debenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Subordinated Debenture
Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder and in reliance thereon.
(3) The Subordinated Debenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent,
attorney, custodian or nominee appointed with due care.
(4) The Subordinated Debenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized
or within its rights or powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 7.03 INDIVIDUAL RIGHTS OF SUBORDINATED DEBENTURE TRUSTEE
The Subordinated Debenture Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or any of its Affiliates with the same rights it would have if it were
not Subordinated Debenture Trustee. Any Agent may do the same with like rights.
However, the Subordinated Debenture Trustee is subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04 SUBORDINATED DEBENTURE TRUSTEE'S DISCLAIMER
The Subordinated Debenture Trustee makes no representation as to the
validity or adequacy of this Indenture or the Securities; it shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision
hereof; it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Subordinated Debenture Trustee; and
it shall not be responsible for any statement or recital herein or any statement
in the Securities other than its certificate of authentication.
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SECTION 7.05 NOTICE OF DEFAULTS
If a Default or Event of Default occurs and is continuing and if it is
actually known to a Trust Officer of the Subordinated Debenture Trustee, the
Subordinated Debenture Trustee shall mail to each Holder a notice of the Default
or Event of Default within 90 days after it occurs, or if later, within 10 days
after such Default or Event of Default becomes known to the Subordinated
Debenture Trustee unless such Default or Event of Default has been cured. Except
in the case of a Default or Event of Default in payment of principal of, premium
and Liquidated Damages, if any, or interest on any Security or that resulted
from a failure to comply with Section 4.08 hereof, the Subordinated Debenture
Trustee may withhold the notice if and so long as a committee of its Trust
Officers determines in good faith that withholding the notice is in the
interests of Holders.
SECTION 7.06 REPORTS BY SUBORDINATED DEBENTURE TRUSTEE TO HOLDERS
Within 60 days after each June 1 beginning with the first June 1 to occur
after the date of this Indenture, the Subordinated Debenture Trustee shall mail
to Holders a brief report dated as of such reporting date that complies with TIA
ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Subordinated Debenture Trustee also shall comply with TIA ss. 313(b). The
Subordinated Debenture Trustee shall also transmit by mail all reports as
required by TIA ss. 313(c).
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each stock exchange on which the Securities are listed. The
Company shall promptly notify the Subordinated Debenture Trustee when the
Securities are listed on any stock exchange and when such Securities become
delisted on any such exchange.
SECTION 7.07 COMPENSATION AND INDEMNITY
The Company shall pay to the Subordinated Debenture Trustee from time to
time such compensation as shall be agreed in writing between the Company and the
Subordinated Debenture Trustee for its acceptance of this Indenture and services
hereunder. The Subordinated Debenture Trustee's compensation shall not be
limited by any law relating to compensation of a trustee of an express trust.
The Company shall reimburse the Subordinated Debenture Trustee upon request for
all reasonable disbursements, advances and expenses incurred by it. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Subordinated Debenture Trustee's agents and counsel.
The Company shall indemnify and hold harmless each of the Subordinated
Debenture Trustee and any predecessor Subordinated Debenture Trustee and its
directors, officers, employees and agents against any and all loss, liability,
damage, claim or expense (including, without limitation, fees and expenses of
counsel) incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture including, without limitation,
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of its powers and duties hereunder,
except as set forth in the next paragraph. The Subordinated Debenture Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Subordinated Debenture Trustee shall
cooperate in the defense. The Subordinated Debenture Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Subordinated Debenture Trustee through its
negligence or bad faith.
39
To secure the Company's payment obligations in this Section 7.07, the
Subordinated Debenture Trustee shall have a Lien prior to the Securities on all
money or property held or collected by the Subordinated Debenture Trustee,
except that held in trust to pay principal, premium and Liquidated Damages, if
any, and interest on particular Securities. Such Lien shall survive the
satisfaction and discharge of the Indenture.
When the Subordinated Debenture Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.01(5) or (6) hereof
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 7.08 REPLACEMENT OF SUBORDINATED DEBENTURE TRUSTEE
The Subordinated Debenture Trustee may resign and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Securities may remove the Subordinated
Debenture Trustee by so notifying the Subordinated Debenture Trustee and the
Company. The Company may remove the Subordinated Debenture Trustee if:
(1) the Subordinated Debenture Trustee fails to comply with Section 7.10
hereof;
(2) the Subordinated Debenture Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to the
Subordinated Debenture Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Subordinated
Debenture Trustee or its property; or
(4) the Subordinated Debenture Trustee becomes incapable of acting.
Notwithstanding the foregoing, a resignation or removal of the
Subordinated Debenture Trustee and appointment of a successor Subordinated
Debenture Trustee shall become effective only upon the successor Subordinated
Debenture Trustee's acceptance of appointment as provided in this Section 7.08,
and thereafter the Subordinated Debenture Trustee shall have no liability for
any acts or omission of any successor Trustee.
If the Subordinated Debenture Trustee resigns or is removed or if a
vacancy exists in the office of Subordinated Debenture Trustee for any reason,
the Company shall promptly appoint a successor Subordinated Debenture Trustee.
If a successor Subordinated Debenture Trustee does not take office within
30 days after the retiring Subordinated Debenture Trustee resigns or is removed,
the retiring Subordinated Debenture Trustee, the Company or the Holders of at
least 10% in principal amount of the then outstanding Securities may petition,
at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Subordinated Debenture Trustee.
If the Subordinated Debenture Trustee fails to comply with Section 7.10
hereof, any Holder may petition any court of competent jurisdiction for the
removal of the Subordinated Debenture Trustee and the appointment of a successor
Subordinated Debenture Trustee.
A successor Subordinated Debenture Trustee shall deliver a written
acceptance of its appointment to the retiring Subordinated Debenture Trustee and
to the Company. Thereupon the resignation or removal of the retiring
Subordinated Debenture Trustee shall become
40
effective, and the successor Subordinated Debenture Trustee shall have all the
rights, powers and duties of the Subordinated Debenture Trustee under this
Indenture. The successor Subordinated Debenture Trustee shall mail a notice of
its succession to Holders. The retiring Subordinated Debenture Trustee shall
promptly transfer all property held by it as Subordinated Debenture Trustee to
the successor Subordinated Debenture Trustee, subject to the Lien provided for
in Section 7.07 hereof. Notwithstanding replacement of the Subordinated
Debenture Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the retiring Subordinated
Debenture Trustee.
SECTION 7.09 SUCCESSOR SUBORDINATED DEBENTURE TRUSTEE BY MERGER, ETC.
Subject to Section 7.10 hereof, if the Subordinated Debenture Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation or national banking
association, the successor entity without any further act shall be the successor
Subordinated Debenture Trustee. In case any Securities have been authenticated,
but not delivered, by the Subordinated Debenture Trustee then in office, any
succession by merger, conversion or consolidation of such authenticating trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor trustee had itself authenticated such
Securities.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Subordinated Debenture Trustee hereunder
which shall be a corporation organized and doing business under the laws of the
United States of America, any state thereof or the District of Columbia
authorized under such laws to exercise corporate trust power, shall be subject
to supervision or examination by federal or state (or the District of Columbia)
authority and shall have a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Subordinated Debenture Trustee who
satisfies the requirements of TIA ss. 310(a)(1). The Subordinated Debenture
Trustee is subject to TIA ss. 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Subordinated Debenture Trustee is subject to TIA ss. 311(a), excluding
therefrom any creditor relationship listed in TIA ss. 311(b). A Subordinated
Debenture Trustee who has resigned or been removed shall be subject to TIA ss.
311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 TERMINATION OF COMPANY'S OBLIGATIONS
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 hereof and the Subordinated Debenture
Trustee's and Paying Agent's obligations under Section 8.03 hereof shall
survive) when all outstanding Securities theretofore authenticated and issued
have been delivered (other than destroyed, lost or stolen Securities that have
been replaced or paid) to the Subordinated Debenture Trustee for cancellation
and the Company has paid all sums payable hereunder. In addition, the Company
may terminate all of its obligations under this Indenture if:
41
(1) the Company irrevocably deposits, or causes to be deposited, in trust
with the Subordinated Debenture Trustee or the Paying Agent or, at the
option of the Subordinated Debenture Trustee, with a trustee satisfactory
to the Subordinated Debenture Trustee and the Company under the terms of
an irrevocable trust agreement in form and substance satisfactory to the
Subordinated Debenture Trustee, money or U.S. Government Obligations in an
amount sufficient (without reinvestment thereof) to pay principal, premium
and Liquidated Damages, if any, and interest on the Securities to maturity
or redemption, as the case may be, as such amounts become due, and to pay
all other sums payable by it hereunder, and such deposit, when made, does
not violate the provisions of Article 10 hereof; provided that (i) the
trustee of the irrevocable trust shall have been irrevocably instructed to
pay such money or the proceeds of such U.S. Government Obligations to the
Subordinated Debenture Trustee and (ii) the Subordinated Debenture Trustee
shall have been irrevocably instructed to apply such money or the proceeds
of such U.S. Government Obligations to the payment of said principal,
premium and Liquidated Damages, if any, and interest on the Securities;
(2) the Company delivers to the Subordinated Debenture Trustee an
Officers' Certificate stating that all conditions precedent to
satisfaction and discharge of this Indenture have been complied with, and
delivers an Opinion of Counsel to the same effect;
(3) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit; and
(4) the Company shall have delivered to the Subordinated Debenture Trustee
an Opinion of Counsel from nationally recognized counsel acceptable to the
Subordinated Debenture Trustee or a tax ruling from the Internal Revenue
Service to the effect that the Holders of the Securities will not
recognize income, gain or loss for federal income tax purposes as a result
of the Company's exercise of its option under this Section 8.01 and will
be subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such option had not
been exercised.
In such event, this Indenture shall cease to be of further effect, except
that the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01,
4.06, 7.07, 7.08 and 8.04 hereof and the Company's, the Subordinated Debenture
Trustee's and the Paying Agent's obligations in Section 8.03, and the
Subordinated Debenture Trustee's rights under Article 7 hereof, shall survive
until the Securities are no longer outstanding. Thereafter, only the Company's
obligations in Section 7.07 hereof and the Subordinated Debenture Trustee's and
the Paying Agent's obligations in Section 8.03 hereof shall survive.
After such irrevocable deposit made pursuant to this Section 8.01 and
satisfaction of the other conditions set forth herein, the Subordinated
Debenture Trustee upon request shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Securities, the U.S. Government Obligations shall be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the issuer's option.
SECTION 8.02 APPLICATION OF TRUST MONEY
The Subordinated Debenture Trustee or a trustee satisfactory to the
Subordinated Debenture Trustee and the Company shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Section 8.01 hereof. It
shall apply the deposited money and the money from U.S. Government Obligations
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Securities.
42
The Company shall pay and indemnify the Subordinated Debenture Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 8.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Securities.
SECTION 8.03 REPAYMENT TO COMPANY
The Subordinated Debenture Trustee and the Paying Agent shall promptly pay
to the Company upon written request any excess money or securities held by them
at any time.
The Subordinated Debenture Trustee and the Paying Agent shall pay to the
Company upon written request any money held by them for the payment of principal
or interest that remains unclaimed for two years after the date upon which such
payment shall have become due; provided that the Company shall have either
caused notice of such payment to be mailed to each Holder entitled thereto no
less than 30 days prior to such repayment or within such period shall have
published such notice in a financial newspaper of widespread circulation
published in The City of New York. After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Subordinated Debenture Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.04 REINSTATEMENT
If the Subordinated Debenture Trustee or Paying Agent is unable to apply
any money or U.S. Government Obligations in accordance with Section 8.01 hereof
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 hereof until such time as the Subordinated Debenture
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 8.01 hereof; provided that if the Company
has made any payment of interest on or principal of any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Subordinated Debenture Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS
Without the consent of any Holder of Securities the Company and the
Subordinated Debenture Trustee may amend or supplement this Indenture or the
Securities:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or in place of
certificated Securities;
(3) to comply with Section 5.01 hereof;
(4) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the rights
hereunder of any Holder; or
43
(5) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA.
Upon the request of the Company, accompanied by a resolution of the Board
of Directors authorizing the execution of any such supplemental indenture, and
upon receipt by the Subordinated Debenture Trustee of the documents described in
Section 9.06 hereof, the Subordinated Debenture Trustee shall join with the
Company in the execution of any supplemental indenture authorized or permitted
by the terms of this Indenture and make any further appropriate agreements and
stipulations that may be therein contained, but the Subordinated Debenture
Trustee shall not be obligated to enter into any supplemental indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
After an amendment or waiver under this Section 9.01 becomes effective, the
Company shall mail to the Holders of each Security affected thereby a notice
briefly describing the amendment or waiver. Any failure of the Company to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 9.02 WITH CONSENT OF HOLDERS
Except as provided below in this Section 9.02, this Indenture or the
Securities may be amended or supplemented with the written consent (including
consents obtained in connection with a tender offer or exchange offer for
Securities) of the Holders of at least 51% in principal amount of the then
outstanding Securities.
Upon the request of the Company, accompanied by a resolution of the Board
of Directors authorizing the execution of any such supplemental indenture, and
upon the filing with the Subordinated Debenture Trustee of evidence of the
consent of the Holders as aforesaid, and upon receipt by the Subordinated
Debenture Trustee of the documents described in Section 9.06 hereof, the
Subordinated Debenture Trustee shall join with the Company in the execution of
such supplemental indenture unless such supplemental indenture affects the
Subordinated Debenture Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Subordinated Debenture 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 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
The Holders of 51% in principal amount of the Securities then outstanding
may waive compliance in a particular instance by the Company with any provision
of this Indenture or the Securities (including waivers obtained in connection
with a tender offer or an exchange offer for Securities) or any existing
default. However, without the consent of each Holder affected, an amendment or
waiver under this Section may not (with respect to any Securities held by a
non-consenting Holder):
(1) reduce the principal amount of Securities whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Security
or alter the provisions with respect to the redemption price in connection
with repurchases under Sections 3.07, 3.08 or 4.08 hereof;
(3) reduce the rate of or change the time for payment of interest on any
Security;
(4) waive a Default or Event of Default in the payment of the principal
of, or premium or Liquidated Damages, if any, or interest on Securities or
that resulted from a failure to comply with Section 4.08 hereof (except a
rescission of acceleration of the Securities as provided in Section 6.02
hereof);
(5) make any Security payable in money other than that stated in the
Security;
44
(6) make any change in Article 10 hereof that adversely affects the rights
of any Holder;
(7) make any change in Section 6.04 or 6.07 hereof or in this sentence of
this Section 9.02;
(8) waive a redemption payment with respect to any Security; or
(9) make a change in any of the foregoing.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Subordinated Debenture Trustee in a notice furnished to
Holders in accordance with the terms of this Indenture.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture or the Securities shall comply in form
and substance with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS
Until an amendment (which includes any supplement) or waiver becomes
effective, a consent to it by a Holder of a Security is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to his or her Security or portion of
a Security if the Subordinated Debenture Trustee receives written notice of
revocation before the date the amendment or waiver becomes effective. An
amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions 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 consent to such amendment or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of
Securities required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every Holder,
unless it is of the type described in any of clauses (1) through (8) of Section
9.02 hereof. In such case, the amendment or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 9.05 NOTATION ON OR EXCHANGE OF SECURITIES
If an amendment, supplement or waiver changes the terms of a Security, the
Subordinated Debenture Trustee may require the Holder of the Security to deliver
it to the Subordinated Debenture Trustee. The Subordinated Debenture Trustee may
place an appropriate notation about the changed terms and return it to the
Holder and the Subordinated Debenture Trustee may place an appropriate notation
on any Security thereafter authenticated. Alternatively, if the Company or
Subordinated Debenture Trustee so determines, the Company
45
in exchange for all Securities shall issue and the Subordinated Debenture
Trustee shall authenticate new Securities that reflect the changed terms.
SECTION 9.06 SUBORDINATED DEBENTURE TRUSTEE TO SIGN AMENDMENTS, ETC.
The Subordinated Debenture Trustee shall sign any amendment or
supplemental indenture authorized pursuant to this Article 9 if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the
Subordinated Debenture Trustee. If it does, the Subordinated Debenture Trustee
may, but need not, sign it. In signing or refusing to sign such amendment or
supplemental indenture, the Subordinated Debenture Trustee shall be entitled to
receive and, subject to Section 7.01 hereof, shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE
The Company agrees, and each Holder by accepting a Security agrees, that
the indebtedness evidenced by the Security is subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment in full of all "Senior Debt" (as defined below) and that the
subordination is for the benefit of the holders of Senior Debt. The Indebtedness
evidenced by the Security shall be pari passu with the Series D Subordinated
Debentures and the Series E Subordinated Debentures.
SECTION 10.02 CERTAIN DEFINITIONS
"Representative" means (i) with respect to the Credit Facilities, the
Agents (as defined therein) and (ii) with respect to any other Senior Debt, the
indenture trustee or other trustee, agent or representative for such Senior
Debt.
"Senior Debt" means all present and future Indebtedness, including all
Indebtedness incurred under the Credit Facilities and the Senior Note
Indentures, created, assumed, incurred or guaranteed by the Company (and all
renewals, extensions and refundings thereof), unless by its terms such
Indebtedness is not senior to the Class G Subordinated Debentures. Senior Debt
does not include any Indebtedness of the Company to any of its subsidiaries or
trade indebtedness.
A distribution may consist of cash, securities or other property, by
set-off or otherwise.
For the purposes of this Article 10, Obligations with respect to Senior
Debt shall not be deemed to have been paid in full unless the holders thereof
shall have received payment in full in cash.
SECTION 10.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property or in
an assignment for the benefit of creditors or any marshalling of the assets and
liabilities of the Company:
46
(1) holders of Senior Debt shall be entitled to receive payment in full of
all Obligations with respect to the Senior Debt (including interest after
the commencement of any such proceeding at the rate specified in the
applicable Senior Debt whether or not such interest is an allowed claim
enforceable against the Company in any such bankruptcy, reorganization,
insolvency, receivership or similar proceeding) before Holders shall be
entitled to receive any payment of any Obligations with respect to the
Securities; and
(2) until all Obligations with respect to Senior Debt (as provided in
subsection (1) of this Section 10.03) are paid in full, any distribution
to which Holders would be entitled but for this Article 10 shall be made
to holders of Senior Debt, as their interests may appear.
SECTION 10.04 DEFAULT ON SENIOR DEBT
No direct or indirect payment or distribution by or on behalf of the
Company of principal of, premium, if any, or interest on the Securities, whether
pursuant to the terms of the Securities or otherwise, may be made (i) if a
default of any Obligations to the holders of Senior Debt occurs and has not been
cured or waived, (ii) for a period of 180 days upon the occurrence of a default
(other than a payment default) in respect of Senior Debt and for successive
periods of 180 days if the default is continuing at the end of such 180 day
period or another default (other than a payment default) in respect of Senior
Debt has occurred or (iii) upon the maturity of any Senior Debt, prior to the
payment of all Obligations with respect to Senior Debt that is then due and
payable. In addition, upon the acceleration of the Securities prior to their
stated maturity, holders of the Senior Debt shall receive payment in full before
any payment shall be made to Holders of the Securities.
SECTION 10.05 ACCELERATION OF SECURITIES
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify the Representatives of Senior Debt of
the acceleration.
SECTION 10.06 WHEN DISTRIBUTION MUST BE PAID OVER
In the event that the Subordinated Debenture Trustee or any Holder
receives any payment of any Obligations (other than, in the case of the
Subordinated Debenture Trustee, fees, expenses and all other amounts payable
pursuant to Section 7.07 hereof) with respect to the Securities at a time when
such payment is prohibited by Section 10.04 hereof, then and in such event (but
with respect to the Subordinated Debenture Trustee, subject to the provisions of
Section 10.12 hereof) such payment shall be held by the Subordinated Debenture
Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to, the holders of Senior Debt as
their interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations due to the holders of Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.
If a distribution is made to the Subordinated Debenture Trustee or any
Holder (other than, in the case of the Subordinated Debenture Trustee, fees,
expenses and all other amounts payable pursuant to Section 7.07 hereof) that
because of this Article 10 should not have been made to it, the Subordinated
Debenture Trustee (subject to the provision of Section 10.12 hereof) or such
Holder who receives the distribution shall hold it in trust for the benefit of,
and, upon written request, pay it over to, the holders of Senior Debt as their
interests may appear, or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations due to the holders of Senior Debt remaining unpaid
47
to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
With respect to the holders of Senior Debt, the Subordinated Debenture
Trustee undertakes to perform only such obligations on the part of the
Subordinated Debenture Trustee as are specifically set forth in this Article 10,
and no implied covenants or obligations with respect to the holders of Senior
Debt shall be read into this Indenture against the Subordinated Debenture
Trustee. The Subordinated Debenture Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Subordinated Debenture Trustee shall pay over or distribute
to or on behalf of Holders or the Company or any other Person money or assets to
which any holders of Senior Debt shall be entitled by virtue of this Article 10,
unless such payment or distribution is made as a result of the willful
misconduct or gross negligence of the Subordinated Debenture Trustee.
SECTION 10.07 NOTICE BY COMPANY
The Company shall promptly notify the Subordinated Debenture Trustee and
the Paying Agent of any facts known to the Company that would cause a payment of
any Obligations with respect to the Securities to violate this Article 10, but
failure to give such notice shall not affect the subordination of the Securities
to the Senior Debt provided in this Article 10.
SECTION 10.08 SUBROGATION
After all Obligations with respect to all Senior Debt are paid in full and
until the Securities are paid in full, Holders shall be subrogated (equally and
ratably with all other Indebtedness ranking pari passu with the Securities) to
the rights of holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distributions otherwise payable to the Holders
have been applied to the payment of Senior Debt. A distribution made under this
Article 10 to holders of Senior Debt which otherwise would have been made to
Holders is not, as between the Company and Holders, a payment by the Company on
the Securities.
SECTION 10.09 RELATIVE RIGHTS
This Article 10 defines the relative rights of Holders and holders of
Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and the Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of, premium
and Liquidated Damages, if any, and interest on the Securities in
accordance with their terms;
(2) affect the relative rights of the Holders and creditors of the Company
other than their rights in relation to holders of Senior Debt; or
(3) prevent the Subordinated Debenture Trustee or any Holder from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders.
If the Company fails because of this Article 10 to pay principal of,
premium or Liquidated Damages, if any, or interest on a Security on the due
date, the failure is still a Default or Event of Default.
SECTION 10.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY
48
No right of any holder of Senior Debt to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 10.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Subordinated Debenture Trustee and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Subordinated Debenture Trustee or to the Holders for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
SECTION 10.12 RIGHTS OF SUBORDINATED DEBENTURE TRUSTEE AND PAYING AGENT
Notwithstanding the provisions of this Article 10 or any other provisions
of this Indenture, the Subordinated Debenture Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment or distribution by the Subordinated Debenture Trustee, or the taking of
any action by the Subordinated Debenture Trustee, and the Subordinated Debenture
Trustee and the Paying Agent may continue to make payments on the Securities
unless it shall have received at its Corporate Trust Office at least three
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Securities to
violate this Article 10. Only the Company, a Representative of Senior Debt or a
holder of an issue of Senior Debt that has no Representative may give the
notice. Nothing in this Article 10 shall impair the claims of, or payments to,
the Subordinated Debenture Trustee under or pursuant to Section 7.07 hereof.
Except as set forth in the immediately preceding sentence, nothing in this
Section 10.12 shall limit the rights of holders of Senior Debt to recover
payments as contemplated by Section 10.06 hereof.
The Subordinated Debenture Trustee in its individual or any other capacity
may hold Senior Debt with the same rights it would have if it were not
Subordinated Debenture Trustee. Any Agent may do the same with like rights.
SECTION 10.13 AUTHORIZATION TO EFFECT SUBORDINATION
Each Holder of a Security by its acceptance thereof authorizes and directs
the Subordinated Debenture Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10 and appoints the Subordinated Debenture Trustee his attorney-in-fact
for any and all such purposes.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included herein by any of Sections 310
to 317 inclusive of the TIA, such required provisions shall control.
49
SECTION 11.02 NOTICES
Any notice or communication to the Company, the Subordinated Debenture
Trustee, or the agents under the Credit Facilities, is duly given if in writing
and delivered in person or mailed by first-class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing next
day delivery, to the other's address:
If to the Company:
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
Attention: General Counsel
Telecopier No.: (212) 745-0199
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary I. Horowitz, Esq.
Telecopier No.: (212) 455-2502
If to the Subordinated Debenture Trustee:
The Bank of New York
101 Barclay Street -- 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopier No.: (212) 815-5915/5917
If to the agents under the Credit Facilities:
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
New York, New York 10081
Attention: William K. Luby
Telecopier No.: (212) 552-1159
The Bank of New York
101 Barclay Street
50
New York, New York 10286
Attention: James Dimino
Telecopier No.: (212) 815-4038
The Company, the Subordinated Debenture Trustee and the agents under the
Credit Facilities Outstanding Note Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail, to the Holder's 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 is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Subordinated Debenture Trustee and each Agent at the same time.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Securities. The Company, the
Subordinated Debenture Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company to the Subordinated
Debenture Trustee to take any action under this Indenture, the Company shall
furnish to the Subordinated Debenture Trustee:
(1) an Officers' Certificate (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall include:
(1) a statement that the Person making such certificate or opinion has
read and understands such covenant
51
or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with; provided that with respect
to matters of fact Opinions of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 11.06 RULES BY SUBORDINATED DEBENTURE TRUSTEE AND AGENTS
The Subordinated Debenture Trustee may make reasonable rules for action by
or at a meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 11.07 LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
SECTION 11.08 NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or shareholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of,
or by reason of, such obligations of their creation. Each Holder of the
Securities by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Security.
SECTION 11.09 GOVERNING LAW
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
SECTION 11.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 11.11 SUCCESSORS
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Subordinated Debenture Trustee in this
Indenture shall bind its successor.
52
SECTION 11.12 SEVERABILITY
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.13 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.14 SUBORDINATED DEBENTURE TRUSTEE AS PAYING AGENT AND REGISTRAR
The Company initially appoints the Subordinated Debenture Trustee as
Paying Agent and Registrar.
SECTION 11.15 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
SECTION 11.16 THE BANK OF NEW YORK NOT ACTING IN INDIVIDUAL CAPACITY
Notwithstanding anything to the contrary contained herein, this Indenture
has been accepted by The Bank of New York not in its individual capacity but
solely as Trustee and in no event shall The Bank of New York have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Company herein or in any of the certificates, notices or agreements
delivered by the Company pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Company, and under no circumstances shall The
Bank of New York be personally liable for the payment of any indebtedness or
expenses of the Company.
SECTION 11.17 ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Transfer Restricted Securities shall have all the rights
set forth in the Registration Rights Agreement.
[Signatures on Next Page]
53
SIGNATURES
PRIMEDIA INC.
Dated as of , By:
-------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Subordinated Debenture Trustee
Dated as of , By:
-------------------------------------
Name:
Title:
EXHIBIT A
(Face of Note)
================================================================================
CUSIP/CINS ____________
85/8% [Series G] [Series H] Subordinated Exchange Debentures due 2010
No. ___ $__________
PRIMEDIA INC.
promises to pay to _________________________________________________
or registered assigns,
the principal sum of ________________________________________________
Dollars on __________ __, 2010.
Interest Payment Dates: January 1, April 1, July 1 and October 1
Record Dates: December 15, March 15, June 15 and September 15
PRIMEDIA INC.
By:
------------------------------
Name:
Title:
Dated: _______________,
This is one of the Global Notes referred to in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Subordinated Debenture Trustee
By:
----------------------------
Authorized Signatory
================================================================================
A-1
(Back of Note)
____ % [Series G] [Series H] Subordinated Exchange Debentures due 2010
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE SUBORDINATED DEBENTURE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
SUBORDINATED DEBENTURE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR
REGULATION S THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $100,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. PRIMEDIA, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 85/8% per annum
from ________________, until maturity and shall pay the Liquidated Damages, if
any, payable pursuant to
A-2
Section 5 of the Registration Rights Agreement referred to below. The Company
will pay interest and Liquidated Damages, if any, on January 1, April 1, July 1
and October 1 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each, an "Interest Payment Date"). Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided, that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be _____________. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate per annum
on the Notes then in effect; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on December 15, March 15,
June 15 and September 15 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes will be payable as to principal, premium and
Liquidated Damages, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and Liquidated Damages, if
any, may be made by check mailed to the Holders at their addresses set forth in
the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Subordinated Debenture Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
____________, ("Indenture") between the Company and the Subordinated Debenture
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $250.0 million
in aggregate principal amount, plus amounts, if any, issued to pay Liquidated
Damages on outstanding Notes as set forth in Paragraph 2 hereof.
5. SUBORDINATION. The Company's payment of the principal of, premium and
Liquidated Damages, if any, and interest on the Notes is subordinated to the
prior payment in full of the Company's Senior Debt. Each Holder of Notes by his
acceptance hereof covenants and agrees that all payments of the principal of,
premium and Liquidated Damages, if any, and interest on the Notes by the Company
shall be subordinated in accordance with the provisions of Article 10 of the
Indenture, and each Holder accepts and agrees to be bound by such provisions.
6. OPTIONAL REDEMPTION. On and after April 1, 2003 and on and after a
Change of Control of the Company, the Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the
A-3
redemption prices (expressed as percentages of the principal amount) set forth
below plus accrued and unpaid interest thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning April 1 of the years
indicated below.
Year Percentage
---- ----------
2003 .................................... 104.313%
2004 .................................... 102.875%
2005 .................................... 101.438%
2006 and thereafter...................... 100.000%
Notwithstanding the foregoing,
(1) at any time prior to April 1, 2001, the Company may redeem up to
$125.0 million of the Securities at a redemption price of 108.625% of the
principal amount thereof, plus accrued and unpaid interest to the redemption
date, out of the net proceeds of one or more Public Equity Offerings, provided
that any such redemption shall occur within 180 days of such Public Equity
Offering; and
(2) upon the occurrence at any time of a Change in Control, the Securities
will be redeemable, at the option of the Company, in whole or in part, pursuant
to the provisions of Section 3.08 hereof.
Any redemption pursuant to this Section 3.07 shall be made, to the extent
applicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof.
7. MANDATORY OFFERS TO REPURCHASE; MANDATORY REDEMPTION. Subject to
repayment of all then outstanding Senior Debt (to the extent required by the
terms thereof) or receipt by the Company of all consents with respect thereto
required to permit such an offer, following the occurrence of any Change of
Control, the Company will be required to offer (a "Change of Control Offer") to
purchase all outstanding Notes at a purchase price equal to 101% of the
aggregate principal amount of such Notes, plus Liquidated Damages and accrued
and unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"), in each case in accordance with and to the extent provided in the
Indenture. The Change of Control Offer shall remain open for a period of 20
Business Days after its commencement unless a longer offering period is required
by law. No earlier than 30 days nor later than 40 days after the notice of the
Change of Control Offer has been mailed (the "Change of Control Payment Date"),
the Company shall deposit, to the extent lawful, with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or portions
thereof tendered by Holders. The Paying Agent shall promptly mail or deliver
payment for all Notes tendered in the Change of Control Offer.
A Holder of Notes may tender or refrain from tendering all or any portion
of his Notes at his discretion by completing the form entitled "OPTION OF HOLDER
TO ELECT PURCHASE" appearing on this Note. Any portion of Notes tendered must be
in integral multiples of $1,000.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each Holder whose Notes are to be redeemed at its registered address. Notes
in denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Subordinated Debenture Trustee may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The
A-4
Company need not exchange or register the transfer of any Note or portion of a
Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Notes for a period of 15 days before the mailing of a notice of redemption
or during the period between a record date and the corresponding Interest
Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented and any existing Default under, or
compliance with any provision of, the Indenture may be waived with the written
consent of the Holders of at least 51% in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for Notes). Without the consent of any Holder, the Company and
the Subordinated Debenture Trustee may amend or supplement the Indenture or the
Notes to cure any ambiguity, defect or inconsistency; to provide for
uncertificated Notes in addition to or in place of certificated Notes; to comply
with Section 5.01 of the Indenture; to make any change that would provide any
additional rights or benefits to the Holders or that does not adversely affect
the rights under the Indenture of any Holder; or to comply with requirements of
the SEC in order to effect or maintain the qualification of the Indenture under
the TIA.
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder): (i) reduce the
principal amount of Notes whose Holders must consent to an amendment, supplement
or waiver; (ii) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption or purchase price in
connection with repurchases under Sections 3.07, 3.08 or 4.08 of the Indenture;
(iii) reduce the rate of or change the time for payment of interest on any Note;
(iv) waive a Default or Event of Default in the payment of the principal of,
premium or Liquidated Damages, if any, or interest on Notes or that resulted
from a failure to comply with Section 4.08 of the Indenture, (except a
rescission of acceleration of the Notes by Holders of at least 51% in aggregate
principal amount of the Notes); (v) make any Note payable in money other than
that stated in the Note; (vi) make any change in Article 10 of the Indenture
that adversely affects the rights of any Holder; (vii) make any change in
Section 6.04 or 6.07 of the Indenture or the last sentence of the fourth
paragraph of Section 9.02 of the Indenture; (viii) waive a redemption payment
with respect to any Note; or (ix) make any change in the foregoing.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Subordinated Debenture Trustee in a notice furnished to
Holders in accordance with the terms of this Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: default in payment
of interest or Liquidated Damages on any Note for 30 days and for five (5) days
after written notice of such default is given to the Company by the Holders of
at least 51% in principal amount of any Note following the expiration of such
30-day period; default in payment of the principal or premium of the Notes at
maturity or upon acceleration, redemption or otherwise, and such default
continues for a period of 10 days; failure by the Company for 60 days after
written notice to it from the Subordinated Debenture Trustee, or after written
notice to it and the Subordinated Debenture Trustee from Holders of at least 51%
in principal amount of the then outstanding Notes, to comply with any of its
other agreements in the Indenture or the Notes; certain defaults under other
Indebtedness; and certain events of bankruptcy or insolvency. If an Event of
Default occurs and is continuing, the Subordinated Debenture Trustee or the
Holders of at least 51% in principal amount of the then outstanding Notes by
written notice to the Company, to the agent under the Credit Facilities, the
trustees under the Senior Notes and the Exchange Debenture Trustee (and to the
Subordinated Debenture Trustee if such notice is given by the Holders) may, and
the Subordinated Debenture Trustee at the request of the Holders shall, declare
all of the Notes to be immediately due and payable for an amount equal to 100%
of the principal amount of the Notes plus premium and Liquidated Damages, if
any, and accrued interest to the date of payment upon the first to occur of an
acceleration under the Credit Facilities, the Senior Notes or the Exchange
Debentures or 15 Business Days after receipt by the Company, such agent and such
trustees of such written notice to the extent such Event of Default is
continuing, except that in the case of an Event
A-5
of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes shall become due and payable immediately without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Subordinated Debenture Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Notes.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Subordinated Debenture Trustee in its
exercise of any trust or power. The Subordinated Debenture Trustee may withhold
from Holders notice of any continuing Default or Event of Default (except a
Default or Event of Default in payment of principal, premium or Liquidated
Damages, if any, or interest or that resulted from a failure to comply with
Section 4.08 of the Indenture) if and so long as a committee of its Trust
Officers determines in good faith that withholding notice is in their interests.
The Company must furnish an annual compliance certificate to the Subordinated
Debenture Trustee.
13. SUBORDINATED DEBENTURE TRUSTEE DEALINGS WITH COMPANY. The Subordinated
Debenture Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not
Subordinated Debenture Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or shareholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations of their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Subordinated Debenture Trustee or an authenticating
agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED NOTES. In addition
to the rights provided to Holders of Notes under the Indenture, Holders of
Transfer Restricted Notes shall have all the rights set forth in the
Registration Rights Agreement.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
PRIMEDIA, INC.
745 Fifth Avenue
New York, New York 10151
Attention: Treasurer
A-6
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:______________________
Your Signature:__________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.*
- -------------------------------------
* Signature must be guaranteed by a financial institution that is a member of
the Securities Transfer Agent Medallion program in accordance with the
Securities Exchange Act of 1934, as amended.
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.08 of the Indenture, check the box below:
|_| Section 4.08
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.08 of the Indenture, state the amount you elect to
have purchased: $___________
Date: Your Signature:
---------------------- ------------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
Signature Guarantee.*
- ---------------------------
* Signature must be guaranteed by a financial institution that is a member of
the Securities Transfer Agent Medallion program in accordance with the
Securities Exchange Act of 1934, as amended.
A-8
SCHEDULE OF EXCHANGES FOR DEFINITIVE DEBENTURES
The following exchanges of a part of this Global Note for Definitive Notes
have been made:
Principal Amount of this
Amount of decrease in Amount of increase in Global Note Signature of
Principal Amount of Principal Amount of following such decrease authorized signatory
Date of Exchange this Global Note this Global Note (or increase) of Trustee Custodian
- ---------------- --------------------- --------------------- ------------------------ --------------------
A-9
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: 8 5/8% Subordinated Exchange Debentures Due 2010
Reference is hereby made to the Indenture, dated as of ___________________
(the "Indenture"), between PRIMEDIA Inc., as issuer (the "Company"), and The
Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. |_| Check if Transferee will take delivery of a beneficial interest in the
144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. |_| Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act and, (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act and (iv) if
the proposed transfer is being made prior
A2-1
to the expiration of the Restricted Period, the transfer is not being made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. |_| Check and complete if Transferee will take delivery of a beneficial
interest in a Definitive Note pursuant to any provision of the Securities Act
other than Rule 144A or Regulation S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) |_| such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) |_| such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) |_| such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) |_| such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that the Transfer complies with the transfer
restrictions applicable to Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $100,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Definitive Note will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on Definitive Notes and in the Indenture and the Securities Act.
4. |_| Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) |_| Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) |_| Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture
A2-2
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) |_| Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
------------------------------
[Insert Name of Transferor]
By:
---------------------------
Name:
Title:
Dated: ,
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP________), or
(ii) |_| Regulation S Global Note (CUSIP________), or
(iii) |_| IAI Global Note (CUSIP________), or
(b) |_| a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP________), or
(ii) |_| Regulation S Global Note (CUSIP________), or
(iii) |_| Unrestricted Global Note (CUSIP________); or
(b) |_| a Restricted Definitive Note; or
(c) |_| an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: 8 5/8% Subordinated Exchange Debentures Due 2010
(CUSIP___________)
Reference is hereby made to the Indenture, dated as of _____________
______________________ (the "Indenture"), between PRIMEDIA Inc., as issuer (the
"Company"), and The Bank of New York, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
_______, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) |_| Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) |_| Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and
C-1
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(d) |_| Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) |_| Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
|_| 144A Global Note, |_| Regulation S Global Note with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any state
of the United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued will be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-------------------------
[Insert Name of Owner]
By:
----------------------
Name:
Title:
Dated: ,
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: 8 5/8% Subordinated Exchange Debentures Due 2010
Reference is hereby made to the Indenture, dated as of
___________________ (the "Indenture"), between PRIMEDIA Inc., as issuer (the
"Company"), and The Bank of New York, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) |_| a beneficial interest in a Global Note, or
(b) |_| a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $100,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require
D-1
to confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion and we are acquiring the Notes for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act or other applicable securities law.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------------------
Name:
Title:
Dated: ,
D-1