Exhibit 4.1(a)
[W&C Draft 2/16/98]
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MENTUS MEDIA CORP.
as Issuer,
The Subsidiary Guarantors
each to become a party
hereto pursuant to
Article 11 herein
and
United States Trust Company of New York
as Trustee
$45,000,000
12% SENIOR SECURED PIK NOTES DUE 2003, SERIES A
12% SENIOR SECURED PIK NOTES DUE 2003, SERIES B
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INDENTURE
Dated as of February 1, 1998
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.
(a)(4).............................................. N.A.
(a)(5).............................................. 7.10
(b)................................................. 7.10
(c)................................................. N.A.
311(a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312(a)................................................. 2.05
(b)................................................. 11.03
(c)................................................. 11.03
313(a)................................................. 7.06
(b)(1).............................................. 7.06
(b)(2).............................................. 7.06
(c)................................................. 7.06
(d)................................................. 7.06
314(a)................................................. 4.04
(b)................................................. 10.04
(c)(1).............................................. 11.05
(c)(2).............................................. 11.05
(c)(3).............................................. N.A.
(d)................................................. 10.04
(e)................................................. 11.05
(f)................................................. N.A.
315(a)................................................. 7.01
(b)................................................. 7.05
(c)................................................. 7.01
(d)................................................. 6.05;7.01
(e)................................................. 6.11
316(a)................................................. 1.01
(a)(1)(A)........................................... 6.02
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
(c)................................................. 2.19
317(a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.04
318(a)................................................. 11.01
(b)................................................. N.A.
(c)................................................. 11.01
(i)
Trust Indenture
Act Section Indenture Section
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* This Cross-Reference Table is not part of the Indenture.
N.A. means not applicable.
(ii)
TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE...................... 1
SECTION 1.01. DEFINITIONS........................................... 1
SECTION 1.02. OTHER DEFINITIONS..................................... 22
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT........................................ 23
SECTION 1.04. RULES OF CONSTRUCTION................................. 24
ARTICLE 2 THE SECURITIES.................................................. 24
SECTION 2.01. FORM AND DATING....................................... 24
SECTION 2.02. EXECUTION AND AUTHENTICATION.......................... 25
SECTION 2.03. REGISTRAR AND PAYING AGENT............................ 26
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST................... 27
SECTION 2.05. SECURITYHOLDER LISTS.................................. 27
SECTION 2.06. TRANSFER AND EXCHANGE................................. 27
SECTION 2.07. REPLACEMENT SECURITIES................................ 28
SECTION 2.08. OUTSTANDING SECURITIES................................ 29
SECTION 2.09. TREASURY SECURITIES................................... 29
SECTION 2.10. TEMPORARY SECURITIES.................................. 29
SECTION 2.11. CANCELLATION.......................................... 30
SECTION 2.12. DEFAULTED INTEREST.................................... 30
SECTION 2.13. CUSIP NUMBER.......................................... 30
SECTION 2.14. DEPOSIT OF MONEYS..................................... 31
SECTION 2.15. RESTRICTIVE LEGENDS................................... 31
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL
SECURITY............................................. 33
SECTION 2.17. SPECIAL TRANSFER PROVISIONS........................... 34
SECTION 2.18. PERSONS DEEMED OWNERS................................. 36
ARTICLE 3 REDEMPTION...................................................... 37
SECTION 3.01. NOTICES TO TRUSTEE.................................... 37
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED................ 37
SECTION 3.03. NOTICE OF REDEMPTION.................................. 38
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION........................ 39
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE........................... 39
SECTION 3.06. SECURITIES REDEEMED IN PART........................... 39
SECTION 3.07. OPTIONAL REDEMPTION................................... 40
SECTION 3.08. MANDATORY REDEMPTION.................................. 40
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF
EXCESS PROCEEDS...................................... 40
ARTICLE 4 COVENANTS....................................................... 42
SECTION 4.01. PAYMENT OF SECURITIES................................. 42
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY....................... 43
(iii)
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SECTION 4.03. SEC REPORTS........................................... 44
SECTION 4.04. COMPLIANCE CERTIFICATES............................... 45
SECTION 4.05. TAXES................................................. 46
SECTION 4.06. STAY, EXTENSION AND USURY LAWS........................ 46
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS..................... 46
SECTION 4.08. LIMITATION ON RESTRICTIONS ON
DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES......................................... 47
SECTION 4.09. LIMITATION ON INDEBTEDNESS............................ 48
SECTION 4.10. LIMITATION ON SALES OF ASSETS AND
SUBSIDIARY STOCK..................................... 51
SECTION 4.11. LIMITATION ON AFFILIATE TRANSACTIONS.................. 53
SECTION 4.12. LIMITATION ON LIENS................................... 54
SECTION 4.13. CORPORATE EXISTENCE................................... 54
SECTION 4.14. CHANGE OF CONTROL..................................... 54
SECTION 4.15. LIMITATION ON ISSUANCES OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES..................... 56
SECTION 4.16. CONDUCT OF BUSINESS................................... 56
SECTION 4.17. LIMITATION ON SALE/LEASEBACK
TRANSACTIONS......................................... 56
SECTION 4.18. LIMITATION ON DESIGNATIONS OF
UNRESTRICTED SUBSIDIARIES............................ 57
SECTION 4.19. FUTURE NOTE GUARANTEES................................ 58
SECTION 4.20. FURTHER INSTRUMENTS AND ACTS.......................... 58
SECTION 4.21. REAL PROPERTY......................................... 58
SECTION 4.22. COLLATERAL DOCUMENTS.................................. 59
SECTION 4.23. FURTHER ASSURANCES.................................... 59
ARTICLE 5 SUCCESSORS...................................................... 60
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION
OR SALE OF ASSETS.................................... 60
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED..................... 61
ARTICLE 6 DEFAULTS AND REMEDIES........................................... 61
SECTION 6.01. EVENTS OF DEFAULT..................................... 61
SECTION 6.02. ACCELERATION.......................................... 63
SECTION 6.03. OTHER REMEDIES........................................ 64
SECTION 6.04. WAIVER OF PAST DEFAULTS............................... 64
SECTION 6.05. CONTROL BY MAJORITY................................... 65
SECTION 6.06. LIMITATION ON SUITS................................... 65
SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE
PAYMENT.............................................. 66
SECTION 6.08. COLLECTION SUIT BY TRUSTEE............................ 66
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM...................... 66
SECTION 6.10. PRIORITIES............................................ 67
SECTION 6.11. UNDERTAKING FOR COSTS................................. 67
(iv)
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ARTICLE 7 TRUSTEE......................................................... 68
SECTION 7.01. DUTIES OF TRUSTEE..................................... 68
SECTION 7.02. RIGHTS OF TRUSTEE..................................... 69
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.......................... 70
SECTION 7.04. TRUSTEE'S DISCLAIMER.................................. 70
SECTION 7.05. NOTICE OF DEFAULTS.................................... 71
SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS................. 71
SECTION 7.07. COMPENSATION AND INDEMNITY............................ 71
SECTION 7.08. REPLACEMENT OF TRUSTEE................................ 73
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC...................... 74
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION......................... 74
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY.................................. 74
ARTICLE 8 DISCHARGE OF INDENTURE.......................................... 75
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES;
DEFEASANCE........................................... 75
SECTION 8.02. CONDITIONS TO DEFEASANCE.............................. 76
SECTION 8.03. APPLICATION OF TRUST MONEY............................ 77
SECTION 8.04. REPAYMENT TO THE COMPANY.............................. 77
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.................. 78
SECTION 8.06. REINSTATEMENT......................................... 78
ARTICLE 9 AMENDMENTS...................................................... 79
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS.................... 79
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS....................... 80
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT................... 82
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS..................... 82
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES................. 83
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC....................... 83
ARTICLE 10 COLLATERAL AND SECURITY........................................ 84
SECTION 10.01. COLLATERAL DOCUMENTS................................. 84
SECTION 10.02. RECORDING AND OPINIONS............................... 85
SECTION 10.03. RELEASE OF COLLATERAL................................ 85
SECTION 10.04. SUBORDINATION........................................ 86
SECTION 10.05. CERTIFICATES OF THE COMPANY.......................... 87
SECTION 10.06. AUTHORIZATION OF ACTIONS TO BE TAKEN
BY THE TRUSTEE UNDER THE COLLATERAL
DOCUMENTS........................................... 87
SECTION 10.07. AUTHORIZATION OF RECEIPT OF FUNDS BY
THE TRUSTEE UNDER THE COLLATERAL
DOCUMENTS........................................... 87
ARTICLE 11 SUBSIDIARY GUARANTEE OF SECURITIES............................. 88
(v)
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SECTION 11.01. SUBSIDIARY GUARANTEE................................. 88
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY
GUARANTEE........................................... 89
SECTION 11.03. SUBSIDIARY GUARANTEE UNCONDITIONAL,
ETC................................................. 90
SECTION 11.04. LIMITATION OF SUBSIDIARY GUARANTOR'S
LIABILITY........................................... 91
SECTION 11.05. CONTRIBUTION......................................... 91
SECTION 11.06. RELEASE.............................................. 92
SECTION 11.07. ADDITIONAL SUBSIDIARY GUARANTORS..................... 92
SECTION 11.08. SUCCESSORS AND ASSIGNS............................... 92
SECTION 11.09. WAIVER OF STAY, EXTENSION OR USURY
LAWS................................................ 93
ARTICLE 12 MISCELLANEOUS.................................................. 93
SECTION 12.01. TRUST INDENTURE ACT CONTROLS......................... 93
SECTION 12.02. NOTICES.............................................. 93
SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS
WITH OTHER SECURITYHOLDERS.......................... 95
SECTION 12.04. CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT................................ 95
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR
OPINION............................................. 95
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.......................... 96
SECTION 12.07. LEGAL HOLIDAYS....................................... 96
SECTION 12.08. NO RECOURSE AGAINST OTHERS........................... 96
SECTION 12.09. DUPLICATE ORIGINALS.................................. 96
SECTION 12.10. GOVERNING LAW........................................ 96
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.......................................... 96
SECTION 12.12. SUCCESSORS........................................... 97
SECTION 12.13. SEVERABILITY......................................... 97
SECTION 12.14. COUNTERPART ORIGINALS................................ 97
SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC..................... 97
EXHIBIT A - FORM OF INITIAL SECURITY
EXHIBIT B - FORM OF EXCHANGE SECURITY
EXHIBIT C - FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS TO NON-QIB
ACCREDITED INVESTORS
EXHIBIT D - FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO
REGULATION S
EXHIBIT E - FORM OF SECURITY AGREEMENT
EXHIBIT F - FORM OF PLEDGE AGREEMENT
(vi)
SCHEDULE A - SCHEDULE OF LIENS
(vii)
INDENTURE, dated as of February 1, 1998, among Mentus Media Corp., a
Delaware corporation (the "Company"), and United States Trust Company of New
York, a banking corporation organized and existing under the laws of the State
of New York, in its capacity as trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 12%
Senior Secured PIK Notes due 2003, Series A (the "Initial Securities") and 12%
Senior Secured PIK Notes due 2003, Series B (the "Exchange Securities") and, to
provide therefor, the Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make the Securities (as defined), when
duly issued and executed by the Company, and authenticated and delivered
hereunder, the valid obligations of the Company, and to make this Indenture a
valid and binding agreement of the Company, have been done.
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Permitted Business; (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or a Restricted Subsidiary of the Company;
(iii) Capital Stock constituting a minority interest in any Person that at such
time is a Restricted Subsidiary of the Company; or (iv) Permitted Investments of
the type and in the amounts described in clause (viii) of the definition
thereof; provided, however, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Permitted Business.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall
mean the lesser of the amount by which (x) the fair market value of the property
of such Subsidiary Guarantor exceeds the total amount of liabilities, including,
without limitation, the probable liability of such Subsidiary Guarantor with
respect to its contingent liabilities (after giving effect to all other fixed
and contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such
date and (y) the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary by such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Subsidiary Guarantee), excluding debt in respect of the Subsidiary Guarantee, as
they become absolute and matured.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Disposition" means any sale, lease, transfer, issuance or
other disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of (or
any other equity interests in) a Restricted Subsidiary (other than directors'
qualifying shares) or of any other property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Company or any of
its Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly-Owned Subsidiary, (ii) a disposition of inventory in the
ordinary course of business, (iii) a disposition of obsolete or worn out
equipment or equipment that is no longer useful in the conduct of the business
of the Company and its Restricted Subsidiaries and that is disposed of in each
case in the ordinary course of business, (iv) dispositions of property for net
proceeds which, when taken collectively with the net proceeds of any other such
dispositions under this clause (iv) that were consummated since the beginning of
the calendar year in which such disposition is consummated, do not exceed
$100,000 and (v) transactions permitted under Section 5.01.
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the product of the numbers of years (rounded upwards to the nearest
month) from the date of determination to the dates of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to Preferred Stock multiplied by the amount of such payment by (ii) the
sum of all such payments.
"Bankruptcy Code" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the Board of
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Directors of such Person or any committee of the Board of Directors of such
Person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP, and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date such lease may be terminated without penalty.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully Guaranteed or insured by the United States
government or any agency or instrumentality thereof, (iii) certificates of
deposit, time deposits and eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers' acceptances with maturities not
exceeding one year and overnight bank deposits, in each case with any commercial
bank having capital and surplus in excess of $500 million, (iv) repurchase
obligations for underlying securities of the types described in clauses (ii) and
(iii) entered into with any financial institution meeting the qualifications
specified in clause (iii) above, (v) commercial paper rated A-1 or the
equivalent thereof by Moody's or S&P and in each case maturing within one year
after the date of acquisition, (vi) investment funds investing 95% of their
assets in securities of the types described in clauses (i)-(v) above, (vii)
readily marketable direct obligations issued by any state of the United States
of America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody's or S&P and (viii) Indebtedness
or Preferred Stock issued by Persons with a rating of "A" or higher from S&P or
"A2" or higher from Moody's.
"Change of Control" means (i) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company and its Subsidiaries; or (ii) a
majority of the Board of Directors of the Company or of any direct or indirect
holding company thereof shall consist of Persons who are not Continuing
Directors of the Company; or (iii) the acquisition by any Person or
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group of related Persons (other than the Controlling Group) for purposes of
Section 13 (d) of the Exchange Act, of the power, directly or indirectly, to
vote or direct the voting of securities having more than 50% of the ordinary
voting power for the election of directors of the Company or of any direct or
indirect holding company thereof.
"Collateral" means, collectively, the Collateral as defined in the
Collateral Documents.
"Collateral Documents" means the Security Agreement (a form of which
is attached hereto as Exhibit E), the Pledge Agreement (a form of which is
attached hereto as Exhibit F), the Mortgages, the Patent and Trademark
Assignments and any other agreements creating a lien in favor of the Trustee
securing the Securities.
"Commission" means the U.S. Securities and Exchange Commission or
its successor.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means Mentus Media Corp., a Delaware corporation, until a
successor replaces it in accordance with Article 5 hereof and thereafter means
the successor.
"Consolidated Cash Flow" for any period means the Consolidated Net
Income for such period, plus the following to the extent deducted in calculating
such Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense, (iv) amortization expense, (v) exchange or
translation losses on foreign currencies, and (vi) all other non-cash items
reducing Consolidated Net Income (excluding any non-cash item to the extent it
represents an accrual of or reserve for cash disbursements for any subsequent
period prior to the Stated Maturity of the Securities) and less, to the extent
added in calculating Consolidated Net Income, (x) exchange or translation gains
on foreign currencies and (y) non-cash items (excluding such non-cash items to
the extent they represent an accrual for cash receipts reasonably expected to be
received prior to the Stated Maturity of the Securities), in each case for such
period. Notwithstanding the foregoing, the income tax expense, depreciation
expense and amortization expense of a Subsidiary of the Company shall be
included in Consolidated Cash Flow only to the extent (and in the same
proportion) that the net income of such Subsidiary was included in calculating
Consolidated Net Income.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of Consolidated Cash Flow for the period
of the most recent two consecutive fiscal quarters ending prior to the date of
such determination and as to which financial statements are available to (ii)
Consolidated Interest Expense for such two fiscal quarters; provided, however,
that (1) if the Company or any of its Restricted
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Subsidiaries has Incurred any Indebtedness since the beginning of such period
and through the date of determination of the Consolidated Coverage Ratio that
remains outstanding or if the transaction giving rise to the need to calculate
Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
Consolidated Cash Flow and Consolidated Interest Expense for such period shall
be calculated after giving effect on a pro forma basis to (A) such Indebtedness
as if such Indebtedness had been Incurred on the first day of such period
(provided that if such Indebtedness is Incurred under a revolving credit
facility (or similar arrangement or under any predecessor revolving credit or
similar arrangement) only that portion of such Indebtedness that constitutes the
one year projected average balance of such Indebtedness (as determined in good
faith by the Board of Directors of the Company) shall be deemed outstanding for
purposes of this calculation), and (B) the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of such
period, (2) if since the beginning of such period any Indebtedness of the
Company or any of its Restricted Subsidiaries has been repaid, repurchased,
defeased or otherwise discharged (other than Indebtedness under a revolving
credit or similar arrangement unless such revolving credit Indebtedness has been
permanently repaid and the underlying commitment terminated and has not been
replaced), Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto as if such Indebtedness had been repaid,
repurchased, defeased or otherwise discharged on the first day of such period,
(3) if since the beginning of such period the Company or any of its Restricted
Subsidiaries shall have made any Asset Disposition or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Asset
Disposition, Consolidated Cash Flow for such period shall be reduced by an
amount equal to the Consolidated Cash Flow (if positive) attributable to the
assets which are the subject of such Asset Disposition for such period or
increased by an amount equal to the Consolidated Cash Flow (if negative)
attributable thereto for such period, and Consolidated Interest Expense for such
period shall be (i) reduced by an amount equal to the Consolidated Interest
Expense attributable to any Indebtedness of the Company or any of its Restricted
Subsidiaries repaid, repurchased, defeased or otherwise discharged with respect
to the Company and its continuing Restricted Subsidiaries in connection with
such Asset Disposition for such period (or, if the Capital Stock of any
Restricted Subsidiary of the Company is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale) and (ii) increased
by interest income attributable to the assets which are the subject of such
Asset Disposition for such period, (4) if since the beginning of such period the
Company or any of its Restricted Subsidiaries (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary of the Company (or any
Person which becomes a Restricted Subsidiary of the Company as a result thereof)
or an acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder which constitutes all or substantially all of
an operating unit of a business, Consolidated Cash Flow and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto (including the incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period and (5) if
since the beginning of such period any Person (that subsequently became a
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Restricted Subsidiary of the Company or was merged with or into the Company or
any Restricted Subsidiary of the Company since the beginning of such period)
shall have made any Asset Disposition, Investment or acquisition of assets that
would have required an adjustment pursuant to clause (3) or (4) above if made by
the Company or a Restricted Subsidiary of the Company during such period,
Consolidated Cash Flow and Consolidated Interest Expense for such period shall
be calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness shall be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Restricted Subsidiaries determined in
accordance with GAAP, plus, to the extent not included in such interest expense
(i) interest expense attributable to Capitalized Lease Obligations, (ii)
amortization of debt discount, (iii) capitalized interest, (iv) non-cash
interest expense, (v) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, (vi)
interest actually paid by the Company or any such Restricted Subsidiary under
any Guarantee of Indebtedness or other obligation of any other Person, (vii) net
payments (whether positive or negative) pursuant to Interest Rate Agreements,
(viii) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust to pay
interest or fees to any Person (other than the Company) in connection with
Indebtedness Incurred by such plan or trust and (ix) cash and Disqualified Stock
dividends in respect of all Preferred Stock of Subsidiaries and Disqualified
Stock of the Company held by Persons other than the Company or a Wholly-Owned
Subsidiary and less (a) to the extent included in such interest expense, the
amortization of capitalized debt issuance costs and (b) interest income.
Notwithstanding the foregoing, the Consolidated Interest Expense with respect to
any Restricted Subsidiary of the Company, that was not a Wholly-Owned
Subsidiary, shall be included only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income.
"Consolidated Net Income" means, for any period, the consolidated
net income (loss) of the Company and its consolidated Restricted Subsidiaries
determined in accordance with GAAP; provided, however, that there shall not be
included in such Consolidated Net Income: (i) any net income (loss) of any
Person acquired by the Company or any of its Restricted Subsidiaries in a
pooling of interests transaction for any period prior to the date of such
acquisition, (ii) any net income of any Restricted Subsidiary of the Company if
such Restricted Subsidiary is subject to restrictions, directly or indirectly,
on
-6-
the payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company (other than restrictions in
effect on the Issue Date with respect to a Restricted Subsidiary of the Company
and other than restrictions that are created or exist in compliance with Section
4.08, (iii) any gain or loss realized upon the sale or other disposition of any
assets of the Company or its consolidated Restricted Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) which are not sold or otherwise
disposed of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any Capital Stock of any Person, (iv) any
extraordinary gain or loss, (v) the cumulative effect of a change in accounting
principles, (vi) the net income of any Person, other than a Restricted
Subsidiary, except to the extent of the lesser of (A) cash dividends or
distributions actually paid to the Company or any of its Restricted Subsidiaries
by such Person and (B) the net income of such Person (but in no event less than
zero), and the net loss of such Person (other than an Unrestricted Subsidiary)
shall be included only to the extent of the aggregate Investment of the Company
or any of its Restricted Subsidiaries in such Person and (vii) any non-cash
expenses attributable to grants or exercises of employee stock options.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of the Company ending prior to the taking of any
action for the purpose of which the determination is being made and for which
financial statements are available (but in no event ending more than 135 days
prior to the taking of such action), as (i) the par or stated value of all
outstanding Capital Stock of the Company plus (ii) paid in capital or capital
surplus relating to such Capital Stock plus (iii) any retained earnings or
earned surplus less (A) any accumulated deficit and (B) any amounts attributable
to Disqualified Stock.
"Continuing Director" of any Person means, as of the date of
determination, any Person who (i) was a member of the Board of Directors of such
Person on the date of the Indenture; (ii) was nominated for election or elected
to the Board of Directors of such Person with the affirmative vote of a majority
of the Continuing Directors of such Person who were members of such Board of
Directors at the time of such nomination or election; or (iii) was nominated or
elected to the Board of Directors in accordance with the provisions of the
Stockholders Agreement dated as of September 25, 1996, as amended by the First
Amendment to the Stockholders Agreement dated as of August 29, 1997, as such
agreement may be further amended or supplemented from time to time.
"Controlling Group" means Gerard P. Joyce, Thomas M. Pugliese or any
Related Party.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 12.02 or such other address as to which the
Trustee may give notice to the Company.
"Currency Agreement" means in respect of a Person any foreign
exchange
-7-
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Disqualified Stock" means any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than an event which
would constitute a Change of Control), (i) matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
Stated Maturity of the Securities, or (ii) is convertible into or exchangeable
(unless at the sole option of the issuer thereof) for (a) debt securities or (b)
any Capital Stock referred to in (i) above, in each case at any time prior to
the Stated Maturity of the Securities.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Offer" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Securityholder of the Initial Securities to exchange all the Initial
Securities held by such Securityholder for the Exchange Securities in an
aggregate principal amount equal to the aggregate principal amount of the
Initial Securities held by such Securityholder, all in accordance with the terms
and conditions of the Registration Rights Agreement.
"Exchange Securities" has the meaning set forth in the preamble to
this Indenture.
"Existing Indebtedness" means Indebtedness of the Company or its
Restricted Subsidiaries in existence on the Issue Date, plus interest accrued
thereon, after application of the net proceeds of the sale of the Securities.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board
-8-
of Directors of the Company acting reasonably and in good faith and shall be
evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money, (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto) (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in clauses (i), (ii) and (v)) entered into in the ordinary
course of business of such Person to the extent that such letters of credit are
not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed
no later than the third Business Day following receipt by such Person of a
demand for reimbursement following payment on the letter of credit, (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except trade payables and accrued expenses Incurred in the
ordinary course of business), which purchase price is due more than six months
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, (v) all Capitalized Lease
Obligations and all Attributable Indebtedness of such
-9-
Person, (vi) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person, (vii)
all Indebtedness of other Persons to the extent Guaranteed by such Person,
(viii) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or, with
respect to any Restricted Subsidiary of the Company, any Preferred Stock of such
Restricted Subsidiary to the extent such obligation arises on or before the
Stated Maturity of the Securities (but excluding, in each case, accrued
dividends) with the amount of Indebtedness represented by such Disqualified
Stock or Preferred Stock, as the case may be, being equal to the greater of its
voluntary or involuntary liquidation preference and its maximum fixed repurchase
price; provided, however, that, for purposes hereof the "maximum fixed
repurchase price" of any Disqualified Stock or Preferred Stock, as the case may
be, which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Stock or Preferred Stock, as the
case may be, as if such Disqualified Stock or Preferred Stock, as the case may
be, were purchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture, and if such price is based on the fair
market value of such Disqualified Stock or Preferred Stock, as the case may be,
such fair market value shall be determined in good faith by the Board of
Directors of the Company and (ix) to the extent not otherwise included in this
definition, obligations under Currency Agreements and Interest Rate Agreements.
Unless specifically set forth above, the amount of Indebtedness of any Person at
any date shall be the outstanding principal amount of all unconditional
obligations as described above, as such amount would be reflected on a balance
sheet prepared in accordance with GAAP, and the maximum liability of such
Person, upon the occurrence of the contingency giving rise to the obligation, of
any contingent obligations described above at such date.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Purchaser" means NatWest Capital Markets Limited.
"Initial Securities" has the meaning set forth in the preamble to
this Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities which shall be each February 1, and August 1 of
each year, commencing February 1, 2001.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
-10-
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts payable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes of
Section 4.07, (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such
Restricted Subsidiary of the Company at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time that such
Subsidiary is so redesignated a Restricted Subsidiary; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors and evidenced by a Board Resolution delivered to
the Trustee.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Material Real Property" means (i) any real property owned by the
Company or any Subsidiary Guarantor or subject to a capitalized lease under
which the Company or a Subsidiary Guarantor is lessee with a fair market value
of greater than $50,000 and (ii) any other lease of real property under which
the Company or Subsidiary Guarantor is lessee the annual payments of which are
greater than $50,000.
"Moody's" means Moody's Investors Service, Inc, or any successor
thereto.
"Mortgages" means any mortgage, deed of trust or similar instrument
whereby real property will be pledged.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring
-11-
Person of Indebtedness or other obligations relating to the properties or assets
subject to, such Asset Disposition) therefrom in each case net of (i) all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, foreign and local taxes required to be paid or
accrued as a liability under GAAP, as a consequence of such Asset Disposition,
(ii) all payments made on any Indebtedness which is secured by any assets
subject to such Asset Disposition, in accordance with the terms of any Lien upon
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition or by applicable law, be repaid out of the
proceeds from such Asset Disposition, (iii) all distributions and other payments
required to be made to any Person owning a beneficial interest in assets subject
to sale or minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition, (iv) the deduction of appropriate amounts to
be provided by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset Disposition);
provided, however, that upon any reduction in such reserves (other than to the
extent resulting from payments of the respective reserved liabilities), Net
Available Cash shall be increased by the amount of such reduction to reserves,
and retained by the Company or any Restricted Subsidiary of the Company after
such Asset Disposition and (v) any portion of the purchase price from an Asset
Disposition placed in escrow (whether as a reserve for adjustment of the
purchase price, for satisfaction of indemnities in respect of such Asset
Disposition or otherwise in connection with such Asset Disposition); provided,
however, that upon the termination of such escrow, Net Available Cash shall be
increased by any portion of funds therein released to the Company or any
Restricted Subsidiary.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"NGN Displays" means the Company's out-of-home electronic billboards
which display video-based information, entertainment and advertising.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (a) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor, general partner or otherwise) and (ii) no
default with respect to which (including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Non-U.S. Person" means a Person who is not a U.S. person, as
defined in Regulation S of the Securities Act.
-12-
"Note Register" means the register of names and addresses of the
Holders of the Securities maintained by the Registrar.
"Obligations" means any principal, premium, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated February
12, 1998, pursuant to which the Initial Securities were offered, and any
supplements thereto.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, any Vice-President, the Treasurer or the
Secretary of the Company
"Officers' Certificate" shall mean a certificate signed by two
Officers of the Company, at least one of whom shall be the principal executive,
financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee and which complies, if applicable, with the
provisions of Section 12.04 hereof. The counsel may be an employee of or counsel
to the Company or the Trustee.
"Patent and Trademark Assignments" means any collateral assignments
of patents or trademarks and/or patent or trademark security agreements.
"Permitted Business" means any business which is the same as or
related, ancillary or complementary to any of the businesses of the Company and
its Restricted Subsidiaries on the date of this Indenture, as reasonably
determined by the Company's Board of Directors.
"Permitted Investment" means an Investment by the Company or any of
its Restricted Subsidiaries in (i) a Wholly-Owned Subsidiary of the Company;
provided, however, that the primary business of such Wholly-Owned Subsidiary is
a Permitted Business; (ii) another Person if as a result of such Investment such
other Person becomes a Wholly-Owned Subsidiary of the Company or is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Wholly-Owned Subsidiary of the Company; provided,
however, that in each case such Person's primary business is a Permitted
Business; (iii) Temporary Cash Investments; (iv) receivables owing to the
Company or any of its Restricted Subsidiaries, created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (v) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business; (vi) loans and advances to employees made in the ordinary
-13-
course of business consistent with past practices of the Company or such
Restricted Subsidiary in an aggregate amount outstanding at any one time not to
exceed $100,000; (vii) stock, obligations or securities received in settlement
of debts created in the ordinary course of business and owing to the Company or
any of its Restricted Subsidiaries or in satisfaction of judgments or claims;
(viii) a Person engaged in a Permitted Business or a loan or advance to the
Company the proceeds of which are used solely to make an investment in a Person
engaged in a Permitted Business or a Guarantee by the Company of Indebtedness of
any Person in which such Investment has been made; provided, however, that no
Permitted Investments may be made pursuant to this clause (viii) to the extent
the amount thereof would, when taken together with all other Permitted
Investments made pursuant to this clause (viii), exceed $1 million in the
aggregate (plus, to the extent not previously reinvested, any return of capital
realized on Permitted Investments made pursuant to this clause (viii), or any
release or other cancellation of any Guarantee constituting such Permitted
Investment); provided, further, that the aggregate amount of Permitted
Investments made pursuant to this clause (viii) that are not Investments in a
joint venture, partnership or similar arrangement in the out of home advertising
industry shall not exceed $250,000; (ix) Persons to the extent such Investment
is received by the Company or any Restricted Subsidiary as consideration for
asset dispositions effected in compliance with the covenant described under
Section 4.10; (x) prepayments and other credits to suppliers made in the
ordinary course of business consistent with the past practices of the Company
and its Restricted Subsidiaries; and (xi) Investments in connection with
pledges, deposits, payments or performance bonds made or given in the ordinary
course of business in connection with or to secure statutory, regulatory or
similar obligations, including obligations under health, safety or environmental
obligations.
"Permitted Liens" means: (i) Liens imposed by law, such as
carriers', warehousemen's and mechanics' Liens, in each case for sums not yet
due from the Company or any Restricted Subsidiary or being contested in good
faith by appropriate proceedings by the Company or any Restricted Subsidiary, as
the case may be, or other Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary, as the case may be, will then be prosecuting an appeal or
other proceedings for review; (ii) Liens for property taxes or other taxes,
assessments or governmental charges of the Company or any Restricted Subsidiary
not yet due or payable or subject to penalties for nonpayment or which are being
contested by the Company or such Restricted Subsidiary, as the case may be, in
good faith by appropriate proceedings; (iii) Liens in favor of issuers of
performance bonds and surety bonds issued pursuant to clause (vi) under Section
4.09; (iv) survey exceptions, encumbrances, easements or, reservations of, or
rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph
and telephone lines and other similar purposes or zoning or other restrictions
as to the use of real property of the Company or any Restricted Subsidiary
incidental to the ordinary course of conduct of the business of the Company or
such Restricted Subsidiary or as to the ownership of properties of the Company
or any Restricted Subsidiary, which, in either case, were not incurred in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of the Company or any Restricted
-14-
Subsidiary; (v) Liens outstanding immediately after the Issue Date as set forth
in Schedule A to this Indenture; (vi) Liens on property, assets or shares of
stock of any Restricted Subsidiary at the time such Restricted Subsidiary became
a Subsidiary of the Company; provided, however, that (A) if any such Lien has
been Incurred in anticipation of such transaction, such property, assets or
shares of stock subject to such Lien will have a fair market value at the date
of the acquisition thereof not in excess of the lesser of (1) the aggregate
purchase price paid or owed by the Company in connection with the acquisition of
such Restricted Subsidiary and (2) the fair market value of all property and
assets of such Restricted Subsidiary and (B) any such Lien will not extend to
any other assets owned by the Company or any Restricted Subsidiary; (vii) Liens
on property or assets at the time the Company or any Restricted Subsidiary
acquired such assets, including any acquisition by means of a merger or
consolidation with or into the Company or such Restricted Subsidiary; provided,
however, that (A) if any such Lien is Incurred in anticipation of such
transaction, such property or assets subject to such Lien will have a fair
market value at the date of the acquisition thereof not in excess of the lesser
of (1) the aggregate purchase price paid or owed by the Company or such
Restricted Subsidiary in connection with the acquisition thereof and of any
other property and assets acquired simultaneously therewith and (2) the fair
market value of all such property and assets acquired by the Company or such
Restricted Subsidiary and (B) any such Lien will not extend to any other
property or assets owned by the Company or any Restricted Subsidiary; (viii)
Liens securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Company or a Wholly-Owned Subsidiary; (ix) Liens to secure any
extension, renewal, refinancing, replacement or refunding (or successive
extensions, renewals, refinancings, replacements or refundings), in whole or in
part, of any Indebtedness secured by Liens referred to in any of clauses (v),
(vi) and (vii); provided, however, that any such Lien will be limited to all or
part of the same property or assets that secured the original Lien (plus
improvements on such property) and the aggregate principal amount of
Indebtedness that is secured by such Lien will not be increased to an amount
greater than the sum of (A) the outstanding principal amount, or, if greater,
the committed amount, of the Indebtedness described under clauses (v), (vi) and
(vii) at the time the original Lien became a Permitted Lien under this Indenture
and (B) an amount necessary to pay any premiums, fees and other expenses
Incurred by the Company in connection with such refinancing, refunding,
extension, renewal or replacement; (x) Liens on property or assets of the
Company securing Interest Rate Agreements or Currency Agreements so long as the
related Indebtedness is permitted under Section 4.09 and is secured by a Lien on
the same property securing the relevant Interest Rate Agreement or Currency
Agreement; (xi) Liens on property or assets of the Company or any Restricted
Subsidiary securing Indebtedness (1) under purchase money obligation, or Capital
Lease Obligations permitted under Section 4.09 or (2) under Sale/Leaseback
Transactions permitted under Section 4.17; provided, that (A) the amount of
Indebtedness Incurred in any specific case does not, at the time such
Indebtedness is Incurred, exceed the lesser of the cost or fair market value of
the property or asset acquired or constructed in connection with such purchase
money obligation or Capital Lease Obligation or subject to such Sale/Leaseback
Transaction, as the case may be, (B) such Lien will attach to such property or
asset upon acquisition of such property or asset and/or upon commencement of
such Sale/Leaseback Transaction, as the case may be, and (C) no property or
asset of the
-15-
Company or any Restricted Subsidiary (other than the property or asset acquired
or contracted in connection with such purchase money Obligation or Capital Lease
Obligation or subject to such Sale/Leaseback Transaction, as the case may be)
are subject to any Lien securing such Indebtedness; (xii) Liens granted to the
Trustee on the assets of the Company securing the Company's obligations under
this Indenture and the Securities; (xiii) Liens granted to the Trustee on the
assets of the Subsidiary Guarantors securing the Subsidiary Guarantors'
Obligations under the Guarantees; and (xiv) Liens on Receivables granted by the
Company and the Subsidiary Guarantors which secures Indebtedness to the extent
such Indebtedness is incurred pursuant to Section 4.09(b)(i).
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
hereof or any other entity.
"Pledge Agreement" means that certain pledge agreement dated as of
February 18, 1998 among the pledgors named therein and the Trustee, as
Collateral Agent.
"Pledged Equipment" means that certain equipment pledged pursuant to
(i) the Security Agreement dated as of January 1, 1997 between the Company and
Outdoor Advertising, LLC or (ii) the Security Agreement dated as of August 18,
1997 between Morris Communications, Inc. and the Company.
"Pledged Equipment Notes" means the notes issued by the Company
evidencing the Company's obligations with respect to the Pledged Equipment
Sellers.
"Pledged Equipment Sellers" means Adams Outdoor Advertising LLC and
Morris Communications, Inc.
"Preferred Stock," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Public Market" exists at any time with respect to the common stock
of the Company if (a) the common stock of the Company is then registered with
the Commission pursuant to Section 12(b) or 12(g) of the Exchange Act and traded
either on a national securities exchange or in the National Association of
Securities Dealers Automated Quotation System and (b) at least 15% of the total
issued and outstanding common stock of the Company has been distributed prior to
such time by means of an effective registration statement under the Securities
Act.
"Qualified Capital Stock" shall mean any Capital Stock which is not
Disqualified Stock.
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"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Record Date" means the record dates specified in the Securities,
whether or not a Legal Holiday.
"Receivables" means any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Company or any Restricted Subsidiary and, in
any event, shall include, but not be limited to, all the Company's or any
Restricted Subsidiary's rights to payment for goods sold or leased or services
performed by the Company or any Restricted Subsidiary, whether now in existence
or arising from time to time hereafter, including without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by the Company or any
Restricted Subsidiary to secure the foregoing, (b) all of the Company's or any
Restricted Subsidiary's right, title and interest in and to any goods, the sale
of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards and invoices related
thereto, (f) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection therewith and
amendments thereto, notices to other creditors or secured parties, and
certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances, replaces, renews, repays or extends (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," and "refinanced"
shall have a correlative meaning) any Indebtedness existing on the date of this
Indenture or Incurred in compliance with this Indenture (including Indebtedness
of the Company that refinances Indebtedness of any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary that refinances Indebtedness of
another Restricted Subsidiary) including Indebtedness that refinances
Refinancing Indebtedness; provided, however, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the earlier of (A) the first
anniversary of the Stated Maturity of the Securities and (B) Stated Maturity of
the Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an
Average Life at the time such Refinancing Indebtedness is Incurred that is equal
to or greater than the lesser of (A) the Average Life of the Securities and (B)
the Average Life of the Indebtedness being refinanced and (iii) the Refinancing
Indebtedness is in an aggregate principal amount (or if issued with original
issue discount, an aggregate issue price) that is equal to (or 101% of, in the
case of a refinancing of the Securities in connection with a Change of Control)
or less than the sum of the aggregate principal amount (or if issued with
original issue discount, the accredit value) then outstanding of the
Indebtedness being refinanced.
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"Registration Rights Agreement" means the Registration Rights
Agreement dated February 18, 1998 between the Company and the Initial Purchaser
for the benefit of itself and the Securityholders, as the same may be amended or
modified from time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"Related Party" means (A) the spouse or immediate family member of
either Gerard Joyce or Thomas Pugliese or (B) any trust, corporation,
partnership or other entity, the beneficiaries, shareholders, partners, members,
owners or Persons beneficially holding an 80% or more controlling interest of
which consist of either Gerard Joyce or Thomas Pugliese and/or such other
Persons referred to in the immediately preceding clause (A).
"Responsible Officer" when used with respect to the Trustee, means
any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"S&P" means Standard and Poor's Ratings Services, or any successor
organization thereto.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Subsidiary
leases it from such Person.
"Securities" means the Initial Securities (including any Additional
Notes) and the Exchange Securities treated as a single class of securities, as
amended or supplemented from time to time in accordance with the terms hereof,
that are issued pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Securityholder" or "Holder" means a registered holder of one or
more Securities.
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"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) 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 (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary shall refer to a Subsidiary of the Company.
"Subsidiary Guarantee" means the Guarantee of the Securities by a
Subsidiary Guarantor.
"Subsidiary Guarantor" means each Subsidiary of the Company (other
than Unrestricted Subsidiaries) created or acquired by the Company after the
Issue Date.
"Temporary Cash Investments" means any of the following: (i) any
Investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (ii) Investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital surplus and undivided
profits aggregating in excess of $250 million (or the foreign currency
equivalent thereof) and whose long-term debt, or whose parent holding company's
long-term debt, is rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act), (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) Investments in commercial paper, maturing not more than
180 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P,
(v) Investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by
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any political subdivision or taxing authority thereof, and rated at least "A" by
S&P or "A" by Moody's and (vi) Investments in mutual funds whose investment
guidelines restrict such funds' investments to those satisfying the provisions
of clauses (i) through (v) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) and the rules and regulations thereunder as in effect on the date
on which this Indenture is qualified under the TIA, except as provided in
Section 9.03 hereof; provided, however, that, in the event the Trust Indenture
Act of 1939 is amended after such date, "TIA" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means United States Trust Company of New York, a banking
corporation organized and existing under the laws of the State of New York,
until a successor replaces it in accordance with Article 7 and thereafter means
the successor serving hereunder.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted Subsidiary
by the Board of Directors in the manner 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 of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of,
or owns or holds any Lien on any property of, the Company or any Restricted
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that each Subsidiary to be so designated and each
of its Subsidiaries has not at the time of such designation, and does not
thereafter create, Incur, issue, assume, guarantee or otherwise becomes liable
with respect to any Indebtedness other than Non-Recourse Indebtedness and either
(A) the Subsidiary to be so designated has total consolidated assets of $10,000
or less or (B) if such Subsidiary has consolidated assets greater than $10,000,
then such designation would be permitted under Section 4.07. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary subject to the limitations contained in Section 4.18.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" with respect to any Person means all classes of
Capital Stock of such Person then outstanding and normally entitled to vote in
elections of directors of such Person.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, at least 99% of the Capital Stock of which (other than directors'
qualifying shares) is owned by the Company or another Wholly-Owned Subsidiary.
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"Working Capital Facility" means any credit facility entered into
during the term of the Securities providing for working capital financing for
the Company and its Restricted Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"actual knowledge"....................................................7.02
"Additional Mortgages"................................................4.21
"Additional Notes"....................................................2.02
"Affiliate Transaction"...............................................4.11
"Agent Members".......................................................2.16
"Asset Disposition Offer".............................................3.09
"Bankruptcy Law"......................................................6.01
"Change of Control Payment Date"......................................4.14
"Change of Control Purchase Price"....................................4.14
"Code"................................................................2.03
"covenant defeasance option"..........................................8.01
"Custodian"...........................................................6.01
"Declaration of Acceleration".........................................6.02
"Default Amount"......................................................6.02
"Designation".........................................................4.18
"Event of Default"....................................................6.01
"Global Note".........................................................2.01
"Guaranteed Obligations".............................................11.01
"judgment default provision"..........................................6.01
"legal defeasance option".............................................8.01
"Legal Holiday"......................................................11.07
"Notice of Default"...................................................6.01
"Offer Amount"........................................................3.09
"Offer Period"........................................................3.09
"Offshore Physical Securities"........................................2.01
"Paying Agent"........................................................2.03
"Physical Securities".................................................2.01
"Private Placement Legend"............................................2.15
"Registrar"...........................................................2.03
"Restricted Payment"..................................................1.02
"Revocation"..........................................................4.18
"Successor Company"...................................................5.01
"Taxes"...............................................................4.05
"U.S. Physical Securities"............................................2.01
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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 Securities and the Subsidiary
Guarantees;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Securities means the Company, the Subsidiary
Guarantors and any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the
plural include the singular; and
(v) provisions apply to successive events and transactions.
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ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Initial Securities and the Trustee's certificate of
authentication thereon shall be substantially in the form of Exhibit A hereto.
The Exchange Securities and the Trustee's certificate of authentication thereon
shall be substantially in the form of Exhibit B hereto. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
Depository rule or usage. The Company and the Trustee shall approve the form of
the Securities and any notation, legend or endorsement on them. Each Security
shall be dated the date of its authentication.
The terms and provisions contained in the forms of the Securities,
annexed hereto as Exhibits A and B, shall constitute, and are hereby expressly
made, a part of this Indenture and, to the extent applicable, the Company and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global notes in registered form,
in substantially the form set forth in Exhibit A (the "Global Note"), deposited
with the Trustee, as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Securities in
registered form in substantially the form set forth in Exhibit A (the "Offshore
Physical Securities"). Securities offered and sold in reliance on any other
exemption from registration under the Securities Act other than as described in
the preceding paragraph shall be issued, and Securities offered and sold in
reliance on Rule 144A may be issued, in the form of permanent certificated
Securities in registered form, in substantially the form set forth in Exhibit A
(the "U.S. Physical Securities"). The Offshore Physical Securities and the U.S.
Physical Securities are sometimes collectively herein referred to as the
"Physical Securities."
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SECTION 2.02. EXECUTION AND AUTHENTICATION.
(a) Two Officers of the Company (each of whom shall, in each case,
have been duly authorized by all requisite corporate actions) shall sign the
Securities for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid.
(b) A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture.
(c) The Trustee shall authenticate (i) Initial Securities for
original issue in the aggregate principal amount not to exceed $45,000,000; (ii)
Exchange Securities from time to time for issue only in exchange for a like
principal amount of Initial Securities; and (iii) additional Initial Securities
("Additional Notes") issued pursuant to this Indenture as interest on the
Securities (not to exceed $15,220,000) plus the principal amount of any
Securities issued in lieu of cash for Additional Interest (as defined in the
Registration Rights Agreement) due on the Securities pursuant to the
Registration Rights Agreement, in each case upon receipt of a written order of
the Company signed by one Officer.
(d) The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate.
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SECTION 2.03. REGISTRAR AND PAYING AGENT.
(a) The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New York)
where (i) Securities may be presented for registration of transfer or for
exchange ("Registrar"), (ii) Securities may be presented for payment ("Paying
Agent") and (iii) notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company may appoint
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent, Registrar or co-registrar without prior notice to any
Securityholder. The Company shall notify the Trustee and the Trustee shall
notify the Securityholders 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
Subsidiary Guarantor may act as Paying Agent, Registrar or co-registrar. The
Company shall enter into an appropriate agency agreement with any Agent not a
party to this Indenture, which shall incorporate the provisions of the TIA. The
agreement shall implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, or fails to
give the foregoing notice, the Trustee shall act as such, and shall be entitled
to appropriate compensation in accordance with Section 7.07 hereof.
(b) The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the
Securities.
(c) The Company shall, or shall cause the Paying Agent to, comply
with all withholding tax, information reporting and backup withholding tax
requirements under the United States Internal Revenue Code of 1986, as amended
(the "Code"), and the Treasury Regulations issued thereunder in respect of any
payment on, or in respect of, a Security (including, without limitation, the
collection of Internal Revenue Service ("IRS") Forms 1001, 4224, W-8 or W-9 (or
any successor form), as the case may be, and the filing of IRS Form 1042-S with
respect thereto).
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SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company, the Subsidiary Guarantors or any other obligor on the
Securities shall require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent shall hold in trust for the benefit of the
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, and interest on the Securities, and
shall notify the Trustee of any Default by the Company, any of the Subsidiary
Guarantors or any other obligor on the Securities in making any such payment.
While any such Default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company, the Subsidiary Guarantors or
any other obligor on the Securities at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary Guarantor) shall have no
further liability for the money delivered to the Trustee. If the Company, the
Subsidiary Guarantors or any other obligor on the Securities acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Securityholders all money held by it as Paying Agent.
SECTION 2.05. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders and shall otherwise comply with TIA ss. 312(a). If the Trustee
is not the Registrar, the Company, the Subsidiary Guarantors or any other
obligor on the Securities shall furnish to the Trustee at least seven Business
Days before each Interest Payment Date and at such other times as the Trustee
may request in writing a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Securityholders, including
the aggregate principal amount of the Securities held by each thereof, and the
Company, the Subsidiary Guarantors or any other obligor on the Securities shall
otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Where Securities are presented to the Registrar or a
co-registrar with a request to register the transfer thereof or exchange them
for an equal principal amount of Securities of other denominations, the
Registrar shall, subject to Section 2.17, register the transfer or make the
exchange if its requirements for such transactions are met; provided, that any
Security presented or surrendered for registration of transfer or exchange shall
be duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Trustee duly executed by the
Securityholder thereof or his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall issue and the Trustee
shall authenticate Securities at the Registrar's request.
(b) Neither the Registrar nor the Company shall be required (i) to
issue, to register the transfer of or to exchange Securities during a period
beginning at the opening of business on a Business Day 15 days before the day of
any selection of Securities for redemption under Section 3.02 hereof and ending
at the close of business on the day of
-26-
selection, (ii) to register the transfer of or exchange any Security so selected
for redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part or (iii) to register the transfer or exchange of
a Security between the Record Date and the next succeeding Interest Payment
Date.
(c) No service charge by the Company shall be made for any
registration of a transfer or exchange (except as otherwise expressly permitted
herein), but the Registrar may require payment by the Securityholder of a sum
sufficient to cover any transfer tax or similar governmental charge payable, or
fee in connection therewith (other than such transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.10, 3.06, 3.09,
4.14 or 9.05 hereof).
(d) Any Holder of the Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interests in such Global Note
may be effected only through a book entry system maintained by the Holder of
such Global Note (or its agent), and that ownership of a beneficial interest in
the Global Note shall be required to be reflected in a book entry.
SECTION 2.07. REPLACEMENT SECURITIES.
(a) If any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon receipt by it of the written order of the Company signed by two
Officers of the Company, shall authenticate a replacement Security if the
Trustee's requirements for replacements of Securities are met. If required by
the Trustee or the Company, an indemnity bond must be supplied by the Holder
that is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Subsidiary Guarantors, the Trustee, any Agent or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Company and the Trustee may charge a Securityholder for reasonable out-of-pocket
expenses in replacing a Security.
(b) Every replacement Security is an obligation of the Company and
each of the Subsidiary Guarantors.
SECTION 2.08. OUTSTANDING SECURITIES.
(a) The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by the Company or by the
Trustee, those delivered to the Trustee for cancellation and those described in
this Section as not outstanding.
(b) If a Security is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.
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(c) 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.
(d) Subject to Section 2.09 hereof, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company or a Subsidiary
Guarantor 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, the Subsidiary Guarantors, or any of their respective
Affiliates shall be considered as though not outstanding, except that for
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which a Responsible Officer
of the Trustee has actual knowledge are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon written
order of the Company signed by two Officers of the Company. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company, the Subsidiary Guarantors and the Trustee consider
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee, upon receipt of the written order of the Company
signed by two Officers of the Company, shall authenticate definitive Securities
in exchange for temporary Securities. Until such exchange, temporary Securities
shall be entitled to the same rights, benefits and privileges as definitive
Securities.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee (or its Agent) shall cancel all Securities, if not already
cancelled, surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall destroy cancelled Securities (subject to
the record retention requirement of the Exchange Act), and deliver certification
of their destruction to the Company, unless by a written order, signed by two
Officers of the Company, the Company shall direct that cancelled Securities be
returned to it. The Company may not issue new Securities to replace Securities
that it has redeemed or paid or that have been delivered to the Trustee for
cancellation. If the Company acquires any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless or until the same are surrendered to the
Trustee (or its Agent) for cancellation pursuant to this Section.
-28-
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
Securityholders on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five Business Days prior to
the payment date, in each case at the rate provided in the Securities and in
Section 4.01 hereof. The Company shall, with the consent of the Trustee, fix or
cause to be fixed each such special record date and payment date. At least 15
days before the special record date, the Company (or, upon the written request
of the Company, the Trustee, in the name of and at the expense of the Company)
shall mail to Securityholders 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 NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and
if so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Securityholders; provided that no representation
shall be deemed to be made by the Trustee as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Securities, and that reliance
may be placed only on the other identification numbers printed on the
Securities. The Company shall promptly notify the Trustee of any change in the
CUSIP number.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and Maturity Date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Securityholders on
such Interest Payment Date or Maturity Date, as the case may be.
SECTION 2.15. RESTRICTIVE LEGENDS.
Each Global Note and Physical Security that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") unless
otherwise agreed by the Company and the Securityholder thereof:
THIS NOTE OR ITS PREDECESSORS HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
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BENEFIT OF, UNITED STATES PERSONS OR A BENEFICIAL INTEREST HEREIN EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) or (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING
THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH
RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO MENTUS MEDIA CORP. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRUSTEE), AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO MENTUS MEDIA CORP. THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (G) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO MENTUS
MEDIA CORP.) AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATES
SECURITIES LAWS AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES"
AND "U.S. PERSON" HAVE
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THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING RESTRICTIONS;
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) The Global Note initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.15.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the
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Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of the Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interest of beneficial owners in the Global Note may be transferred or
exchanged for Physical Securities in accordance with the rules and procedures of
the Depository and the provisions of Section 2.17. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Note if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the Global
Note and a successor depository is not appointed by the Company within 90 days
of such notice or (ii) an Event of Default has occurred and is continuing and
the Registrar has received a written request from the Depository or the Trustee
to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b) above, the Registrar shall (if one or more Physical Securities are
to be issued) reflect on its books and records the date and a decrease in the
principal amount of the beneficial interest in the Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Note, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in the Global Note pursuant to paragraph
(b) or (c) above shall, except as otherwise provided by paragraphs (a)(i)(x) and
(c) of Section 2.17, bear the Private Placement Legend.
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Securityholder is
entitled to take under this Indenture or the Securities.
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SECTION 2.17. SPECIAL TRANSFER PROVISIONS.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears the
Private Placement Legend, if (x) the requested transfer is after February
18, 2000 or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S.Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit C hereto or (2) in the case of a
transfer to a Non-U.S. Person, the proposed transferor has delivered to
the Registrar a certificate substantially in the form of Exhibit D hereto;
and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures, whereupon (a) the Registrar shall reflect on its books and
records the date and (if the transfer does not involve a transfer of
outstanding Physical Securities) a decrease in the principal amount of the
Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and (b) the Company shall
execute and the Trustee shall authenticate and deliver one or more
Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Security stating, or has otherwise advised the Company and
the Registrar in writing, that the sale has been effected in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that any such account is
a QIB within the meaning of Rule 144A, and it is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined
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not to request such information and that it is aware that the transferor
is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the Global Note, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect
on its books and records the date and an increase in the principal amount
of the Global Note in an amount equal to the principal amount of the
Physical Securities to be transferred, and the Trustee shall cancel the
Physical Securities so transferred.
(c) Private Placement Legend. Upon the registration of the transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of the transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar shall deliver
only Securities that bear the Private Placement Legend unless (i) the
circumstance contemplated by paragraph (a)(i)(x) of this Section 2.17 exists or
(ii) there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain for at least two years copies of all
letters, notices and other written communications received pursuant to Section
2.16 or this Section 2.17. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
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SECTION 2.18. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer
and subject to Section 2.12, the Company, the Trustee, any Paying Agent, any
Registrar and any co-registrar and Agent of the foregoing shall deem and treat
the Person in whose name any Security shall be registered upon the register of
Securities kept by the Registrar as the absolute owner of such Security (whether
or not such Security shall be overdue and notwithstanding any notation of the
ownership or other writing thereon made by anyone other than the Company, any
Registrar or any co-registrar) for the purpose of receiving payments of
principal of or interest on such Security and for all other purposes; and none
of the Company, the Trustee, any Paying Agent, any Registrar or any co-registrar
or any Agent of the foregoing shall be affected by any notice to the contrary.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO 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
Trustee, at least 45 days (unless a shorter period is acceptable to the Trustee)
but not more than 60 days before a redemption date, an Officers' Certificate
setting forth (i) the Section of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Securities
to be redeemed, (iv) the redemption price and accrued and unpaid interest and
(v) whether it requests the Trustee to give notice of such redemption.
(b) If the Company is required to make an offer to purchase
Securities pursuant to the provisions of Sections 3.09 or 4.14 hereof, it shall
furnish to the Trustee at least 30 days but not more than 60 days before a
purchase date, an Officers' Certificate setting forth (i) the Section of this
Indenture pursuant to which the offer to purchase shall occur, (ii) the proposed
purchase date, (iii) the maximum principal amount of Securities to be purchased,
(iv) the purchase price and accrued and unpaid interest, (v) whether it requests
the Trustee to give notice of such redemption and (vi) further setting forth a
statement to the effect that (a) the Company or one of its Subsidiaries has
effected an Asset Disposition and the conditions set forth in Section 4.10 have
been satisfied or (b) a Change of Control has occurred and the conditions set
forth in Section 4.14 have been satisfied, as applicable.
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SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
(a) If less than all of the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed among the Securityholders on
a pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate (and in such manner as complies with applicable
legal and stock exchange requirements, if any), unless such method is otherwise
prohibited. In the event of partial redemption by lot, 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 Trustee from
the outstanding Securities not previously called for redemption.
(b) The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed. Securities may
be redeemed in part in multiples of $1,000 principal amount only. 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.
SECTION 3.03. NOTICE OF REDEMPTION.
(a) Subject to the provisions of Section 3.09 hereof, at least 30
days before a redemption date, the Company shall mail or cause to be mailed a
notice of redemption by first class mail, postage prepaid to each Holder whose
Securities are to be redeemed at the last address for such Holder then shown on
the Note Register books.
The notice shall identify the Securities to be redeemed and shall
state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Security is being redeemed in part only, 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 shall be
issued;
(iv) the name and address of the Paying Agent;
(v) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the redemption date;
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(vii) the paragraph of the Securities and/or Section of this
Indenture pursuant to which the Securities called for redemption are being
redeemed; and
(viii) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption.
(b) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided,
however, that the Company shall have delivered to the Trustee at least 45 days
(unless a shorter period is acceptable to the Trustee) prior to the proposed
redemption date an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Securities called for redemption become due and payable on the
redemption date at the redemption price plus accrued and unpaid interest, if
any.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
(a) Prior to 10:00 a.m., New York City time, on the redemption date,
the Company shall deposit with the Paying Agent (other than the Company or any
of its Subsidiaries) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date. The Paying Agent shall
promptly return to the Company any money deposited with the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Securities to be redeemed.
(b) If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest ceases to accrue on the
Securities or the portions of Securities called for redemption whether or not
such Securities are presented for payment, and the only remaining right of the
Holders of such Securities shall be to receive payment of the redemption price
upon surrender to Paying Agent if the Securities are redeemed. If a Security is
redeemed on or after an Interest Record Date but on or prior to the related
Interest Payment Date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Security was registered at the close of business on
such record 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, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid and, to the extent lawful,
on any interest not paid on such unpaid principal, in each case at the rate
provided in the Securities and in Section 4.01 hereof.
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SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and upon the Company's written request, the Trustee shall
authenticate for the Securityholder at the expense of the Company a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Securities will not be redeemable at the option of the Company
prior to February 1, 2000. On and after such date, the Company may redeem all or
any portion of the Securities at a redemption price equal to a percentage of the
principal amount thereof 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 period commencing on February
1 of the years set forth below, plus in each case, accrued and unpaid interest
to the date of redemption:
Period Redemption Price
------ ----------------
2000 106.50%
2001 103.25%
2002 and thereafter 100.00%
SECTION 3.08. MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Securities.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.10 hereof, the Company
shall commence an offer to all Securityholders to purchase Securities (an "Asset
Disposition Offer"), it shall follow the procedures specified below:
(i) The Asset Disposition Offer shall remain open for a period of 30
Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the "Offer
Period"). No later than five Business Days after the termination of the
Offer Period (the "Purchase Date"), the Company shall purchase the
principal amount of Securities required to be purchased pursuant to
Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount
has been tendered, all Securities tendered in response to the Asset
Disposition Offer.
(ii) If the Purchase Date is on or after a Record Date and on or
before the related Interest Payment Date, any accrued interest shall be
paid to the Person under
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whose name a Security is registered at the close of business on such
Record Date, and no additional interest shall be payable to holders who
tender Securities pursuant to the Asset Disposition Offer.
(iii) Upon the commencement of any Asset Disposition Offer, the
Company shall send or cause to be sent in accordance with Section 3.03, a
notice to each Securityholder. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Securities
pursuant to the Asset Disposition Offer. The notice, which shall govern
the terms of the Asset Disposition Offer, shall state:
(1) that the Asset Disposition Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the
Asset Disposition Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Security not tendered or accepted for payment
shall continue to accrue interest;
(4) that any Security accepted for payment pursuant to the
Asset Disposition Offer shall cease to accrue interest after the
Purchase Date;
(5) that Holders electing to have a Security purchased
pursuant to any Asset Disposition Offer shall be required to
surrender the Security, with the form entitled "Option of
Securityholder to Elect Purchase" on the reverse of the Security
completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at
least three days before the Purchase Date;
(6) that Holders shall be entitled to withdraw their election
if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have the Security purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the Company shall
select the Securities to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(8) that Holders whose Securities were purchased only in part
shall
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be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(iv) On or before the Purchase Date, the Trustee shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Securities or portions thereof tendered
pursuant to the Asset Disposition Offer or, if less than the Offer Amount
has been tendered, all Securities or portions thereof tendered, and
deliver to the Trustee an Officers' Certificate stating that such
Securities or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Paying Agent shall
promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Security tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Security,
and at the written request of the Company the Trustee shall authenticate
and mail or deliver such new Security to such Holder equal in principal
amount to any unpurchased portion of the Security surrendered. Any
Security not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the
results of the Asset Disposition Offer on the Purchase Date.
(b) In the event the Company is required to make an offer to
purchase Securities pursuant to Sections 3.09 and 4.10 hereof and the amount of
the Excess Proceeds from the Asset Disposition are not evenly divisible by
$1,000, the Trustee shall promptly refund to the Company any remaining Excess
Proceeds.
(c) Other than as specifically provided in this Section 3.09, any
offer to purchase pursuant to this Section 3.09 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
(a) The Company shall pay the principal of, premium, if any, and
interest on the Securities on the dates and in the manner provided in the
Securities and in this Indenture. Principal, premium, if any, and interest shall
be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary, holds as of 10:00 a.m. New York City time on the due
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Company, no later than
five Business Days following the date of payment, any money that exceeds such
amount of principal, premium, if any, and interest paid or payable on the
Securities.
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(b) The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 2% per annum in excess of the then applicable interest rate 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.
(c) Through and including August 1, 2000, on each Interest Payment
Date, the Company may, at its option and in its sole discretion, in lieu of the
payment of interest on the Securities in whole or in part in cash, pay such
interest on the Securities through the issuance of Additional Notes in an
aggregate principal amount equal to the amount of interest that would otherwise
be payable with respect to the Securities in cash; provided, however, that the
Company may issue Additional Notes only in denominations of $1,000 and integral
multiples of $1,000. The Company shall notify the Trustee in writing of its
election to pay interest through the issuance of Additional Notes and the
aggregate amount of Additional Notes to be issued not less than 10 nor more than
45 days prior to the record date for an Interest Payment Date on which
Additional Notes will be issued. On each such Interest Payment Date, the Trustee
shall authenticate Additional Notes for original issuance to each Holder on the
relevant record date in the aggregate principal amount required to pay such
interest. Each Additional Note is an additional obligation of the Company and
shall be governed by, and entitled to the benefits of, this Indenture and shall
be subject to the terms of this Indenture and shall be pari passu with and
subject to the same terms (including the rate of interest from time to time
payable thereon) as the Securities (except, as the case may be, with respect to
the issuance date and aggregate principal amount). The Company shall pay
interest on Global Notes through the issuance of Additional Notes only in
accordance with the rules and regulations of the Depository as in effect from
time to time. From and after August 1, 2000, interest on the Securities will be
payable only in cash.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company shall maintain in the Borough of Manhattan, in the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where 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 prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
(b) 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
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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, in the City of New York for such purposes. The Company shall give
prior written notice to the Trustee of any such designation or rescission and of
any change in the location of any such other office or agency.
(c) The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03. SEC REPORTS.
(a) Upon consummation of the Exchange Offer and the issuance of the
Exchange Securities, the Company (at its own expense) shall file with the
Commission and shall furnish to the Trustee and each Securityholder within 15
days after it files them with the Commission copies of the quarterly and annual
reports and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) to be filed pursuant to Section 13 or 15(d) of the Exchange Act
(without regard to whether the Company is subject to the requirements of such
Section 13 or 15(d) of the Exchange Act); provided, that prior to the
consummation of the Exchange Offer and the issuance of the Exchange Securities,
the Company (at its own expense), will mail to the Trustee and the
Securityholders in accordance with paragraph (b) of this Section 4.03
substantially the same information that would have been required by the
foregoing documents within 15 days of when any such document would otherwise
have been required to be filed with the Commission. Upon qualification of this
Indenture under the TIA, the Company shall also comply with the provisions of
TIA ss. 314(a).
(b) At the Company's expense, the Company shall cause an annual
report if furnished by it to stockholders generally and each quarterly or other
financial report if furnished by it to stockholders generally to be filed with
the Trustee and mailed to the Securityholders at their addresses appearing in
the register of Securities maintained by the Registrar at the time of such
mailing or furnishing to stockholders.
(c) The Company shall provide to any Securityholder any information
reasonably requested by such Securityholder concerning the Company (including
financial statements) necessary in order to permit such Securityholder to sell
or transfer Securities in compliance with Rule 144A under the Securities Act.
(d) If the Company instructs the Trustee to distribute any of the
documents described in Section 4.03(a) to the Securityholders, the Company shall
provide the Trustee with a sufficient number of copies of all such documents.
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SECTION 4.04. COMPLIANCE CERTIFICATES.
(a) The Company and each Subsidiary Guarantor shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate signed by its principal executive officer, principal financial
officer or principal accounting officer stating that a review of the activities
of the Company and its Subsidiaries, as the case may be, during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether each has kept, observed, performed and fulfilled its
Obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge each has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action each 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 above shall be accompanied by a
written statement of (x) 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 which would lead them to believe that the Company has violated
any provisions of Article 4, 5 or 6 of this Indenture insofar as they relate to
accounting matters or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation and (y) if any Restricted Subsidiary's financial
statements are not prepared on a consolidated basis with the Company's, such
Restricted Subsidiary'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
which would lead them to believe that any of the Restricted Subsidiaries is in
Default under this Indenture or, if any such Default 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, deliver to the Trustee, forthwith upon any Officer becoming aware
of (i) any Default or Event of Default or (ii) any event of default under any
other mortgage, indenture or instrument to which the Company is a party, an
Officers' Certificate specifying such Default, Event of Default or event of
default and what action the Company is taking or proposes to take with respect
thereto.
(d) The Company shall also comply with TIA ss. 314(a)(4).
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SECTION 4.05. TAXES.
The Company will, and will cause its Restricted Subsidiaries to, pay
and discharge when due and pay all taxes, levies, imposts, duties or other
governmental charges ("Taxes") imposed on its income or profits or on any of its
properties except such Taxes which are being contested in good faith in
appropriate proceedings, and for which adequate reserves have been established
with GAAP.
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
covenants or the performance of this Indenture (including, but not limited to,
the payment of the principal of or interest on the Securities); and the Company
and each Subsidiary Guarantor (to the extent that they may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenant
that they shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries, directly or indirectly, to (i) declare or pay any dividend or make
any distribution on or in respect of its Capital Stock (including any payment in
connection with any merger or consolidation involving the Company or any of its
Restricted Subsidiaries), (ii) purchase, redeem, retire or otherwise acquire for
value any Capital Stock of the Company held by Persons other than a Wholly-Owned
Subsidiary of the Company or any Capital Stock of a Restricted Subsidiary of the
Company held by any Affiliate of the Company, other than a Wholly-Owned
Subsidiary (in either case, other than in exchange for its Capital Stock (other
than Disqualified Stock)), (iii) purchase, repurchase, redeem, defease or
otherwise acquire or retire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated Obligations (other
than the purchase, repurchase or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
purchase, repurchase or acquisition) or (iv) make any Investment (other than a
Permitted Investment) in any Person (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Investment
as described in preceding clauses (i) through (iv) being referred to as a
"Restricted Payment").
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SECTION 4.08. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS
FROM RESTRICTED SUBSIDIARIES.
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The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any such Restricted Subsidiary to
(i) pay dividends or make any other distributions on its Capital Stock or pay
any Indebtedness or other obligation owed to the Company, (ii) make any loans or
advances to the Company or (iii) transfer any of its property or assets to the
Company, except: (a) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date; (b) any encumbrance or restriction
with respect to such a Restricted Subsidiary pursuant to an agreement relating
to any Indebtedness issued by such Restricted Subsidiary on or prior to the date
on which such Restricted Subsidiary was acquired by the Company and outstanding
on such date (other than Indebtedness Incurred in anticipation of, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary of the Company or was acquired by the
Company); (c) any encumbrance or restriction with respect to such a Restricted
Subsidiary pursuant to an agreement evidencing Indebtedness Incurred without
violation of this Indenture or effecting a refinancing of Indebtedness issued
pursuant to an agreement referred to in clauses (a) or (b) or this clause (c) or
contained in any amendment to an agreement referred to in clauses (a) or (b) or
this clause (c); provided, however, that the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in any of such agreement,
refinancing agreement or amendment, taken as a whole, are no less favorable to
the Holders of the Securities in any material respect, as determined in good
faith by the Board of Directors of the Company, than encumbrances and
restrictions with respect to such Restricted Subsidiary contained in agreements
in effect at, or entered into on, the Issue Date; (d) in the case of clause
(iii), of this Section 4.08, any encumbrance or restriction (A) that restricts
in a customary manner the subletting, assignment or transfer of any property or
asset that is a lease, license, conveyance or contract or similar property or
asset, (B) by virtue of any transfer of, agreement to transfer, option, or right
with respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture, (C) that is
included in a licensing agreement to the extent such restrictions limit the
transfer of the property subject to such licensing agreement or (D) arising or
agreed to in the ordinary course of business and that does not, individually or
in the aggregate, detract from the value of property or assets of the Company or
any of its Subsidiaries in any manner material to the Company or any such
Restricted Subsidiary; (e) in the case of clause (iii) of this Section 4.08
above, restrictions contained in security agreements, mortgages or similar
documents securing Indebtedness of a Restricted Subsidiary to the extent such
restrictions restrict the transfer of the property subject to such security
agreements; (f) in the case of clause (iii) of this Section 4.08 above, any
instrument governing or evidencing Indebtedness of a Person acquired by the
Company or any Restricted Subsidiary of the Company at the time of such
acquisition, which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person so acquired;
provided, however, that such Indebtedness is not Incurred in connection with or
in contemplation of such acquisition; (g) any restriction with respect to such a
Restricted Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all of the Capital Stock or assets of
such Restricted Subsidiary pending the closing of such sale or disposition; and
(h) encumbrances or
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restrictions arising or existing by reason of applicable law.
SECTION 4.09. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness; provided, however, that the
Company and any of its Restricted Subsidiaries may Incur Indebtedness if (i) no
Default or Event of Default shall have occurred and be continuing at the time of
such Incurrence or would occur as a consequence of such Incurrence and (ii) on
the date thereof the Consolidated Coverage Ratio would be greater than 2.5:1.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred pursuant to a Working Capital Facility
(including, without limitation, any renewal, extension, refunding,
restructuring, replacement or refinancing, thereof); provided, however,
that the aggregate principal amount of all Indebtedness Incurred pursuant
to this clause (i) does not exceed (a) prior to the date on which the
Company shall have installed 11,000 NGN Displays, $3 million at any one
time outstanding or (b) from and after the date on which the Company shall
have installed 11,000 NGN Displays, $8 million at any one time
outstanding;
(ii) Indebtedness represented by Capitalized Lease Obligations,
mortgage financings or purchase money obligations, in each case Incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property or equipment used in a
Permitted Business or Incurred to refinance any such purchase price or
cost of construction or improvement, in each case Incurred no later than
365 days after the date of such acquisition or the date of completion of
such construction or improvement; provided, however, that the principal
amount of any Indebtedness Incurred pursuant to this clause (ii), together
with Indebtedness Incurred in connection with Sale/Leaseback Transactions
in accordance with Section 4.17, shall not exceed $3 million at any time
outstanding;
(iii) Indebtedness of the Company owing to and held by any
Wholly-Owned Subsidiary or Indebtedness of a Restricted Subsidiary owing
to and held by the Company or any Wholly-Owned Subsidiary; provided,
however, that any subsequent issuance or transfer of any Capital Stock or
any other event which results in any such Wholly-Owned Subsidiary ceasing
to be a Wholly-Owned Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or any Wholly-Owned Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such Indebtedness
by the issuer thereof;
(iv) Indebtedness represented by (a) the Securities, (b) any
Subsidiary Guarantees, (c) Existing Indebtedness and (d) any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this
clause (iv) or Incurred
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pursuant to paragraph (a);
(v) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on the date on which such Restricted Subsidiary was acquired
by the Company (other than Indebtedness Incurred in anticipation of, or to
provide all or any portion of the funds or credit support utilized to
consummate the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Subsidiary or was otherwise
acquired by the Company); provided, however, that at the time such
Restricted Subsidiary is acquired by the Company, the Company would have
been able to Incur $ 1.00 of additional Indebtedness pursuant to paragraph
(a) above after giving effect to the Incurrence of such Indebtedness
pursuant to this clause (v) and (B) Refinancing Indebtedness Incurred by a
Restricted Subsidiary in respect of Indebtedness Incurred by such
Restricted Subsidiary pursuant to this clause (v);
(vi) Indebtedness (A) in respect of performance bonds, bankers'
acceptances and surety or appeal bonds provided by the Company or any of
its Restricted Subsidiaries to their customers in the ordinary course of
their business, (B) in respect of performance bonds or similar obligations
of the Company or any of its Restricted Subsidiaries for or in connection
with pledges, deposits or payments made or given in the ordinary course of
business in connection with or to secure statutory, regulatory or similar
obligations, including obligations under health, safety or environmental
obligations, (C) arising from Guarantees to suppliers, lessors, licensees,
contractors, franchises or customers of obligations (other than
Indebtedness) Incurred in the ordinary course of business and (D) under
Currency Agreements and Interest Rate Agreements; provided, however, that
in the case of Currency Agreements and Interest Rate Agreements, such
Currency Agreements and Interest Rate Agreements are entered into for bona
fide hedging purposes of the Company or its Restricted Subsidiaries (as
determined in good faith by the Board of Directors of the Company) and
correspond in terms of notional amount, duration, currencies and interest
rates, as applicable, to Indebtedness of the Company, or its Restricted
Subsidiaries Incurred without violation of this Indenture or to business
transactions of the Company or its Restricted Subsidiaries on customary
terms entered into in the ordinary course of business;
(vii) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in each case Incurred in
connection with the disposition of any business assets or Restricted
Subsidiary of the Company (other than Guarantees of Indebtedness or other
obligations Incurred by any Person acquiring all or any portion of such
business assets or Restricted Subsidiary of the Company for the purpose of
financing such acquisition) in a principal amount not to exceed the gross
proceeds actually received by the Company or any of its Restricted
Subsidiaries in connection with such
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disposition; provided, however, that the principal amount of any
Indebtedness Incurred pursuant to this clause (vii) when taken together
with all Indebtedness Incurred pursuant to this clause (vii) and then
outstanding, shall not exceed $250,000;
(viii) Indebtedness consisting of (A) Guarantees by the Company of
Indebtedness Incurred by a Wholly-Owned Subsidiary without violation of
this Indenture (so long as the Company could have Incurred such
Indebtedness directly without violation of this Indenture) and (B)
Guarantees by a Restricted Subsidiary of senior Indebtedness Incurred by
the Company without violation of this Indenture (so long as such
Restricted Subsidiary could have Incurred such Indebtedness directly
without violation of this Indenture);
(ix) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument issued by
the Company or its Restricted Subsidiaries drawn against insufficient
funds in the ordinary course of business in an amount not to exceed
$250,000 at any time, provided that such Indebtedness is extinguished
within two Business Days of its incurrence; and
(x) Indebtedness (other than Indebtedness described in clauses
(i)-(ix)) in a principal amount which, when taken together with the
principal amount of all other Indebtedness Incurred pursuant to this
clause (x) and then outstanding, will not exceed $500,000 (it being
understood that any Indebtedness Incurred under this clause (x) shall
cease to be deemed Incurred or outstanding for purposes of this clause (x)
(but shall be deemed to be Incurred for purposes of paragraph (a)) from
and after the first date on which the Company or its Restricted
Subsidiaries could have Incurred such Indebtedness under the foregoing
paragraph (a) without reliance upon this clause (x)).
(c) Neither the Company nor any Restricted Subsidiary shall Incur
any Indebtedness under paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to refinance any Subordinated Obligations of the Company
or a Restricted Subsidiary unless such Indebtedness shall be subordinated to the
Securities and the Subsidiary Guarantees, as the case may be, to at least the
same extent as such Subordinated Obligations.
(d) The Company will not permit any Unrestricted Subsidiary to Incur
any Indebtedness other than Non-Recourse Debt.
SECTION 4.10. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any Asset Disposition unless (i) the Company or
such Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value (as determined in good faith
by the Company's Board of Directors)
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(including as to the value of all non-cash consideration), of the shares and
assets subject to such Asset Disposition, (ii) at least 80% of the consideration
thereof received by the Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents and (iii) an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be): (A) first, to the extent the Company or any
Restricted Subsidiary elects (or is required by the terms of any senior
Indebtedness), (x) to prepay, repay or purchase senior Indebtedness or (y) to
the investment in or acquisition of Additional Assets within 365 days from the
later of the date of such Asset Disposition or the receipt of such Net Available
Cash; (B) second, within 365 days from the receipt of such Net Available Cash,
to the extent of the balance of such Net Available Cash after application in
accordance with clause (A), to make an offer to purchase Securities at 100% of
the principal amount thereof plus accrued and unpaid interest, if any, thereon;
(C) third, within 90 days after the later of the application of Net Available
Cash in accordance with clauses (A) and (B) and the date that is one year from
the receipt of such Net Available Cash, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A) and (B), to
prepay, repay or repurchase Indebtedness (other than Preferred Stock) of a
Wholly-Owned Subsidiary (in each case other than Indebtedness owned to the
Company); and (D) fourth, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A), (B) and (C), to (w) the
investment in or acquisition of Additional Assets, (x) the making of Temporary
Cash Investments, (y) the prepayment, repayment or purchase of Indebtedness of
the Company (other than Indebtedness owing to any Subsidiary of the Company) or
Indebtedness of any Subsidiary (other than Indebtedness owed to the Company, or
any of its Subsidiaries) or (z) any other purpose otherwise permitted under this
Indenture, in each case within the later of 45 days after the application of Net
Available Cash in accordance with clauses (A), (B) and (C) or the date that is
one year from the receipt of such Net Available Cash; provided, however, that,
in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (A), (B), (C) or (D) above, the Company or such Restricted
Subsidiary shall retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions, the Company and its Restricted Subsidiaries shall not be required to
apply any Net Available Cash in accordance herewith except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this covenant at any time exceed $500,000. The
Company shall not be required to make an offer for Securities pursuant to this
covenant if the Net Available Cash available therefor (after application of the
proceeds as provided in clause (A)) is less than $500,000 for any particular
Asset Disposition (which lesser amounts shall be carried forward for purposes of
determining whether an offer is required with respect to the Net Available Cash
from any subsequent Asset Disposition).
For the purposes of this covenant, the following will be deemed to
be cash: (x) the assumption by the transferee of senior Indebtedness of the
Company or senior Indebtedness of any Restricted Subsidiary and the release of
the Company or such Restricted Subsidiary from all liability on such senior
Indebtedness in connection with such Asset Disposition (in which case the
Company shall, without further action, be deemed to have
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applied such assumed Indebtedness in accordance with clause (A) of the preceding
paragraph) and (y) securities received by the Company or any Restricted
Subsidiary of the Company from the transferee that are promptly (and in any
event within 60 days) converted by the Company or such Restricted Subsidiary
into cash.
(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to clause (a)(iii)(B), the Company will be required to
purchase Securities tendered pursuant to an offer by the Company for the
Securities at a purchase price of 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the purchase date in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
this Indenture. If the aggregate purchase price of the Securities tendered
pursuant to the offer is less than the Net Available Cash allotted to the
purchase of the Securities, the Company will apply the remaining Net Available
Cash in accordance with clauses (a)(iii)(C) or (D) above.
(c) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Indenture by virtue thereof.
SECTION 4.11. LIMITATION ON AFFILIATE TRANSACTIONS.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or conduct any transaction
or series of related transactions (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with or for the
benefit of any Affiliate of the Company, other than a Wholly-Owned Subsidiary
(an "Affiliate Transaction") unless: (i) the terms of such Affiliate Transaction
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than those that could be obtained at the time of such transaction in
arm's length dealings with a Person who is not such an Affiliate; (ii) in the
event such Affiliate Transaction involves an aggregate amount in excess of
$100,000, the terms of such transaction have been approved by a majority of the
members of the Board of Directors of the Company and by a majority of the
disinterested members of such Board, if any (and such majority or majorities, as
the case may be, determines that such Affiliate Transaction satisfies the
criteria in (i) above); and (iii) in the event such Affiliate Transaction
involves an aggregate amount in excess of $250,000, the Company has received a
written opinion from an independent investment banking firm of nationally
recognized standing that such Affiliate Transaction is fair to the Company or
such Restricted Subsidiary, as the case may be, from a financial point of view;
provided, however, that in the event advertising contracts entered into in the
ordinary course of business between the Company and Hachette Filipacchi exceed
$250,000, such contracts need only be approved in the manner contemplated in
(a)(ii) above.
-51-
(b) The foregoing paragraph (a) shall not apply to (i) any issuance
of securities, or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment arrangements, or any stock
options and stock ownership plans for the benefit of employees, officers and
directors, consultants and advisors approved by the Board of Directors of the
Company, (ii) loans or advances to employees in the ordinary course of business
of the Company or any of its Restricted Subsidiaries in aggregate amount
outstanding not to exceed $100,000 at any time, (iii) any transaction between
Wholly-Owned Subsidiaries, (iv) indemnification agreements with, and the payment
of fees and indemnities to, directors, officers and employees of the Company and
its Restricted Subsidiaries, in each case in the ordinary course of business,
(v) transactions pursuant to agreements in existence on the Issue Date which are
(x) described in the Offering Memorandum or (y) otherwise, in the aggregate,
immaterial to the Company and its Restricted Subsidiaries taken as a whole, (vi)
any employment, non-competition or confidentiality agreements entered into by
the Company or any of its Restricted Subsidiaries with its employees in the
ordinary course of business and (vii) the issuance of Capital Stock of the
Company (other than Disqualified Stock).
SECTION 4.12. LIMITATION ON LIENS.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Liens,
except for Permitted Liens.
SECTION 4.13. 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 in accordance with its organizational documents (as the same
may be amended from time to time) and the rights (charter and statutory),
licenses and franchises of the Company.
SECTION 4.14. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control each Securityholder
will have the right to require the Company to repurchase all or any part of such
Securityholder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase (subject to the right of Securityholders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date) (such
applicable purchase price being hereinafter referred to as the "Change of
Control Purchase Price").
(b) Within 30 days following any Change of Control, unless the
Company has mailed a redemption notice with respect to all the outstanding
Securities in connection with such Change of Control, the Company shall mail a
notice to each Securityholder with a copy to the Trustee stating:
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(i) that a Change of Control has occurred and that such
Securityholder has the right to require the Company to purchase such
Securityholder's Securities at a purchase price in cash equal to the
Change of Control Purchase Price;
(ii) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed) (the "Change of
Control Payment Date"); and
(iii) the procedures determined by the Company, consistent with this
Indenture, that a Securityholder must follow in order to have its
Securities purchased.
(c) Securityholders electing to have a Security repurchased will be
required to surrender the Security, with the form entitled "Option of
Securityholder to Elect Purchase" on the reverse of the Security completed, to
the Company at the address specified in the notice at least 10 Business Days
prior to the Change of Control Payment Date. Securityholders will be entitled to
withdraw their election if the Trustee or the Company receives not later than
three Business Days prior to the Change of Control Payment Date a telegram,
telex, facsimile transmission or letter setting forth the name of the
Securityholder, the principal amount of the Security which was delivered for
repurchase by the Securityholder and a statement that such Securityholder is
withdrawing his election to have such Security purchased.
(d) On the Change of Control Payment Date, the Company will, to the
extent lawful, (i) accept for payment all Securities or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Trustee an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate stating the aggregate principal amount of Securities or portions
thereof being purchased by the Company. The Trustee will promptly mail to each
Securityholder so tendered the Change of Control Payment for such Securities,
and the Trustee will promptly authenticate and mail (or cause to be transferred
by book entry) to each Securityholder a new Security equal in principal amount
to any unpurchased portion of the Securities surrendered, if any; provided that
each such new Security will be in a principal amount of $1,000 or an integral
multiple thereof. Unless the Company defaults in the payment for any Securities
properly tendered pursuant to the Change of Control Offer, any Securities
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date.
(e) The Company will to the extent applicable comply with any tender
offer rules under the Exchange Act which may then be applicable, including Rule
14e-1, in connection with any offer required to be made by the Company to
repurchase the Securities as a result of a Change of Control. To the extent that
the provisions of any securities laws
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or regulations conflict with the provisions of this Indenture relative to the
Company's obligation to make an offer to repurchase the Securities as a result
of a Change of Control, the Company will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
under such provisions of the Indenture by virtue thereof.
SECTION 4.15. LIMITATION ON ISSUANCES OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES.
The Company will not permit any of its Restricted Subsidiaries to
issue any Capital Stock to any Person (other than to the Company or a
Wholly-Owned Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly-Owned Subsidiary of the Company) to own any Capital Stock of
a Restricted Subsidiary of the Company, if in either case as a result thereof
such Restricted Subsidiary would no longer be a Restricted Subsidiary of the
Company; provided, however, that this provision shall not prohibit (x) the
Company or any of its Restricted Subsidiaries from selling or otherwise
disposing of all of the Capital Stock of any, Restricted Subsidiary or (y) the
designation, of a Restricted Subsidiary as an Unrestricted Subsidiary in
compliance with this Indenture.
SECTION 4.16. CONDUCT OF BUSINESS.
The Company shall not, nor shall permit any of its Subsidiaries,
directly or indirectly, to engage in any business other than a Permitted
Business.
SECTION 4.17. LIMITATION ON SALE/LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, Guarantee or otherwise become liable
with respect to any Sale/Leaseback Transaction with respect to any property or
assets unless (i) the Company or such Restricted Subsidiary, as the case may be,
would be entitled to pursuant to this Indenture Incur Indebtedness secured by a
Permitted Lien on such property or assets in an amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction, (ii) the Net Cash
Proceeds from such Sale/Leaseback Transaction are at least equal to the fair
market value of the property or assets subject to such Sale/Leaseback
Transaction (such fair market value determined, in the event such property or
assets have a fair market value in excess of $500,000, no more than 30 days
prior to the effective date of such Sale/Leaseback Transaction, by the Board of
Directors of the Company as evidenced by a resolution of such Board of
Directors), (iii) the Net Cash Proceeds of such Sale/Leaseback Transaction are
applied in accordance with the provisions described under Section 4.10 and (iv)
the Indebtedness Incurred in connection with such Sale/Leaseback Transaction,
together with Indebtedness Incurred in accordance with (ii) of paragraph (b) of
Section 4.09, does not exceed $3 million at any time outstanding.
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SECTION 4.18. LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES.
(a) The Company may designate any Subsidiary of the Company (other
than a Subsidiary of the Company which owns Capital Stock of a Restricted
Subsidiary) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") only if:
(i) no Default shall have occurred and be continuing at the time of
or, after giving effect to such Designation; and
(ii) the Company would be permitted under this Indenture to make an
Investment at the time of such Designation (assuming the effectiveness of
such Designation) in an amount (the "Designation Amount") equal to the sum
of (i) fair market value of the Capital Stock of such Subsidiary owned by
the Company and the Restricted Subsidiaries on such date and (ii) the
aggregate amount of other Investments of the Company and the Restricted
Subsidiaries in such Subsidiary on such date; and
(iii) the Company would be permitted to Incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.09
at the time of Designation (assuming the effectiveness of such
Designation).
(b) In the event of any such Designation, the Company shall be
deemed to have made an Investment constituting a Restricted Payment pursuant to
the covenant described under Section 4.07 for all purposes of this Indenture in
the Designation Amount. The Company shall not, and shall not permit any
Restricted Subsidiary to, at any time (x) provide direct or indirect credit
support for or a Guarantee of any Indebtedness of any Unrestricted Subsidiary
(including of any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary), except, in the case of clause (x) or (y), to the extent permitted
under Section 4.07.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall then
constitute a Restricted Subsidiary, if:
(i) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been
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permitted to be incurred for all purposes of this Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions of the Company delivered to the Trustee certifying compliance with
the foregoing provisions.
SECTION 4.19. FUTURE NOTE GUARANTEES.
The Company will cause each newly organized or acquired Subsidiary
(other than any Unrestricted Subsidiary) to execute and deliver to the Trustee
pursuant to Section 11.02 a Subsidiary Guarantee of the Securities in form and
substance satisfactory to the Trustee. Such Guaranty will be secured by a first
priority Lien on all of the assets of such Subsidiary except that the Lien on
any Receivables of any such Subsidiary may be a second priority Lien in the
event that a first priority Lien secures a Working Capital Facility.
SECTION 4.20. FURTHER INSTRUMENTS AND ACTS.
The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company, except as otherwise set forth herein, but the Trustee may
require of the Company full information and advice as to the performance of the
covenants, conditions and agreements contained herein, and upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.21. REAL PROPERTY.
(a) The Company and each Subsidiary Guarantor will grant to the
Trustee security interests and mortgages in any Material Real Property acquired
after the Issue Date (collectively, the "Additional Mortgages") within 15 days
of such acquisition and shall deliver to the Trustee an Opinion of Counsel that
the Additional Mortgages comply with the requirements of this Indenture. All
such Additional Mortgages shall constitute valid and enforceable Liens superior
to and prior to the rights of all third Persons and subject to no other Liens
except Permitted Liens. The Additional Mortgages or instruments related thereto
shall have been duly recorded or filed in such manner and in such places as are
required by law to establish and perfect the Liens in favor of the Trustee
required to be granted pursuant to the Additional Mortgages and all taxes, fees
and other charges payable in connection therewith shall have been paid in full.
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SECTION 4.22. COLLATERAL DOCUMENTS.
Neither the Company nor any Subsidiary Guarantor will amend, waive
or modify, or take or refrain from taking any action which has the effect of
amending, waiving or modifying, any provision of the Collateral Documents
unless, in connection therewith, the Company shall have furnished to the Trustee
an Opinion of Counsel to the effect that such amendment, waiver, modification or
action would not have an adverse effect on the rights of the Trustee or the
Securityholders (as provided in the Collateral Documents), provided that:
(1) Collateral may be released or modified as expressly provided
herein and in the Collateral Documents;
(2) Subsidiary Guarantees, Liens, and pledges may be released as
expressly provided herein and in the Collateral Documents; and
(3) this Indenture and any of the Collateral Documents may be
otherwise amended, waived or modified pursuant to Article 9 hereof.
SECTION 4.23. FURTHER ASSURANCES.
The Company and each Subsidiary Guarantor shall execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as may be reasonably
required from time to time in order (i) to carry out more effectively the
purposes of the Collateral Documents, (ii) to subject to the Liens created by
any of the Collateral Documents any of the properties, rights or interests
covered by any of the Collateral Documents, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and the
Liens intended to be created thereby and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Trustee any of the rights
granted or now or hereafter intended to be granted to the Trustee or under any
other instrument executed in connection therewith or granted to the Company
under the Collateral Documents or under any other instrument executed in
connection therewith.
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ARTICLE 5
SUCCESSORS
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all of its assets to any Person,
unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation, partnership, trust or limited liability
company organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor
Company (if not the Company) shall expressly assume, by supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Securities and
this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default or
Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company (A) would have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately prior
to such transaction and (B) would be able to Incur at least an additional
$1.00 of Indebtedness pursuant to paragraph (a) of Section 4.09;
(iv) there has been delivered to the Trustee an Opinion of Counsel
to the effect that Holders of the Securities will not recognize income,
gain or loss for U.S. Federal income tax purposes as a result of such
consolidation, merger, conveyance, transfer or lease and will be subject
to U.S. 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 consolidation,
merger, conveyance, transfer or lease had not occurred; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
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The Successor Company will succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, but, in
the case of a lease of all or substantially all its assets, the Company will not
be released from the obligation to pay the principal of and interest on the
Securities.
Notwithstanding clauses (ii) and (iii) of Section 5.01, any
Restricted Subsidiary of the Company may consolidate with, merge into or
transfer all or part of its properties and assets to the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
(a) An "Event of Default" occurs if:
(i) there is a default in any payment of interest on any Security
when due, continued for 30 days;
(ii) there is a default in the payment of principal of any Security
when due at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise;
(iii) there is a failure by the Company to comply with its
obligations under Section 5.01 hereof;
(iv) there is failure by the Company to comply for 30 days after
notice with any of its obligations under Sections 4.01, 4.03, 4.04, 4.05,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18 or
4.19 hereof (in each case, other than a failure to purchase Securities
which shall constitute an Event of Default under clause (ii) above);
(v) there is a failure by the Company or any Subsidiary Guarantor to
comply for 60 days after notice with its other agreements contained in
this Indenture;
(vi) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $250,000 and
such default shall not have been cured or such acceleration rescinded
after a 10-day period;
(vii) any judgment or decree for the payment of money in excess of
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$250,000 (to the extent not covered by insurance) is rendered against the
Company or a Subsidiary and such judgment or decree shall remain
unsatisfied, undischarged or unstayed for a period of 60 days after such
judgment becomes final and non-appealable (the"judgment default
provision");
(viii) any Subsidiary Guarantee by a Subsidiary Guarantor ceases to
be in full force and effect (except as contemplated by the terms of this
Indenture) or any Subsidiary Guarantor denies or disaffirms its
obligations under this Indenture or its Subsidiary Guarantee and such
Default continues for 10 days;
(ix) the Company or any of its 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,
(D) makes a general assignment for the benefit of its
creditors,
(E) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, or
(F) takes any corporate action to authorize or effect any of
the foregoing;
(x) 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
Subsidiaries in an involuntary case,
(B) appoints a Custodian of the Company or any of its
Subsidiaries or for all or substantially all of the property of the
Company or any of its Subsidiaries, or
(C) orders the liquidation of the Company or any of its
Subsidiaries, and the order or decree remains unstayed and in effect
for 60 consecutive days; or
(xi) an event of default under, or if none specified therein, a
failure to comply with any provision of the Collateral Documents for a
period of 30 days after
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notice provided that if such event of default adversely affects (1)
Collateral with an aggregate book value of $100,000, (2) the priority or
perfection of the security interests purported to be created with respect
to any portion of the Collateral with an aggregate book value of $100,000
or (3) the rights and remedies of the Trustee or the respective secured
creditors in respective of any portion of the Collateral with an aggregate
book value of $100,000, then the event of default need only continue for a
period of 10 days after notice.
(b) The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
(c) A Default under clause (iv), (v) or (xi) of Section 6.01(a)
hereof is not an Event of Default until the Trustee notifies the Company or such
Subsidiary Guarantor, as the case may be, or the Holders of 25% in principal
amount of the outstanding Securities notifies the Company or such Subsidiary
Guarantor, as the case may be, and the Trustee of the Default and the Company or
such Subsidiary Guarantor, as the case may be, does not cure such Default within
the time specified in such clause (iv), (v) or (xi) after receipt of the notice.
The written 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 specified in
clause (ix) or (x) of Section 6.01(a) with respect to the Company or any
Subsidiary Guarantor) occurs and is continuing, the Trustee or the Holders of
not less than 25% in aggregate principal amount of the then outstanding
Securities by notice to the Company (and to the Trustee if given by the
Holders), may declare (a "Declaration of Acceleration") the principal amount of,
and any accrued and unpaid interest on, all the Securities to be due and payable
(the "Default Amount"). Upon any such Declaration of Acceleration the Default
Amount shall be due and payable immediately. If an Event of Default specified in
clause (ix) or (x) of Section 6.01(a) occurs with respect to the Company or any
of the Subsidiary Guarantors, the Default Amount shall ipso facto become and be
immediately due and payable without any Declaration of Acceleration or other act
on the part of the Trustee or any Securityholder. The Holders of a majority in
aggregate principal amount of the then outstanding Securities by written notice
to the Trustee and to the Company may rescind any Declaration of Acceleration if
(i) the rescission would not conflict with any judgment or decree and (ii) if
all Events of Default then continuing (other than any Events of Default with
respect to the nonpayment of principal of or interest on any Security which has
become due solely as a result of such Declaration of Acceleration) have been and
(iii) all amounts due to the Trustee under Section 7.07 have been paid, and may
waive any Default other than a Default with respect to a covenant or provision
that cannot be modified or amended without the consent of each Securityholder
pursuant to Section 9.02 hereof.
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SECTION 6.03. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the Trustee and
the Securityholders may pursue any available remedy (under this Indenture, the
Collateral Documents or otherwise) to collect the payment of principal, premium,
if any, or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
(c) If the Securities become due and payable prior to the Stated
Maturity thereof or not paid in full at the Stated Maturity thereof and after
any applicable grace period has expired, the Trustee has a right to foreclose
upon the Collateral in accordance with the instructions from the Holders of 25%
percent in aggregate principal amount of the Securities or, in the absence of
such instructions, in such manner as the Trustee deems appropriate in its
absolute discretion; provided, however, that in any event such foreclosure shall
be done in a manner consistent with the Collateral Documents.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Prior to a Declaration of Acceleration, Securityholders of not less
than a majority in aggregate principal amount of the then outstanding Securities
by notice to the Trustee may, on behalf of all the Securityholders, waive an
existing Default or Event of Default and its consequences, except a continuing
Default or Event of Default in the payment of the principal, premium, if any, or
interest on any Security (other than principal, premium (if any) or interest
which has become due solely as a result of a Declaration of Acceleration) or a
Default or Event of Default that cannot be modified or amended without the
consent of the Holder of each outstanding Security affected. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
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SECTION 6.05. CONTROL BY MAJORITY.
Securityholders of a majority in principal amount of the Securities
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Securityholders or that may involve
the Trustee in personal liability. The Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction.
SECTION 6.06. LIMITATION ON SUITS.
(a) A Securityholder may pursue a remedy with respect to this
Indenture or the Securities only if:
(i) the Securityholder has previously given to the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(iii) such Securityholder or Securityholders offer, and, if
requested, provide, to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Securities do not give the Trustee, in the
reasonable opinion of such Trustee, a direction inconsistent with the
request.
(b) A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Securityholder to receive payment of principal, premium, if any, interest on
the Security, on or after the respective due dates expressed in the Security, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Securityholder.
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SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) or an
acceleration pursuant to Section 6.02 occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company or any Subsidiary Guarantor or any other obligor on
the Securities for the whole amount of principal, premium, if any, and accrued
interest remaining unpaid on the Securities and interest on overdue principal,
premium, if any, and, to the extent lawful, interest on overdue installments of
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including any advances made by the Trustee and the
reasonable compensation, expenses and disbursements of the Trustee, its agents
and counsel, and any other amounts due to the Trustee under Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due to the Trustee under Section 7.07) and the Securityholders allowed
in any judicial proceedings relative to the Company or any Subsidiary Guarantor
(or any other obligor on the Securities), 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 Securityholder to make
such payments to the Trustee, and in the event that the Trustee shall consent to
the making of such payments directly to the Securityholders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties which the Securityholders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Securityholder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
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SECTION 6.10. PRIORITIES.
(a) If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
(i) First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
(ii) Second: if the Securityholders are forced to proceed against
the Company directly without the Trustee, to the Securityholders for their
collection costs;
(iii) Third: to the Securityholders for amounts due and unpaid on
the Securities for principal, premium, 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, if any, and
interest, respectively; and
(iv) Fourth: to the Company or, to the extent the Trustee collects
any amount pursuant to a Collateral Document from any Subsidiary
Guarantor, to such Subsidiary Guarantor, or to such party as a court of
competent jurisdiction shall direct.
(b) The Trustee may fix a record date and payment date for any
payment to Securityholders. At least 15 calendar days before such record date,
the Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and the amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Securityholder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
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ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and the Collateral Documents, and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances and in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform only those duties as are
specifically set forth in this Indenture and the duties of the Trustee
shall be determined solely by the express provisions of this Indenture,
the 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 Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture, but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine the same to determine whether or not
they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of
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this Section 7.01.
(e) No provision of this Indenture or the Collateral Documents shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or
thereunder or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of Section 7.01 and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The 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.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Subsidiary
Guarantor shall be sufficient if signed by an Officer of the Company or any
Subsidiary Guarantor.
(f) The permissive rights of the Trustee to do certain things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or wilful default with
respect to such permissive rights.
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(g) Except for an Event of Default under 6.01(a)(i) (other than with
respect to Additional Interest) or (ii) hereof, the Trustee shall not be deemed
to have notice of any Default or Event of Default, or the identity of any
Restricted Subsidiary or of the existence of any Asset Sale or Change of Control
unless specifically notified in writing of such event by the Company or the
Securityholders of not less than 25% in aggregate principal amount of Securities
outstanding.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Subsidiary Guarantor or any Affiliate of the Company or any Subsidiary Guarantor
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Collateral Documents, the
Securities or the Subsidiary Guarantees, 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 of this Indenture,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Securities or the Subsidiary
Guarantees or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication. The
Trustee makes no representation as to the validity, value or condition of any
property covered or intended to be covered by the Lien of the Collateral
Documents or any part thereof or as to the title of the Company or any
Subsidiary Guarantor to such property or as to the security afforded by the
Collateral Documents or hereby, including the perfection or priority of any
security interest granted to the Trustee.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder a notice
of the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in any payment of principal or interest on
any Security, the Trustee may withhold the notice so long as its board of
directors, a committee of its board of directors or a committee of its trust
officers in good faith determines that withholding the notice is in the interest
of the Securityholders.
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SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as the Securities remain
outstanding, the Trustee shall mail to the Securityholders 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 Trustee also shall comply
with TIA ss. 313(b)(2) and (c).
(b) A copy of each report at the time of its mailing to the
Securityholders shall be filed with the Commission and each stock exchange, if
any, on which the Securities are listed, in accordance with and to the extent
required by TIA ss. 313(d). The Company shall promptly notify the Trustee if and
when the Securities are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
(a) The Company and the each of the Subsidiary Guarantors, jointly
and severally, shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder and
under the Collateral Documents, including extraordinary services such as default
administration. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company and each of the
Subsidiary Guarantors, jointly and severally, shall reimburse the Trustee upon
request for all reasonable disbursements, advances and expenses incurred or made
by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company and each of the Subsidiary Guarantors, jointly and
severally, shall indemnify the Trustee against any and all losses, liabilities
or expenses incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Indenture and the Collateral
Documents, including the costs and expenses of enforcing this Indenture and the
Collateral Documents against the Company (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company, any Holder
or any other Person) or liability in connection with the exercise or performance
of any of its powers or duties hereunder, except as set forth below in
subparagraph (d). The Trustee shall notify the Company and each of the
Subsidiary Guarantors promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company or any Subsidiary Guarantor
shall not relieve the Company or any of the Subsidiary Guarantors of their
Obligations hereunder. The Trustee may have separate counsel and the Company and
each of the Subsidiary Guarantors, jointly and severally, shall pay the
reasonable fees and expenses of such counsel. Neither the Company nor any
Subsidiary Guarantor need pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.
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(c) The obligations of the Company and each of the Subsidiary
Guarantors under this Section 7.07 shall survive the resignation or removal of
the Trustee and the satisfaction and discharge or termination of this Indenture.
(d) Notwithstanding subparagraphs (a) or (b) above, neither the
Company nor any Subsidiary Guarantor need reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through its own
negligence, bad faith or willful misconduct.
(e) To secure the Company's and each of the Subsidiary Guarantor's
payment obligations in this Section, the Trustee shall have a Lien prior to the
Securities on all money or property held or collected by the Trustee, except
that held in trust to pay principal, premium, if any, and interest on particular
Securities. Such Lien shall survive the resignation or removal of the Trustee
and the satisfaction and discharge of this Indenture.
(f) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(ix) or (x) hereof occurs, the
expenses and the compensation for such services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign at any time and be discharged from the
trust hereby created by so notifying the Company. The Securityholders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(iii) a Custodian, receiver or other public officer takes charge of
the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall notify each
Securityholder of such event and promptly appoint a successor Trustee. Within
one year after the successor Trustee takes office, the Holders of a majority in
principal amount of the then outstanding Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
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(d) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to each Securityholder. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's and each of the Subsidiary Guarantor's
obligations under Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.
(e) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
any of the Subsidiary Guarantors or the Securityholders of at least 10% in
principal amount of the then outstanding Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) If the Trustee after written request by any Securityholder who
has been a Securityholder for at least six months fails to comply with Section
7.10, such Securityholder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
(a) There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or the District of Columbia authorized
under such laws to exercise corporate trustee power, shall be subject to
supervision or examination by Federal, State, Territorial, or District of
Columbia authority and shall have (or be a part of a holding company with) a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition.
(b) This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee shall comply with
TIA ss. 310(b); including, but not limited to the provisions regarding
"conflicting interest".
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The provisions of TIA ss. 310 shall also apply to the Company and each of the
Subsidiary Guarantors, as obligor of the Securities.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein. The
provisions of TIA ss. 311 shall apply to the Company and each of the Subsidiary
Guarantors as obligor on the Securities.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07 hereof)
canceled or for cancellation or (ii) all outstanding Securities have become due
and payable and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.07 hereof), and if
in either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.01(e) and 8.06 hereof, cease to
be of further effect. The Trustee shall acknowledge satisfaction and discharge
of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel reasonably acceptable to the Trustee and
at the cost and expense of the Company.
(b) Subject to Sections 8.01(e), 8.02 and 8.06 hereof, the Company
at any time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) all obligations under Sections
3.09, 4.04(a), (b) and (c), 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14,
4.15, 4.16, 4.17, 4.18, 4.19, 5.01(iii) and the operation of Sections
6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi), 6.01(a)(vii), 6.01(viii), 6.01(a)(xi) as
well as 6.01(a)(ix) and 6.01(a)(x) hereof (but only with respect to
Subsidiaries) ("covenant defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
(c) If the Company exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section
6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi), 6.01(a)(vii), 6.01(a)(viii), 6.01(a)(xi)
as well as 6.01(a)(ix) and 6.01(a)(x) (but only with respect to Subsidiaries) or
because of the failure of the Company or the Subsidiary Guarantors to comply
with Sections 5.01(iii). If the Company exercises either defeasance option, the
Trustee shall release all Collateral pursuant to Section 10.03.
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(d) Upon satisfaction of the conditions set forth herein and Section
8.02 and upon request of the Company, the Trustee shall acknowledge in writing
the discharge of those obligations that the Company terminates.
(e) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.01(d), 8.04,
8.05 and 8.06 hereof shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 hereof
shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE.
(a) The Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(i) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations in amounts (including interest, but without
consideration of any reinvestment of such interest) and maturities
sufficient, but in the case of the legal defeasance option only, not more
than such amounts (in each case as certified by a nationally recognized
firm of independent public accountants), to pay and discharge at their
Stated Maturity (or such earlier redemption date as the Company shall have
specified to the Trustee) the principal of, premium, if any, interest on
all outstanding Securities to maturity or redemption, as the case may be,
and to pay all of the sums payable by it hereunder; provided, that the
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, if any, and interest with respect to the Securities;
(ii) in the case of the legal defeasance option only, 123 days pass
after the deposit is made and during the 123 day period no Default or
Event of Default specified in Section 6.01(ix) or (x) hereof with respect
to the Company or any Subsidiary Guarantor occurs which is continuing at
the end of the period;
(iii) no Default or Event of Default has occurred and is continuing
on the date of such deposit and after giving effect thereto;
(iv) the deposit does not constitute a default under any other
agreement binding on the Company;
(v) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940, as amended;
(vi) in the case of the legal defeasance option, the Company shall
have
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delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or loss
for U.S. Federal income tax purposes as a result of such defeasance and
will be subject to U.S. Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance had not occurred;
(vii) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(viii) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
(b) In order to have money available on a payment date to pay
principal, premium, if any, or interest on the Securities, the U.S. Government
Obligations deposited pursuant to preceding clause (a) shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as shall provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
(c) Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3 hereof.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. 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, premium, if any, and
interest on the Securities.
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SECTION 8.04. REPAYMENT TO THE COMPANY.
(a) The 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; provided, however, that the Trustee shall not pay any such excess to the
Company unless the amount remaining on deposit with the Trustee, after giving
effect to such transfer are sufficient to pay principal, premium, if any, and
interest on the outstanding Securities, which amount shall be certified to the
Trustee by independent public accountants.
(b) The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal, premium, if
any, or interest that remains unclaimed for two years after the date upon which
such payment shall have become due; provided, however, that the Company shall
have either caused notice of such payment to be mailed to each Securityholder
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,
Securityholders entitled to the money must look to the Company and the
Subsidiary Guarantors for payment as general creditors unless an applicable
abandoned property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Company and the Subsidiary Guarantors, jointly and severally,
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and each of the Subsidiary Guarantor's Obligations under this
Indenture and the Securities and the Subsidiary Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with this Article 8; provided,
however, that if the Company or any Subsidiary Guarantor has made any payment of
principal of, premium, if any, or interest on any Securities because of the
reinstatement of its Obligations, the Company or any of the Subsidiary
Guarantors, as the case may be, shall be subrogated to the rights of the
Securityholders to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS.
(a) Notwithstanding Section 9.02 of this Indenture, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture or
the Securities without the consent of any Securityholder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article 5 hereof and Section 10.01 (concerning
amendments to the Collateral Documents expressly called for therein);
(iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated
Securities are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code);
(iv) to add Subsidiary Guarantees with respect to the Securities;
(v) to add to the covenants of the Company for the benefit of the
Securityholders or to surrender any right or power conferred upon the
Company;
(vi) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(vii) to make any change that would provide additional rights or
benefits to the Holders of the Securities or that does not, as evidenced
by an Opinion of Counsel delivered to the Trustee, adversely affect the
rights of any Securityholder in any respect;
(viii) to evidence or provide for a replacement Trustee under
Section 7.08 hereof;
(ix) to execute and deliver any documents necessary or appropriate
to release Liens on any Collateral as permitted by Section 10.03 hereof;
or
(x) to provide a security interest in any additional Collateral for
the benefit of the Securityholders;
provided, that the Company has delivered to the Trustee an Opinion of Counsel
stating that any such amendment or supplement complies with the provisions of
this Section 9.01.
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(b) Upon the request of the Company and the Subsidiary Guarantors
accompanied by Board Resolutions of their respective Boards of Directors
authorizing the execution of any such supplemental indenture, and upon receipt
by the Trustee of the documents described in Section 7.02 and Section 9.06
hereof, the Trustee shall join with the Company and the Subsidiary Guarantors in
the execution of any supplemental indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into such supplemental indenture which affects its own
rights, duties or immunities under this Indenture, the Collateral Documents or
otherwise.
(c) After an amendment or supplement under this Section 9.01 becomes
effective, the Company shall mail to all Securityholders a notice briefly
describing such amendment or supplement. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment or supplement under this Section.
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS.
(a) Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Securityholders of not less than a majority in aggregate
principal amount of the Securities then outstanding (including consents obtained
in connection with a purchase of, or tender offer or exchange offer for the
Securities) and subject to Section 6.04 and 6.07 any existing Default or Event
of Default and its consequences (other than a Default or Event of Default in the
payment of principal premium, if any, or interest, if any, on the Securities
except a payment default resulting from an acceleration of the Securities that
has been rescinded) or compliance with any provision of this Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including consents obtained
in connection with a purchase of, or tender offer or exchange offer for the
Securities). Furthermore, subject to Sections 6.04 and 6.07 hereof, the Holders
of a majority in aggregate principal amount of the Securities then outstanding
(including consents obtained in connection with a purchase of, or tender offer
or exchange offer for the Securities) may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Securities.
However, without the consent of each Securityholder affected, an amendment,
supplement or waiver under this Section 9.02 may not (with respect to any
Securities held by a non-consenting Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the stated rate of or extend the stated time for payment
of any interest on any Security;
(iii) reduce the principal of or extend the Stated Maturity of any
Security
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or alter the redemption provisions (including, without limitation,
Sections 3.07, 3.09, 4.11 and 4.14 hereof) with respect thereto;
(iv) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may be redeemed in
accordance with Section 3.07;
(v) make any Security payable in money other than that stated in the
Security;
(vi) make any change in Section 6.04 or 6.07 hereof or in this
Section 9.02(a);
(vii) waive a Default or Event of Default in the payment of
principal of premium, if any, or interest, if any, on, or redemption
payment with respect to, any or Security (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities and a waiver of the payment
default that resulted from such acceleration);
(viii) impair the right of any Holder to receive payment of
principal of and interest on such holder's Securities on or after the due
dates therefor or to institute suit for the enforcement of any payment on
or with respect to such Holder's Securities;
(ix) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions or requiring any Guaranty
hereof or in the provisions of any such Guaranty;
(x) release any Subsidiary Guarantor from its Subsidiary Guarantee,
except as provided herein; or
(xi) directly or indirectly release Liens on all or substantially
all of the Collateral securing the obligations under this Indenture, the
Securities or any Guaranty thereof.
(b) Upon the request of the Company and the Subsidiary Guarantors
accompanied by Board Resolutions of their respective Boards of Directors
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence satisfactory to the Trustee of the consent
of the Securityholders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 7.02 and Section 9.06 hereof, the Trustee shall
join with the Company and the Subsidiary Guarantors in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
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(c) It shall not be necessary for the consent of the Securityholders
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to all Securityholders a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Securityholder is a continuing consent by the Securityholder
and every subsequent Securityholder 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 Securityholder or subsequent
Securityholder may revoke the consent as to its Security if the Trustee receives
written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective when
approved by the requisite Holders and executed by the Trustee (or, if otherwise
provided in such waiver, amendment or supplement, in accordance with its terms)
and thereafter binds every Securityholder, unless it makes a change described in
any of clauses (i) through (xi) of Section 9.02, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Security who has consented
to it and every subsequent Holder of a Security or portion of a Security that
evidences the same indebtedness as the consenting Holder's Security.
(b) The Company may fix a record date for determining which
Securityholders must consent to such amendment, supplement or waiver. If the
Company fixes a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of Securityholders furnished to the Trustee prior to such
solicitation pursuant to Section 2.05 hereof, or (ii) such other date as the
Company shall designate. If a record date is fixed, then notwithstanding the
last sentence of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or 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 890
days after such record date except to the extent that the requisite number of
consents to the amendment, supplement or waiver have been obtained within
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such 90-day period or as set forth in the preceding paragraph of this Section
9.04.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
(a) Securities authenticated and delivered after the execution of
any supplemental indenture may bear a notation in form approved by the Trustee
as to any matter provided for in such amendment, supplement or waiver on any
Security thereafter authenticated. The Company in exchange for all Securities
may issue and the Trustee shall authenticate new Securities that reflect the
amendment, supplement or waiver.
(b) Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, waiver or supplemental
indenture authorized pursuant to this Article 9 if the amendment, waiver or
supplemental indenture does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may, but need not, sign
it. In signing or refusing to sign such amendment, waiver or supplemental
indenture, the Trustee shall be entitled to receive and, subject to Section
7.01, shall be fully protected in relying upon, in addition to the documents
required by Sections 7.02 and 12.04, an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that such amendment, waiver 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
and each Subsidiary Guarantor in accordance with its terms.
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ARTICLE 10
COLLATERAL AND SECURITY
SECTION 10.01. COLLATERAL DOCUMENTS.
The due and punctual payment of the principal of, premium, if any,
and interest on the Securities when and as the same shall be due and payable,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, and interest on the overdue principal of and interest
(to the extent permitted by law), if any, on the Securities and performance of
all other Obligations of the Company and the Subsidiary Guarantors to the
Securityholders or the Trustee under this Indenture and the Securities,
according to the terms hereunder or thereunder, shall be secured as provided in
the Collateral Documents. Each Securityholder, by its acceptance of a Security,
consents and agrees to the terms of the Collateral Documents (including, without
limitation, the provisions providing for foreclosure and release of Collateral)
as the same may be in effect or may be amended from time to time in accordance
with the terms thereof and hereof and authorizes and directs the Trustee as
collateral agent to enter into each of the Collateral Documents and to perform
its respective obligations and exercise its respective rights thereunder in
accordance therewith. The Company and the Subsidiary Guarantors will do or cause
to be done all such acts and things as may be necessary or proper, or as may be
required by the provisions of the Collateral Documents, to assure and confirm to
the Trustee the security interest in the Collateral contemplated hereby and by
the Collateral Documents including, except as hereinafter provided, in all
Material Real Property of the Company and the Subsidiary Guarantors acquired
after the Securities are issued, as from time to time constituted, so as to
render the same available for the security and benefit of this Indenture and of
the Securities secured hereby, according to the intent and purposes herein
expressed. The Company and each Subsidiary Guarantor shall take any and all
actions required to cause the Collateral Documents to create and maintain, as
security for the Obligations of the Company and the Subsidiary Guarantors under
this Indenture and the Securities, valid and enforceable, perfected (except as
expressly provided therein) Liens in and on all the Collateral and such real
property, in favor of the Trustee, superior to and prior to the rights of all
third persons, and subject to no other Liens, other than as provided herein and
therein.
In the event that at any time after the date of this Indenture, the
Company or any Subsidiary Guarantor acquires any Collateral, or it is determined
that any Collateral is not then subject to a perfected security interest in
favor of the Trustee pursuant to the relevant Collateral Document (after giving
effect to any express exceptions contained in such Collateral Document), then
(i) in the case of Receivables, a second priority perfected security interest in
favor of the Trustee subject only to a first priority security interest granted
pursuant to a Working Capital Facility and (ii) in the case of all other
Collateral, a first priority perfected security interest in favor of the
Trustee, shall immediately be granted in such Collateral, pursuant to the
respective Collateral Documents and, to the extent necessary, additional
security documents shall be entered into in order to effectively grant such
perfected security interests, together with such other documents, mortgage title
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insurance policies, certificates, resolutions, instruments, financing
statements, opinions and writings that would have been required to be delivered
if such perfected security interests had been created on the date of this
Indenture, all of which shall be in form and substance satisfactory to the
Trustee.
Anything in the Collateral Documents to the contrary
notwithstanding, none of the Company or any Subsidiary Guarantor will be
required to grant Liens on real property acquired after the Securities are
issued if such Lien on such real property is expressly prohibited from being
pledged pursuant to another contractual obligation binding on any such Person,
such prohibition was not incurred by such Person with the intent of negating the
requirements of this Section 10.01, such Person, after using reasonable efforts,
has been unable to terminate or modify such prohibition in order to permit such
pledge and such real property is not pledged to any other Person.
SECTION 10.02. RECORDING AND OPINIONS.
(a) The Company shall furnish to the Trustee promptly after the
execution and delivery of this Indenture or any Collateral Documents executed
and delivered after the date of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, the
Collateral Documents, financing statements or other instruments necessary to
make effective the Liens intended to be created by the Collateral Documents, and
reciting the details of such action or (ii) stating that, in the opinion of such
counsel, no such action is necessary to make such Liens effective.
(b) The Company shall furnish to the Trustee within three months
after each anniversary of the date of this Indenture, an Opinion of Counsel,
dated as of such date, stating either that (i) in the opinion of such counsel,
all action has been taken with respect to the recording, registering, filing,
re-recording, re-registering and refiling of all supplemental indentures,
financing statements, continuation statements or other instruments of further
assurance as is necessary to maintain the Liens of the Collateral Documents and
reciting the details of such action or (ii) in the opinion of such counsel, no
such action is necessary to maintain such Liens.
SECTION 10.03. RELEASE OF COLLATERAL.
(a) Subject to subsections (b) and (c) of this Section 10.03,
Collateral may be released from the Lien and security interest created by the
Collateral Documents at any time or from time to time at the sole cost and
expense of the Company (x)(i) upon payment in full of the Securities in
accordance with the terms thereof and of this Indenture and all other
Obligations of the Company and the Subsidiary Guarantors then due and owing
under this Indenture, the Securities and the Collateral Documents, including any
defeasance pursuant to Section 8.01; (ii) upon the sale or other disposition of
such Collateral constituting an Asset Sale if such sale or other disposition is
not prohibited under this Indenture and if the Net Proceeds of such sale or
other disposition are applied in accordance
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with this Indenture; (iii) upon the sale or other disposition of such Collateral
not constituting an Asset Sale by virtue of clauses (ii), (iii) and (iv) of the
definition of Asset Sales contained in Section 1.01 of this Indenture and (y)
the delivery to the Trustee of an Opinion of Counsel that such release of the
Collateral is authorized and permitted by this Section 10.03 and the applicable
Collateral Documents and that all conditions precedent to such release contained
in this Indenture and the Collateral Documents have been satisfied. Upon
compliance with the above provisions and the provisions of Section 12.04 hereof,
the Trustee shall execute, deliver or acknowledge any necessary or proper
instruments or termination, satisfaction or release provided by or on behalf of
the Company to evidence the release of any Collateral permitted to be released
pursuant to this Indenture or the Collateral Documents.
(b) At any time when a Default or Event of Default shall have
occurred and be continuing and the maturity of the Securities shall have been
accelerated (whether by declaration or otherwise) and the Trustee shall have
delivered a notice of acceleration to the Company, no release of Collateral
pursuant hereto shall be effective as against the Securityholders.
SECTION 10.04. SUBORDINATION.
(a) The Securityholders hereby acknowledge that the security
interest granted to the Trustee in the Receivables may be junior and subordinate
to the security interest in the Receivables of any lender under a Working
Capital Facility (the "Working Capital Lender"), provided, that the amount of
such Working Capital Facility shall not exceed the amount permitted by this
Indenture and provided further that such subordination shall be limited to the
Receivables and provided further, that if the Working Capital Lender receives
any cash proceeds from the sale or other disposition of the Receivables arising
from any creditor enforcement proceeding or otherwise, any cash proceeds
received in excess of the amount necessary to pay in full all outstanding
obligations of the Company to the Working Capital Lender shall be held in trust
by the Working Capital Lender for the benefit of the Trustee and promptly
delivered to the Trustee at such address specified by the Trustee.
(b) The priorities set forth herein regarding the Receivables are
applicable irrespective of the time, order or method of attachment or perfection
of the respective security interest of the Trustee or the Working Capital Lender
or of the time or order of filing of financing statements.
(c) Notwithstanding the provisions of this Indenture or any
Collateral Documents, the Trustee can enforce its rights in the Receivables only
upon 30 days written notice to the Working Capital Lender.
SECTION 10.05. CERTIFICATES OF THE COMPANY.
To the extent applicable, the Company and the Subsidiary Guarantors
shall
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comply with (a) TIA ss. 314(b), relating to Opinions of Counsel regarding the
Lien of the Collateral Documents and (b) TIA ss. 314(d), relating to the release
of Collateral from the Lien of the Collateral Documents and Officers'
Certificates or other documents regarding fair value of the Collateral. Any
certificate or opinion required by TIA ss. 314(d) may be made by an Officer of
the Company or any other obligor upon the Securities, as applicable, to the
extent permitted by TIA ss. 314(d).
SECTION 10.06. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE
TRUSTEE UNDER THE COLLATERAL DOCUMENTS.
The Trustee may, in its sole discretion and without the consent of
the Securityholders, on behalf of the Securityholders, take all actions it deems
necessary or appropriate in order to (a) enforce any of the terms of the
Collateral Documents and (b) collect and receive any and all amounts payable in
respect of the Obligations of the Company and the Subsidiary Guarantors
hereunder. The Trustee shall have the power to institute and to maintain such
suits and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Collateral
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interests and the interests of the
Securityholders in the Collateral (including power to institute and maintain
suits or proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Securityholders or of the Trustee).
SECTION 10.07. AUTHORIZATION OF RECEIPT OF FUNDS BY THE
TRUSTEE UNDER THE COLLATERAL DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of
the Securityholders distributed under the Collateral Documents, and to make
further distributions of such funds to the Securityholders according to the
provisions of this Indenture and the Collateral Documents.
ARTICLE 11
SUBSIDIARY GUARANTEE OF SECURITIES
SECTION 11.01. SUBSIDIARY GUARANTEE.
(a) Each Subsidiary Guarantor, by execution and delivery of a
supplemental Indenture pursuant to Section 9.01(a)(iv) and 11.07 agreeing to be
bound by the terms hereof, jointly and severally irrevocably and unconditionally
guarantees, as a primary obligor and not a surety, to each Securityholder of a
Security now or hereafter
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authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Securities or the Obligations of the Company hereunder or thereunder, (i)
the due and punctual payment of the principal, premium, if any, interest
(including post-petition interest in any proceeding under any Bankruptcy Law
whether or not an allowed claim in such proceeding) on overdue principal,
premium, if any, and interest, if lawful on such Security, and (ii) all other
monetary Obligations payable by the Company under this Indenture (including
under Section 7.07 hereof) and the Securities (all of the foregoing being
hereinafter collectively called the "Guaranteed Obligations"), when and as the
same shall become due and payable, whether by acceleration thereof, call for
redemption or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code), in
accordance with the terms of any such Security and of this Indenture, subject,
however, in the case of (i) and (ii) above, to the limitations set forth in
Section 9.04 hereof. Each Subsidiary Guarantor hereby agrees that its
Obligations hereunder shall be absolute and unconditional, irrespective of, and
shall be unaffected by, any failure to enforce the provisions of any such
Security or this Indenture, any waiver, modification or indulgence granted to
the Company with respect thereto, the recovery of any judgment against the
Company, any action to enforce the same, by the Securityholders or the Trustee,
the recovery of any judgment against the Company, any action to enforce the
same, or any other circumstances which may otherwise constitute a legal or
equitable discharge of a surety or guarantor. Each Subsidiary Guarantor hereby
waives diligence, presentment, filing of claims with a court in the event of a
merger or bankruptcy of the Company, any right to require a proceeding first
against the Company, the benefit of discussion, protest or notice with respect
to any such Security or the Indebtedness evidenced thereby and all demands
whatsoever, and covenants that its Subsidiary Guarantee shall not be discharged
as to any such Security except by payment in full of the principal thereof,
premium, if any, and all accrued interest thereon.
(b) Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Securityholder or the Trustee to any security held
for payment of the Guaranteed Obligations.
(c) Each Subsidiary Guarantor agrees that it shall not be entitled
to, and hereby irrevocably waives, any right of subrogation in relation to the
Securityholders or the Trustee in respect of any Guaranteed Obligations. Each
Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor,
on the one hand, and the Securityholders and the Trustee, on the other hand, (x)
the maturity of the Guaranteed Obligations may be accelerated as provided in
Article 6 for the purposes of such Subsidiary Guarantor's Subsidiary Guarantee
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Guaranteed Obligations, and (y) in the event
of any Declaration of Acceleration of such Guaranteed Obligations as provided in
Article 6 hereof, such Guaranteed Obligations (whether or not due and payable)
shall forthwith become due and payable by such Subsidiary Guarantor for the
purpose of this Article 11.
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(d) Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Noteholder in enforcing any rights under this Article 11.
(e) Each Subsidiary Guarantor also agrees that the Guaranteed
Obligations will be secured by a first priority lien on all the assets of such
Subsidiary Guarantor.
(f) Each Subsidiary Guarantor agrees to become a party to the
Collateral Documents whereby the Guaranteed Obligations will be secured in the
manner set forth in such Collateral Documents.
(g) The Subsidiary Guarantee set forth in this Article 11 shall not
be valid or become obligatory for any purpose with respect to a Security until
the certificate of authentication on such Security shall have been signed by or
on behalf of the Trustee.
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
(a) To evidence each Subsidiary Guarantor's Subsidiary Guarantee set
forth in this Article 11, each Subsidiary Guarantor hereby agrees that a
notation of such Subsidiary Guarantee shall be placed on each Security
authenticated and delivered by the Trustee.
(b) This Indenture shall be executed on behalf of each Subsidiary
Guarantor, and an Officer of each Subsidiary Guarantor shall sign the notation
of the Subsidiary Guarantee on the Security, by manual or facsimile signature.
If an Officer whose signature is on this Indenture or the notation of Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which the Subsidiary Guarantee is endorsed, the Subsidiary Guarantee
shall be valid nevertheless. Each Subsidiary Guarantor hereby agrees that the
Subsidiary Guarantee set forth in Section 11.01 hereof shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation of the Subsidiary Guarantee.
(c) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of each Subsidiary
Guarantor.
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SECTION 11.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC.
Upon failure of payment when due of any Guaranteed Obligation for
whatever reason, each Subsidiary Guarantor will be obligated to pay the same
immediately. Each Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be continuing, absolute and unconditional, irrespective of: the
recovery of any judgment against the Company or any Subsidiary Guarantor; any
extension, renewal, settlement, compromise, waiver or release in respect of any
obligation of the Company under this Indenture or any Security, by operation of
law or otherwise; any modification or amendment of or supplement to this
Indenture or any Security; any change in the corporate existence, structure or
ownership of the Company, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Company or its assets or any resulting release
or discharge of any obligation of the Company contained in this Indenture or any
Security; the existence of any claim, set-off or other rights which any
Subsidiary Guarantor may have at any time against the Company, the Trustee, any
Securityholder or any other Person, whether in connection herewith or any
unrelated transactions; provided, that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim; any
invalidity or unenforceability relating to or against the Company for any reason
of this Indenture or any Security, or any provision of applicable law or
regulation purporting to prohibit the payment by the Company of the principal,
premium, if any, or interest on any Security or any other Guaranteed Obligation;
or any other act or omission to act or delay of any kind by the Company, the
Trustee, any Securityholder or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the Subsidiary Guarantors' obligations
hereunder. Each Subsidiary Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demand whatsoever and covenants that this
Subsidiary Guarantee will not be discharged except by the complete performance
of the obligations contained in the Securities, this Indenture and in this
Article 11. Each Subsidiary Guarantor's obligations hereunder shall remain in
full force and effect until this Indenture shall have terminated and the
principal of and interest on the Securities and all other Guaranteed Obligations
shall have been paid in full. If at any time any payment of the principal of or
interest on any Security or any other payment in respect of any Guaranteed
Obligation is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, each
Subsidiary Guarantor's obligations hereunder with respect to such payment shall
be reinstated as though such payment had been due but not made at such time, and
this Article 11, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Subsidiary Guarantor irrevocably waives any and all
rights to which it may be entitled, by operation of law or otherwise, upon
making any payment hereunder to be subrogated to the rights of the payee against
the Company with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by the Company in respect thereof.
SECTION 11.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
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Each Subsidiary Guarantor, and by its acceptance of a Security each
Securityholder, hereby confirms that it is the intention of all such parties
that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary
Guarantee not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Law, Federal and state fraudulent conveyance laws or other legal
principles. To effectuate the foregoing intention, the Securityholders and each
Subsidiary Guarantor hereby irrevocably agree that the obligations of such
Subsidiary Guarantor under the Subsidiary Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guarantee or pursuant to Section 11.05 hereof, result in the
obligations of such Subsidiary Guarantor under the Subsidiary Guarantee not
constituting such fraudulent transfer or conveyance under federal or state law.
SECTION 11.05. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under the Subsidiary Guarantee, such Funding
Subsidiary Guarantor shall be entitled to a contribution from all other
Subsidiary Guarantors in a pro rata amount based on the Adjusted Net Assets of
each Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by that Funding Subsidiary Guarantor in
discharging the Company's obligations with respect to the Securities or any
other Subsidiary Guarantor's obligations with respect to the Subsidiary
Guarantee.
SECTION 11.06. RELEASE.
Upon the sale or disposition of all of the Equity Interests of a
Subsidiary Guarantor to a Person which is not the Company or a Subsidiary of the
Company, which is otherwise in compliance with this Indenture, such Subsidiary
Guarantor shall be deemed released from all its obligations under this Indenture
without any further action required on the part of the Trustee or any
Securityholder; provided, however, that any such termination shall occur if and
only to the extent that all Obligations of each Subsidiary Guarantor under all
of its guarantees of, and under all of its pledges of assets or other security
interests which secure, Indebtedness of the Company and the other Subsidiary
Guarantors shall also terminate upon such release, sale or transfer; provided
further, that without limiting the foregoing, any proceeds received by the
Company or any Subsidiary of the Company from such transaction shall be applied
as provided in Section 4.10 and Section 3.09. The Trustee shall execute an
appropriate instrument prepared by the Company evidencing such release upon
receipt of a request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 11.06. Any Subsidiary
Guarantor not so released remains liable for the full amount of principal,
premium, if any, and interest on the Securities as provided in this Article 11.
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SECTION 11.07. ADDITIONAL SUBSIDIARY GUARANTORS.
Any Person that was not a Subsidiary Guarantor on the date of this
Indenture may become a Subsidiary Guarantor by executing and delivering to the
Trustee (a) a supplemental indenture in form and substance satisfactory to the
Trustee, which subjects such Person to the provisions of this Indenture as a
Subsidiary Guarantor and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such customary exceptions concerning creditors' rights and equitable
principles as may be acceptable to the Trustee in its discretion). The
Subsidiary Guarantee of each Person described in this Section 11.07 shall apply
to all Securities theretofore executed and delivered, notwithstanding any
failure of such Securities to contain a notation of such Subsidiary Guarantee
thereon.
SECTION 11.08. SUCCESSORS AND ASSIGNS.
This Article 11 shall be binding upon each Subsidiary Guarantor and
its successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Securityholders and, in the event of any transfer
or assignment of rights by any Securityholder or the Trustee, the rights and
privileges conferred upon that party in this Indenture and in the Securities
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 11.09. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive each
such Subsidiary Guarantor from performing its Subsidiary Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each such Subsidiary Guarantor hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with another
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provision which is required to be included in this Indenture by the TIA, the
required provision shall control. Until such time as this Indenture becomes
qualified under the TIA, the Company, the Subsidiary Guarantors and the Trustee
shall be deemed subject to and governed by the TIA as if the Indenture were so
qualified on the date hereof.
SECTION 12.02. NOTICES.
(a) Any notice or communication by the Company, any Subsidiary
Guarantor or the Trustee to the other is duly given if in writing and delivered
in person or mailed by first class mail (registered or certified, return receipt
requested), confirmed facsimile transmission or overnight air courier
guaranteeing next day delivery, to the other's address:
If to the Company or any of the Subsidiary Guarantors:
Mentus Media Corp.
9531 West 78th Street
Suite 400
Minneapolis, MN 55344
Attention: Chief Executive Officer
If to the Trustee:
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, NY 10036
Attention: Corporate Trust Department
(b) The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) All notices and communications (other than those sent to
Securityholders) 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 by facsimile
transmission; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
(d) Any notice or communication to a Securityholder shall be mailed
by first class mail, postage prepaid, to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Securityholder or any defect in it shall
not affect its sufficiency with respect to other Securityholders.
-90-
(e) If a notice or communication is mailed to any Person in the
manner provided above within the time prescribed, it is duly given, whether or
not the addressee receives it.
(f) If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the same
time.
SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS
WITH OTHER SECURITYHOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Subsidiary Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA ss. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company and/or any of the
Subsidiary Guarantors to the Trustee to take any action under this Indenture,
the Company and/or any of the Subsidiary Guarantors, as the case may be, shall
furnish to the Trustee:
(i) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 12.05. 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 comply with the provisions of TIA
ss. 314(e), shall comply with the definition of the term "Officers' Certificate"
and shall include:
(i) a statement that the person making such certificate or opinion
has read such covenant or condition;
(ii) 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;
-91-
(iii) 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 satisfied; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 12.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York City, 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 12.08. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, agent,
manager, stockholder or partner of the Company or its predecessors 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 or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. This waiver and release are part of the
consideration for issuance of the Securities.
SECTION 12.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 12.10. GOVERNING LAW.
This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York but without
giving effect to applicable principles of conflicts of law to the extent that
the application of the laws of another jurisdiction would be required thereby.
-92-
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Subsidiary Guarantors, the Company or their
respective Subsidiaries. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 12.12. SUCCESSORS.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Securities shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 12.13. 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 12.14. COUNTERPART ORIGINALS.
This Indenture may be executed in any number of counterparts, each
of which so executed shall be an original, but all of them together represent
the same agreement.
SECTION 12.15. 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 of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
-93-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
SIGNATURES
MENTUS MEDIA CORP.
By
---------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
By
---------------------------------
Name:
Title:
-94-
EXHIBIT A
THIS NOTE OR ITS PREDECESSORS HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE
OFFERED, SOLD OR PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, UNITED STATES PERSONS OR A BENEFICIAL
INTEREST HEREIN EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT
A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT
AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO MENTUS
MEDIA CORP. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE),
AND IF SUCH
EXHIBIT A
Page 2
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO MENTUS
MEDIA CORP. THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (G) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO MENTUS MEDIA CORP.) AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE STATES SECURITIES LAWS
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS;
THIS NOTE WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF
SECTIONS 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED. THE ISSUE DATE OF THIS NOTE IS
FEBRUARY 18, 1998. FOR INFORMATION REGARDING THE
ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL
AMOUNT AND YIELD TO MATURITY FOR PURPOSES OF THE OID
RULES, PLEASE CONTACT THE TREASURER OF THE COMPANY AT
9531 WEST 78TH STREET, SUIT 400, MINNEAPOLIS, MN
55344.
EXHIBIT A
Page 3
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF
THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF
SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
EXHIBIT A
Page 4
CUSIP No:
(Front of Security)
No. 1 $___________
MENTUS MEDIA CORP.
12% Senior Secured PIK Note due 2003, Series A
MENTUS MEDIA CORP., a Delaware corporation promises to pay to ____________, or
its registered assigns, the principal sum of $___________ [in the case of a
Global Security, insert --, as such amount may be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the
Depository,] on February 1, 2003.
Interest Payment Dates: February 1 and August 1, commencing February 1, 1998.
Record Dates: January 15 and July 15 (whether or not a Business Day).
Additional provisions of this Security are set forth on the other side of this
Security.
Dated:
MENTUS MEDIA CORP.
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
EXHIBIT A
Page 5
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture
United States Trust Company of New York, as Trustee
By
---------------------------------
Authorized Signatory
EXHIBIT A
Page 6
(Reverse of Security)
12% SENIOR SECURED PIK NOTE DUE 2003, Series A
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. Interest. Mentus Media Corp., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate and in the manner specified below. The Company shall pay, in cash,
interest on the principal amount of this Security at the rate per annum of 12%;
provided, however, that through and including August 1, 2000, on each Interest
Payment Date (as defined below), the Company may, at its option and in its sole
discretion, in lieu of the payment in whole or in part of interest due on this
Security, pay interest on this Security through the issuance of additional
Securities in an aggregate principal amount equal to the amount of interest that
would be payable with respect to this Security, if such interest were paid in
cash. After August 1, 2000 (as defined below), the Company shall pay interest on
this Security in cash. The Company shall notify the Trustee in writing of its
election to pay interest on this Security through the issuance of additional
Securities not less than 10 nor more than 45 days prior to the record date for
the Interest Payment Date on which additional Securities will be issued.
Additional Securities shall be governed by, and entitled to the benefits of, the
Indenture and shall be subject to the terms of the Indenture and shall be
subject to the same terms (including the rate of interest from time to time
payable thereon) as this Security (except, as the case may be, with respect to
the issuance date and aggregate principal amount). The Company will pay interest
semiannually in arrears on February 1 and August 1 of each year (each an
"Interest Payment Date"), commencing August 1, 1998, or if any such day is not a
Business Day, on the next succeeding Business Day. Interest will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Interest shall
accrue from the most recent Interest Payment Date to which interest has been
paid or, if no interest has been paid, from the date of the original issuance of
this Security. To the extent lawful, the Company shall pay interest on overdue
principal at the rate of 2% per annum in excess of the then applicable interest
rate on the Securities; it shall pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the same rate to
the extent lawful. The rate of interest payable on this Security shall be
subject to the assessment of additional interest (the "Additional Interest") as
follows:
(i) if the Exchange Offer Registration Statement (as defined below)
or Shelf Registration Statement (as defined below) is not filed within 45 days
following the Issue Date, Additional Interest shall accrue on the Securities
over and above the stated interest at a rate of 0.50% per annum for the first 30
days commencing on the 46th day after the Issue Date, such Additional Interest
rate increasing by an additional 0.50% per annum at the beginning of each
subsequent 30-day period;
(ii) if the Exchange Offer Registration Statement or Shelf
Registration
EXHIBIT A
Page 7
Statement is not declared effective within 150 days following the Issue Date,
Additional Interest shall accrue on the Securities over and above the stated
interest at a rate of 0.50% per annum for the first 30 days commencing on the
151st day after the Issue Date, such Additional Interest rate increasing by an
additional 0.50% per annum at the beginning of each subsequent 30-day period; or
(iii) if (A) the Company and the Subsidiary Guarantors have not
exchanged all Securities validly tendered in accordance with the terms of the
Exchange Offer on or prior to 180 days after the Issue Date or (B) the Exchange
Offer Registration Statement ceases to be effective at any time prior to the
time that the Exchange Offer is consummated or (C) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf Registration
Statement ceases to be effective at any time prior to the second anniversary of
the Issue Date (unless all the Securities have been sold thereunder), then
Additional Interest shall accrue on the Securities over and above the stated
interest at a rate of 0.50% per annum for the first 30 days commencing on (x)
the 181st day after the Issue Date with respect to the Securities validly
tendered and not exchanged by the Company, in the case of (A) above, or (y) the
day the Exchange Offer Registration Statement ceases to be effective or usable
for its intended purpose in the case of (B) above, or (z) the day such Shelf
Registration Statement ceases to be effective in the case of (C) above, such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 30-day period; provided, however, that the
Additional Interest rate on the Securities under clauses (i), (ii) and (iii)
above may not exceed in the aggregate 2.0% per annum; and provided further, that
(1) upon the filing of the Exchange Offer Registration Statement or Shelf
Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Offer Registration Statement or Shelf Registration
Statement (in the case of (ii) above), or (3) upon the exchange of Exchange
Securities for all Securities tendered (in the case of clause (iii)(A) above),
or upon the effectiveness of the Exchange Offer Registration Statement which had
ceased to remain effective (in the case of clause (iii)(B) above), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(C) above), Additional Interest on the
Securities as a result of such clause (or the relevant subclause thereof), as
the case may be, shall cease to accrue. Any amounts of Additional interest due
pursuant to clauses (i), (ii) or (iii) above will be payable and will be
determined by multiplying the applicable Additional Interest rate by the
principal amount of the Notes multiplied by a fraction, the numerator of which
is the number of days such Additional Interest rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360 but in any event shall not exceed
in the aggregate 2.0% per annum.
"Exchange Offer" shall mean the exchange offer by the Company of
Initial Securities for Exchange Securities pursuant to Section 2(a) of the
Registration Rights Agreement.
"Exchange Offer Registration Statement" shall mean an exchange offer
EXHIBIT A
Page 8
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Offering Memorandum or prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Record Date" shall have the meaning provided on the front of this
Security.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Subsidiary Guarantors pursuant to the
provisions of the Registration Rights Agreement which covers all of the Initial
Securities on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the Commission, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Offering Memorandum contained therein, all exhibits
thereto and all material incorporated by reference therein.
2. Method of Payment. The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the Record Date immediately preceding
the Interest Payment Date, even if such Securities are cancelled after such
Record Date and on or before such Interest Payment Date. Securityholders must
surrender Securities to a Paying Agent to collect principal payments. Except as
provided above, the Company shall pay principal, premium, if any, and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal, premium, if any, and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Securityholder at the Securityholder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-registrar without prior notice to any Securityholder. The Company or any
Guarantor of the Company may act in any such capacity, except that none of the
Company, its Subsidiaries or their Affiliates shall act (i) as Paying Agent in
connection with any redemption, offer to purchase, discharge or defeasance, as
otherwise specified in the Indenture, and (ii) as Paying Agent or Registrar if a
Default or Event of Default has occurred and is continuing.
4. Indenture. The Company issued the Securities under an Indenture,
dated as of February 1, 1998 (the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the TIA as in effect on the
date the Indenture is qualified, except as the Indenture otherwise provides. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the
Securities. The Securities are senior Obligations of the Company limited to
$60,220,151 in
EXHIBIT A
Page 9
aggregate principal amount.
5. Optional Redemption. The Company may not redeem the Notes prior
to February 1, 2000. On or after such date, the Securities will be redeemable,
at the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days prior notice mailed by first class mail to each holder's
registered address, at the redemption prices (expressed as percentages of the
principal amount of the Securities) set forth below, if redeemed during the
12-month period commencing on February 1 of the years set forth below, plus
accrued interest to the redemption date:
Period Redemption Price
------ ----------------
2000..................................... 106.50%
2001..................................... 103.25%
2002 and thereafter.......................100.00%
6. Mandatory Redemption. The Securities are not subject to mandatory
redemption or sinking fund payments.
7. Repurchase at Option of Securityholder. (a) If there is a Change
of Control, each Holder of Securities will have the right to require the Company
to repurchase all or any part of such Holder's Securities at a repurchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of repurchase (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant Interest
Payment Date). Within 30 days following any Change of Control, unless the
Company has mailed a redemption notice with respect to all of the outstanding
Securities in connection with such Change in Control, the Company will mail a
notice to each Securityholder stating (i) that a Change of Control has occurred
and that such Securityholder has the right to require the Company to repurchase
all or any part of such Securityholder's Securities at a repurchase price in
cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date); (ii) the repurchase date (which will be no earlier then
30 days nor later than 60 days from the date such notice is mailed); and (iii)
the procedures, determined by the Company consistent with the Indenture, that a
Securityholder must follow in order to have its Securities repurchased.
Securityholders that are subject to an offer to repurchase may elect to have
such Securities repurchased by completing the form entitled "Option of
Securityholder to Elect Purchase" appearing below.
(b) If the Company or a Subsidiary consummates any Asset
Disposition, and when the aggregate amount of Net Available Cash from such an
Asset Disposition exceeds $500,000, the Company shall be required to offer to
purchase the maximum principal amount of Securities, that is in an integral
multiple of $1,000, that may be purchased out of the Net Available Cash at 100%
of the principal amount thereof, plus
EXHIBIT A
Page 10
accrued and unpaid interest, if any, to the date fixed for the closing of such
offer in accordance with the procedures set forth in the Indenture. If the
aggregate purchase price of Securities surrendered by Holders thereof pursuant
to the offer exceeds the amount of Net Available Cash, the Securities to be
redeemed shall be selected on a pro rata basis, subject to the terms of the
Indenture. Securityholders that are the subject of an offer to purchase will
receive an Asset Disposition Offer from the Company prior to any related
purchase date and may elect to have such Securities purchased by completing the
form entitled "Option of Securityholder to Elect Purchase" appearing below.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 but not more than 60 days before the redemption date to each Holder
whose Securities are to be redeemed at its registered address. Securities may be
redeemed in part but only in whole multiples of $1,000, unless all of the
Securities held by a Securityholder are to be redeemed. On and after the
redemption date, interest ceases to accrue on Securities or portions of them
called for redemption as long as the Company has deposited with the Paying Agent
funds for such redemption.
9. Registration Rights. Pursuant to the Registration Rights
Agreement, and subject to certain terms and conditions stated therein, the
Company will be obligated to consummate an Exchange Offer pursuant to which the
Holders of the Initial Securities shall have the right to exchange this Security
for Exchange Securities, which have been registered under the Securities Act, in
like principal amount and having terms identical in all material respect to the
Initial Security.
10. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Securityholder among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not exchange or register the
transfer of any Security or portion of a Security selected for redemption. Also,
it need not exchange or register the transfer of any Securities during a period
beginning at the opening of business on a Business Day 15 days before the day of
any selection of Securities to be redeemed and ending at the close of business
on the day of selection or during the period between a Record Date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. Prior to due presentment to the Trustee
for registration of the transfer of this Security, the Trustee, any Paying
Agent, any Registrar, any Co-Registrar and Agent of the foregoing and the
Company shall deem and treat the Person in whose name this Security is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all other
purposes whatsoever, whether or not this Security is overdue, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Securityholder shall be treated as its owner for all purposes;
and none of the Company, the
EXHIBIT A
Page 11
Trustee, any Paying Agent, and Registrar or Co-Registrar or any Agent of the
foregoing shall be affected by any notice to the contrary.
12. Amendments and Waivers. Subject to certain exceptions provided
in the Indenture, the Indenture or the Securities may be amended with the
consent of the Holders of a majority in principal amount of the then outstanding
Securities, and any existing Default or Event of Default (except a payment
default) may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities. Without the consent of any
Securityholder the Indenture or the Securities may be amended to, among other
things, cure any ambiguity, defect or inconsistency, to comply with the
requirements of the Commission in order to effect or maintain qualification of
the Indenture under the TIA or to make any change that does not adversely affect
the rights of any Securityholder.
13. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities voting as a single class by notice to the
Company may declare the unpaid principal of, and any accrued and unpaid interest
on, all the Securities to be due and payable immediately; provided, that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any Subsidiary Guarantor, all
outstanding Securities shall become due and payable immediately without further
action or notice. Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee.
14. Trustee Dealings with the Company. The Trustee under the
Indenture, in its individual or any other capacity may make loans to, accept
deposits from, and perform services for the Company, the Subsidiary Guarantors
or any Affiliate of the Company or the Subsidiary Guarantors, and may otherwise
deal with the Company, the Subsidiary Guarantors and their respective Affiliates
as if it were not Trustee.
15. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions provided for in the Indenture. The Company must
annually report to the Trustee on compliance with such limitations.
EXHIBIT A
Page 12
16. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. Future Note Guarantees. The Company will cause each newly
organized or acquired Subsidiary (other than any Unrestricted Subsidiary) to
execute and deliver to the Trustee a Guarantee of the Notes in form and
substance satisfactory to the Trustee.
18. Security. The Securities will, with the exception of certain
equipment, be secured by a first priority lien on substantially all of the
assets of the Company, provided that in the event that a security interest in
the Company's receivables is granted to secure a working capital facility as
provided in the Indenture, the security interest on such receivables will be a
second priority lien and security interest.
19. Defeasance. Subject to certain conditions provided for in the
Indenture, the Company at any time may terminate some or all of its obligations
under the Securities and the Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Securities to redemption or maturity, as the case may
be.
20. Governing Law. The Laws of the State of New York shall govern
this Security and the Indenture, without regard to principles of conflict of
laws.
21. Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Securityholders.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Request may be made to:
Mentus Media Corp.
9531 West 78th Street
Suite 400
Minneapolis, MN 55344
EXHIBIT A
Page 13
Attn: Chief Executive Officer
EXHIBIT A
Page 14
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
EXHIBIT A
Page 15
agent to transfer this Security 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 Security)
-------------------------------------
Signature Guarantee:
- --------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements will include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.)
EXHIBIT A
Page 16
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) February 18, 2000 the undersigned confirms that it has
not utilized any general solicitation or general advertising in connection with
the transfer and that this Security is being transferred:
Check One
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the
Securities Act; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule
144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement under the
Securities Act; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered Securityholder thereof; provided that if box (3), (4), (5)
or (7) is checked, the Company or the Trustee may require, prior to registering
any such transfer of the Securities, in its sole discretion, such legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act. If none of the foregoing boxes is checked, the Trustee or
Registrar shall not be obligated to register this Security in the name of any
Person other than the Securityholder hereof unless and until the
EXHIBIT A
Page 17
conditions to any such transfer of registration set forth herein and in Section
2.17 of the Indenture shall have been satisfied.
Dated:__________________________ Signed:_________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:________________________________________________
- --------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements will include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.)
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
EXHIBIT A
Page 18
Dated:_______________________ _____________________________________
NOTICE: To be executed by an
executive officer
EXHIBIT A
Page 19
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Company pursuant to Section 4.10 or Section 4.14 of the
Indenture check the appropriate box:
|_| Section 4.10 |_| Section 4.14
If you want to have only part of the Security purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$______________________
Date:_________________
Your Signature:
(Sign exactly as your name appears on the face of
this Security)
-------------------------------------
Signature Guarantee:
- --------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements will include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.)
EXHIBIT B
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY
THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.
THIS NOTE WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH ORIGINAL
ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS 1271 ET SEQ. OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE DATE
OF THIS NOTE IS FEBRUARY 18, 1997. FOR INFORMATION REGARDING
THE ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT
AND YIELD TO MATURITY FOR PURPOSES OF THE OLD RULES, PLEASE
CONTACT THE TREASURER OF THE COMPANY 9531 WEST 78TH STREET,
SUIT 400, MINNEAPOLIS, MN 55344.
EXHIBIT B
Page 2
CUSIP No:
(Front of Security)
No. 1 $___________
MENTUS MEDIA CORP.
12% Senior Secured PIK Note due 2003, Series B
MENTUS MEDIA CORP., a Delaware corporation, promises to pay to ______________,
or its registered assigns, the principal sum of $_______________ [in the case of
a Global Security, insert --, as such amount may be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the
Depository,] on February 1, 2003.
Interest Payment Dates: February 1 and August 1, commencing February 1, 1998.
Record Dates: January 15 and July 15 (whether or not a Business Day).
Additional provisions of this Security are set forth on the other side of this
Security.
Dated:
MENTUS MEDIA CORP.
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture
United States Trust Company of New York, as Trustee
By:
-------------------------------
Authorized Signatory
EXHIBIT B
Page 3
(Reverse of Security)
12% SENIOR SECURED PIK NOTE DUE 2003, SERIES B
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. Interest. Mentus Media Corp., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate and in the manner specified below. The Company shall pay, in cash,
interest on the principal amount of this Security at the rate per annum of 12%;
provided, however, that through and including August 1, 2000, on each Interest
Payment Date (as defined below), the Company may, at its option and in its sole
discretion, in lieu of the payment in whole or in part of interest due on this
Security, pay interest on this Security through the issuance of additional
Securities in an aggregate principal amount equal to the amount of interest that
would be payable with respect to this Security, if such interest were paid in
cash. After August 1, 2000, the Company shall pay interest on this Security in
cash. The Company shall notify the Trustee in writing of its election to pay
interest on this Security through the issuance of additional Securities not less
than 10 nor more than 45 days prior to the record date for the Interest Payment
Date on which additional Securities will be issued. Additional Securities shall
be governed by, and entitled to the benefits of, the Indenture and shall be
subject to the terms of the Indenture and shall be subject to the same terms
(including the rate of interest from time to time payable thereon) as this
Security (except, as the case may be, with respect to the issuance date and
aggregate principal amount). The Company will pay interest semiannually in
arrears on February 1 and August 1 of each year (each an "Interest Payment
Date"), commencing August 1, 1998, or if any such day is not a Business Day on
the next succeeding Business Day. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Interest shall accrue from the
most recent Interest Payment Date to which interest has been paid or, if no
interest has been paid, from the date of the original issuance of this Security.
To the extent lawful, the Company shall pay interest on overdue principal at the
rate of 2% per annum in excess of the then applicable interest rate on the
Securities; it shall pay interest on overdue installments of interest (without
regard to any applicable grace periods) at the same rate to the extent lawful.
2. Method of Payment. The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered
Securityholders at the close of business on the Record Date immediately
preceding the Interest Payment Date, even if such Securities are cancelled after
such Record Date and on or before such Interest Payment Date. Securityholders
must surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal premium, if any, and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts ("U.S. Legal Tender"). However, the Company may pay principal and
interest by its check payable in such U.S. Legal Tender. The Company may deliver
any such interest
EXHIBIT B
Page 4
payment to the Paying Agent or to a Securityholder at the Securityholder's
registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-registrar without prior notice to any Securityholder. The Company, or any
Subsidiary Guarantor of the Company may act in any such capacity, except that
none of the Company, its Subsidiaries or their Affiliates shall act (i) as
Paying Agent in connection with any redemption, offer to purchase, discharge or
defeasance, as otherwise specified in the Indenture, and (ii) as Paying Agent or
Registrar if a Default or Event of Default has occurred and is continuing.
4. Indenture. The Company issued the Securities under an Indenture,
dated as of February 1, 1998 (the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the TIA as in effect on the
date the Indenture is qualified, except as the Indenture otherwise provides. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the
Securities. The Securities are senior Obligations of the Company limited to
$60,220,151 in aggregate principal amount.
5. Optional Redemption. The Company may not redeem the Notes prior
to February 1, 2000. On or after such date, the Securities will be redeemable,
at the option of the Company, in whole or in part, at the redemption prices
(expressed as percentages of the principal value of the Securities) set forth
below, if redeemed during the 12-month period commencing on February 1 of the
years set forth below, plus accrued interest to the redemption date:
Period Redemption Price
------ ----------------
2000..................................... 106.50%
2001..................................... 103.25%
2002 and thereafter .....................100.00%
6. Mandatory Redemption. The Securities are not subject to mandatory
redemption or sinking fund payments.
EXHIBIT B
Page 5
7. Repurchase at Option of Securityholder. (a) If there is a Change
of Control, each Holder of Securities will have the right to require the Company
to repurchase all or any part of such Holder's Securities at a repurchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of repurchase (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant Interest
Payment Date). Within 45 days following any Change of Control, the Company will
mail a notice to each Securityholder stating (i) that a Change of Control has
occurred and that such Securityholder has the right to require the Company to
repurchase all or any part of such Securityholder's Securities at a repurchase
price in cash equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of repurchase (subject to the right of
Holders of record on the relevant Record Date to receive interest due on the
relevant Interest Payment Date); (ii) the circumstances and relevant facts
regarding such Change of Control (including information with respect to pro
forma historical income, cash flow and capitalization after giving effect to
such Change of Control; (iii) the repurchase date (which will be no earlier then
30 days nor later than 30 days from the date such notice is mailed); and (iv)
the procedures, determined by the Company consistent with the Indenture, that a
Securityholder must follow in order to have its Securities repurchased.
Securityholders that are subject to an offer to repurchase may elect to have
such Securities repurchased by completing the form entitled "Option of
Securityholder to Elect Purchase" appearing below.
(b) If the Company or a Subsidiary consummates any Asset
Disposition, and when the aggregate amount of Net Available Cash from such an
Asset Disposition exceeds $500,000, the Company shall be required to offer to
purchase the maximum principal amount of Securities, that is in an integral
multiple of $1,000, that may be purchased out of the Net Available Cash, at an
offer price in cash in an amount equal to 100% of principal value thereof, plus
accrued and unpaid interest, if any, to the date fixed for the closing of such
offer in accordance with the procedures set forth in the Indenture. If the
aggregate principal amount of Securities surrendered by Holders thereof exceeds
the amount of Net Available Cash, the Securities to be redeemed shall be
selected on a pro rata basis, subject to the terms of the Indenture.
Securityholders that are the subject of an offer to purchase will receive an
Asset Disposition Offer from the Company prior to any related purchase date and
may elect to have such Securities purchased by completing the form entitled
"Option of Securityholder to Elect Purchase" appearing below.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address. Securities
may be redeemed in part but only in whole multiples of $1,000, unless all of the
Securities held by a Securityholder are to be redeemed. On and after the
redemption date, interest ceases to accrue on Securities or portions of them
called for redemption.
9. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The
EXHIBIT B
Page 6
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a
Securityholder among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Security or portion of a Security selected for redemption. Also, it need not
exchange or register the transfer of any Securities during a period beginning on
the opening of business on a Business Day 15 days before the day of any
selection of Securities to be redeemed and ending on the close of business on
the day of selection or during the period between a Record Date and the
corresponding Interest Payment Date.
10. Persons Deemed Owners. Prior to due presentment to the Trustee
for registration of the transfer of this Security, the Trustee, any Agent and
the Company shall deem and treat the Person in whose name this Security is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all other
purposes whatsoever, whether or not this Security is overdue, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Securityholder shall be treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions provided
in the Indenture, the Indenture or the Securities may be amended with the
consent of the Holders of a majority in principal amount of the then outstanding
Securities, and any existing default or Event of Default (except a payment
default) may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities. Without the consent of any
Securityholder the Indenture or the Securities may be amended to, among other
things, cure any ambiguity, defect or inconsistency, to comply with the
requirements of the Commission in order to effect or maintain qualification of
the Indenture under the TIA Securityholders or to make any change that does not
adversely affect the rights of any Securityholder.
12. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities may declare the unpaid principal of, and any
accrued and unpaid interest on, all the Securities to be due and payable
immediately; provided, that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company or any
Subsidiary Guarantor, all outstanding Securities shall become due and payable
immediately without further action or notice. Securityholders may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Securities may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Securityholders notice of
any continuing default (except a default in payment of principal or interest) if
it determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Trustee.
13. Trustee Dealings with the Company. The Trustee under the
Indenture,
EXHIBIT B
Page 7
in its individual or any other capacity may make loans to, accept deposits from,
and perform services for the Company, the Subsidiary Guarantor or any Affiliate
of the Company or the Subsidiary Guarantor, and may otherwise deal with the
Company, the Subsidiary Guarantor and their respective Affiliates as if it were
not Trustee.
14. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions provided for in the Indenture. The Company must
annually report to the Trustee on compliance with such limitations.
15. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. Future Note Guarantees. The Company will cause each newly
organized or acquired Subsidiary (other than any Unrestricted Subsidiary) to
execute and deliver to the Trustee a Guarantee of the Notes in form and
substance satisfactory to the Trustee.
17. Security. The Securities will, with the exception of certain
equipment, be secured by a first priority lien on substantially all of the
assets of the Company, provided that in the event that a security interest in
the Company's receivables is granted to secure a working capital facility as
provided in the Indenture, the security interest on such receivables will be a
second priority lien and security interest.
18. Defeasance. Subject to certain conditions provided for in the
Indenture, the Company at any time may terminate some or all of its obligations
under the Securities and the Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Securities to redemption or maturity, as the case may
be.
19. Governing Law. The Laws of the State of New York shall govern
this Security and the Indenture, without regard to principles of conflict of
laws.
20. Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
EXHIBIT B
Page 8
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Securityholders.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Request may be made to:
Mentus Media Corp.
9531 West 78th Street
Suite 400
Minneapolis, MN 55344
Attn: Chief Executive Officer
EXHIBIT B
Page 9
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
EXHIBIT B
Page 10
agent to transfer this Security 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 Security)
---------------------------
Signature Guarantee:
- --------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements will include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.)
EXHIBIT B
Page 11
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Company pursuant to Section 4.10 or Section 4.14 of the
Indenture check the appropriate box:
|_| Section 4.10 |_| Section 4.14
If you want to have only part of the Security purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$______________________
Date:_________________
Your Signature:
(Sign exactly as your name appears on the face of
this Security)
----------------------------
Signature Guarantee:
- --------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements will include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.)
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: Mentus Media Corp.
12% Senior Secured PIK Notes due 2003
Ladies and Gentlemen:
In connection with our proposed purchase of 12% Senior Secured PIK
Notes due 2003 (the "Securities") of Mentus Media Corp. (the "Company"), we
confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated February 12, 1998 relating to the Securities and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated on pages (i),
(ii) and (iii) of the Offering Memorandum and in the section entitled "Transfer
Restrictions" of the Offering Memorandum including the restrictions on
duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Securities (as described in the Offering Memorandum) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities 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 or otherwise transfer any Securities prior to the
date which is two years after the original issuance of the Securities, we will
do so only (i) to the Company or any of its subsidiaries, (ii) inside the
EXHIBIT C
Page 2
United States in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act), (iii) inside the United States 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 the Trustee (as defined in the Indenture
relating to the Securities), a signed letter containing certain representations
and agreements relating to the restrictions on transfer of the Securities, (iv)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (v) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing any of the Securities from us a notice advising such
purchaser that resales of the Securities are restricted as stated herein.
4. We are not acquiring the Securities for or on behalf of, and will
not transfer the Securities to, any pension or welfare plan (as defined in
Section 3 of the Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Company such certification,
legal opinions and other information as the Trustee and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
6. 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 Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
7. We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
EXHIBIT C
Page 3
By
-----------------------------------
Name:
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
---------------, ----
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: Mentus Media Corp.
(the "Company") 12% Senior Secured PIK
Notes due 2003 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $_____________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration
EXHIBIT D
Page 2
requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
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. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By
---------------------------------
Authorized Signature