Exhibit 4.1
==============
CHESAPEAKE CORPORATION
as Issuer
and
THE BANK OF NEW YORK
as Trustee
-----------------------------
Indenture
Dated as of November 19, 2001
-----------------------------
10 3/8%
Senior Subordinated Notes
Due 2011
==============
CROSS-REFERENCE TABLE
---------------------
TIA Sections Indenture Sections
------------ ------------------
(S) 310 (a)........................................ 7.10
(b)........................................ 7.08
(S) 311 .......................................... 7.03
(S) 312 .......................................... 12.02
(S) 313 .......................................... 7.06
(S) 314 (a)........................................ 4.19, 4.20
(c)........................................ 12.04
(e)........................................ 12.05
(S) 315 (a)........................................ 7.01, 7.02
(b)........................................ 7.02, 7.05
(c)........................................ 7.01
(d)........................................ 7.02
(e)........................................ 6.12, 7.02
(S) 316 (a)........................................ 2.05, 6.02, 6.04, 6.05
(b)........................................ 6.06, 6.07
(c)........................................ 12.02
(S 317 (a) (1).................................... 6.08
(a) (2).................................... 6.09
(b)........................................ 2.03
(S) 318............................................ 12.01
RECITALS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions........................................................................................ 1
Section 1.02. Rules of Construction.............................................................................. 26
ARTICLE 2
THE NOTES
Section 2.01. Form, Dating and Denominations; Legends............................................................ 27
Section 2.02. Execution and Authentication; Exchange Notes; Additional Notes..................................... 28
Section 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust.............. 30
Section 2.04. Replacement Notes.................................................................................. 30
Section 2.05. Outstanding Notes.................................................................................. 31
Section 2.06. Temporary Notes.................................................................................... 31
Section 2.07. Cancellation....................................................................................... 32
Section 2.08. CUSIP, CINS, ISIN and Common Code Numbers.......................................................... 32
Section 2.09. Registration, Transfer and Exchange................................................................ 32
Section 2.10. Restrictions on Transfer and Exchange.............................................................. 35
ARTICLE 3
REDEMPTION; OFFER TO PURCHASE
Section 3.01. Optional Redemption................................................................................ 38
Section 3.02. Redemption with Proceeds of Public Equity Offering................................................. 38
Section 3.03. Redemption for Changes Affecting Taxation.......................................................... 38
Section 3.04. Method and Effect of Redemption.................................................................... 39
Section 3.05. Offer to Purchase.................................................................................. 40
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes................................................................................... 43
Section 4.02. Maintenance of Office or Agency.................................................................... 43
Section 4.03. Existence.......................................................................................... 44
Section 4.04. Payment of Taxes and Other Claims.................................................................. 44
Section 4.05. Maintenance of Properties and Insurance............................................................ 44
Section 4.06. Limitation on Debt and Disqualified or Preferred Stock............................................. 45
ii
SECTION 4.07. Limitation on Restricted Payments........................................................ 48
SECTION 4.08. Limitation on Liens...................................................................... 52
SECTION 4.09. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.. 52
SECTION 4.10. Limitation on Sale or Issuance of Equity Interests of Restricted Subsidiaries............ 53
SECTION 4.11. Guarantees by Restricted Subsidiaries.................................................... 54
SECTION 4.12. Repurchase of Notes upon Change of Control............................................... 55
SECTION 4.13. Limitation on Asset Sales................................................................ 55
SECTION 4.14. Limitation on Accounts Receivables Facilities............................................ 57
SECTION 4.15. Limitation on Transactions with Shareholders and Affiliates.............................. 57
SECTION 4.16. Line of Business......................................................................... 58
SECTION 4.17. Designation of Restricted and Unrestricted Subsidiaries.................................. 58
SECTION 4.18. Anti-Layering............................................................................ 60
SECTION 4.19. Financial Reports........................................................................ 60
SECTION 4.20. Reports to Trustee....................................................................... 61
SECTION 4.21. Additional Amounts....................................................................... 62
ARTICLE 5
CONSOLIDATION, MERGER OR SALE OF ASSETS
SECTION 5.01. Consolidation, Merger or Sale of Assets by the Company; No Lease of All or
Substantially All Assets.............................................................................. 64
ARTICLE 6
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default........................................................................ 66
SECTION 6.02. Acceleration............................................................................. 67
SECTION 6.03. Other Remedies........................................................................... 68
SECTION 6.04. Waiver of Past Defaults.................................................................. 68
SECTION 6.05. Control by Majority...................................................................... 68
SECTION 6.06. Limitation on Suits...................................................................... 69
SECTION 6.07. Rights of Holders to Receive Payment..................................................... 69
SECTION 6.08. Collection Suit by Trustee............................................................... 69
SECTION 6.09. Trustee May File Proofs of Claim......................................................... 70
SECTION 6.10. Priorities............................................................................... 70
SECTION 6.11. Restoration of Rights and Remedies....................................................... 70
SECTION 6.12. Undertaking for Costs.................................................................... 71
SECTION 6.13. Rights and Remedies Cumulative........................................................... 71
SECTION 6.14. Delay or Omission Not Waiver............................................................. 71
SECTION 6.15. Waiver of Stay, Extension or Usury Laws.................................................. 71
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ARTICLE 7
THE TRUSTEE
SECTION 7.01. General....................................................................... 72
SECTION 7.02. Certain Rights of Trustee..................................................... 72
SECTION 7.03. Individual Rights of Trustee.................................................. 74
SECTION 7.04. Trustee's Disclaimer.......................................................... 74
SECTION 7.05. Notice of Default............................................................. 74
SECTION 7.06. Reports by Trustee to Holders................................................. 75
SECTION 7.07. Compensation and Indemnity.................................................... 75
SECTION 7.08. Replacement of Trustee........................................................ 75
SECTION 7.09. Successor Trustee by Merger................................................... 77
SECTION 7.10. Eligibility................................................................... 77
SECTION 7.11. Money Held in Trust........................................................... 77
ARTICLE 8
DEFEASANCE AND DISCHARGE
SECTION 8.01. Discharge of Company's Obligations............................................ 77
SECTION 8.02. Legal Defeasance.............................................................. 78
SECTION 8.03. Covenant Defeasance........................................................... 80
SECTION 8.04. Application of Trust Money.................................................... 80
SECTION 8.05. Repayment to Company.......................................................... 80
SECTION 8.06. Reinstatement................................................................. 81
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Amendments Without Consent of Holders; Consent of Holders of Senior Debt
Needed to Amend Subordination Provisions.................................................. 81
SECTION 9.02. Amendments With Consent of Holders............................................ 82
SECTION 9.03. Effect of Consent............................................................. 84
SECTION 9.04. Trustee's Rights and Obligations.............................................. 84
SECTION 9.05. Conformity with Trust Indenture Act........................................... 84
SECTION 9.06. Payments for Consents......................................................... 84
ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement to Subordinate..................................................... 85
SECTION 10.02. Liquidation, Dissolution, Bankruptcy......................................... 85
SECTION 10.03. Default on Designated Senior Debt............................................ 85
SECTION 10.04. When Distribution Must Be Paid Over.......................................... 86
SECTION 10.05. Subrogation.................................................................. 86
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SECTION 10.06. Relative Rights; Subordination Not to Prevent Events of Default or Limit Right to Accelerate.......... 87
SECTION 10.07. Subordination May Not Be Impaired by Company.......................................................... 87
SECTION 10.08. Rights of Trustee..................................................................................... 87
SECTION 10.09. Distributions and Notices to, and Notices and Consents by, Representatives of Holders of Senior Debt.. 87
SECTION 10.10. Trust Moneys Not Subordinated; Payments in Permitted Junior Securities................................ 87
SECTION 10.11. Trustee Entitled to Rely.............................................................................. 88
SECTION 10.12. Trustee to Effectuate Subordination................................................................... 88
SECTION 10.13. Trustee Not Fiduciary for Holders of Senior Debt...................................................... 88
SECTION 10.14. Reliance by Holder of Senior Debt on Subordination Provisions; No Waiver.............................. 88
ARTICLE 11
GUARANTIES
SECTION 11.01. The Guaranties; Subordination......................................................................... 89
SECTION 11.02. Guaranty Unconditional................................................................................ 90
SECTION 11.03. Discharge; Reinstatement.............................................................................. 90
SECTION 11.04. Waiver by the Guarantors.............................................................................. 91
SECTION 11.05. Subrogation and Contribution.......................................................................... 91
SECTION 11.06. Stay of Acceleration.................................................................................. 91
SECTION 11.07. Limitation on Amount of Guaranty...................................................................... 91
SECTION 11.08. Execution and Delivery of Guaranty.................................................................... 91
SECTION 11.09. Release of Guaranty................................................................................... 92
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939........................................................................... 92
SECTION 12.02. Noteholder Communications; Noteholder Actions......................................................... 92
SECTION 12.03. Notices............................................................................................... 93
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.................................................... 94
SECTION 12.05. Statements Required in Certificate or Opinion......................................................... 95
SECTION 12.06. Payment Date Other Than a Business Day................................................................ 95
SECTION 12.07. Governing Law......................................................................................... 95
SECTION 12.08. No Adverse Interpretation of Other Agreements......................................................... 95
SECTION 12.09. Successors............................................................................................ 95
SECTION 12.10. Duplicate Originals................................................................................... 96
SECTION 12.11. Separability.......................................................................................... 96
SECTION 12.12. Table of Contents and Headings........................................................................ 96
SECTION 12.13. No Liability of Directors, Officers, Employees, Incorporators and Shareholders........................ 96
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SECTION 12.14. Judgment Currency.............................. 96
SECTION 12.15. European Monetary Union........................ 97
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Supplemental Indenture
EXHIBIT C Restricted Legend
EXHIBIT D Global Legend
EXHIBIT E Regulation S Certificate
EXHIBIT F Rule 144A Certificate
EXHIBIT G Institutional Accredited Investor Certificate
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INDENTURE, dated as of November 19, 2001, between Chesapeake Corporation, a
Virginia corporation, as the Company, and THE BANK OF NEW YORK, a New York
banking corporation, acting through its London office, as Trustee.
RECITALS
The Company has duly authorized the execution and delivery of the Indenture
to provide for the issuance of up to (Pounds)115,000,000 aggregate principal
amount of the Company's 103/8% Senior Subordinated Notes Due 2011, and, if and
when issued, any Additional Notes, together with any Exchange Notes or Private
Exchange Notes issued therefor as provided herein (the "Notes"). All things
necessary to make the Indenture a valid agreement of the Company, in accordance
with its terms, have been done, and the Company has done all things necessary to
make the Notes (in the case of the Additional Notes, when duly authorized), when
executed by the Company and authenticated and delivered by the Trustee and duly
issued by the Company, the valid obligations of the Company as hereinafter
provided.
This Indenture is subject to, and will be governed by, the provisions of
the Trust Indenture Act that are required to be a part of and govern indentures
qualified under the Trust Indenture Act.
THIS INDENTURE WITNESSETH
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, the parties hereto covenant and agree, for the equal and
proportionate benefit of all Holders, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Debt" means Debt of a Person existing at the time the Person
merges with or into or becomes a Restricted Subsidiary and not Incurred in
connection with, or in contemplation of, the Person merging with or into or
becoming a Restricted Subsidiary.
"Additional Amounts" has the meaning assigned to such term in Section 4.21.
"Additional Assets" has the meaning assigned to such term in Section 4.13.
"Additional Interest" means additional interest owed to the Holders
pursuant to a Registration Rights Agreement.
"Additional Notes" means any notes issued under the Indenture in addition
to the Original Notes, having the same terms in all respects as the Original
Notes, except that interest will accrue on the Additional Notes from their date
of issuance, including any Exchange Notes issued in exchange for such Additional
Notes.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with") with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent or Authenticating Agent.
"Agent Member" means Clearstream, Euroclear or any member of, or a
participant in, Clearstream or Euroclear.
"Asset Sale" means any sale, lease, transfer or other disposition
(including a Sale and Leaseback Transaction) of any assets by the Company or any
Restricted Subsidiary, including by means of a merger, consolidation or similar
transaction and including any sale or issuance of the Equity Interests of any
Restricted Subsidiary (each of the above referred to as a "disposition"),
provided that the following are not included in the definition of "Asset Sale":
(1) a disposition to the Company or a Restricted Subsidiary,
including the sale or issuance by the Company or any Restricted Subsidiary
of any Equity Interests of any Restricted Subsidiary to the Company or any
Restricted Subsidiary;
(2) the disposition by the Company or any Restricted Subsidiary in
the ordinary course of business of (i) cash and cash management
investments, (ii) inventory and other assets acquired and held for resale
(including land held by the Company's land development segment) in the
ordinary course of business, (iii) damaged, worn out or obsolete assets, or
(iv) rights granted to others pursuant to leases or licenses;
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(3) the sale or discount of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof;
(4) a transaction covered by Section 5.01;
(5) a Restricted Payment permitted under Section 4.07 or a
Permitted Investment;
(6) the issuance of Disqualified Stock pursuant to Section 4.06;
(7) any disposition of accounts receivable to a Securitization
Subsidiary in connection with a Permitted Receivables Financing;
(8) disposition of any line of business or Person that is part of a
discontinued operation of the Company on the Issue Date; and
(9) any disposition in a transaction or series of related
transactions of assets with a fair market value of less than $1.0 million.
"Authenticating Agent" refers to a Person engaged to authenticate the Notes
in the stead of the Trustee.
"Average Life" means, with respect to any Debt, the quotient obtained by
dividing (i) the sum of the products of (x) the number of years from the date of
determination to the dates of each successive scheduled principal payment of
such Debt and (y) the amount of such principal payment by (ii) the sum of all
such principal payments.
"bankruptcy default" has the meaning assigned to such term in Section 6.01.
"Blockage Notice" has the meaning assigned to such term in Section 10.03.
"Board of Directors" means the board of directors or comparable governing
body of the Company, or any committee thereof duly authorized to act on its
behalf.
"Board Resolution" means a resolution duly adopted by the Board of
Directors which is certified by the Secretary or an Assistant Secretary of the
Company and remains in full force and effect as of the date of its
certification.
3
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in London or in the city where the Corporate Trust Office
of the Trustee is located are authorized by law to close.
"Capital Lease" means, with respect to any Person, any lease of any
property which, in conformity with GAAP, is required to be capitalized on the
balance sheet of such Person.
"Capital Stock" means, with respect to any Person, any and all shares of
stock of a corporation, partnership interests or other equivalent interests
(however designated, whether voting or non-voting) in such Person's equity,
entitling the holder to receive a share of the profits and losses, and a
distribution of assets, after liabilities, of such Person.
"Cash Equivalents" means
(1) United States dollars, or money in other currencies received in
the ordinary course of business,
(2) U.S. Government Obligations or certificates representing an
ownership interest in U.S. Government Obligations, in each case with
maturities not exceeding one year from the date of acquisition,
(3) (i) demand deposits, (ii) time deposits and certificates of
deposit with maturities of one year or less from the date of acquisition,
(iii) bankers' acceptances with maturities not exceeding one year from the
date of acquisition, and (iv) overnight bank deposits, in each case with
any bank or trust company organized or licensed under the laws of the
United States or any state thereof having capital, surplus and undivided
profits in excess of $500 million whose short-term debt is rated "A-2" or
higher by S&P or "P-2" or higher by Moody's,
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the type described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above,
(5) commercial paper rated at least P-1 by Moody's or A-1 by S&P
and maturing within six months after the date of acquisition,
(6) money market funds at least 95% of the assets of which consist
of investments of the type described in clauses (1) through (5) above; and
4
(7) in the case of a Foreign Restricted Subsidiary, substantially
similar investments, of comparable credit quality, denominated in the
currency of any jurisdiction in which such Person conducts business.
"Certificated Note" means a Note in registered individual form without
interest coupons.
"Change of Control" means:
(1) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person, unless holders of a majority of the aggregate voting power of the
Voting Stock of the Company, immediately prior to such transaction, hold
securities of the surviving or transferee corporation that represent,
immediately after such transaction, at least a majority of the aggregate
voting power of the Voting Stock of the surviving corporation;
(2) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as such term is used in Rules 13d-3 under the Exchange Act),
directly or indirectly, of more than 35% of the total voting power of the
Voting Stock of the Company;
(3) individuals who on the Issue Date constituted the board of
directors of the Company, together with any new directors whose election by
the board of directors or whose nomination for election by the shareholders
of the Company was approved by a majority of the directors then still in
office who were either directors or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the board of directors of the Company then in office; or
(4) the adoption of a plan relating to the liquidation or
dissolution of the Company.
"Clearstream" means Clearstream Banking SA and its successors.
"Code" means the United States Internal Revenue Code of 1986.
"Commission" means the United States Securities and Exchange Commission.
5
"Common Stock" means Capital Stock not entitled to any preference on
dividends or distributions, upon liquidation or otherwise.
"Company" means the party named as such in the first paragraph of the
Indenture or any successor obligor under the Indenture and the Notes pursuant to
Section 5.01.
"Consolidated Net Income" means, for any period, the aggregate net income
(or loss) of the Company and its Restricted Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP, provided that the
following (without duplication) will be excluded in computing Consolidated Net
Income:
(1) the net income (but not loss) of any Person that is not a
Restricted Subsidiary, except to the extent of the lesser of
(x) the dividends or other distributions actually paid in
cash to the Company or any of its Restricted Subsidiaries (subject to
clause (3) below) by such Person during such period, and
(y) the Company's pro rata share of such Person's net income
earned during such period;
(2) any net income (or loss) of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition;
(3) the net income (but not loss) of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of such net income would not
have been permitted for the relevant period by charter or by any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary;
(4) any net after-tax gains or losses attributable to Asset Sales;
(5) any net after-tax extraordinary gains or losses;
(6) any net after-tax non-recurring and unusual gains or losses;
and
(7) the cumulative effect of a change in accounting principles.
"Corporate Trust Office" means the office of the Trustee at which the
United Kingdom corporate trust business of the Trustee is principally
6
administered, which at the date of the Indenture is located at One Canada
Square, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"Credit Agreement" means the amended and restated credit agreement dated as
of February 8, 2001, among the Company and the other borrowers party thereto,
the lenders and agents party thereto and First Union National Bank, as
administrative agent, together with any related documents (including any
security documents and guarantee agreements), as such agreement may be amended,
modified, supplemented, extended, renewed, refinanced or replaced or substituted
from time to time.
"Credit Agreement Guarantor" has the meaning assigned to such term in
Section 4.11.
"Debt" means, with respect to any Person, without duplication,
(1) all indebtedness of such Person for borrowed money;
(2) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all obligations of such Person in respect of letters of credit,
bankers' acceptances or other similar instruments (including without
limitation all obligations of such Person in respect of any Guarantee
issued by a bank for the benefit of such Person), excluding obligations in
respect of trade letters of credit or bankers' acceptances issued in
respect of trade payables to the extent not drawn upon or presented, or, if
drawn upon or presented, the resulting obligation of the Person is paid
within 10 Business Days;
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, to the extent any such obligation
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, excluding trade payables arising in the ordinary
course of business;
(5) all obligations of such Person as lessee under Capital Leases;
(6) all Debt of other Persons Guaranteed by such Person to the
extent so Guaranteed;
(7) all Debt of other Persons secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person; and
7
(8) all obligations of such Person under Hedging Agreements.
The amount of Debt of any Person will be deemed to be:
(A) with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the
obligation;
(B) with respect to Debt secured by a Lien on an asset of
such Person but not otherwise the obligation, contingent or otherwise,
of such Person, the lesser of (x) the fair market value of such asset
on the date the Lien attached and (y) the amount of such Debt;
(C) with respect to any Debt issued with original issue
discount, the face amount of such Debt less the remaining unamortized
portion of the original issue discount of such Debt;
(D) with respect to any Hedging Agreement, the net amount
payable if such Hedging Agreement terminated at that time due to
default by such Person; and
(E) otherwise, the outstanding principal amount thereof.
The principal amount of any Debt or other obligation that is denominated in
any currency other than United States dollars (after giving effect to any
Hedging Agreement in respect thereof) shall be the amount thereof, as determined
pursuant to the foregoing sentence, converted into United States dollars at the
Spot Rate in effect on the date of determination.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means the depositary of each Global Note, which will initially
be The Bank of New York, as common depositary for Clearstream and Euroclear.
"Designated Senior Debt" means (i) the Debt under the Credit Agreement and
(ii) any other Senior Debt which, at the date of determination, has an aggregate
principal amount outstanding of at least $10.0 million and is specifically
designated as "Designated Senior Debt" in the instrument governing such Senior
Debt and in an Officers' Certificate received by the Trustee.
8
"Disqualified Equity Interests" means Equity Interests that by their terms
or upon the happening of any event are
(1) required to be redeemed or redeemable at the option of the
holder prior to the Stated Maturity of the Notes for consideration other
than Qualified Equity Interests, or
(2) convertible at the option of the holder into Disqualified
Equity Interests or exchangeable for Debt;
provided that Equity Interests will not constitute Disqualified Equity Interests
solely because of provisions giving holders thereof the right to require
repurchase or redemption upon an "asset sale" or "change of control" occurring
prior to the Stated Maturity of the Notes if those provisions
(A) are no more favorable to the holders than Section 4.12 and
Section 4.13, and
(B) specifically state that repurchase or redemption pursuant
thereto will not be required prior to the repurchase of the Notes as
required by the Indenture.
"Disqualified Stock" means Capital Stock constituting Disqualified Equity
Interests.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary formed
under the laws of, or 50% or more of the assets of which are located in, the
United States of America or any jurisdiction thereof.
"EBITDA" means, for any period, the sum of
(1) Consolidated Net Income, plus
(2) Fixed Charges, to the extent deducted in calculating
Consolidated Net Income, plus
(3) to the extent deducted in calculating Consolidated Net Income
and as determined on a consolidated basis for the Company and its
Restricted Subsidiaries in conformity with GAAP:
(A) income taxes, other than income taxes or income tax
adjustments (whether positive or negative) attributable to gains or
losses on Asset Sales or extraordinary, non-recurring or unusual gains
or losses; and
9
(B) depreciation, amortization and all other non-cash items
reducing Consolidated Net Income (not including non-cash charges in a
period which reflect cash expenses paid or to be paid in another
period), less all non-cash items increasing Consolidated Net Income;
provided that, with respect to any Restricted Subsidiary, such items will
be added only to the extent and in the same proportion that the relevant
Restricted Subsidiary's net income was included in calculating Consolidated
Net Income.
"Eligible Debt" means any Debt other than:
(1) Debt in the form of, or represented by, bonds or other similar
securities or any guarantee thereof (other than a guarantee of Debt of the
Company in the form of, or represented by, bonds or other similar
securities); and
(2) Debt that is, or may be, quoted, listed or purchased and sold
on any stock exchange, automated trading system or over-the-counter or
other securities market (including, without prejudice to the generality of
the foregoing, the market for securities eligible for resale pursuant to
Rule 144A).
"employee stock ownership plan" means any employee stock ownership plan and
any similar plan (except to the extent that such plan is funded by employees of
the Company and its Restricted Subsidiaries).
"EMU Legislation" means the legislative measures of the Council of the
European Union providing for the introduction of, changeover to, or operation
of, the euro.
"Equity Interests" means all Capital Stock and all warrants or options with
respect to, or other rights to purchase, Capital Stock, but excluding Debt
convertible into equity.
"EU" means the European Union.
"euro" means the single currency of the Participating Member States in the
Third Stage.
"Euroclear" means Euroclear Bank S.A./N.V., and its successors or assigns,
as operator of the Euroclear System.
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"Event of Default" has the meaning assigned to such term in Section 6.01.
"Excess Proceeds" has the meaning assigned to such term in Section 4.13.
"Exchange Act" means the United States Securities Exchange Act of 1934.
"Exchange Notes" means the Notes of the Company issued pursuant to the
Indenture in exchange for, and in an aggregate principal amount equal to, the
Initial Notes or any Initial Additional Notes in compliance with the terms of a
Registration Rights Agreement and containing terms substantially identical to
the Initial Notes or any Initial Additional Notes (except that (i) such Exchange
Notes will be registered under the Securities Act and will not be subject to
transfer restrictions or bear the Restricted Legend, and (ii) the provisions
relating to Additional Interest will be eliminated).
"Exchange Offer" means an offer by the Company to the Holders of the
Initial Notes or any Initial Additional Notes to exchange outstanding Notes for
Exchange Notes, as provided for in a Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in a Registration Rights Agreement.
"Fixed Charge Coverage Ratio" means, on any date (the "transaction date"),
the ratio of
(x) the aggregate amount of EBITDA for the four fiscal quarters
immediately prior to the transaction date for which internal financial
statements are available (the "reference period") to
(y) the aggregate Fixed Charges during such reference period.
In making the foregoing calculation,
(1) pro forma effect will be given to any Debt, Disqualified Stock
or Preferred Stock Incurred during or after the reference period to the
extent the Debt, Disqualified Stock or Preferred Stock is outstanding or is
to be Incurred on the transaction date as if the Debt, Disqualified Stock
or Preferred Stock had been Incurred on the first day of the reference
period;
(2) pro forma calculations of interest on Debt bearing a floating
interest rate will be made as if the rate in effect on the transaction date
11
(taking into account any Hedging Agreement applicable to the Debt if the
Hedging Agreement has a remaining term of at least 12 months) had been the
applicable rate for the entire reference period;
(3) Fixed Charges related to any Debt, Disqualified Stock or
Preferred Stock no longer outstanding or to be repaid or redeemed on the
transaction date, except for Interest Expense accrued during the reference
period under a revolving credit facility to the extent of the commitment
thereunder (or under any successor revolving credit facility) in effect on
the transaction date, will be excluded;
(4) pro forma effect will be given to
(A) the creation, designation or redesignation of Restricted
and Unrestricted Subsidiaries,
(B) the acquisition or disposition of companies, divisions or
lines of businesses by the Company and its Restricted Subsidiaries,
including any acquisition or disposition of a company, division or
line of business since the beginning of the reference period by a
Person that became a Restricted Subsidiary after the beginning of the
reference period, and
(C) the discontinuation of any discontinued operations, but,
in the case of Fixed Charges, only to the extent that the obligations
giving rise to the Fixed Charges will not be obligations of the
Company or any Restricted Subsidiary following the transaction date
that have occurred since the beginning of the reference period as if such
events had occurred, and, in the case of any disposition, the proceeds
thereof applied, on the first day of the reference period. To the extent
that pro forma effect is to be given to an acquisition or disposition of a
company, division or line of business, the pro forma calculation will be
based upon the most recent four full fiscal quarters for which the relevant
financial information is available.
"Fixed Charges" means, for any period, the sum of
(1) Interest Expense for such period; and
(2) the product of
12
(x) cash and non-cash dividends paid, declared, accrued or
accumulated on any Disqualified or Preferred Stock of the Company
or a Restricted Subsidiary, except for dividends payable in the
Company's Qualified Stock or paid to the Company or to a Wholly
Owned Restricted Subsidiary, and
(y) a fraction, the numerator of which is one and the
denominator of which is one minus the sum of the currently
effective combined Federal, state, local and foreign tax rate
applicable to the Company and its Restricted Subsidiaries;
provided that Fixed Charges of a Restricted Subsidiary that is not a Wholly
Owned Restricted Subsidiary will be reduced in proportion to any proportional
reduction in respect of such Restricted Subsidiary's net income included in
calculating Consolidated Net Income.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that
is not a Domestic Restricted Subsidiary.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"Global Legend" means the legend set forth in Exhibit D.
"Global Note" means a Note in registered global form without interest
coupons.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the foregoing, 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
Debt or other obligation 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 Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof, in whole or
in part; provided that the term "Guarantee" does not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means each Restricted Subsidiary that executes a
supplemental indenture in the form of Exhibit B to the Indenture providing for
the
13
guaranty of the payment of the Notes, or any successor obligor under its Note
Guaranty pursuant to Section 4.11, in each case unless and until such Guarantor
is released from its Note Guaranty pursuant to the Indenture.
"Hedging Agreement" means (i) any interest rate swap agreement, interest
rate cap agreement or other agreement designed to protect against fluctuations
in interest rates or (ii) any foreign exchange forward contract, currency swap
agreement or other agreement designed to protect against fluctuations in foreign
exchange rates or (iii) any commodity or raw material futures contract or any
other agreement designed to protect against fluctuations in raw material prices.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Debt or Capital Stock, to incur, create,
issue, assume or Guarantee such Debt or Capital Stock. If any Person becomes a
Restricted Subsidiary on any date after the Issue Date (including by
redesignation of an Unrestricted Subsidiary or failure of an Unrestricted
Subsidiary to meet the qualifications necessary to remain an Unrestricted
Subsidiary), the Debt and Capital Stock of such Person outstanding on such date
will be deemed to have been Incurred by such Person on such date for purposes of
Section 4.06, but will not be considered the sale or issuance of Equity
Interests for purposes of Section 4.10 or Section 4.13. The accretion of
original issue discount or payment of interest in kind will not be considered an
Incurrence of Debt.
"Indenture" means this indenture, as amended or supplemented from time to
time.
"Initial Additional Notes" means Additional Notes issued in an offering not
registered under the Securities Act and any Notes issued in replacement thereof
(including Private Exchange Notes), but not including any Exchange Notes issued
in exchange therefor.
"Initial Notes" means the Notes issued on the Issue Date and any Notes
issued in replacement thereof (including Private Exchange Notes), but not
including any Exchange Notes issued in exchange therefor.
"Initial Purchasers" means the initial purchasers party to a purchase
agreement with the Company relating to the sale of the Initial Notes or Initial
Additional Notes by the Company.
"Institutional Accredited Investor Certificate" means a certificate
substantially in the form of Exhibit G hereto.
14
"inter-company debt" has the meaning assigned to such term in Section 4.06.
"interest", in respect of the Notes, unless the context otherwise requires,
refers to interest, Additional Interest, if any, and Additional Amounts, if any
payable thereon.
"Interest Expense" means, for any period, the consolidated interest expense
of the Company and its Restricted Subsidiaries, plus, to the extent not included
in such consolidated interest expense, and to the extent incurred, accrued or
payable by the Company or its Restricted Subsidiaries, without duplication, (i)
interest expense attributable to Capital Leases, (ii) amortization of debt
discount and debt issuance costs, (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) net
costs associated with Hedging Agreements (including the amortization of fees),
(vii) any of the above expenses with respect to Debt of another Person
Guaranteed by the Company or any of its Restricted Subsidiaries, (viii) 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 Debt Incurred by such
plan or trust, and (ix) any premiums, fees, discounts, expenses and losses on
the sale of accounts receivable (and any amortization thereof) payable by the
Company or any Restricted Subsidiary in connection with a Permitted Receivables
Financing, as determined on a consolidated basis and in accordance with GAAP.
"Interest Payment Date" means May 15 and November 15 of each year,
commencing May 15, 2002.
"Investment" means
(1) any direct or indirect advance, loan or other extension of
credit to another Person,
(2) any capital contribution to another Person, by means of any
transfer of cash or other property or in any other form,
(3) any purchase or acquisition of Equity Interests, bonds, notes
or other Debt, or other instruments or securities issued by another Person,
including the receipt of any of the above as consideration for the
disposition of assets or rendering of services, or
(4) any Guarantee of any obligation of another Person.
15
If the Company or any Restricted Subsidiary (x) sells or otherwise disposes of
any Equity Interests of any direct or indirect Restricted Subsidiary so that,
after giving effect to that sale or disposition, such Person is no longer a
Subsidiary of the Company, or (y) designates any Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with Section 4.17, all remaining
Investments of the Company and the Restricted Subsidiaries in such Person shall
be deemed to have been made at such time.
"Issue Date" means the date on which the Original Notes are originally
issued under the Indenture.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or Capital Lease).
"Luxembourg Paying Agent" has the meaning assigned to such term in Section
2.03(a).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of
such Asset Sale in the form of cash (including (i) payments in respect of
deferred payment obligations to the extent corresponding to principal, but not
interest, when received in the form of cash, and (ii) proceeds from the
conversion of other consideration received when converted to cash), net of
(1) brokerage commissions and other fees and expenses related to such
Asset Sale, including fees and expenses of counsel, accountants and
investment bankers;
(2) provisions for taxes as a result of such Asset Sale, taking into
account the consolidated results of operations of the Company and its
Restricted Subsidiaries;
(3) payments required to be made to holders of minority interests in
Restricted Subsidiaries as a result of such Asset Sale or to repay Debt
outstanding at the time of such Asset Sale that is secured by a Lien on the
property or assets sold; and
(4) appropriate amounts to be provided as a reserve against
liabilities associated with such Asset Sale, including pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and indemnification obligations associated with such Asset Sale,
16
with any subsequent reduction of the reserve other than by payments made
and charged against the reserved amount to be deemed a receipt of cash.
"Non-Recourse Debt" means Debt as to which (i) neither the Company nor any
Restricted Subsidiary provides any Guarantee and as to which the lenders have
been notified in writing that they will not have any recourse to the stock or
assets of the Company or any Restricted Subsidiary and (ii) no default
thereunder would, as such, constitute a default under any Debt of the Company or
any Restricted Subsidiary.
"Non-U.S. Person" means a Person that is not a U.S. person, as defined in
Regulation S.
"Notes" has the meaning assigned to such term in the Recitals.
"Note Guaranty" means the guaranty of the Notes by a Guarantor pursuant to
the Indenture.
"Obligations" means, with respect to any Debt, all obligations (whether in
existence on the Issue Date or arising afterwards, absolute or contingent,
direct or indirect) for or in respect of principal (when due, upon acceleration,
upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory
offer to purchase, or otherwise), premium, interest, penalties, fees,
indemnification, reimbursement and other amounts payable and liabilities with
respect to such Debt, including all interest accrued or accruing after (or which
would have accrued but for) the commencement of any bankruptcy, insolvency or
reorganization or similar case or proceeding at the contract rate (including,
without limitation, any contract rate applicable upon default) specified in the
relevant documentation, whether or not the claim for such interest is allowed as
a claim in such case or proceeding.
"Offering Circular" means the confidential offering circular dated November
13, 2001 relating to the Initial Notes.
"Offer to Purchase" has the meaning assigned to such term in Section 3.05.
"Officer" means the chairman of the Board of Directors, the president or
chief executive officer, any vice president, the chief financial officer, the
treasurer or any assistant treasurer, or the secretary or any assistant
secretary, of the Company.
"Officers' Certificate" means a certificate signed in the name of the
Company (i) by the chairman of the Board of Directors, the president or chief
17
executive officer or a vice president and (ii) by the chief financial officer,
the treasurer or any assistant treasurer or the secretary or any assistant
secretary.
"Offshore Global Note" means a Global Note representing Notes issued and
sold pursuant to Regulation S.
"Opinion of Counsel" means a written opinion signed by legal counsel, who
may be an employee of or counsel to the Company, satisfactory to the Trustee.
"Original Notes" means the Initial Notes and any Exchange Notes issued in
exchange therefor.
"Participating Member State" means a member state of the European Union
from time to time that adopts the single, shared currency in the Third Stage of
European economic and monetary union, as defined and identified in the EMU
Legislation.
"Paying Agent" refers to a Person engaged to perform the obligations of the
Trustee in respect of payments made or funds held hereunder in respect of the
Notes.
"Payment Blockage Period" has the meaning assigned to such term in Section
10.03(b).
"payment in full" has the meaning assigned to such term in Section 10.02.
"pay the Notes" has the meaning assigned to such term in Section 10.03.
"Permitted Business" means any of the businesses in which the Company and
its Restricted Subsidiaries are engaged on the Issue Date, and any business
that, in the reasonable good faith business judgment of the Board of Directors,
is reasonably related, incidental, complementary or ancillary thereto.
"Permitted Debt" has the meaning assigned to such term in Section 4.06.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company that is engaged in a Permitted Business;
(2) any Investment in Cash Equivalents;
18
(3) any Investment by the Company or any Subsidiary of the Company
in a Person, if as a result of such Investment,
(A) such Person becomes a Restricted Subsidiary of the Company
engaged in a Permitted Business, or
(B) such Person is merged or consolidated with or into, or
transfers or conveys substantially all its assets to, or is liquidated
into, the Company or a Restricted Subsidiary engaged in a Permitted
Business;
(4) Investments received as non-cash consideration in an Asset Sale
made pursuant to and in compliance with Section 4.13;
(5) Hedging Agreements otherwise permitted under the Indenture;
(6) (i) receivables owing to the Company or any Restricted Subsidiary
if created or acquired in the ordinary course of business, (ii)
endorsements for collection or deposit in the ordinary course of business,
and (iii) securities, instruments or other obligations received in
compromise or settlement of debts created in the ordinary course of
business, or by reason of a composition or readjustment of debts or
reorganization of another Person, or in satisfaction of claims or
judgments;
(7) payroll, travel and other loans or advances to, or Guarantees
issued to support the obligations of, officers and employees, in each case
in the ordinary course of business, not in excess of $1.0 million
outstanding at any time;
(8) Investments in a Securitization Subsidiary that are necessary
or desirable to effect a Permitted Receivables Financing;
(9) Investments made by the Company or any Person that is a
Restricted Subsidiary of the Company as of the Issue Date in any other
Person, to the extent such Investment was made prior to the Issue Date; and
(10) in addition to Investments listed above, Investments in an
aggregate amount, taken together with all other Investments made in
reliance on this clause, not to exceed $10.0 million (net of, with respect
to the Investment in any particular Person made pursuant to this clause,
the cash return thereon received after the Issue Date as a result of any
sale for cash, repayment, redemption, liquidating distribution or other
cash
19
realization (not included in Consolidated Net Income) not to exceed the
amount of such Investments in such Person made after the Issue Date in
reliance on this clause).
"Permitted Junior Securities" means, as to the Company or a Guarantor, as
the case may be, any securities of the Company or such Guarantor, as the case
may be, provided for by a plan of reorganization or readjustment authorized by
an order or decree of a court of competent jurisdiction in a reorganization
proceeding under any applicable bankruptcy law relating to the Company or such
Guarantor, as relevant, that constitute either (x) Equity Interests of the
Company or the Guarantor, as the case may be, or (y) Debt of the Company or the
Guarantor, as the case may be, subordinated in right of payment to all Senior
Debt of the Company or Guarantor, as relevant, then outstanding to at least the
same extent as the Notes are subordinated as provided in the Indenture.
"Permitted Liens" means
(1) Liens existing on the Issue Date;
(2) Liens securing the Notes or any Note Guaranties;
(3) Liens securing Obligations under or with respect to Senior Debt
of the Company or any Guarantor;
(4) Liens incurred in the ordinary course of business not securing
Debt and not in the aggregate detracting from the value of the properties
or their use in the operation of the business of the Company and its
Restricted Subsidiaries in any way that would be material to the Company
and its Restricted Subsidiaries, taken as a whole;
(5) Liens (including the interest of a lessor under a Capital Lease)
on property that secure Debt Incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement of
such property and which attach within 180 days after the date of such
purchase or the completion of construction or improvement;
(6) Liens on property of a Person at the time such Person becomes a
Restricted Subsidiary of the Company, provided such Liens were not created
in contemplation thereof and do not extend to any other property of the
Company or any Restricted Subsidiary;
(7) Liens on property at the time the Company or any of the
Restricted Subsidiaries acquires such property, including any acquisition
by means of a merger or consolidation with or into the Company or a
20
Restricted Subsidiary of such Person, provided such Liens were not created
in contemplation thereof and do not extend to any other property of the
Company or any Restricted Subsidiary;
(8) Liens securing Debt or other obligations of the Company or a
Restricted Subsidiary to the Company or a Wholly Owned Restricted
Subsidiary;
(9) Liens securing Hedging Agreements so long as such Hedging
Agreements are with the lenders party to the Credit Agreement or their
affiliates;
(10) Liens on accounts receivable and proceeds thereof arising in
connection with a Permitted Receivables Financing; and
(11) extensions, renewals or replacements of any Liens referred to
in clauses (1), (2), (5), (6) or (7) in connection with the refinancing of
the obligations secured thereby, provided that such Lien does not extend to
any other property and, except as contemplated by the definition of
"Permitted Refinancing Debt," the amount secured by such Lien is not
increased.
"Permitted Receivables Financing" means any receivables financing facility
or arrangement pursuant to which a Securitization Subsidiary purchases or
otherwise acquires accounts receivable of the Company or any Restricted
Subsidiaries and enters into a third party financing thereof on terms that the
Board of Directors has, in its good faith business judgment, concluded are
customary and market terms fair to the Company and its Restricted Subsidiaries.
"Permitted Refinancing Debt" has the meaning assigned to such term in
Section 4.06.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity, including a
government or political subdivision or an agency or instrumentality thereof.
"Preferred Stock" means, with respect to any Person, any and all Capital
Stock which is preferred as to the payment of dividends or distributions, upon
liquidation or otherwise, over another class of Capital Stock of such Person.
"principal" of any Debt means the principal amount of such Debt, (or if
such Debt was issued with original issue discount, the face amount of such Debt
less the remaining unamortized portion of the original issue discount of such
Debt), together with, unless the context otherwise indicates, any premium then
21
payable on such Debt. References to "principal" of the Notes shall be deemed to
include Additional Amounts, if any, thereon.
"Private Exchange Notes" means the Notes of the Company issued pursuant to
the Indenture in exchange for, and in an aggregate principal amount equal to,
the Initial Notes or any Initial Additional Notes held by any Initial Purchasers
as part of their unsold allotment in compliance with the terms of a Registration
Rights Agreement and containing terms substantially identical to the Initial
Notes or any Initial Additional Notes.
"Public Equity Offering" means an underwritten primary public offering,
after the Issue Date, of Qualified Stock of the Company pursuant to an effective
registration statement under the Securities Act other than an issuance
registered on Form S-4 or S-8 or any successor thereto or any issuance pursuant
to employee benefit plans or otherwise in compensation to officers, directors or
employees.
"Qualified Equity Interests" means all Equity Interests of a Person other
than Disqualified Equity Interests.
"Qualified Stock" means all Capital Stock of a Person other than
Disqualified Stock.
"refinance" has the meaning assigned to such term in Section 4.06.
"Register" has the meaning assigned to such term in Section 2.09.
"Registrar" means a Person engaged to maintain the Register.
"Registration Rights Agreement" means (i) the Registration Rights Agreement
dated on or about the Issue Date between the Company and the Initial Purchasers
party thereto with respect to the Initial Notes, and (ii) with respect to any
Additional Notes, any registration rights agreements between the Company and the
Initial Purchasers party thereto relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes or exchange
them for Notes registered under the Securities Act.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the May 1 or November 1 (whether or not a Business Day) next preceding
such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" means a certificate substantially in the form of
Exhibit E hereto.
22
"Related Party Transaction" has the meaning assigned to such term in
Section 4.15.
"Responsible Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Restricted Legend" means the legend set forth in Exhibit C.
"Restricted Payment" has the meaning assigned to such term in Section 4.07.
"Restricted Period" means the relevant 40-day distribution compliance
period as defined in Regulation S.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Certificate" means (i) a certificate substantially in the form
of Exhibit F hereto or (ii) a written certification addressed to the Company and
the Trustee to the effect that the Person making such certification (x) is
acquiring such Note (or beneficial interest) for its own account or one or more
accounts with respect to which it exercises sole investment discretion and that
it and each such account is a qualified institutional buyer within the meaning
of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable,
is being made in reliance upon the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A, and (z) acknowledges that it has
received such information regarding the Company as it has requested pursuant to
Rule 144A(d)(4) or has determined not to request such information.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc. and its successors.
"Sale and Leaseback Transaction" means, with respect to any Person, an
arrangement whereby such Person enters into a lease of property previously
transferred by such Person to the lessor.
23
"Securities Act" means the United States Securities Act of 1933.
"Securitization Subsidiary" means a Subsidiary of the Company
(1) that is designated a "Securitization Subsidiary" by the Board
of Directors in a resolution delivered to the Trustee,
(2) that does not engage in, and whose charter prohibits it from
engaging in, any activities other than Permitted Receivables Financings and
any activity necessary, incidental or related thereto,
(3) no portion of the Debt or any other obligation, contingent or
otherwise, of which
(A) is Guaranteed by the Company or any Restricted Subsidiary
of the Company,
(B) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way, or
(C) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, and
(4) with respect to which neither the Company nor any Restricted
Subsidiary of the Company has any obligation to subscribe for additional
Capital Stock or make any capital contribution or to maintain or preserve
its financial condition or cause it to achieve certain levels of operating
results
other than, in respect of clauses (3) and (4), pursuant to customary
representations, warranties, covenants and indemnities entered into in
connection with a Permitted Receivables Financing.
"Senior Debt" of the Company or of a Guarantor, as the case may be, means
all Obligations with respect to Debt of the Company or such Guarantor, as
relevant, whether outstanding on the Issue Date or thereafter created, except
for Debt which, in the instrument creating or evidencing the same, is expressly
stated to be not senior in right of payment to the Notes or, in respect of such
Guarantor, its Note Guaranty; provided that Senior Debt does not include (i) any
obligation to the Company or any Restricted Subsidiary, (ii) trade payables,
(iii) any Debt Incurred in violation of the Indenture or (iv) any liability for
Federal, state, local or other taxes owed by the Company or such Guarantor.
24
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in a Registration Rights Agreement.
"Significant Restricted Subsidiary" means any Restricted Subsidiary, or
group of Restricted Subsidiaries, that would, taken together, be a "significant
subsidiary" as defined in Article 1, Rule 1-02 (w)(1) or (2) of Regulation S-X
promulgated under the Securities Act, as such regulation is in effect on the
Issue Date.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02(w) of Regulation S-X promulgated
under the Securities Act, as such regulation is in effect on the Issue Date,
other than a Subsidiary that would be a significant subsidiary solely by virtue
of its ownership of Equity Interests of other Subsidiaries that are not
Guarantors.
"specified currency" has the meaning assigned to such term in Section
12.14.
"Spot Rate" means, for any currency, the spot rate at which that currency
is offered for sale against United States dollars as published in The Wall
Street Journal on the business day immediately preceding the date of
determination or, if that rate is not available in that publication, as
determined in any publicly available source of similar market data.
"Stated Maturity" means (i) with respect to any Debt, the date specified as
the fixed date on which the final installment of principal of such Debt is due
and payable or (ii) with respect to any scheduled installment of principal of or
interest on any Debt, the date specified as the fixed date on which such
installment is due and payable as set forth in the documentation governing such
Debt, not including any contingent obligation to repay, redeem or repurchase
prior to the regularly scheduled date for payment.
"Subordinated Debt" means any Debt of the Company or any Guarantor which is
subordinated in right of payment to the Notes or the Note Guaranty, as
applicable, pursuant to a written agreement to that effect.
"Subsidiary" means with respect to any Person, any corporation, association
or other business entity of which more than 50% of the outstanding Voting Stock
is owned, directly or indirectly, by such Person and one or more Subsidiaries of
such Person (or a combination thereof). Unless otherwise specified, "Subsidiary"
means a Subsidiary of the Company.
"Taxes" has the meaning assigned to such term in Section 4.21.
25
"Taxing Authority" has the meaning assigned to such term in Section 4.21.
"third-party lender" has the meaning assigned to such term in Section 4.06.
"Third Stage" means the third stage of European economic and monetary union
pursuant to the Treaty establishing the European Community (as amended from time
to time).
"Trustee" means the party named as such in the first paragraph of the
Indenture or any successor trustee under the Indenture pursuant to Article 7.
"Trust Indenture Act" means the Trust Indenture Act of 1939.
"U.K. Government Obligations" means obligations issued or directly and
fully guaranteed or insured by the United Kingdom, provided that the full faith
and credit of the United Kingdom is pledged in support thereof.
"U.S. Global Note" means a Global Note that bears the Restricted Legend
representing Notes issued and sold pursuant to Rule 144A.
"U.S. Government Obligations" means obligations issued or directly and
fully guaranteed or insured by the United States of America or by any agent or
instrumentality thereof, provided that the full faith and credit of the United
States of America is pledged in support thereof.
"Unrestricted Subsidiary" means (1) any Securitization Subsidiary and (2)
any other Subsidiary of the Company that at the time of determination has
previously been designated, and continues to be, an Unrestricted Subsidiary in
accordance with Section 4.17.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Restricted Subsidiary, a
Restricted Subsidiary all of the outstanding Capital Stock of which (other than
any director's qualifying shares) is owned by the Company and one or more Wholly
Owned Restricted Subsidiaries (or a combination thereof).
SECTION 1.02. Rules of Construction. Unless the context otherwise
requires or except as otherwise expressly provided,
26
(1) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(2) "herein," "hereof" and other words of similar import refer to
the Indenture as a whole and not to any particular Section, Article or
other subdivision;
(3) all references to Sections or Articles or Exhibits refer to
Sections or Articles or Exhibits of or to the Indenture unless otherwise
indicated; and
(4) references to agreements or instruments, or to statutes or
regulations, are to such agreements or instruments, or statutes or
regulations, as amended from time to time (or to successor statutes and
regulations).
ARTICLE 2
THE NOTES
SECTION 2.01. Form, Dating and Denominations; Legends. (a) The Notes and
the Trustee's certificate of authentication will be substantially in the form
attached as Exhibit A. The terms and provisions contained in the form of the
Notes annexed as Exhibit A constitute, and are hereby expressly made, a part of
the Indenture. The Notes may have notations, legends or endorsements required
by law, rules of or agreements with national securities exchanges to which the
Company is subject, or usage. Each Note will be dated the date of its
authentication. The Notes will be issuable in denominations of (Pounds)1,000 in
principal amount and any multiple of (Pounds)1,000 in excess thereof.
(b) (1) Except as otherwise provided in paragraph (c), Section
2.10(b)(3), (b)(5), or (c) or Section 2.09(b)(4), each Initial Note or
Initial Additional Note (including any Private Exchange Note issued in
exchange therefor) will bear the Restricted Legend.
(2) Each Global Note, whether or not an Initial Note or
Additional Note, will bear the Global Legend.
(3) Initial Notes and Initial Additional Notes offered and
sold in reliance on any exception under the Securities Act other than
Regulation S and Rule 144A will be issued, and upon the request of the
Company to the Trustee, Initial Notes offered and sold in reliance on Rule
144A may be issued, in the form of Certificated Notes.
27
(4) Exchange Notes will be issued, subject to Section
2.09(b), in the form of one or more Global Notes.
(c) (1) If the Company determines (upon the advice of counsel and such
other certifications and evidence as the Company may reasonably require)
that a Note is eligible for resale pursuant to Rule 144(k) under the
Securities Act (or a successor provision) and that the Restricted Legend is
no longer necessary or appropriate in order to ensure that subsequent
transfers of the Note (or a beneficial interest therein) are effected in
compliance with the Securities Act, or
(2) after an Initial Note or any Initial Additional Note is
(x) sold pursuant to an effective registration
statement under the Securities Act, pursuant to the
Registration Rights Agreement or otherwise, or (y) is validly
tendered for exchange into an Exchange Note pursuant to an
Exchange Offer
the Company may instruct the Trustee to cancel the Note and issue to the Holder
thereof (or to its transferee) a new Note of like tenor and amount, registered
in the name of the Holder thereof (or its transferee), that does not bear the
Restricted Legend, and the Trustee will comply with such instruction.
In addition, the Private Placement Legend shall be removed from any Initial
Note or Initial Additional Note that is an Offshore Global Note upon termination
of the Restricted Period.
(d) By its acceptance of any Note bearing the Restricted Legend (or any
beneficial interest in such a Note), each Holder thereof and each owner of a
beneficial interest therein acknowledges the restrictions on transfer of such
Note (and any such beneficial interest) set forth in this Indenture and in the
Restricted Legend and agrees that it will transfer such Note (and any such
beneficial interest) only in accordance with the Indenture and such legend.
SECTION 2.02. Execution and Authentication; Exchange Notes; Additional
Notes. (a) Two Officers shall execute the Notes for the Company by facsimile or
manual signature in the name and on behalf of the Company. If an Officer whose
signature is on a Note no longer holds that office at the time the Note is
authenticated, the Note will still be valid.
(b) A Note will not be valid until the Trustee manually signs the
certificate of authentication on the Note, with the signature conclusive
evidence that the Note has been authenticated under the Indenture.
28
(c) At any time and from time to time after the execution and delivery
of the Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication. The Trustee will authenticate and deliver
(i) Initial Notes for original issue in the aggregate principal
amount not to exceed (Pounds)115,000,000,
(ii) Initial Additional Notes from time to time for original issue
in aggregate principal amounts specified by the Company, and
(iii) Exchange Notes and Private Exchange Notes from time to time
for issue in exchange for a like principal amount of Initial Notes or
Initial Additional Notes
after the following conditions have been met:
(1) Receipt by the Trustee of an Officers' Certificate specifying
(A) the amount of Notes to be authenticated and the date on
which the Notes are to be authenticated,
(B) whether the Notes are to be Initial Notes, Additional
Notes, Exchange Notes, or Private Exchange Notes,
(C) in the case of Initial Additional Notes, that the
issuance of such Notes does not contravene any provision of Article 4,
(D) whether the Notes are to be issued as one or more Global
Notes or Certificated Notes, and
(E) other information the Company may determine to include or
the Trustee may reasonably request.
(2) In the case of Initial Additional Notes, receipt by the
Trustee of an Opinion of Counsel confirming that the Holders of the
outstanding Notes will be subject to federal income tax in the same
amounts, in the same manner and at the same times as would have been the
case if such Additional Notes were not issued.
(3) In the case of Exchange Notes, effectiveness of an Exchange
Offer Registration Statement and consummation of the exchange offer
thereunder (and receipt by the Trustee of an Officers' Certificate to that
29
effect). Initial Notes or Initial Additional Notes exchanged for Exchange
Notes or Private Exchange Notes will be cancelled by the Trustee.
SECTION 2.03. Registrar, Paying Agent and Authenticating Agent; Paying
Agent to Hold Money in Trust. (a) The Company may appoint one or more
Registrars and one or more Paying Agents, and the Trustee may appoint an
Authenticating Agent, in which case each reference in the Indenture to the
Trustee in respect of the obligations of the Trustee to be performed by that
Agent will be deemed to be references to the Agent. The Company may act as
Registrar or (except for purposes of Article 8) Paying Agent. In each case the
Company and the Trustee will enter into an appropriate agreement with the Agent
implementing the provisions of the Indenture relating to the obligations of the
Trustee to be performed by the Agent and the related rights. The Company
initially appoints the Trustee as Registrar and Paying Agent. So long as the
Notes are listed on the Luxembourg Stock Exchange, the Company will also
maintain a Paying Agent in Luxembourg (the "Luxembourg Paying Agent"). The
Company initially appoints The Bank of New York (Luxembourg) S.A. as Luxembourg
Paying Agent.
(b) The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of the
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of and interest on the Notes and will promptly notify the Trustee of
any default by the Company in making any such payment. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require the Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent will have no
further liability for the money so paid over to the Trustee.
(c) Upon any change in the Paying Agent or Registrar, the Company will
publish a notice of such in a leading daily newspaper of general circulation in
Luxembourg.
SECTION 2.04. Replacement Notes. If a mutilated Note is surrendered to the
Trustee or if a Holder claims that its Note has been lost, destroyed or
wrongfully taken, the Company will issue and the Trustee will authenticate a
replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding. Every replacement Note is an additional
obligation of the Company and entitled to the benefits of the Indenture. If
required by the Trustee or the Company, an indemnity must be furnished that is
sufficient in the judgment of both the Trustee and the Company to protect the
Company and the Trustee from any loss they may suffer if a Note is replaced. The
30
Company may charge the Holder for the expenses of the Company and the Trustee in
replacing a Note. In case the mutilated, lost, destroyed or wrongfully taken
Note has become or is about to become due and payable, the Company in its
discretion may pay the Note instead of issuing a replacement Note.
SECTION 2.05. Outstanding Notes. (a) Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for
(1) Notes cancelled by the Trustee or delivered to it for
cancellation;
(2) any Note which has been replaced pursuant to Section 2.04 unless
and until the Trustee and the Company receive proof satisfactory to them
that the replaced Note is held by a bona fide purchaser; and
(3) on or after the maturity date or any redemption date or date for
purchase of the Notes pursuant to an Offer to Purchase, those Notes payable
or to be redeemed or purchased on that date for which the Trustee (or
Paying Agent, other than the Company or an Affiliate of the Company) holds
money sufficient to pay all amounts then due.
(b) A Note does not cease to be outstanding because the Company or one of
its Affiliates holds the Note, provided that in determining whether the Holders
of the requisite principal amount of the outstanding Notes have given or taken
any request, demand, authorization, direction, notice, consent, waiver or other
action hereunder, Notes owned by the Company or any Affiliate of the Company
will be disregarded and deemed not to be outstanding (it being understood that
in determining whether the Trustee is protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Notes which the Trustee knows to be so owned will be so
disregarded). Notes so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company or any Affiliate of the Company.
SECTION 2.06. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee will authenticate temporary
Notes. Temporary Notes will be substantially in the form of definitive Notes but
may have insertions, substitutions, omissions and other variations determined to
be appropriate by the Officer executing the temporary Notes, as evidenced by the
execution of the temporary Notes. If temporary Notes are issued, the Company
will cause definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes will be exchangeable for
definitive Notes upon surrender of the temporary Notes at the office or agency
of
31
the Company designated for the purpose pursuant to Section 4.02, without charge
to the Holder. Upon surrender for cancellation of any temporary Notes the
Company will execute and the Trustee will authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes will be entitled to the
same benefits under the Indenture as definitive Notes.
SECTION 2.07. Cancellation. The Company at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. Any Registrar or the
Paying Agent will forward to the Trustee any Notes surrendered to it for
transfer, exchange or payment. The Trustee will cancel all Notes surrendered
for transfer, exchange, payment or cancellation and dispose of them in
accordance with its normal procedures or the written instructions of the
Company. The Company may not issue new Notes to replace Notes it has paid in
full or delivered to the Trustee for cancellation.
SECTION 2.08. CUSIP, CINS, ISIN and Common Code Numbers. The Company in
issuing the Notes may use "CUSIP," "CINS," "ISIN" and "Common Code" numbers, and
the Trustee will use CUSIP numbers, CINS, ISIN or Common Code numbers in notices
of redemption or exchange or in Offers to Purchase as a convenience to Holders,
the notice to state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or exchange or Offer to Purchase. The Company will promptly notify
the Trustee of any change in the CUSIP, CINS, ISIN or Common Code numbers.
SECTION 2.09. Registration, Transfer and Exchange. (a) The Notes will be
issued in registered form only, without coupons, and the Company shall cause the
Trustee to maintain a register (the "Register") of the Notes, for registering
the record ownership of the Notes by the Holders and transfers and exchanges of
the Notes.
(b) (1) Each Global Note will be registered in the name of the
Depositary or its nominee and will bear the Global Legend.
(2) Each Global Note will be delivered to the Trustee as
custodian for the Depositary. Transfers of a Global Note (but not a
beneficial interest therein) will be limited to transfers thereof in whole,
but not in part, to the Depositary, its successors or their respective
nominees, except (x) as set forth in Section 2.09(b)(4) and (y) transfers
of portions thereof in the form of Certificated Notes may be made upon
request of an
32
Agent Member (for itself or on behalf of a beneficial owner) by written
notice given to the Trustee by or on behalf of the Depositary in accordance
with customary procedures of the Depositary, Euroclear and Clearstream and
in compliance with this Section and Section 2.10.
(3) Agent Members will have no rights under the Indenture with
respect to any Global Note held on their behalf by the Depositary, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and Holder of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, the Depositary
or its nominee may grant proxies and otherwise authorize any Person
(including any Agent Member and any Person that holds a beneficial interest
in a Global Note through an Agent Member) to take any action which a Holder
is entitled to take under the Indenture or the Notes, and nothing herein
will impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a holder of
any security.
(4) If (x) Euroclear and Clearstream notify the Company that they
are unwilling or unable to continue as a clearing agency for a Global Note
and a successor clearing agency is not appointed by the Company within 90
days of the notice or (y) an Event of Default has occurred and is
continuing and the Trustee has received a request from Euroclear or
Clearstream, the Trustee will promptly exchange each beneficial interest in
the Global Note for one or more Certificated Notes in authorized
denominations having an equal aggregate principal amount registered in the
name of the owner of such beneficial interest, as identified to the Trustee
by the Depositary, and thereupon the Global Note will be deemed canceled.
If such Note does not bear the Restricted Legend, then the Certificated
Notes issued in exchange therefor will not bear the Restricted Legend. If
such Note bears the Restricted Legend, then the Certificated Notes issued
in exchange therefor will bear the Restricted Legend, provided that any
Holder of any such Certificated Note issued in exchange for a beneficial
interest in an Offshore Global Note will have the right upon presentation
to the Trustee of a duly completed Regulation S Certificate after the
Restricted Period to exchange such Certificated Note for a Certificated
Note of like tenor and amount that does not bear the Restricted Legend,
registered in the name of such Holder.
(c) Each Certificated Note will be registered in the name of the holder
thereof or its nominee.
(d) A Holder may transfer a Note (or a beneficial interest therein) to
another Person or exchange a Note (or a beneficial interest therein) for another
33
Note or Notes of any authorized denomination by presenting to the Trustee a
written request therefor stating the name of the proposed transferee or
requesting such an exchange, accompanied by any certification, opinion or other
document required by Section 2.10. The Trustee will promptly register any
transfer or exchange that meets the requirements of this Section by noting the
same in the register maintained by the Trustee for the purpose; provided that
(x) no transfer or exchange will be effective until it is registered
in such register and
(y) the Trustee will not be required (i) to issue, register the
transfer of or exchange any Note for a period of 15 days before a selection
of Notes to be redeemed or purchased pursuant to an Offer to Purchase, (ii)
to register the transfer of or exchange any Note so selected for redemption
or purchase in whole or in part, except, in the case of a partial
redemption or purchase, that portion of any Note not being redeemed or
purchased, or (iii) if a redemption or a purchase pursuant to an Offer to
Purchase is to occur after a Regular Record Date but on or before the
corresponding Interest Payment Date, to register the transfer of or
exchange any Note on or after the Regular Record Date and before the date
of redemption or purchase. Prior to the registration of any transfer, the
Company, the Trustee and their agents will treat the Person in whose name
the Note is registered as the owner and Holder thereof for all purposes
(whether or not the Note is overdue), and will not be affected by notice to
the contrary.
From time to time the Company will execute and the Trustee will
authenticate additional Notes as necessary in order to permit the registration
of a transfer or exchange in accordance with this Section.
No service charge will be imposed in connection with any transfer or
exchange of any Note, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than a transfer tax or other similar governmental charge
payable upon exchange pursuant to subsection (b)(4)).
(e) (1) Global Note to Global Note. If a beneficial interest in a
Global Note is transferred or exchanged for a beneficial interest in
another Global Note, the Trustee will (x) record a decrease in the
principal amount of the Global Note being transferred or exchanged equal to
the principal amount of such transfer or exchange and (y) record a like
increase in the principal amount of the other Global Note. Any beneficial
interest in one Global Note that is transferred to a Person who takes
delivery in the form of an interest in another Global Note, or exchanged
for an interest in
34
another Global Note, will, upon transfer or exchange, cease to be an
interest in such Global Note and become an interest in the other Global
Note and, accordingly, will thereafter be subject to all transfer and
exchange restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains
such an interest.
(2) Global Note to Certificated Note. If a beneficial interest in a
Global Note is transferred or exchanged for a Certificated Note, the
Trustee will (x) record a decrease in the principal amount of such Global
Note equal to the principal amount of such transfer or exchange and (y)
deliver one or more new Certificated Notes in authorized denominations
having an equal aggregate principal amount to the transferee (in the case
of a transfer) or the owner of such beneficial interest (in the case of an
exchange), registered in the name of such transferee or owner, as
applicable.
(3) Certificated Note to Global Note. If a Certificated Note is
transferred or exchanged for a beneficial interest in a Global Note, the
Trustee will (x) cancel such Certificated Note, (y) record an increase in
the principal amount of such Global Note equal to the principal amount of
such transfer or exchange and (z) in the event that such transfer or
exchange involves less than the entire principal amount of the canceled
Certificated Note, deliver to the Holder thereof one or more new
Certificated Notes in authorized denominations having an aggregate
principal amount equal to the untransferred or unexchanged portion of the
canceled Certificated Note, registered in the name of the Holder thereof.
(4) Certificated Note to Certificated Note. If a Certificated Note
is transferred or exchanged for another Certificated Note, the Trustee will
(x) cancel the Certificated Note being transferred or exchanged, (y)
deliver one or more new Certificated Notes in authorized denominations
having an aggregate principal amount equal to the principal amount of such
transfer or exchange to the transferee (in the case of a transfer) or the
Holder of the canceled Certificated Note (in the case of an exchange),
registered in the name of such transferee or Holder, as applicable, and (z)
if such transfer or exchange involves less than the entire principal amount
of the canceled Certificated Note, deliver to the Holder thereof one or
more Certificated Notes in authorized denominations having an aggregate
principal amount equal to the untransferred or unexchanged portion of the
canceled Certificated Note, registered in the name of the Holder thereof.
SECTION 2.10. Restrictions on Transfer and Exchange. (a) The transfer or
exchange of any Note (or a beneficial interest therein) may only be made in
35
accordance with this Section and Section 2.09 and, in the case of a Global Note
(or a beneficial interest therein), the applicable rules and procedures of the
Depositary. The Trustee shall refuse to register any requested transfer or
exchange that does not comply with the preceding sentence.
(b) Subject to paragraph (c), the transfer or exchange of any Note (or a
beneficial interest therein) of the type set forth in column A below for a Note
(or a beneficial interest therein) of the type set forth opposite in column B
below may only be made in compliance with the certification requirements (if
any) described in the clause of this paragraph set forth opposite in column C
below.
A B C
U.S. Global Note U.S. Global Note (1)
U.S. Global Note Offshore Global Note (2)
U.S. Global Note Certificated Note (3)
Offshore Global Note U.S. Global Note (4)
Offshore Global Note Offshore Global Note (1)
Offshore Global Note Certificated Note (5)
Certificated Note U.S. Global Note (4)
Certificated Note Offshore Global Note (2)
Certificated Note Certificated Note (3)
(1) No certification is required.
(2) The Person requesting the transfer or exchange must deliver or
cause to be delivered to the Trustee a duly completed Regulation S
Certificate; provided that if the requested transfer or exchange is made by
the Holder of a Certificated Note that does not bear the Restricted Legend,
then no certification is required.
(3) The Person requesting the transfer or exchange must deliver or
cause to be delivered to the Trustee (x) a duly completed Rule 144A
Certificate, (y) a duly completed Regulation S Certificate or (z) a duly
completed Institutional Accredited Investor Certificate, and/or an Opinion
of Counsel and such other certifications and evidence as the Company may
reasonably require in order to determine that the proposed transfer or
exchange is being made in compliance with the Securities Act and any
applicable securities laws of any state of the United States; provided that
if the requested transfer or exchange is made by the Holder of a
Certificated Note that does not bear the Restricted Legend, then no
certification is required. In the event that (i) the requested transfer or
exchange takes place after the Restricted Period and a duly completed
Regulation S Certificate is delivered to the Trustee or (ii) a Certificated
Note that does not bear the Restricted Legend is surrendered for transfer
or exchange,
36
upon transfer or exchange the Trustee will deliver a Certificated Note that
does not bear the Restricted Legend.
(4) The Person requesting the transfer or exchange must deliver or
cause to be delivered to the Trustee a duly completed Rule 144A
Certificate.
(5) If the requested transfer or exchange takes place during the
Restricted Period, the Person requesting the transfer must deliver or cause
to be delivered to the Trustee (x) a duly completed Rule 144A Certificate
or (y) a duly completed Institutional Accredited Investor Certificate
and/or an Opinion of Counsel and such other certifications and evidence as
the Company may reasonably require in order to determine that the proposed
transfer is being made in compliance with the Securities Act and any
applicable securities laws of any state of the United States. If the
requested transfer or exchange takes place after the Restricted Period, no
certification is required and the Trustee will deliver a Certificated Note
that does not bear the Restricted Legend.
(c) No certification is required in connection with any transfer or
exchange of any Note (or a beneficial interest therein)
(1) after such Note is eligible for resale pursuant to Rule 144(k)
under the Securities Act (or a successor provision); provided that the
Company has provided the Trustee with an Officer's Certificate to that
effect, and the Company may require from any Person requesting a transfer
or exchange in reliance upon this clause (1) an opinion of counsel and any
other reasonable certifications and evidence in order to support such
certificate; or
(2) (x) sold pursuant to an effective registration statement,
pursuant to the Registration Rights Agreement or otherwise or (y) which is
validly tendered for exchange into an Exchange Note pursuant to an Exchange
Offer.
Any Certificated Note delivered in reliance upon this paragraph will not
bear the Restricted Legend.
(d) The Trustee will retain copies of all certificates, opinions and
other documents received in connection with the transfer or exchange of a Note
(or a beneficial interest therein), and the Company will have the right to
inspect and make copies thereof at any reasonable time upon written notice to
the Trustee.
37
ARTICLE 3
REDEMPTION; OFFER TO PURCHASE
SECTION 3.01. Optional Redemption. At any time and from time to time on or
after November 15, 2006, the Company may redeem the Notes, in whole or in part,
at a redemption price equal to the percentage of principal amount set forth
below plus accrued and unpaid interest to the redemption date.
12-month period
commencing
November 15
in Year Percentage
------------------------- ----------------
2006..................... 105.188%
2007..................... 103.458%
2008..................... 101.729%
2009 and thereafter...... 100.000%
SECTION 3.02. Redemption with Proceeds of Public Equity Offering. At any
time and from time to time prior to November 15, 2004, the Company may redeem
Notes with the net cash proceeds received by the Company from any Public Equity
Offering at a redemption price equal to 110.375% of the principal amount plus
accrued and unpaid interest to the redemption date, in an aggregate principal
amount for all such redemptions not to exceed 35% of the original aggregate
principal amount of the Notes (including Additional Notes) originally issued
under the Indenture, provided that
(1) in each case the redemption takes place not later than 60 days after
the closing of the related Public Equity Offering, and
(2) not less than (Pounds)74,750,000 principal amount of the Notes
(excluding Notes held, directly or indirectly, by the Company or any of its
Affiliates) remains outstanding immediately thereafter.
SECTION 3.03. Redemption for Changes Affecting Taxation. (a) The Notes
will be subject to redemption as a whole, but not in part, at the option of the
Company at any time at a price equal to 100% of the principal amount thereof,
plus accrued and unpaid interest and Additional Interest and Additional Amounts,
if any, thereon to the redemption date, if the Company has become or would
become obligated to pay, on the next date on which any amount would be payable
with respect to the Notes, any Additional Amounts as a result of a change in
laws (including any regulations promulgated thereunder) or in the interpretation
or administration thereof, if such change is announced and becomes effective
after
38
the Issue Date and such obligation cannot be avoided by the use of reasonable
measures available to the Company.
(b) Before the Company provides notice of redemption, it will be required
to deliver an Officers' Certificate to the Trustee to the effect that it cannot
avoid such obligation to pay Additional Amounts by taking reasonable measures
available to it and an Opinion of Counsel, which counsel is of recognized
national standing in the applicable jurisdiction, stating that the Company will
be obligated to pay Additional Amounts as a result of an event described above.
SECTION 3.04. Method and Effect of Redemption. (a) If the Company elects
to redeem Notes, it must notify the Trustee of the redemption date and the
principal amount of Notes to be redeemed by delivering an Officers' Certificate
at least 60 days before the redemption date (unless a shorter period is
satisfactory to the Trustee). If fewer than all of the Notes are being redeemed,
the Officers' Certificate must also specify a record date not less than 15 days
after the date of the notice of redemption is given to the Trustee, and the
Trustee will select the Notes to be redeemed in compliance with the applicable
requirements of the Luxembourg Stock Exchange or other securities exchange, if
any, on which the Notes are listed, or, if the Notes are not then listed on any
securities exchange (or the relevant securities exchange does not specify any
manner of selection) pro rata, by lot or by any other method the Trustee in its
sole discretion deems fair and appropriate, in denominations of (Pounds)1,000
principal amount and multiples thereof. The Trustee will notify the Company
promptly of the Notes or portions of Notes to be called for redemption. Notice
of redemption must be sent by the Company or at the Company's request, by the
Trustee in the name and at the expense of the Company, to Holders whose Notes
are to be redeemed at least 30 days but not more than 60 days before the
redemption date.
(b) The notice of redemption will identify the Notes to be redeemed and
will include or state the following:
(1) the redemption date;
(2) the redemption price, including the portion thereof representing
any accrued interest;
(3) the place or places where Notes are to be surrendered for
redemption;
(4) Notes called for redemption must be so surrendered in order to
collect the redemption price;
39
(5) on the redemption date the redemption price will become due and
payable on Notes called for redemption, and interest on Notes called for
redemption will cease to accrue on and after the redemption date;
(6) if any Note is redeemed in part, on and after the redemption
date, upon surrender of such Note, new Notes equal in principal amount to
the unredeemed portion will be issued; and
(7) if any Note contains a CUSIP, CINS, ISIN or Common Code number,
no representation is being made as to the correctness of the CUSIP, CINS,
ISIN or Common Code number either as printed on the Notes or as contained
in the notice of redemption and that the Holder should rely only on the
other identification numbers printed on the Notes.
(c) Once notice of redemption is sent to the Holders, Notes called for
redemption become due and payable at the redemption price on the redemption
date, and upon surrender of the Notes called for redemption, the Company shall
redeem such Notes at the redemption price. Commencing on the redemption date,
Notes redeemed will cease to accrue interest. Upon surrender of any Note
redeemed in part, the Holder will receive a new Note equal in principal amount
to the unredeemed portion of the surrendered Note.
SECTION 3.05. Offer to Purchase. (a) An "Offer to Purchase" means an offer
by the Company to purchase Notes as required by the Indenture. An Offer to
Purchase must be made by written offer (the "offer") sent to the Holders. The
Company will notify the Trustee at least 15 days (or such shorter period as is
acceptable to the Trustee) prior to sending the offer to Holders of its
obligation to make an Offer to Purchase, and the offer will be sent by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
(b) The offer must include or state the following as to the terms of the
Offer to Purchase:
(1) the provision of the Indenture pursuant to which the Offer to
Purchase is being made;
(2) the aggregate principal amount of the outstanding Notes offered
to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined pursuant to the Indenture) (the "purchase amount");
(3) the purchase price, including the portion thereof representing
accrued interest;
40
(4) an expiration date (the "expiration date") not less than 30 days
or more than 60 days after the date of the offer, and a settlement date for
purchase (the "purchase date") not more than five Business Days after the
expiration date;
(5) information concerning the business of the Company and its
Subsidiaries which the Company in good faith believes will enable the
Holders to make an informed decision with respect to the Offer to Purchase,
at a minimum to include
(A) the most recent annual and quarterly financial statements
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for the Company,
(B) a description of material developments in the Company's
business subsequent to the date of the latest of the financial
statements (including a description of the events requiring the
Company to make the Offer to Purchase), and
(C) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company
to make the Offer to Purchase;
(6) a Holder may tender all or any portion of its Notes, subject to
the requirement that any portion of a Note tendered must be in a multiple
of (Pounds)1,000 principal amount;
(7) the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;
(8) each Holder electing to tender a Note pursuant to the offer will
be required to surrender such Note at the place or places specified in the
offer prior to the close of business on the expiration date (such Note
being, if the Company or the Trustee so requires, duly endorsed or
accompanied by a duly executed written instrument of transfer);
(9) interest on any Note not tendered, or tendered but not purchased
by the Company pursuant to the Offer to Purchase, will continue to accrue;
(10) on the purchase date the purchase price will become due and
payable on each Note accepted for purchase, and interest on Notes purchased
will cease to accrue on and after the purchase date;
41
(11) Holders are entitled to withdraw Notes tendered by giving notice,
which must be received by the Company or the Trustee not later than the
close of business on the expiration date, setting forth the name of the
Holder, the principal amount of the tendered Notes, the certificate number
of the tendered Notes and a statement that the Holder is withdrawing all or
a portion of the tender;
(12) (i) if Notes in an aggregate principal amount less than or equal
to the purchase amount are duly tendered and not withdrawn pursuant to the
Offer to Purchase, the Company will purchase all such Notes, and (ii) if
the Offer to Purchase is for less than all of the outstanding Notes and
Notes in an aggregate principal amount in excess of the purchase amount are
tendered and not withdrawn pursuant to the offer, the Company will purchase
Notes having an aggregate principal amount equal to the purchase amount on
a pro rata basis, with adjustments so that only Notes in multiples of
(Pounds)1,000 principal amount will be purchased;
(13) if any Note is purchased in part, new Notes equal in principal
amount to the unpurchased portion of the Note will be issued; and
(14) if any Note contains a CUSIP, CINS, ISIN or Common Code number,
no representation is being made as to the correctness of the CUSIP, CINS,
ISIN or Common Code number either as printed on the Notes or as contained
in the offer and that the Holder should rely only on the other
identification numbers printed on the Notes.
(c) Prior to the purchase date, the Company will accept tendered Notes for
purchase as required by the Offer to Purchase and deliver to the Trustee all
Notes so accepted together with an Officers' Certificate specifying which Notes
have been accepted for purchase. On the purchase date the purchase price will
become due and payable on each Note accepted for purchase, and interest on Notes
purchased will cease to accrue on and after the purchase date. The Trustee will
promptly return to Holders any Notes not accepted for purchase and send to
Holders new Notes equal in principal amount to any unpurchased portion of any
Notes accepted for purchase in part.
(d) The Company will comply with Rule 14e-1 under the Exchange Act and all
other applicable laws and regulations, including any applicable requirements of
the Luxembourg Stock Exchange, in making any Offer to Purchase, and the above
procedures will be deemed modified as necessary to permit such compliance.
42
(e) The Company will timely repay Debt or obtain consents as necessary
under, or terminate, any agreements or instruments that would otherwise prohibit
an Offer to Purchase required to be made pursuant to the Indenture.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes. (a) The Company agrees to pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and the Indenture. Not later than 9:00 A.M. (London time) on the
due date of any principal of or interest on any Notes, or any redemption or
purchase price of the Notes, the Company will deposit with the Trustee (or
Paying Agent) money in immediately available funds sufficient to pay such
amounts, provided that if the Company or any Affiliate of the Company is acting
as Paying Agent, it will, on or before each due date, segregate and hold in a
separate trust fund for the benefit of the Holders a sum of money sufficient to
pay such amounts until paid to such Holders or otherwise disposed of as provided
in the Indenture. In each case the Company will promptly notify the Trustee of
its compliance with this paragraph.
(b) An installment of principal or interest will be considered paid on
the date due if the Trustee (or Paying Agent, other than the Company or any
Affiliate of the Company) holds on that date money designated for and sufficient
to pay the installment. If the Company or any Affiliate of the Company acts as
Paying Agent, an installment of principal or interest will be considered paid on
the due date only if paid to the Holders.
(c) The Company agrees to pay interest on overdue principal, and overdue
installments of interest at the rate per annum specified in the Notes.
(d) Payments in respect of the Notes represented by the Global Notes are
to be made by wire transfer of immediately available funds to the accounts
specified by the Holders of the Global Notes. With respect to Certificated
Notes, the Company will make all payments at the office or agency maintained by
the Company for that purpose or, if a Holder has specified an account and so
requested, by wire transfer of immediately available funds to the accounts
specified by the Holder thereof.
SECTION 4.02. Maintenance of Office or Agency. The Company will maintain
in London, England, an office or agency where Notes may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the
43
Notes and the Indenture may be served. The Company hereby initially designates
the Corporate Trust Office of the Trustee as such office of the Company. For so
long as the Notes are listed on the Luxembourg Stock Exchange and the rules of
the Luxembourg Stock Exchange so require, Holders may surrender their Notes for
registration of transfer or exchange or for presentation of payment at the
office of the Luxembourg Paying Agent. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of any
such office or agency. If at any time the Company fails to maintain any such
required office or agency or fails to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served to the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be surrendered or presented for any of such
purposes and may from time to time rescind such designations. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
SECTION 4.03. Existence. The Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
the existence of each of its Restricted Subsidiaries in accordance with their
respective organizational documents, and the material rights, licenses and
franchises of the Company and each Restricted Subsidiary, provided that the
Company is not required to preserve any such right, license or franchise, or the
existence of any Restricted Subsidiary, if the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole; and provided further that this
Section does not prohibit any transaction otherwise permitted by Section 4.13 or
Section 5.01.
SECTION 4.04. Payment of Taxes and Other Claims. The Company will pay or
discharge, and cause each of its Subsidiaries to pay or discharge before the
same become delinquent (i) all material taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or its income or
profits or property, and (ii) all material lawful claims for labor, materials
and supplies that, if unpaid, might by law become a Lien upon the property of
the Company or any Subsidiary, other than any such tax, assessment, charge or
claim the amount, applicability or validity of which is being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established.
SECTION 4.05. Maintenance of Properties and Insurance. (a) The Company
will cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries to be maintained and kept in good
condition, repair and working order as in the judgment of the Company may be
necessary so that the business of the Company and its Restricted Subsidiaries
may be properly and advantageously conducted at all times; provided that nothing
44
in this Section prevents the Company or any Restricted Subsidiary from
discontinuing the use, operation or maintenance of any of such properties or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Company, desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole.
(b) The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance, with reputable
insurers, in such amounts, with such deductibles and by such methods as are
customary for corporations similarly situated in the industry in which the
Company and its Restricted Subsidiaries are then conducting business.
SECTION 4.06. Limitation on Debt and Disqualified or Preferred Stock. (a)
The Company
(1) will not, and will not permit any of its Restricted Subsidiaries
to, Incur any Debt; and
(2) will not, and will not permit any Restricted Subsidiary to, Incur
any Disqualified Stock, and will not permit any of its Restricted
Subsidiaries to Incur any Preferred Stock (other than Disqualified or
Preferred Stock of Restricted Subsidiaries held by the Company or a Wholly
Owned Restricted Subsidiary, so long as it is so held);
provided that the Company or any Guarantor may Incur Debt or Disqualified Stock
and any Restricted Subsidiary may Incur Eligible Debt if, on the date of the
Incurrence, after giving effect to the Incurrence and the receipt and
application of the proceeds therefrom, the Fixed Charge Coverage Ratio is not
less than (x) 2.0 to 1, if such Debt or Disqualified Stock is incurred before
November 19, 2003 or (y) 2.25 to 1, if such Debt or Disqualified Stock is
incurred on or after November 19, 2003.
(b) Notwithstanding the foregoing, the Company and, to the extent provided
below, any Restricted Subsidiary may Incur the following ("Permitted Debt"):
(1) (x) Debt of the Company or any Restricted Subsidiary pursuant to
the Credit Agreement; provided that the aggregate principal amount at any
time outstanding under the Credit Agreement does not exceed $250.0 million,
less the aggregate amount of all principal payments made from time to time
after the Issue Date in respect of Debt under the
45
Credit Agreement (but, in the case of Debt under a revolving credit
facility, only to the extent the commitment thereunder is reduced in
connection therewith) other than principal payments made from the proceeds
of any Incurrence of Debt refinancing thereof, and (y) Guarantees of such
Debt by such Persons;
(2) Debt of the Company or any Restricted Subsidiary ("inter-
company debt") to the Company or any Wholly Owned Restricted Subsidiary so
long as such Debt continues to be owed to the Company or a Wholly Owned
Restricted Subsidiary and which, if the obligor is the Company or a
Guarantor, is subordinated in right of payment to the Notes (unless (a) the
inter-company debt was funded with proceeds of Debt (other than
Subordinated Debt) borrowed by the obligee from a Person that is not an
Affiliate of the Company (the "third-party lender"), which Debt was
permitted to be incurred under any other provision of this covenant and (b)
the obligor of the inter-company debt would have been permitted to
Guarantee the Debt owed to the third-party lender pursuant to another
provision of this covenant, in which case such Debt need not be
subordinated in right of payment to the Notes);
(3) Debt of the Company pursuant to the Notes (other than
Additional Notes) and Debt of any Guarantor pursuant to a Note Guaranty of
the Notes (including Additional Notes);
(4) Debt ("Permitted Refinancing Debt") constituting an extension
or renewal of, replacement of, or substitution for, or issued in exchange
for, or the net proceeds of which are used to repay, redeem, repurchase,
refinance or refund, including by way of defeasance (all of the above, for
purposes of this clause, "refinance") then outstanding Debt in an amount
not to exceed the principal amount of the Debt so refinanced, plus
premiums, fees and expenses; provided that
(A) in case the Notes are refinanced in part or the Debt to
be refinanced is pari passu with the Notes, the new Debt, by its terms
or by the terms of any agreement or instrument pursuant to which it is
outstanding, is expressly made pari passu with, or subordinate in
right of payment to, the remaining Notes,
(B) in case the Debt to be refinanced is subordinated in
right of payment to the Notes, the new Debt, by its terms or by the
terms of any agreement or instrument pursuant to which it is
outstanding, is expressly made subordinate in right of payment to the
Notes at least to the extent that the Debt to be refinanced is
subordinated to the Notes,
46
(C) the new Debt does not have a Stated Maturity prior to the
Stated Maturity of the Debt to be refinanced, and the Average Life of
the new Debt is at least equal to the remaining Average Life of the
Debt to be refinanced,
(D) in no event may Debt of the Company be refinanced
pursuant to this clause by means of any Debt of any Restricted
Subsidiary of the Company that is not a Guarantor and in no event may
Debt of any Guarantor be refinanced pursuant to this clause by means
of any Debt of any Restricted Subsidiary that is not a Guarantor, and
(E) Debt Incurred pursuant to clauses (1), (2), (5), (6),
(10), (11) and (12) may not be refinanced pursuant to this clause (4);
(5) Hedging Agreements of the Company or any Restricted Subsidiary
entered into in the ordinary course of business for the purpose of limiting
risks associated with the business of the Company and its Restricted
Subsidiaries and not for speculation;
(6) Debt of the Company or any Restricted Subsidiary with respect
to letters of credit and bankers' acceptances issued in the ordinary course
of business and not supporting Debt, including letters of credit supporting
performance, surety or appeal bonds or indemnification, adjustment of
purchase price or similar obligations incurred in connection with the
acquisition or disposition of any business or assets;
(7) Acquired Debt, provided that after giving effect to the
Incurrence thereof, the Company could Incur at least $1.00 of Debt under
the Fixed Charge Coverage Ratio in clause (a) above;
(8) Debt of the Company or any Restricted Subsidiary outstanding on
the Issue Date (and, for purposes of clause (4)(E), not otherwise
constituting Permitted Debt);
(9) Debt of the Company or any Restricted Subsidiary, which may
include Capital Leases, Incurred on or after the Issue Date and no later
than 180 days after the date of purchase or completion of construction or
improvement of property for the purpose of financing all or any part of the
purchase price or cost of construction or improvement, provided that the
principal amount of any Debt Incurred pursuant to this clause at any time
outstanding may not exceed (a) $25.0 million less (b) the aggregate
47
outstanding principal amount of Permitted Refinancing Debt Incurred to
refinance Debt Incurred pursuant to this clause (9);
(10) Debt of the Company or any Guarantor consisting of Guarantees
of Debt of the Company or any Restricted Subsidiary Incurred under any
other clause of this covenant;
(11) Debt that is Guaranteed by a letter of credit or other Debt
Incurred under the Credit Agreement pursuant to clause (1) above so long as
such Debt is so Guaranteed; and
(12) Debt of the Company or any Restricted Subsidiary not otherwise
permitted in an aggregate principal amount at any time outstanding not to
exceed $25.0 million.
(c) Notwithstanding the foregoing, neither the Company nor any Guarantor
will Incur any Debt pursuant to the foregoing paragraph (b) if the proceeds
thereof are used, directly or indirectly, to refinance any Subordinated Debt of
the Company or any Guarantor unless such Debt shall be subordinated to the Notes
or the applicable Guaranty to at least the same extent as such Subordinated
Debt.
(d) Notwithstanding anything to the contrary in this covenant, the
maximum amount of Debt that the Company and its Restricted Subsidiaries may
Incur pursuant to this covenant shall not be deemed to be exceeded, with respect
to any outstanding Debt, solely as a result of fluctuations in the exchange rate
of currencies.
SECTION 4.07. Limitation on Restricted Payments. (a) The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly (the
payments and other actions described in the following clauses being collectively
"Restricted Payments"):
(i) declare or pay any dividend or make any distribution on its Equity
Interests (other than dividends or distributions paid in the Company's Qualified
Equity Interests) held by Persons other than the Company or any of its Wholly
Owned Restricted Subsidiaries;
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any Restricted Subsidiary held by Persons other than
the Company or any of its Wholly Owned Restricted Subsidiaries;
48
(iii) repay, redeem, repurchase, defease or otherwise acquire or retire for
value, or make any payment on or with respect to, any Subordinated Debt except a
payment of interest or principal at Stated Maturity; or
(iv) make any Investment other than a Permitted Investment;
unless, at the time of, and after giving effect to, the proposed Restricted
Payment:
(1) no Default has occurred and is continuing,
(2) the Company could Incur at least $1.00 of Debt under the Fixed
Coverage Ratio set forth in Section 4.06(a) and
(3) the aggregate amount expended for all Restricted Payments made
on or after the Issue Date would not, subject to paragraph (c), exceed the
sum of
(A) 50% of the aggregate amount of the Consolidated Net
Income (or, if the Consolidated Net Income is a loss, minus 100% of
the amount of the loss) accrued on a cumulative basis during the
period, taken as one accounting period, beginning on the first day
of the Company's fiscal quarter during which the Issue Date occurs
and ending on the last day of the Company's most recently completed
fiscal quarter for which internal financial statements are
available, plus
(B) subject to paragraph (c), the aggregate net cash proceeds
received by the Company (other than from a Subsidiary and other than
from an employee stock ownership plan or trust established by the
Company or any of its Subsidiaries for the benefit of their
employees) after the Issue Date from the issuance and sale of its
Qualified Equity Interests, including by way of issuance of its
Disqualified Equity Interests or Debt to the extent since converted
into Qualified Equity Interests of the Company, plus
(C) an amount equal to the sum, for all Unrestricted
Subsidiaries, of the following:
(x) the cash return, after the Issue Date, on
Investments in an Unrestricted Subsidiary made after the Issue
Date pursuant to this paragraph (a) as a result of any sale
for cash, repayment, redemption, liquidating
49
distribution or other cash realization (not included in
Consolidated Net Income), plus
(y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the
assets less liabilities of an Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted
Subsidiary,
not to exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments made after the Issue Date by the Company and
its Restricted Subsidiaries in such Unrestricted Subsidiary
pursuant to this paragraph (a), plus
(D) the cash return, after the Issue Date, on any other
Investment made after the Issue Date pursuant to this paragraph
(a), as a result of any sale for cash, repayment, redemption,
liquidating distribution or other cash realization (not included in
Consolidated Net Income), not to exceed the amount of such
Investment so made.
The amount expended in any Restricted Payment, if other than in cash, will be
deemed to be the fair market value of the relevant non-cash assets, as
determined in good faith by the Board of Directors, whose determination will be
conclusive and evidenced by a Board Resolution.
(b) The foregoing will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof if, at the date of declaration, such payment would
comply with paragraph (a);
(2) dividends or distributions by a Restricted Subsidiary
payable, on a pro rata basis or on a basis more favorable to the Company,
to all holders of any class of Capital Stock of such Restricted
Subsidiary a majority of which is held, directly or indirectly through
Restricted Subsidiaries, by the Company;
(3) the repayment, redemption, repurchase, defeasance or other
acquisition or retirement for value of Subordinated Debt with the
proceeds of, or in exchange for, Permitted Refinancing Debt;
(4) the purchase, redemption or other acquisition or retirement
for value of Equity Interests of the Company or any Restricted Subsidiary
50
in exchange for, or out of the proceeds of a substantially concurrent
offering of, Qualified Equity Interests of the Company;
(5) the repayment, redemption, repurchase, defeasance or other
acquisition or retirement of Subordinated Debt in exchange for, or out of
the proceeds of, a substantially concurrent offering of, Qualified Equity
Interests of the Company;
(6) any Investment made in exchange for, or out of the proceeds of,
a substantially concurrent offering of, Qualified Equity Interests of the
Company;
(7) the purchase, redemption or other acquisition or retirement for
value of Equity Interests of the Company (x) held by officers, directors or
employees or former officers, directors or employees (or their estates or
beneficiaries under their estates), upon death, disability, retirement,
severance or termination of employment or pursuant to any agreement under
which the Equity Interests were issued or (y) which are or are intended to
be used to satisfy issuances of Equity Interests upon exercise of employee
or director stock options or upon exercise or satisfaction of other similar
instruments outstanding under employee or director benefit plans of the
Company or any Subsidiary of the Company; provided that (i) the aggregate
cash consideration paid therefor in any twelve-month period after the Issue
Date does not exceed an aggregate amount of $2.0 million and (ii) no
Default has occurred and is continuing or would occur as a result thereof;
or
(8) any other Restricted Payment that, together with all other
Restricted Payments made pursuant to this clause (8) on or after the Issue
Date, does not exceed $25.0 million; provided no Default has occurred and
is continuing or would occur as a result thereof.
(c) Proceeds of the issuance of Qualified Equity Interests will be
included under clause (3) of paragraph (a) only to the extent they are not
applied as described in clause (4), (5) or (6) of paragraph (b). Restricted
Payments permitted pursuant to clause (3), (4), (5) or (6) of paragraph (b) will
not be included in making the calculations under clause (3) of paragraph (a).
(d) Not later than the date of making any Restricted Payment, the
Company will deliver to the trustee an Officers' Certificate stating that the
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the covenant were calculated.
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SECTION 4.08. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, incur or permit to
exist any Lien of any nature whatsoever on any of its properties or assets,
whether owned at the Issue Date or thereafter acquired, to secure Debt or other
obligations that are pari passu with or subordinated in right of payment to the
Notes or the Note Guaranties, other than Permitted Liens, without effectively
providing that the Notes or any Note Guaranty are secured equally and ratably
with (or, if the obligation to be secured by the Lien is subordinated in right
of payment to the Notes or any Note Guaranty, prior to) the obligations so
secured for so long as such obligations are so secured.
SECTION 4.09. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. (a) Except as provided in paragraph (b), the
Company will not, and will not permit any Restricted Subsidiary to, create or
otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Restricted
Subsidiary to
(1) pay dividends or make any other distributions on any Equity
Interests of the Restricted Subsidiary owned by the Company or any other
Restricted Subsidiary,
(2) pay any Debt or other obligation owed to the Company or any
other Restricted Subsidiary,
(3) make loans or advances to the Company or any other Restricted
Subsidiary, or
(4) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
(b) The provisions of paragraph (a) do not apply to any encumbrances or
restrictions
(1) existing on the Issue Date in the Credit Agreement, the
Indenture or any other agreements in effect on the Issue Date, and any
extensions, renewals, replacements or refinancings of any of the foregoing;
provided that the encumbrances and restrictions in the extension, renewal,
replacement or refinancing are, taken as a whole, no less favorable in any
material respect to the Noteholders than the encumbrances or restrictions
being extended, renewed, replaced or refinanced;
(2) existing
52
(A) with respect to any Person, or to the property or assets
of any person, at the time the Person is acquired by the Company or
any Restricted Subsidiary, or
(B) with respect to any Unrestricted Subsidiary at the time
it is designated or is deemed to become a Restricted Subsidiary,
which encumbrances or restrictions (i) are not applicable to any other
Person or the property or assets of any other Person and (ii) were not put
in place in anticipation of such event and any extensions, renewals,
replacements or refinancings of any of the foregoing, provided the
encumbrances and restrictions in the extension, renewal, replacement or
refinancing are, taken as a whole, no less favorable in any material
respect to the Noteholders than the encumbrances or restrictions being
extended, renewed, replaced or refinanced;
(3) of the type described in clause (a)(4) arising or agreed to in
the ordinary course of business (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is subject
to a lease or license or (B) by virtue of any Lien on, or agreement to
transfer, option or similar right with respect to any property or assets
of, the Company or any Restricted Subsidiary;
(4) with respect to a Restricted Subsidiary and imposed pursuant to
an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of,
the Restricted Subsidiary that is permitted by Section 4.10 and Section
4.13;
(5) with respect to a Restricted Subsidiary and imposed pursuant to
a customary provision in a joint venture or other similar agreement with
respect to such Restricted Subsidiary that was entered into in the ordinary
course of business;
(6) under applicable law or regulations; or
(7) required pursuant to the Indenture.
SECTION 4.10. Limitation on Sale or Issuance of Equity Interests of
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, sell or issue any Equity
Interests of a Restricted Subsidiary unless
(1) the sale or issuance is to the Company or a Wholly Owned
Restricted Subsidiary,
53
(2) the sale or issuance is of Capital Stock representing
directors' qualifying shares or Capital Stock required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary,
(3) (i) if, after giving effect to the sale or issuance, the
Restricted Subsidiary would no longer be a Restricted Subsidiary, all
remaining Investments of the Company and the Restricted Subsidiaries in
such Person are permitted under Section 4.07 and (ii) the Company complies
with Section 4.13 with respect to the sale or issuance, or
(4) the sale or issuance is of Disqualified Stock of a Guarantor
permitted under Section 4.06.
SECTION 4.11. Guarantees by Restricted Subsidiaries. (a) If (i) any
Restricted Subsidiary that Guarantees any Debt of the Company under the Credit
Agreement on the Issue Date (each, a "Credit Agreement Guarantor") becomes a
Significant Subsidiary and, at the time it becomes a Significant Subsidiary or
any time thereafter, Guarantees any Debt of the Company under the Credit
Agreement; or (ii) any Restricted Subsidiary (excluding any Credit Agreement
Guarantor), directly or indirectly, Guarantees any Debt of the Company under the
Credit Agreement after the Issue Date, such Restricted Subsidiary shall provide
a Note Guaranty. If the guaranteed Debt of the Company is Subordinated Debt,
the Guarantee of such guaranteed Debt must be subordinated in right of payment
to the Note Guaranty to at least the extent that the guaranteed Debt is
subordinated to the Notes.
(b) A Restricted Subsidiary required to provide a Note Guaranty shall
execute a supplemental indenture in the form of Exhibit B, and deliver an
Opinion of Counsel to the Trustee to the effect that the supplemental indenture
has been duly authorized, executed and delivered by the Restricted Subsidiary
and constitutes a valid and binding obligation of the Restricted Subsidiary,
enforceable against the Restricted Subsidiary in accordance with its terms
(subject to customary exceptions).
(c) No Guarantor may
(i) consolidate with or merge with or into any Person, or
(ii) sell, convey, transfer or dispose of, all or substantially
all its assets as an entirety or substantially as an entirety, in one
transaction or a series of related transactions, to any Person, or
(iii) permit any Person to merge with or into the Guarantor
54
unless
(A) the other Person is the Company or any Wholly Owned Restricted
Subsidiary that is Guarantor or becomes a Guarantor concurrently with the
transaction; or
(B) (1) either (x) the Guarantor is the continuing Person or (y) the
resulting, surviving or transferee Person expressly assumes by
supplemental indenture all of the obligations of the Guarantor
under its Note Guaranty; and
(2) immediately after giving effect to the transaction, no Default
has occurred and is continuing; or
(C) the transaction constitutes a sale or other disposition (including
by way of consolidation or merger) of the Guarantor or the sale or disposition
of all or substantially all the assets of the Guarantor (in each case other than
to the Company or a Restricted Subsidiary) otherwise permitted by the Indenture.
SECTION 4.12. Repurchase of Notes upon Change of Control. Not later than
30 days following a Change of Control, the Company will make an Offer to
Purchase all outstanding Notes at a purchase price equal to 101% of the
principal amount plus accrued interest to the date of purchase.
The Company will not be required to make an Offer to Purchase upon a
Change of Control if a third party makes the Offer to Purchase in the manner, at
the time and otherwise in compliance with the requirements set forth in the
Indenture applicable to an Offer to Purchase made by the Company and purchases
all of the Notes properly tendered and not withdrawn under the Offer to
Purchase.
SECTION 4.13. Limitation on Asset Sales. (a) The Company will not, and
will not permit any Restricted Subsidiary to, make any Asset Sale unless the
following conditions are met:
(1) The Asset Sale is for fair market value, as determined in good
faith by an Officer of the Company or, if the fair market value of the
assets subject to such Asset Sale is in excess of $5 million, by the
Board of Directors.
(2) At least 75% of the consideration consists of (x) cash or Cash
Equivalents received at closing or (y) substantially all of the assets of
a facility, company, division or line of business engaged in a Permitted
Business, a majority of the Voting Stock of another Person that thereupon
55
becomes a Restricted Subsidiary engaged in a Permitted Business or other
long-term assets (other than securities) used in a Permitted Business
("Additional Assets"). (For purposes of this clause (2), the assumption
by the purchaser of Debt or other obligations (other than Subordinated
Debt) of the Company or a Restricted Subsidiary pursuant to a customary
novation agreement, and instruments or securities received from the
purchaser that are promptly, but in any event within 30 days of the
closing, converted by the Company to cash, to the extent of the cash
actually so received, shall be considered cash received at closing.)
(3) Within 360 days after the receipt of any Net Cash Proceeds from
an Asset Sale, the Net Cash Proceeds from the Asset Sale may be used
(A) to permanently repay Senior Debt of the Company or a
Guarantor or any Debt of a Restricted Subsidiary that is not a
Guarantor (and in the case of a revolving credit, permanently reduce
the commitment thereunder by such amount), in each case owing to a
Person other than the Company or any of its Affiliates, or
(B) to (i) acquire Additional Assets or (ii) enter into a
binding commitment for any such acquisition or expenditure (provided
that the acquisition or expenditure covered by such binding
commitment is made within 180 days after the expiration of the
aforementioned 360 day period).
Pending the final application of any Net Cash Proceeds, the Company may
temporarily reduce revolving Debt under the Credit Agreement or otherwise
invest the Net Cash Proceeds in any manner not prohibited by the
Indenture.
(4) The Net Cash Proceeds of an Asset Sale not applied pursuant to
clause (3) within the time periods specified in clause (3) constitute
"Excess Proceeds." Excess Proceeds of less than $10.0 million will be
carried forward and accumulated. When accumulated Excess Proceeds equals
or exceeds $10.0 million, the Company must, within 30 days, make an Offer
to Purchase Notes having a principal amount equal to
(A) accumulated Excess Proceeds, multiplied by
(B) a fraction (x) the numerator of which is equal to the
outstanding principal amount of the Notes and (y) the denominator of
which is equal to the outstanding principal amount of the Notes
56
and all pari passu Debt similarly required to be repaid, redeemed or
tendered for in connection with the Asset Sale,
rounded down to the nearest (Pounds)1,000. The purchase price for the Notes
will be 100% of the principal amount plus accrued interest to the date of
purchase. If the Offer to Purchase is for less than all of the outstanding
Notes and Notes in an aggregate principal amount in excess of the purchase
amount are tendered and not withdrawn pursuant to the offer, the Company will
purchase Notes having an aggregate principal amount equal to the purchase amount
on a pro rata basis, with adjustments so that only Notes in multiples of
(Pounds)1,000 principal amount will be purchased. Upon completion of the Offer
to Purchase, Excess Proceeds will be reset at zero, and any Excess Proceeds
remaining after consummation of the Offer to Purchase may be used for any
purpose not otherwise prohibited by the Indenture.
SECTION 4.14. Limitation on Accounts Receivables Facilities. The Company
and its Restricted Subsidiaries may sell, transfer or otherwise dispose of
accounts receivable to a Securitization Subsidiary; provided that (1) the sale,
transfer or other disposition is in connection with a Permitted Receivables
Financing; and (2) the aggregate consideration received in each such sale,
transfer or other disposition is at least equal to the fair market value of the
receivables sold.
SECTION 4.15. Limitation on Transactions with Shareholders and Affiliates.
(a) The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, renew or extend any transaction or
arrangement including the purchase, sale, lease or exchange of property or
assets, or the rendering of any service with any Affiliate of the Company or any
Restricted Subsidiary (a "Related Party Transaction"), except upon fair and
reasonable terms no less favorable to the Company or the Restricted Subsidiary
than could be obtained in a comparable arm's-length transaction with a Person
that is not an Affiliate of the Company.
(b) Any Related Party Transaction or series of Related Party
Transactions with an aggregate value in excess of $5.0 million must first be
approved by a majority of the Board of Directors who are disinterested in the
subject matter of the transaction pursuant to a Board Resolution delivered to
the trustee. Prior to entering into any Related Party Transaction or series of
Related Party Transactions with an aggregate value in excess of $25.0 million,
the Company must in addition obtain and deliver to the Trustee a favorable
written opinion from a nationally recognized investment banking firm as to the
fairness of the transaction to the Company and its Restricted Subsidiaries from
a financial point of view.
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(c) The foregoing paragraphs do not apply to
(1) any transaction between the Company and any of its Restricted
Subsidiaries or between Restricted Subsidiaries of the Company;
(2) the payment of reasonable and customary regular fees to
directors of the Company who are not employees of the Company;
(3) any Restricted Payment of a type described in paragraph (a)(i)
or (ii) under Section 4.07 if permitted by that covenant;
(4) transactions or payments pursuant to any employee, officer or
director compensation or benefit plans or arrangements entered into in the
ordinary course of business;
(5) transactions pursuant to any contract or agreement in effect on
the Issue Date, as amended, modified or replaced from time to time so long
as the amended, modified or new agreements, taken as a whole, are no less
favorable to the Company and its Restricted Subsidiaries than those in
effect on the Issue Date; or
(6) sales of accounts receivable to a Securitization Subsidiary as
part of a Permitted Receivables Financing.
SECTION 4.16. Line of Business. The Company will not, and will not permit
any of its Restricted Subsidiaries, to engage in any business other than a
Permitted Business, except to an extent that so doing would not be material to
the Company and its Restricted Subsidiaries, taken as a whole.
SECTION 4.17. Designation of Restricted and Unrestricted Subsidiaries .
(a) The Board of Directors may designate any Subsidiary, including a newly
acquired or created Subsidiary, to be an Unrestricted Subsidiary if it meets the
following qualifications and the designation would not cause a Default.
(1) Such Subsidiary does not own any Capital Stock of the Company
or any Restricted Subsidiary or hold any Debt of, or any Lien on any
property of, the Company or any Restricted Subsidiary.
(2) At the time of designation, the designation would be permitted
under Section 4.07.
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(3) To the extent the Debt of the Subsidiary is not Non-Recourse
Debt, any Guarantee or other credit support thereof by the Company or any
Restricted Subsidiary is permitted under Section 4.06 and Section 4.07.
(4) The Subsidiary is not party to any transaction or arrangement
with the Company or any Restricted Subsidiary that would not be permitted
under Section 4.15.
(5) Neither the Company nor any Restricted Subsidiary has any
obligation to subscribe for additional Equity Interests of the Subsidiary
or to maintain or preserve its financial condition or cause it to achieve
specified levels of operating results except to the extent permitted by
Section 4.06 and Section 4.07.
Once so designated the Subsidiary will remain an Unrestricted Subsidiary,
subject to paragraph (b).
(b) The Board of Directors may designate an Unrestricted Subsidiary to
be a Restricted Subsidiary if the designation would not cause a Default.
(c) Upon a Restricted Subsidiary becoming an Unrestricted Subsidiary,
(1) all existing Investments of the Company and the Restricted
Subsidiaries therein will be deemed made at that time;
(2) all existing Capital Stock or Debt of the Company or a
Restricted Subsidiary held by it will be deemed Incurred at that time, and
all Liens on property of the Company or a Restricted Subsidiary held by it
will be deemed incurred at that time;
(3) all existing transactions between it and the Company or any
Restricted Subsidiary will be deemed entered into at that time;
(4) it is released at that time from its Note Guaranty, if any; and
(5) it will cease to be subject to the provisions of the Indenture
as a Restricted Subsidiary.
(d) Upon an Unrestricted Subsidiary becoming, or being deemed to become,
a Restricted Subsidiary,
(1) all of its Debt and Disqualified or Preferred Stock will be
deemed Incurred at that time for purposes of Section 4.06, but will not be
59
considered the sale or issuance of Equity Interests for purposes of Section
4.10 or Section 4.13;
(2) Investments therein previously charged under Section 4.07 will
be credited thereunder;
(3) it may be required to issue a Note Guaranty of the Notes
pursuant to Section 4.11; and
(4) it will thenceforward be subject to the provisions of the
Indenture as a Restricted Subsidiary.
(e) Any designation by the Board of Directors of a Subsidiary as a
Restricted Subsidiary or Unrestricted Subsidiary will be evidenced to the
Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to the designation and an Officer's Certificate certifying that
the designation complied with the foregoing provisions.
SECTION 4.18. Anti-Layering. Neither the Company nor any Guarantor may
Incur Debt that is subordinate in right of payment to Senior Debt of the Company
or the Guarantor unless such Debt is pari passu with, or subordinated in right
of payment to, the Notes or the relevant Note Guaranty. This does not apply to
distinctions between categories of Debt that exist by reason of any Liens or
Guarantees securing or in favor of some but not all of such Debt.
SECTION 4.19. Financial Reports. (a) Whether or not the Company is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company must file with the Commission within the time periods specified
in the Commission's rules and regulations and, promptly thereafter, provide the
Trustee and the Holders with,
(1) all quarterly and annual reports that would be required to be
filed with the Commission on Forms 10-Q and 10-K if the Company were
required to file such forms, and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports.
In addition, the Company will make the information and reports available to
securities analysts and prospective investors upon request. For so long as any
of the Notes are listed on the Luxembourg Stock Exchange and the rules of such
exchange require, copies of such information will also be available during
normal business hours at the office of the Luxembourg Paying Agent. If the
Company
60
had any Unrestricted Subsidiaries during the relevant period, the Company will
also provide to the Trustee and the Noteholders information sufficient to
ascertain the financial condition and results of operations of the Company and
its Restricted Subsidiaries, accounting for the Unrestricted Subsidiaries under
the equity method of accounting.
(b) For so long as any of the Notes remain outstanding and constitute
"restricted securities" under Rule 144, the Company will furnish to the holders
of the Notes and prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(c) All obligors on the Notes will comply with Section 314(a) of the
Trust Indenture Act.
(d) Delivery of these reports and information to the Trustee is for
informational purposes only and the Trustee's receipt of them will not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.20. Reports to Trustee. (a) The Company will deliver to the
Trustee within 120 days after the end of each fiscal year a certificate from the
principal executive, financial or accounting officer of the Company stating that
the officer has conducted or supervised a review of the activities of the
Company and its Restricted Subsidiaries and their performance under the
Indenture and that, based upon such review, the Company has fulfilled its
obligations hereunder or, if there has been a Default, specifying the Default
and its nature and status.
(b) The Company will deliver to the Trustee, as soon as possible and in
any event within 30 days after the Company becomes aware of the occurrence of a
Default, an Officers' Certificate setting forth the details of the Default, and
the action which the Company proposes to take with respect thereto.
(c) The Company will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company a written statement by the Company's
independent public accountants stating that their audit examination has included
a review of the terms of this Indenture and the Notes as they relate to
accounting matters, and whether, in connection with their audit examination, any
Default has come to their attention and, if a Default has come to their
attention, specifying the nature and period of the existence thereof.
(d) The Company will notify the Trustee when any Notes are listed on any
national securities exchange and of any delisting.
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SECTION 4.21. Additional Amounts. (a) All payments by the Company in
respect of the Notes will be made free and clear of, and without withholding or
deduction for or on account of, any present or future taxes, duties, assessments
or governmental charges of whatever nature ("Taxes") imposed or levied by or on
behalf of the United States of America or any jurisdiction in which the Company
or any Guarantor is organized or resident for tax purposes, or any political
subdivision or taxing authority thereof or therein having power to tax (each, a
"Taxing Authority"), unless the withholding or deduction is then required by
law. In such event, the Company will pay such additional amounts ("Additional
Amounts") as may be necessary so that the net amount received by each Holder
after such withholding or deduction will not be less than the amount the Holder
would have received if such Taxes had not been withheld or deducted. However,
the foregoing obligation to pay Additional Amounts does not apply to:
(1) any Taxes which would not have been so imposed but for the existence
of any present or former connection between such holder and the
relevant Taxing Authority (other than the mere ownership or holding of
a Note or enforcement of rights thereunder or receipt of payments in
respect thereof);
(2) any estate, inheritance, gift, sales, excise, transfer, personal
property tax or similar tax, assessment or governmental charge; or
(3) any Taxes payable otherwise than by deduction or withholding from
payments of principal, premium, interest and additional interest, if
any, on such Note.
Additional Amounts will also not be paid:
(1) if, where presentation is required, the payment could have been made
without such deduction or withholding (a) if made by or through
another Paying Agent or (b) if the holder had presented the Note for
payment within 30 days after the date on which such payment became due
and payable or on which payment thereof was duly provided for,
whichever occurs later, except to the extent that the holder of such
Note would have been entitled to such Additional Amounts if it had
presented such Note for payment on the last day of such period of 30
days;
(2) if the payment could have been made without such deduction or
withholding had the holder of the Note or, if different, the
beneficiary of the payment, complied with a request of the Company or
any other Person through whom payment may be
62
made, made upon reasonable notice prior to such payment, addressed or
otherwise provided to such holder or beneficiary to provide
information, documents or other evidence concerning the nationality,
residence, identity or connection with the taxing jurisdiction of such
holder or beneficiary which is required or imposed by a treaty,
statute, regulation or administrative practice of the taxing
jurisdiction as a precondition to exemption from all or part of such
tax (including, without limitation, a holder's failure to comply with
the request to provide Form W-8BEN as described in the Offering
Circular under "Summary of Certain United States Federal Tax
Consequences");
(3) to any holder who is a fiduciary or partnership or any person other
than the sole beneficial owner of such payment, to the extent that a
beneficiary or settlor with respect to such fiduciary, a member of
such partnership or the beneficial owner of such payment would not
have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the actual holder of the
Note;
(4) to any holder that is or was a "10-percent shareholder" of Chesapeake
as defined in Section 871(h)(3) of the Code, or any successor
provision;
(5) to any holder that is a bank receiving interest described in Section
881(c) (3)(A) as of the Code; or
(6) for withholding or deduction imposed on a payment to an individual and
is (a) required to be made pursuant to any European Union Directive on
taxation of savings implementing the conclusions of the European
Council Meeting of November 2000 or any new law implementing or
complying with, or introduced to conform with, such Directive or (b)
presented for payment by or on behalf of a holder who would have been
able to avoid such withholding or deduction by presenting the relevant
Note or coupon to another Paying Agent in a member state of the EU.
(b) The foregoing provisions shall survive any termination or discharge of
the Indenture.
(c) The Company or the Guarantor, as applicable, will make such
withholding or deduction and remit the full amount deducted or withheld to the
relevant Taxing Authority in accordance with applicable law. The Company and
the Guarantors will use commercially reasonable efforts to facilitate
63
administrative actions necessary to assist holders to obtain any refund of or
credit against Taxes for which Additional Amounts are not paid as a result of
the conditions set forth in clause (a) above.
(d) If the Company or any Guarantor will be obligated to pay Additional
Amounts with respect to any payment under or with respect to the Notes or the
Note Guaranties, if any, the Company will deliver to the Trustee an Officers'
Certificate stating that Additional Amounts will be payable, the amount payable,
and any other information necessary to enable the Trustee and the Paying Agents
to pay the Additional Amounts to holders on the payment date. Such notice shall
be delivered at least 30 days prior to the date when such Additional Amounts are
to be paid or, if the obligation arises thereafter, promptly after the
obligation arises.
(e) All references in the Indenture to the payment of amounts based upon
the principal amount of the Notes or of principal, premium, interest and
Additional Interest, if any, on any of the Notes shall be deemed to include the
payment of Additional Amounts to the extent that, in such context, Additional
Amounts are, were or would be payable in respect thereof.
ARTICLE 5
CONSOLIDATION, MERGER OR SALE OF ASSETS
SECTION 5.01. Consolidation, Merger or Sale of Assets by the Company; No
Lease of All or Substantially All Assets. (a) The Company will not:
(i) consolidate with or merge with or into any Person, or
(ii) sell, convey, transfer, or otherwise dispose of all or
substantially all of its assets as an entirety or substantially an
entirety, in one transaction or a series of related transactions, to any
Person or
(iii) permit any Person to merge with or into the Company
unless
(1) either (x) the Company is the continuing Person or (y)
the resulting, surviving or transferee Person is a corporation
organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and expressly assumes by
supplemental indenture all of the obligations of the Company
64
under the Indenture, the Notes and the Registration Rights
Agreement;
(2) immediately after giving effect to the transaction, no
Default has occurred and is continuing;
(3) immediately after giving effect to the transaction on a
pro forma basis, the Company or the resulting surviving or
transferee Person could Incur at least $1.00 of Debt under Section
4.06(a); and
(4) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the
consolidation, merger or transfer and the supplemental indenture (if
any) comply with the Indenture;
provided that clause (3) does not apply (i) to the consolidation or merger of
the Company with or into a Wholly Owned Restricted Subsidiary or the
consolidation or merger of a Wholly Owned Restricted Subsidiary with or into the
Company or (ii) if, in the good faith determination of the Board of Directors of
the Company, whose determination is evidenced by a Board Resolution, the sole
purpose of the transaction is to change the jurisdiction of incorporation of the
Company.
(b) For purposes of this covenant, the sale, conveyance, transfer or
other disposition (including by way of merger or consolidation) of all or
substantially all of the properties and assets of one or more Subsidiaries of
ts, if held by the Company instead of the Subsidiaries, would constitute all or
substantially all of the properties and assets of the Company on a consolidated
basis, will be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
(c) The Company shall not lease all or substantially all of its assets,
whether in one transaction or a series of transactions, to one or more other
Persons.
(d) Upon the consummation of any transaction effected in accordance with
these provisions, if the Company is not the continuing Person, the resulting,
surviving or transferee Person will succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Indenture with the same
effect as if such successor Person had been named as the Company in the
Indenture. Upon such substitution, unless the successor is one or more of the
Company's Subsidiaries, the Company will be released from its obligations under
the Indenture and the Notes.
65
ARTICLE 6
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" occurs if
(1) the Company defaults in the payment of the principal of any
Note when the same becomes due and payable at maturity, upon acceleration
or redemption, or otherwise (other than pursuant to an Offer to Purchase),
whether or not the payment is prohibited under Article 10;
(2) the Company defaults in the payment of interest (including any
Additional Interest or Additional Amounts) on any Note when the same
becomes due and payable, and the default continues for a period of 30 days,
whether or not the payment is prohibited under Article 10;
(3) the Company fails to make an Offer to Purchase and thereafter
accept and pay for Notes tendered when and as required pursuant to Section
4.12 or Section 4.13 (whether or not the payment is prohibited under
Article 10) or the Company fails to comply with Section 5.01;
(4) the Company or any of its Restricted Subsidiaries defaults in
the performance of or breaches any of the covenants contained in Sections
4.06 through 4.11 and Sections 4.14 through 4.20 and the default or
breach continues for a period of 30 consecutive days after written notice
to the Company by the Trustee or to the Company and the Trustee by the
Holders of more than 25% in aggregate principal amount of the Notes;
(5) the Company or any of its Restricted Subsidiaries defaults in
the performance of or breaches any other covenant or agreement in the
Indenture or under the Notes and the default or breach continues for a
period of 60 consecutive days after written notice to the Company by the
Trustee or to the Company and the Trustee by the Holders of 25% or more in
aggregate principal amount of the Notes;
(6) there occurs with respect to any Debt of the Company or any of
its Restricted Subsidiaries having an outstanding principal amount of $10.0
million or more in the aggregate for all such Debt of all such Persons (i)
an event of default that has caused the holder thereof to declare such Debt
to be due and payable prior to its scheduled maturity or (ii) failure to
make a principal payment when due and such defaulted payment is not made,
waived or extended within the applicable grace period;
66
(7) one or more final judgments or orders for the payment of money
are rendered against the Company or any of its Significant Restricted
Subsidiaries and are not paid or discharged, and there is a period of 60
consecutive days following entry of the final judgment or order that causes
the aggregate amount for all such final judgments or orders outstanding and
not paid or discharged against all such Persons to exceed $10.0 million (in
excess of amounts which the Company's insurance carriers have agreed to pay
under applicable policies) during which a stay of enforcement, by reason of
a pending appeal or otherwise, is not in effect;
(8) an involuntary case or other proceeding is commenced against
the Company or any Significant Restricted Subsidiary with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding remains
undismissed and unstayed for a period of 60 days; or an order for relief is
entered against the Company or any Significant Restricted Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
(9) the Company or any of its Significant Restricted Subsidiaries
(i) commences a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consents to the entry
of an order for relief in an involuntary case under any such law, (ii)
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Company or any of its Significant Restricted Subsidiaries or for all
or substantially all of the property and assets of the Company or any of
its Significant Restricted Subsidiaries or (iii) effects any general
assignment for the benefit of creditors (an event of default specified in
clause (8) or (9) a "bankruptcy default"); or
(10) any Note Guaranty ceases to be in full force and effect, other
than in accordance with the terms of the Indenture, or a Guarantor denies
or disaffirms its obligations under its Note Guaranty.
SECTION 6.02. Acceleration. (a) If an Event of Default, other than a
bankruptcy default with respect to the Company, occurs and is continuing under
the Indenture, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding, by written notice to the Company (and to
the Trustee if the notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of and accrued interest on
the
67
Notes to be immediately due and payable. Upon a declaration of acceleration,
such principal and interest will become due and payable upon the 5th day after
notice thereof has been given to holders of Designated Senior Debt. If a
bankruptcy default occurs with respect to the Company, the principal of and
accrued interest on the Notes then outstanding will become immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Company or the Trustee will promptly notify the holders of
Designated Senior Debt of any declaration of acceleration of the Notes.
(b) The Holders of a majority in principal amount of the outstanding
Notes by written notice to the Company and to the Trustee may waive all past
defaults and rescind and annul a declaration of acceleration and its
consequences if
(1) all existing Events of Default, other than the nonpayment of
the principal of, premium, if any, and interest on the Notes that have
become due solely by the declaration of acceleration, have been cured or
waived, and
(2) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue, in its own name or as trustee of an express
trust, any available remedy by proceeding at law or in equity to collect the
payment of principal of and interest on the Notes or to enforce the performance
of any provision of the Notes or the Indenture. The Trustee may maintain a
proceeding even if it does not possess any of the Notes or does not produce any
of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Except as otherwise provided in
Sections 6.02, 6.07 and 9.02, the Holders of a majority in principal amount of
the outstanding Notes may, by notice to the Trustee, waive an existing Default
and its consequences. Upon such waiver, the Default will cease to exist, and
any Event of Default arising therefrom will be deemed to have been cured, but no
such waiver will extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05. Control by Majority. The Holders of a majority in aggregate
principal amount of the outstanding Notes 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 the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or the Indenture, that
may involve the Trustee in personal liability, or that the Trustee determines in
good
68
faith may be unduly prejudicial to the rights of Holders of Notes not joining in
the giving of such direction, and may take any other action it deems proper that
is not inconsistent with any such direction received from Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not institute any
proceeding, judicial or otherwise, with respect to the Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy under
the Indenture or the Notes, unless:
(1) the Holder has previously given to the Trustee written notice
of a continuing Event of Default;
(2) Holders of at least 25% in aggregate principal amount of
outstanding Notes have made written request to the Trustee to institute
proceedings in respect of the Event of Default in its own name as Trustee
under the Indenture;
(3) Holders have offered to the Trustee indemnity reasonably
satisfactory to the Trustee against any costs, liabilities or expenses to
be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes have not given the
Trustee a direction that is inconsistent with such written request.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
anything to the contrary, the right of a Holder of a Note to receive payment of
principal of or interest on its Note on or after the Stated Maturities thereof,
or to bring suit for the enforcement of any such payment on or after such
respective dates, may not be impaired or affected without the consent of that
Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal or interest specified in clause (1) or (2) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust for the whole amount of principal and accrued
interest remaining unpaid, together with interest on overdue principal and
overdue installments of interest, in each case at the rate specified in the
Notes, and such further amount as is sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel and any other amounts due
the Trustee hereunder.
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SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
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
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee hereunder) and the Holders
allowed in any judicial proceedings relating to the Company or any Guarantor or
their respective creditors or property, and is entitled and empowered to
collect, receive and distribute any money, securities or other property payable
or deliverable upon conversion or exchange of the Notes or upon any such claims.
Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, if the Trustee consents to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel, and any other amounts due the
Trustee hereunder. Nothing in the Indenture will be deemed to empower the
Trustee to authorize or consent to, or accept or adopt on behalf of any Holder,
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
First: to the Trustee for all amounts due hereunder;
Second: to Holders for amounts then due and unpaid for principal of
and interest on the Notes, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest; and
Third: to the Company or as a court of competent jurisdiction may
direct.
The Trustee, upon written notice to the Company, may fix a record date and
payment date for any payment to Holders pursuant to this Section.
SECTION 6.11. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted a proceeding to enforce any right or remedy under the
Indenture and the proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to the Holder, then, subject
to any determination in the proceeding, the Company, any Guarantors, the Trustee
and the Holders will be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Company, any
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Guarantors, the Trustee and the Holders will continue as though no such
proceeding had been instituted.
SECTION 6.12. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under the Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit (other than the Trustee) to file an undertaking to pay the
costs of the suit, and the court may assess reasonable costs, including
reasonable attorneys fees, against any party litigant (other than the Trustee)
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 a
Holder to enforce payment of principal of or interest on any Note on the
respective due dates, or a suit by Holders of more than 10% in principal amount
of the outstanding Notes.
SECTION 6.13. Rights and Remedies Cumulative. No right or remedy
conferred or reserved to the Trustee or to the Holders under this Indenture is
intended to be exclusive of any other right or remedy, and all such rights and
remedies are, to the extent permitted by law, cumulative and in addition to
every other right and remedy hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or exercise of any right or remedy
hereunder, or otherwise, will not prevent the concurrent assertion or exercise
of any other right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default will impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 6.15. Waiver of Stay, Extension or Usury Laws. The Company and
each Guarantor covenants, to the extent that it may lawfully do so, that it will
not at any time insist upon, or 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 the Company or the Guarantor from paying all
or any portion of the principal of, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of the Indenture. The Company and each
Guarantor hereby expressly waives, to the extent that it may lawfully do so, 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.
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ARTICLE 7
THE TRUSTEE
SECTION 7.01. General. (a) The duties and responsibilities of the Trustee
are as provided by the Trust Indenture Act and as set forth herein. Whether or
not expressly so provided, every provision of the Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee is
subject to this Article.
(b) Except during the continuance of an Event of Default, the Trustee need
perform only those duties that are specifically set forth in the Indenture and
no others, and no implied covenants or obligations will be read into the
Indenture against the Trustee. In case an Event of Default has occurred and is
continuing, the Trustee shall exercise those rights and powers vested in it by
the Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's affairs.
(c) No provision of the Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
SECTION 7.02. Certain Rights of Trustee. Subject to Trust Indenture Act
Sections 315(a) through (d):
(1) In the absence of bad faith on its part, the Trustee may
conclusively rely, and will be protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or 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,
but, in the case of any document which is specifically required to be
furnished to the Trustee pursuant to any provision hereof, the Trustee
shall examine the document to determine whether it conforms to the
requirements of the Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein). The
Trustee, in its discretion, may make further inquiry or investigation into
such facts or matters as it sees fit.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel conforming to Section
12.05 and the Trustee will not be liable for any action it takes or omits
to take in good faith in reliance on the certificate or opinion.
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(3) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent appointed with
due care.
(4) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by the Indenture at the request or direction
of any of the Holders, unless such Holders have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(5) The Trustee will not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance
with the direction of the Holders in accordance with Section 6.05 relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under the Indenture.
(6) The Trustee may consult with counsel of its selection, and the
written advice of such counsel or any Opinion of Counsel will be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(7) No provision of the Indenture will require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of its duties hereunder, or in the exercise of its rights or
powers, unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(8) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a Default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Notes and this Indenture.
(9) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed by it to act hereunder.
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(10) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified
as so authorized in any such certificate previously delivered and not
superseded.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its individual
or any other capacity, may become the owner or pledgee of Notes and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not the Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311.
For purposes of Trust Indenture Act Section 311(b)(4) and (6):
(a) "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery of
the goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, ▇▇▇▇ of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred for
the purpose of financing the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and which is secured by
documents evidencing title to, possession of, or a lien upon, the goods,
wares or merchandise or the receivables or proceeds arising from the sale
of the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with the
creation of the creditor relationship arising from the making, drawing,
negotiating or incurring of the draft, ▇▇▇▇ of exchange, acceptance or
obligation.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of the Indenture or the Notes,
(ii) is not accountable for the Company's use or application of the proceeds
from the Notes and (iii) is not responsible for any statement in the Notes other
than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default occurs and is continuing
and is known to the Trustee, the Trustee will send notice of the Default to each
Holder within 90 days after it occurs, unless the Default has been cured;
provided that, except in the case of a default in the payment of the principal
of or interest on any Note, the Trustee may withhold the notice if and so long
as the board of directors, the executive committee or a trust committee of
directors of the Trustee
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in good faith determines that withholding the notice is in the interest of the
Holders. Notice to Holders under this Section will be given in the manner and to
the extent provided in Trust Indenture Act Section 313(c).
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each May
15, beginning with May 15, 2002, the Trustee will mail to each Holder, as
provided in Trust Indenture Act Section 313(c), a brief report dated as of such
May 15, if required by Trust Indenture Act Section 313(a), and file such reports
with each stock exchange upon which its Notes are listed and with the Commission
as required by Trust Indenture Act Section 313(d).
SECTION 7.07. Compensation and Indemnity. (a) The Company will pay the
Trustee compensation as agreed upon in writing for its services. The
compensation of the Trustee is not limited by any law on compensation of a
Trustee of an express trust. The Company will reimburse the Trustee upon
request for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Trustee, including the reasonable compensation and
expenses of the Trustee's agents and counsel.
(b) The Company will indemnify the Trustee for, and hold it harmless
against, any and all loss, damage, claim, liability or expense (including taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee)) incurred by it without negligence or bad faith on its part arising out
of or in connection with the acceptance or administration of the Indenture and
its duties under the Indenture and the Notes, including the costs and expenses
of defending itself against any claim (whether asserted by the Company, any
Holder or any other Person) or liability and of complying with any process
served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under the Indenture and the Notes.
(c) To secure the Company's payment obligations in this Section, the
Trustee will have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held in trust to pay principal of, and interest on particular Notes.
(d) When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(8) or 6.01(9), the expenses
(including the reasonable fees and expenses of its counsel) and the compensation
for the services are intended to constitute expenses of administration under any
applicable Federal or state bankruptcy, insolvency or other similar law.
SECTION 7.08. Replacement of Trustee. (a) (1) The Trustee may resign at
any time by written notice to the Company.
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(2) The Holders of a majority in principal amount of the outstanding
Notes may remove the Trustee by written notice to the Trustee.
(3) If the Trustee is no longer eligible under Section 7.10 or in
the circumstances described in Trust Indenture Act Section 310(b), any
Holder that satisfies the requirements of Trust Indenture Act Section
310(b) may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
(4) The Company may remove the Trustee if: (i) the Trustee is no
longer eligible under Section 7.10; (ii) the Trustee is adjudged a bankrupt
or insolvent; (iii) a receiver or other public officer takes charge of the
Trustee or its property; or (iv) the Trustee becomes incapable of acting.
A resignation or removal of the Trustee and appointment of a successor Trustee
will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
(b) If the Trustee has been removed by the Holders, Holders of a
majority in principal amount of the Notes may appoint a successor Trustee with
the consent of the Company. Otherwise, if the Trustee resigns or is removed, or
if a vacancy exists in the office of Trustee for any reason, the Company will
promptly appoint a successor Trustee. If the successor Trustee does not deliver
its written acceptance within 30 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of a majority in
principal amount of the outstanding Notes may petition any court of competent
jurisdiction (in the case of the Trustee, at the expense of the Company) for the
appointment of a successor Trustee.
(c) Upon delivery by the successor Trustee of a written acceptance of
its appointment to the retiring Trustee and to the Company, (i) the retiring
Trustee will transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in Section 7.07(c), (ii) the
resignation or removal of the retiring Trustee will become effective, and (iii)
the successor Trustee will have all the rights, powers and duties of the Trustee
under the Indenture. Upon request of any successor Trustee, the Company will
execute any and all instruments for fully vesting in and confirming to the
successor Trustee all such rights, powers and trusts. The Company will give
notice of any resignation and any removal of the Trustee and each appointment of
a successor Trustee to all Holders, and include in the notice the name of the
successor Trustee and the address of its Corporate Trust Office.
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(d) Notwithstanding replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.07 will continue for the benefit of
the retiring Trustee.
(e) The Trustee agrees to give the notices provided for in, and otherwise
comply with, Trust Indenture Act Section 310(b).
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act will be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee in the
Indenture.
SECTION 7.10. Eligibility. The Indenture must always have a Trustee that
satisfies the requirements of Trust Indenture Act Section 310(a) and has a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition.
SECTION 7.11. Money Held in Trust. The Trustee will not be liable for
interest on any money received by it except as it may agree with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law and except for money held in trust under
Article 8.
ARTICLE 8
DEFEASANCE AND DISCHARGE
SECTION 8.01. Discharge of Company's Obligations. (a) Subject to paragraph
(b), the Company's obligations under the Notes and the Indenture, and each
Guarantor's obligations under its Note Guaranty, will terminate if:
(1) all Notes previously authenticated and delivered (other than (i)
destroyed, lost or stolen Notes that have been replaced or (ii) Notes that
are paid pursuant to Section 4.01 or (iii) Notes for whose payment money,
U.K. Government Obligations or U.S. Government Obligations have been held
in trust and then repaid to the Company pursuant to Section 8.05) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder; or
(2) (A) the Notes mature within one year, or all of them are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption,
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(B) the Company irrevocably deposits in trust with the
Trustee, as trust funds solely for the benefit of the Holders, money,
U.K. Government Obligations or U.S. Government Obligations or a
combination thereof sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certificate delivered to the Trustee, without consideration of
any reinvestment, to pay principal of and interest on the Notes to
maturity or redemption, as the case may be, and to pay all other sums
payable by it hereunder,
(C) no Default has occurred and is continuing on the date of
the deposit,
(D) the deposit will not result in a breach or violation of,
or constitute a default under, the Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound,
and
(E) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction
and discharge of the Indenture have been complied with.
(b) After satisfying the conditions in clause (1), only the Company's
obligations under Section 7.07 will survive. After satisfying the conditions in
clause (2), only the Company's obligations in Article 2 and Sections 4.01, 4.02,
7.07, 7.08, 8.05 and 8.06 will survive. In either case, the Trustee upon
request will acknowledge in writing the discharge of the Company's obligations
under the Notes and the Indenture other than the surviving obligations.
SECTION 8.02. Legal Defeasance. After the 123rd day following the deposit
referred to in clause (1) of this Section 8.02, the Company will be deemed to
have paid and will be discharged from its obligations in respect of the Notes
and the Indenture, other than its obligations in Article 2 and Sections 4.01,
4.02, 7.07, 7.08, 8.05 and 8.06, and each Guarantor's obligations under its Note
Guaranty will terminate, provided the following conditions have been satisfied:
(1) The Company has irrevocably deposited in trust with the
Trustee, as trust funds solely for the benefit of the Holders, money, U.K.
Government Obligations or U.S. Government Obligations or a combination
thereof sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certificate thereof
delivered to the Trustee, without consideration of any
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reinvestment, to pay principal of and interest on the Notes to maturity or
redemption, as the case may be, provided that any redemption before
maturity has been irrevocably provided for under arrangements satisfactory
to the Trustee.
(2) No Default has occurred and is continuing on the date of the
deposit or occurs at any time during the 123-day period following the
deposit.
(3) The deposit will not result in a breach or violation of, or
constitute a default under, the Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound.
(4) The Company has delivered to the Trustee
(A) either (x) a ruling received from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain
or loss for federal income tax purposes as a result of the defeasance
and will be subject to federal income tax on the same amount and in
the same manner and at the same times as would otherwise have been the
case or (y) an Opinion of Counsel, based on a change in law after the
date of the Indenture, to the same effect as the ruling described in
clause (x), and
(B) an Opinion of Counsel to the effect that (i) the creation
of the defeasance trust does not violate the Investment Company Act of
1940, (ii) the Holders have a valid first priority Note interest in
the trust funds (subject to customary exceptions), and (iii) after the
passage of 123 days following the deposit, the trust funds will not be
subject to the effect of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy
Code or Section 15 of the New York Debtor and Creditor Law.
(5) If the Notes are listed on the Luxembourg Stock Exchange or any
other securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the deposit and defeasance will not
cause the Notes to be delisted.
(6) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance have
been complied with.
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Prior to the end of the 123-day period, none of the Company's obligations
under the Indenture will be discharged. Thereafter, the Trustee upon request
will acknowledge in writing the discharge of the Company's obligations under the
Notes and the Indenture except for the surviving obligations specified above.
SECTION 8.03. Covenant Defeasance. After the 123rd day following the
deposit referred to in clause (1) of Section 8.02, the Company's obligations set
forth in Sections 4.06 through 4.18, inclusive and clause (3) of Section
5.01(a)(iii), and each Guarantor's obligations under its Note Guaranty, will
terminate, and clauses (6), (7) and (10) of Section 6.01 will no longer
constitute Events of Default, provided the following conditions have been
satisfied:
(1) The Company has complied with clauses (1), (2), (3), (4)(B),
(5) and (6) of Section 8.02; and
(2) the Company has delivered to the Trustee an Opinion of Counsel
to the effect that the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of the defeasance and will be
subject to federal income tax on the same amount and in the same manner and
at the same times as would otherwise have been the case.
Except as specifically stated above, none of the Company's obligations
under the Indenture will be discharged.
SECTION 8.04. Application of Trust Money. Subject to Section 8.05, the
Trustee will hold in trust the money, U.K. Government Obligations or U.S.
Government Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03,
and apply the deposited money and the proceeds from deposited U.K. Government
Obligations or U.S. Government Obligations to the payment of principal of and
interest on the Notes in accordance with the Notes and the Indenture. Such
money, U.K. Government Obligations and U.S. Government Obligations need not be
segregated from other funds except to the extent required by law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee will promptly pay to the Company upon request any excess
money held by the Trustee at any time and thereupon be relieved from all
liability with respect to such money. The Trustee will pay to the Company upon
request any money held for payment with respect to the Notes that remains
unclaimed for two years, provided that before making such payment the Trustee
may at the expense of the Company publish once in a newspaper of general
circulation in New York City, or send to each Holder entitled to such money,
notice that the money remains unclaimed and that after a date specified in the
notice (at least 30 days after the date of the publication or notice) any
remaining
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unclaimed balance of money will be repaid to the Company. After payment to the
Company, Holders entitled to such money must look solely to the Company for
payment, unless applicable law designates another Person, and all liability of
the Trustee with respect to such money will cease.
SECTION 8.06. Reinstatement. If and for so long as the Trustee is unable
to apply any money, U.K. Government Obligations or U.S. Government Obligations
held in trust pursuant to Section 8.01, 8.02 or 8.03 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under the Indenture and the Notes will be reinstated as
though no such deposit in trust had been made. If the Company makes any payment
of principal of or interest on any Notes because of the reinstatement of its
obligations, it will be subrogated to the rights of the Holders of such Notes to
receive such payment from the money, U.K. Government Obligations or U.S.
Government Obligations held in trust.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Amendments Without Consent of Holders; Consent of Holders of
Senior Debt Needed to Amend Subordination Provisions. (a) The Company and the
Trustee may amend or supplement the Indenture or the Notes without notice to or
the consent of any Noteholder
(1) to cure any ambiguity, defect or inconsistency in the Indenture
or the Notes;
(2) to comply with Section 5.01;
(3) to comply with any requirements of the Commission in connection
with the qualification of the Indenture under the Trust Indenture Act;
(4) to evidence and provide for the acceptance of an appointment
hereunder by a successor Trustee;
(5) to provide for uncertificated Notes in addition to or in place
of certificated Notes; provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code;
81
(6) to provide for any Guarantee of the Notes, to secure the Notes
or to confirm and evidence the release, termination or discharge of any
Guarantee of or Lien securing the Notes when such release, termination or
discharge is permitted by the Indenture;
(7) to provide for or confirm the issuance of Additional Notes;
(8) to make any change in Article 10 that would limit or terminate
the benefits available to any holder of Senior Debt thereunder; or
(9) to make any other change that does not materially and adversely
affect the rights of any Holder.
(b) An amendment may not effect any change that adversely affects the
rights of any holder of Senior Debt then outstanding under Article 10 unless
such holder of Senior Debt, or a representative for such holder, consents to
such change.
SECTION 9.02. Amendments With Consent of Holders. (a) Except as otherwise
provided in Sections 6.02, 6.04 and 6.07 or paragraph (b), the Company and the
Trustee may amend the Indenture and the Notes with the written consent of the
Holders of a majority in principal amount of the outstanding Notes, and the
Holders of a majority in principal amount of the outstanding Notes by written
notice to the Trustee may waive future compliance by the Company with any
provision of the Indenture or the Notes.
(b) Notwithstanding the provisions of paragraph (a), without the consent
of each Holder affected, an amendment or waiver may not
(1) reduce the principal amount of or change the Stated Maturity of
any installment of principal of any Note,
(2) reduce the rate of or change the Stated Maturity of any
interest payment on any Note,
(3) reduce the amount payable upon the redemption of any Note or
change the time of any mandatory redemption or, in respect of an optional
redemption, the times at which any Note may be redeemed or, once notice of
redemption has been given, the time at which it must thereupon be redeemed,
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(4) after the time an Offer to Purchase is required to have been
made, reduce the purchase amount or purchase price, or extend the latest
expiration date or purchase date thereunder,
(5) make any Note payable in money other than that stated in the
Note,
(6) impair the right of any Holder of Notes to receive any
principal payment or interest payment on such Holder's Notes, on or after
the Stated Maturity thereof, or to institute suit for the enforcement of
any such payment,
(7) make any change in the percentage of the principal amount of
the Notes required for amendments or waivers,
(8) modify or change any provision of the Indenture affecting the
ranking of the Notes or any Note Guaranty in a manner adverse to the
Holders of the Notes,
(9) make any change to Article 10 that would adversely affect the
Noteholders,
(10) make any change in any Note Guaranty that would adversely
affect the Noteholders, or
(11) make any change to Section 4.21 that adversely affects the
right of any Holder or amend the terms of the Notes or the Indenture in a
way that would result in the loss of an exemption from any of the taxes
described thereunder.
(c) It is not necessary for Noteholders to approve the particular form
of any proposed amendment, supplement or waiver, but is sufficient if their
consent approves the substance thereof.
(d) An amendment, supplement or waiver under this Section will become
effective on receipt by the Trustee of written consents from the Holders of the
requisite percentage in principal amount of the outstanding Notes. After an
amendment, supplement or waiver under this Section becomes effective, the
Company will send to the Holders affected thereby a notice briefly describing
the amendment, supplement or waiver. The Company will send supplemental
indentures to Holders upon request. Any failure of the Company to send such
notice, or any defect therein, will not, however, in any way impair or affect
the validity of any such supplemental indenture or waiver.
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SECTION 9.03. Effect of Consent. (a) After an amendment, supplement or
waiver becomes effective, it will bind every Holder unless it is of the type
requiring the consent of each Holder affected. If the amendment, supplement or
waiver is of the type requiring the consent of each Holder affected, the
amendment, supplement or waiver will bind each Holder that has consented to it
and every subsequent Holder of a Note that evidences the same debt as the Note
of the consenting Holder.
(b) If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder to deliver it to the Trustee so that the Trustee
may place an appropriate notation of the changed terms on the Note and return it
to the Holder, or exchange it for a new Note that reflects the changed terms.
The Trustee may also place an appropriate notation on any Note thereafter
authenticated. However, the effectiveness of the amendment, supplement or waiver
is not affected by any failure to annotate or exchange Notes in this fashion.
SECTION 9.04. Trustee's Rights and Obligations. The Trustee is entitled to
receive, and will be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article is authorized or
permitted by the Indenture. If the Trustee has received such an Officer's
Certificate and an Opinion of Counsel, it shall sign the amendment, supplement
or waiver so long as the same does not adversely affect the rights of the
Trustee. The Trustee may, but is not obligated to, execute any amendment,
supplement or waiver that affects the Trustee's own rights, duties or immunities
under the Indenture.
SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.
SECTION 9.06. Payments for Consents. Neither the Company nor any of its
Subsidiaries or Affiliates may, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of the Indenture or the Notes unless such consideration is offered
to be paid or agreed to be paid to all Holders of the Notes that consent, waive
or agree to amend such term or provision within the time period set forth in the
solicitation documents relating to the consent, waiver or amendment.
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ARTICLE 10
SUBORDINATION
The provisions of Sections 10.01 through 10.14, as written, define the
subordination of the Notes, as obligations of the Company, with respect to
Senior Debt of the Company and Permitted Junior Securities, as defined for the
Company, only. All such provisions shall also be deemed to apply in the same way
(mutatis mutandis) to each Guarantor, if any, and its Note Guaranty, with
appropriate corresponding references to the Senior Debt of, and Permitted Junior
Securities with respect to, such Guarantor.
SECTION 10.01. Agreement to Subordinate. The Debt evidenced by the Notes
is subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment of all Senior Debt. The subordination
provisions are for the benefit of and enforceable by the holders of Senior Debt.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of the Company to creditors upon a total or partial
liquidation or a total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(1) holders of Senior Debt are entitled to receive payment in full
in cash of all Obligations in respect of Senior Debt, including all
interest accrued or accruing on Senior Debt after (or which would have
accrued but for) the commencement of any bankruptcy, insolvency or
reorganization or similar case or proceeding at the contract rate
(including, without limitation, any contract rate applicable upon default)
specified in the relevant documentation, whether or not the claim for the
interest is allowed as a claim in the case or proceeding with respect to
the Senior Debt (only such payment constituting "payment in full") before
Holders will be entitled to receive any payment of principal of or interest
on the Notes; and
(2) until the Senior Debt is paid in full, any distribution to
which Noteholders would be entitled but for these subordination provisions
shall instead be made to holders of Senior Debt as their interests may
appear.
SECTION 10.03. Default on Designated Senior Debt. (a) The Company shall
not pay the principal of or interest on the Notes or make any deposit pursuant
to Article 8 and shall not repurchase, redeem or otherwise retire any Notes
(collectively, "pay the Notes") if at the time any Designated Senior Debt has
not been paid when due, whether at maturity, upon redemption or mandatory
85
repurchase, acceleration, or otherwise, and the default has not been cured or
waived.
(b) During the continuance of any other default with respect to any
Designated Senior Debt pursuant to which the maturity thereof may be accelerated
immediately without further notice (except any notice that may be required to
effect acceleration) or upon the expiration of a grace period, the Company may
not pay the Notes for a period (a "Payment Blockage Period")
(1) commencing upon the receipt by the Company and the Trustee of
written notice of default from the holders of any Designated Senior Debt
specifying an election to effect a Payment Blockage Period (a "Blockage
Notice") and
(2) ending 179 days thereafter (or earlier if the Payment Blockage
Period is terminated (i) by written notice to the Trustee and the Company
from the Person that gave the Blockage Notice, (ii) by repayment in full of
such Senior Debt or (iii) because the default giving rise to the Blockage
Notice is no longer continuing).
Subject to the preceding paragraph, unless the holders of such Senior Debt have
accelerated the maturity of such Senior Debt, the Company may resume payments on
the Notes after the Payment Blockage Period.
(c) Not more than one Blockage Notice may be given in any consecutive
360-day period, irrespective of the number of defaults with respect to Senior
Debt during such period. No default which existed or was continuing on the date
of the commencement of any Payment Blockage Period with respect to the Senior
Debt whose holders initiated the Payment Blockage Period may be made the basis
of the commencement of a subsequent Payment Blockage Period by the holders of
such Senior Debt, whether or not within a period of 360 consecutive days, unless
the default has been cured or waived for a period of not less than 90
consecutive days.
SECTION 10.04. When Distribution Must Be Paid Over. If a payment or other
distribution is made to Noteholders that because of these subordination
provisions should not have been made to them, the Noteholders that receive the
distribution shall hold it in trust for holders of Senior Debt and pay it over
to them as their interests may appear.
SECTION 10.05. Subrogation. A distribution made under these subordination
provisions to holders of Senior Debt which otherwise would have been made to
Noteholders is not, as between the Company and Noteholders, a payment by the
Company on Senior Debt. After all Senior Debt is paid in full and
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until the Notes are paid in full, Noteholders will be subrogated to the rights
of holders of Senior Debt to receive payments in respect of Senior Debt.
SECTION 10.06. Relative Rights; Subordination Not to Prevent Events of
Default or Limit Right to Accelerate. These subordination provisions define the
relative rights of Noteholders and holders of Senior Debt and do not impair, as
between the Company and Noteholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on the Notes in
accordance with their terms. The failure to make a payment pursuant to the Notes
by reason of these subordination provisions does not prevent the occurrence of a
Default, nor do these subordination provisions have any effect on the right of
the Noteholders or the Trustee to accelerate the maturity of the Notes upon an
Event of Default or prevent the Trustee or any Noteholder from exercising its
available remedies upon a Default, subject to the rights of holders of Senior
Debt to receive distributions otherwise payable to Noteholders.
SECTION 10.07. Subordination May Not Be Impaired by Company. No right of
any holder of Senior Debt to enforce the subordination of the Notes will be
impaired by any act or failure to act by the Company or by its failure to comply
with the Indenture.
SECTION 10.08. Rights of Trustee. (a) The Trustee may continue to make
payments on the Notes and will not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments unless, not less than
two Business Days prior to the date of such payment, the Trustee receives notice
satisfactory to it from the Company or a holder of Senior Debt that payments may
not be made under this Article.
(b) The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights, including rights under this Article, it would have if
it were not Trustee. Nothing in this Article applies to claims of, or payments
to, the Trustee under or pursuant to Section 7.07.
SECTION 10.09. Distributions and Notices to, and Notices and Consents by,
Representatives of Holders of Senior Debt. Whenever a distribution is to be made
or a notice given to holders of Senior Debt, the distribution may be made and
the notice given to their representative (if any). If there is a representative
acting for the holders of any Senior Debt pursuant to the agreements governing
such Senior Debt, notices or consents under the Indenture from holders of such
Senior Debt may be given only by their representative.
SECTION 10.10. Trust Moneys Not Subordinated; Payments in Permitted Junior
Securities. Notwithstanding anything to the contrary,
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(i) payments from money, U.S. Government Obligations or U.K.
Government Obligations held by the Trustee in trust under Article 8 (after
passage of the 123-day period referred to therein, if relevant) and
(ii) distributions to Noteholders in the form of Permitted Junior
Securities of the Company
are not subordinated to the prior payment of any Senior Debt or otherwise
subject to these subordination provisions, and none of the Noteholders will be
obligated to pay over any such payments or distributions to any holder of Senior
Debt.
SECTION 10.11. Trustee Entitled to Rely. For the purpose of ascertaining
the outstanding amount of Senior Debt, the holders thereof, and all other
information relevant to making any payment or distribution to holders of Senior
Debt pursuant to this Article, the Trustee and the Noteholders are entitled to
rely upon an order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 10.02 are pending, a
certificate of the liquidating trustee or other Person making a payment or
distribution to the Trustee or to the Noteholders, or information provided by
the holders of Senior Debt. The Trustee may defer any payment or distribution
pending receipt of evidence or instructions satisfactory to it or a judicial
determination regarding the rights of parties to receive the payment or
distribution.
SECTION 10.12. Trustee to Effectuate Subordination. Each Noteholder by
accepting a Note authorizes and directs the Trustee on behalf of the Noteholder
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Noteholders and the holders of Senior
Debt as provided in this Article and appoints the Trustee as attorney-in-fact
for any and all such purposes, including for the purpose of filing a claim in
any proceedings of the nature referred to in Section 10.02.
SECTION 10.13. Trustee Not Fiduciary for Holders of Senior Debt. The
Trustee will not be deemed to owe any fiduciary duty to the holders of Senior
Debt and will not be liable to any such holders if it mistakenly pays over or
distribute to Noteholders, or to the Company or any other Person, any money or
assets to which holders of Senior Debt are entitled by virtue of this Article.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article and no implied covenants or obligations
with respect to holders of Senior Debt shall be read into this Indenture against
the Trustee.
SECTION 10.14. Reliance by Holder of Senior Debt on Subordination
Provisions; No Waiver. (a) Each Noteholder by accepting a Note acknowledges
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and agrees that these subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of Senior Debt, whether created or
acquired before or after the issuance of the Notes, to acquire or to hold such
Senior Debt, and each holder of Senior Debt will be deemed conclusively to have
relied on these subordination provisions in acquiring and holding such Senior
Debt.
(b) The holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Notes,
without incurring any liability or responsibility to the Holders of the Notes,
and without impairing the rights of holders of Senior Debt under these
subordination provisions, do any of the following:
(1) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Debt or any instrument evidencing
the same or any agreement under which Senior Debt is outstanding or
secured;
(2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt;
(3) release any Person liable in any manner for the payment of
Senior Debt; or
(4) exercise or refrain from exercising any rights against the
Company and any other Person.
ARTICLE 11
GUARANTIES
SECTION 11.01. The Guaranties; Subordination. Subject to the provisions of
this Article, each Guarantor by execution of a supplemental indenture in the
form of Exhibit B hereto hereby irrevocably and unconditionally guarantees,
jointly and severally, on an unsecured subordinated basis, the full and punctual
payment (whether at Stated Maturity, upon redemption, purchase pursuant to an
Offer to Purchase or acceleration, or otherwise) of the principal of, premium,
if any, and interest on, and all other amounts payable under, each Note, and the
full and punctual payment of all other amounts payable by the Company under the
Indenture. Upon failure by the Company to pay punctually any such amount, each
Guarantor shall forthwith on demand pay the amount not so paid at the place and
in the manner specified in the Indenture. The obligations of each Guarantor
under its Note Guaranty are junior and subordinated in right of payment to the
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Senior Debt of such Guarantor in the same manner and to the same extent as the
Notes are subordinated to Senior Debt of the Company.
SECTION 11.02. Guaranty Unconditional. The obligations of each Guarantor
hereunder are unconditional and absolute and, without limiting the generality of
the foregoing, will not be released, discharged or otherwise affected by
(1) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Company under the Indenture or
any Note, by operation of law or otherwise;
(2) any modification or amendment of or supplement to the Indenture
or any Note;
(3) 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 the
Indenture or any Note;
(4) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Company, the Trustee or any
other Person, whether in connection with the Indenture or any unrelated
transactions, provided that nothing herein prevents the assertion of any
such claim by separate suit or compulsory counterclaim;
(5) any invalidity or unenforceability relating to or against the
Company for any reason of the Indenture or any Note, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Company of the principal of or interest on any Note or any other amount
payable by the Company under the Indenture; or
(6) any other act or omission to act or delay of any kind by the
Company, the Trustee 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 or defense to such Guarantor's
obligations hereunder.
SECTION 11.03. Discharge; Reinstatement. Each Guarantor's obligations
hereunder will remain in full force and effect until the principal of, premium,
if any, and interest on the Notes and all other amounts payable by the Company
under the Indenture have been paid in full. If at any time any payment of the
principal of, premium, if any, or interest on any Note or any other amount
payable
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by the Company under the Indenture is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, each Guarantor's obligations hereunder with respect to such payment
will be reinstated as though such payment had been due but not made at such
time.
SECTION 11.04. Waiver by the Guarantors. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Company or any other Person.
SECTION 11.05. Subrogation and Contribution. Upon making any payment with
respect to any obligation of the Company under this Article, the Guarantor
making such payment will be subrogated to the rights of the payee against the
Company with respect to such obligation, provided that the Guarantor may not
enforce either any right of subrogation, or any right to receive payment in the
nature of contribution, or otherwise, from any other Guarantor, with respect to
such payment so long as any amount payable by the Company hereunder or under the
Notes remains unpaid.
SECTION 11.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Company under the Indenture or the Notes is
stayed upon the insolvency, bankruptcy or reorganization of the Company, all
such amounts otherwise subject to acceleration under the terms of the Indenture
are nonetheless payable by the Guarantors hereunder forthwith on demand by the
Trustee or the Holders.
SECTION 11.07. Limitation on Amount of Guaranty. Notwithstanding anything
to the contrary in this Article, each Guarantor, and by its acceptance of Notes,
each Holder, hereby confirms that it is the intention of all such parties that
the Note Guaranty of such Guarantor not constitute a fraudulent conveyance
under applicable fraudulent conveyance provisions of the United States
Bankruptcy Code or any comparable provision of state law. To effectuate that
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of each Guarantor under its Note Guaranty are limited to
the maximum amount that would not render the Guarantor's obligations subject to
avoidance under applicable fraudulent conveyance provisions of the United States
Bankruptcy Code or any comparable provision of state law.
SECTION 11.08. Execution and Delivery of Guaranty. The execution by each
Guarantor of a supplemental indenture in the form of Exhibit B evidences the
Note Guaranty of such Guarantor, whether or not the person signing as an officer
of the Guarantor still holds that office at the time of authentication of any
Note. The delivery of any Note by the Trustee after authentication constitutes
due
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delivery of the Note Guaranty set forth in the Indenture on behalf of each
Guarantor.
SECTION 11.09. Release of Guaranty. The Note Guaranty of a Guarantor will
terminate upon
(1) a sale or other disposition (including by way of consolidation
or merger) of the Guarantor or the sale or disposition of all or
substantially all the assets of the Guarantor (in each case other than to
the Company or a Restricted Subsidiary) otherwise permitted by the
Indenture,
(2) the release or discharge of the Guarantee by such Restricted
Subsidiary of all Debt of the Company under the Credit Agreement, except a
discharge or release by or as a result of payment under such Guarantee,
(3) the designation in accordance with the Indenture of the
Guarantor as an Unrestricted Subsidiary, or
(4) defeasance or discharge of the Notes, as provided in Article 8.
Upon delivery by the Company to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the foregoing effect, the Trustee will execute any
documents reasonably required in order to evidence the release of the Guarantor
from its obligations under its Note Guaranty.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939. The Indenture shall
incorporate and be governed by the provisions of the Trust Indenture Act that
are required to be part of and to govern indentures qualified under the Trust
Indenture Act.
SECTION 12.02. Noteholder Communications; Noteholder Actions. (a) The
rights of Holders to communicate with other Holders with respect to the
Indenture or the Notes are as provided by the Trust Indenture Act, and the
Company and the Trustee shall comply with the requirements of Trust Indenture
Act Sections 312(a) and 312(b). Neither the Company nor the Trustee will be
held accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act.
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(b) (1) Any request, demand, authorization, direction, notice,
consent to amendment, supplement or waiver or other action provided by this
Indenture to be given or taken by a Holder (an "act") may be evidenced by
an instrument signed by the Holder delivered to the Trustee. The fact and
date of the execution of the instrument, or the authority of the person
executing it, may be proved in any manner that the Trustee deems
sufficient.
(2) The Trustee may make reasonable rules for action by or at a
meeting of Holders, which will be binding on all the Holders.
(c) Any act by the Holder of any Note binds that Holder and every
subsequent Holder of a Note that evidences the same debt as the Note of the
acting Holder, even if no notation thereof appears on the Note. Subject to
paragraph (d), a Holder may revoke an act as to its Notes, but only if the
Trustee receives the notice of revocation before the date the amendment or
waiver or other consequence of the act becomes effective.
(d) The Company may, but is not obligated to, fix a record date (which
need not be within the time limits otherwise prescribed by Trust Indenture Act
Section 316(c)) for the purpose of determining the Holders entitled to act with
respect to any amendment or waiver or in any other regard, except that during
the continuance of an Event of Default, only the Trustee may set a record date
as to notices of default, any declaration or acceleration or any other remedies
or other consequences of the Event of Default. If a record date is fixed,
those Persons that were Holders at such record date and only those Persons will
be entitled to act, or to revoke any previous act, whether or not those Persons
continue to be Holders after the record date. No act will be valid or effective
for more than 90 days after the record date.
SECTION 12.03. Notices. (a) Any notice or communication to the Company
will be deemed given if in writing (i) when delivered in person, (ii) five days
after mailing when mailed by first class mail, or when sent by facsimile
transmission, with transmission confirmed or (iii) in the case of the Trustee,
when received. Notices or communications to a Guarantor will be deemed given if
given to the Company. In each case the notice or communication should be
addressed as follows:
if to the Company:
Chesapeake Corporation
▇▇▇▇▇ Center II
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
if to the Trustee:
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Corporate Trust Administration - Global Finance Unit
Facsimile: ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
(b) Except as otherwise expressly provided with respect to published
notices, any notice or communication to a Holder will be deemed given when
mailed to the Holder at its address as it appears on the Register by first class
mail or, as to any Global Note registered in the name of the Depositary or its
nominee, when published in a leading newspaper of general circulation in London
and, so long as the Notes are listed on the Luxembourg Stock Exchange (and the
rules of such exchange so require), a leading newspaper of general circulation
in Luxembourg. Copies of any notice or communication to a Holder, if given by
the Company, will be mailed to the Trustee at the same time. Defect in mailing
a notice or communication to any particular Holder will not affect its
sufficiency with respect to other Holders.
(c) Where the Indenture provides for notice, the notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and the waiver will be the equivalent of the notice. Waivers of
notice by Holders must be filed with the Trustee, but such filing is not a
condition precedent to the validity of any action taken in reliance upon such
waivers.
SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under the Indenture, the Company will furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in the Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that all such conditions
precedent have been complied with.
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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 the Indenture must include:
(1) a statement that each person signing the certificate or opinion
has read the covenant or condition and the related definitions;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in the
certificate or opinion is based;
(3) a statement that, in the opinion of each such person, that
person has made such examination or investigation as is necessary to enable
the person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with, provided that an
Opinion of Counsel may rely on an Officers' Certificate or certificates of
public officials with respect to matters of fact.
SECTION 12.06. Payment Date Other Than a Business Day. If any payment with
respect to a payment of any principal of, premium, if any, or interest on any
Note (including any payment to be made on any date fixed for redemption or
purchase of any Note) is due on a day which is not a Business Day, then the
payment need not be made on such date, but may be made on the next Business Day
with the same force and effect as if made on such date, and no interest will
accrue for the intervening period.
SECTION 12.07. Governing Law. The Indenture, including any Note
Guaranties, and the Notes shall be governed by, and construed in accordance
with, the laws of the State of New York.
SECTION 12.08. No Adverse Interpretation of Other Agreements. The
Indenture may not be used to interpret another indenture or loan or debt
agreement of the Company or any Subsidiary of the Company, and no such indenture
or loan or debt agreement may be used to interpret the Indenture.
SECTION 12.09. Successors. All agreements of the Company or any Guarantor
in the Indenture and the Notes will bind its successors. All agreements of the
Trustee in the Indenture will bind its successor.
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SECTION 12.10. Duplicate Originals. The parties may sign any number of
copies of the Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 12.11. Separability. In case any provision in the Indenture or in
the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
SECTION 12.12. Table of Contents and Headings. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of the Indenture
have been inserted for convenience of reference only, are not to be considered a
part of the Indenture and in no way modify or restrict any of the terms and
provisions of the Indenture.
SECTION 12.13. No Liability of Directors, Officers, Employees,
Incorporators and Shareholders. No director, officer, employee, incorporator or
shareholder of the Company as such, will have any liability for any obligations
of the Company under the Notes or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes.
SECTION 12.14. Judgment Currency. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from the Company or
any Guarantor under the Indenture, the Notes or any Note Guaranty in the
currency expressed to be payable therein (the "specified currency") into another
currency, to the fullest extent permitted by law, the rate of exchange used
shall be the Spot Rate at which a Person could purchase the specified currency
with such other currency on the Business Day preceding that on which final
judgment is given. The obligations of the Company and each Guarantor in respect
of any sum due to the Trustee or any Holder under the Indenture, the Notes and
the Note Guaranties shall, notwithstanding any judgment in a currency other than
the specified currency, be discharged only to the extent that, on the Business
Day following receipt by such Holder or the Trustee (as the case may be) of any
sum adjudged to be so due in such other currency, such Holder or the Trustee (as
the case may be) may purchase the specified currency with such other currency.
If the amount of the specified currency so purchased (at the Spot Rate on such
date) is less than the sum originally due to such Holder or the Trustee in the
specified currency, the Company and the Guarantors agree, to the fullest extent
that they may effectively do so, as a separate obligation and notwithstanding
any such judgment, to indemnify such holder or the trustee against such loss.
96
SECTION 12.15. European Monetary Union. (a) If the United Kingdom becomes
a Participating Member State at any time after the Issue Date, then all amounts
in the Indenture and the Notes denominated in British pounds sterling shall be
redenominated into euro in accordance with EMU Legislation and paid by the
applicable obligor in euro or British pounds sterling (so long as such currency
remains legal tender), but not in any other currency, whether or not such other
currency (i) has been substituted or replaced by the euro or (ii) is a currency
that is considered a denomination of the euro and has a fixed conversion rate
with respect to the euro.
(b) None of (i) the introduction of the euro; (ii) the tendering of
euros in connection with any obligation under the Indenture or the Notes in
compliance with paragraph (a) above; or (iii) the determining of the value of
any obligation under the Indenture or the Notes in compliance with paragraph (a)
shall either have the effect of discharging or excusing the performance of the
Company, any Guarantor, the Trustee or any Holder under the Indenture, any Note
Guaranty or the Notes or give any such party the right to unilaterally alter or
terminate the Indenture, any Note Guaranty or the Notes.
97
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly
executed as of the date first written above.
CHESAPEAKE CORPORATION
as Issuer
By: /s/ ▇.▇. ▇▇▇▇▇▇ ▇▇.
---------------------------
Name: ▇.▇. ▇▇▇▇▇▇ ▇▇.,
Title: Senior Vice President, Secretary &
General Counsel
THE BANK OF NEW YORK
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A
[FACE OF NOTE]
Chesapeake Corporation
103/8% Senior Subordinated Note Due 2011
[CUSIP] [CINS] [ISIP] [Common Code] _______________
No. (Pounds)_______________
Chesapeake Corporation, a Virginia corporation (the "Company", which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to ____________________, or its registered assigns,
the principal sum of ____________ UNITED KINGDOM POUNDS STERLING
((Pounds)______) [or such other amount as indicated on the Schedule of Exchange
of Notes attached hereto] on November 15, 2011.
[Initial]/1/ Interest Rate: 103/8% per annum.
Interest Payment Dates: May 15 and November 15, commencing May 15, 2002.
Regular Record Dates: May 1 and November 1.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which will for all purposes have the same effect as if
set forth at this place.
_______________
/1/ For Initial Notes or Initial Additional Notes only
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date: Chesapeake Corporation
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
A-2
(Form of Trustee's Certificate of Authentication)
This is one of the 103/8% Senior Subordinated Notes Due 2011 described in
the Indenture referred to in this Note.
THE BANK OF NEW YORK, as Trustee
By: _____________________________
Authorized Signatory
A-3
[REVERSE SIDE OF NOTE]
Chesapeake Corporation
103/8% Senior Subordinated Note Due 2011
1. Principal and Interest.
The Company promises to pay the principal of this Note on November 15,
2011.
The Company promises to pay interest on the principal amount of this Note
on each interest payment date, as set forth on the face of this Note, at the
rate of 103/8% per annum (subject to adjustment as provided below).
Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the May 1 or November 1 immediately preceding
the interest payment date) on each interest payment date, commencing May 15,
2002.
[The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated November 19, 2001, between the Company and the Initial
Purchasers named therein (the "Registration Rights Agreement"). In the event
that (i) the Company fails to file any registration statement required by the
Registration Rights Agreement on or prior to the applicable filing deadline set
forth in such agreement; (ii) any such registration statement is not declared
effective on or prior to the applicable effectiveness deadline set forth in such
agreement; (iii) the exchange offer required by such agreement is not
consummated on or prior to the consummation deadline set forth in such
agreement; or (iv) any registration statement required by such agreement has
been declared effective but thereafter ceases to be effective or useable in
connection with resales of the Notes that are Transfer Restricted Securities (as
defined in the Registration Rights Agreement) during the periods specified in
the Registration Rights Agreement (each, a "Registration Default"), the interest
rate on this Note will be increased (pursuant to and subject to the conditions
set forth in the Registration Rights Agreement) from and including the date on
which any Registration Default shall occur to but excluding the date on which
all such Registration Defaults have been cured, at a rate of .25% per annum for
the first 90-day period (the "Additional Interest"). The amount of additional
interest shall increase by an additional .25% per annum with respect to each
subsequent 90 day period until all Registration Defaults have been cured, up to
a maximum amount of Additional Interest of 1.0% per annum. All accrued
Additional Interest shall be
A-4
paid by the Company in the same manner and at the same time as payments of
interest on the Notes.]/2/
The Company shall also be required to pay Additional Amounts on the Notes
upon the occurrence of the events specified in the Indenture.
Interest on this Note will accrue from the most recent date to which
interest has been paid on this Note [or the Note surrendered in exchange for
this Note]/3/ (or, if there is no existing default in the payment of interest
and if this Note is authenticated between a regular record date and the next
interest payment date, from such interest payment date) or, if no interest has
been paid, from [the Issue Date]./4/ Interest will be computed in the basis of a
360-day year of twelve 30-day months.
The Company will pay interest on overdue principal, premium, if any, and
interest at a rate per annum that is 1% in excess of 10 3/8%. Interest not paid
when due and any interest on principal, premium or interest not paid when due
will be paid to the Persons that are Holders on a special record date, which
will be the 15th day preceding the date fixed by the Company for the payment of
such interest, whether or not such day is a Business Day. At least 15 days
before a special record date, the Company will send to each Holder and to the
Trustee a notice that sets forth the special record date, the payment date and
the amount of interest to be paid.
2. Indenture; Subordination; Note Guaranty.
This is one of the Notes issued under an Indenture dated as of November 19,
2001 (as amended from time to time, the "Indenture"), between the Company and
The Bank of New York, as Trustee. Capitalized terms used herein are used as
defined in the Indenture unless otherwise indicated. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Notes are subject to all such terms,
and Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture will control.
____________________
/2/ Include only for Initial Note or Initial Additional Note.
/3/ Include only for Exchange Note.
/4/ For Additional Notes, should be the date of their original issue.
A-5
The Notes are general unsecured obligations of the Company. The Indenture
limits the original aggregate principal amount of the Notes to
(Pounds)115,000,000, but Additional Notes may be issued pursuant to the
Indenture, and the originally issued Notes and all such Additional Notes
(together with any Exchange Notes and Private Exchange Notes issued in exchange
therefor) vote together for all purposes as a single class. This Note is
subordinated as set forth in the Indenture. Under the circumstances set forth in
the Indenture, Restricted Subsidiaries of the Company may be required to
guarantee this Note.
3. Redemption and Repurchase; Discharge Prior to Redemption or Maturity.
This Note is subject to optional redemption, and may be the subject of an
Offer to Purchase, as further described in the Indenture. There is no sinking
fund or mandatory redemption applicable to this Note.
If the Company deposits with the Trustee money, U.S. Government Obligations
or U.K. Government Obligations sufficient to pay the then outstanding principal
of, premium, if any, and accrued interest on the Notes to redemption or
maturity, the Company may in certain circumstances be discharged from the
Indenture and the Notes or may be discharged from certain of its obligations
under certain provisions of the Indenture.
4. Registered Form; Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
(Pounds)1,000 principal amount and any multiple of (Pounds)1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Trustee may require a Holder to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. Pursuant to the Indenture, there are certain
periods during which the Trustee will not be required to issue, register the
transfer of or exchange any Note or certain portions of a Note.
5. Defaults and Remedies.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Notes may declare all the Notes to be due and payable. If a bankruptcy or
insolvency default with respect to the Company occurs and is continuing, the
Notes automatically become due and payable. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of a majority in principal
amount of the Notes then outstanding may direct the Trustee in its exercise of
remedies.
A-6
6. Amendment and Waiver.
Subject to certain exceptions, the Indenture and the Notes may be amended,
or default may be waived, with the consent of the Holders of a majority in
principal amount of the outstanding Notes. Without notice to or the consent of
any Holder, the Company and the Trustee may amend or supplement the Indenture or
the Notes to, among other things, cure any ambiguity, defect or inconsistency.
7. Authentication.
This Note is not valid until the Trustee (or Authenticating Agent) signs
the certificate of authentication on the other side of this Note.
8. Governing Law.
This Note shall be governed by, and construed in accordance with, the laws
of the State of New York.
9. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).
The Company will furnish a copy of the Indenture to any Holder upon written
request and without charge.
A-7
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
________________________________________________________________________________
________________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
A-8
[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL
CERTIFICATES BEARING A RESTRICTED LEGEND]
In connection with any transfer of this Note occurring prior to
______________, the undersigned confirms that such transfer is made without
utilizing any general solicitation or general advertising and further as
follows:
Check One
[_] (1) This Note is being transferred to a "qualified institutional buyer" in
compliance with Rule 144A under the Securities Act of 1933, as amended and
certification in the form of Exhibit F to the Indenture is being furnished
herewith.
[_] (2) This Note is being transferred to a Non-U.S. Person in compliance with
the exemption from registration under the Securities Act of 1933, as amended,
provided by Regulation S thereunder, and certification in the form of Exhibit E
to the Indenture is being furnished herewith.
or
[_] (3) This Note is being transferred other than in accordance with (1) or (2)
above and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee is not obligated to
register this Note in the name of any Person other than the Holder hereof unless
and until the conditions to any such transfer of registration set forth herein
and in the Indenture have been satisfied.
Date:____________________
__________________________
Seller
By________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in
every particular, without alteration or any
change whatsoever.
A-9
Signature Guarantee:/5/ _______________________________
By_____________________________
To be executed by an executive officer
___________________
/5/Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Association 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.
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have all of this Note purchased by the Company pursuant to
Section 4.12 or Section 4.13 of the Indenture, check the box: [_]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.12 or Section 4.13 of the Indenture, state the amount (in
original principal amount) below:
(Pounds)_____________________.
Date:____________
Your Signature:__________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:/1/_____________________________
_____________________
/1/Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Trustee, which requirements include membership
or participation in the Securities Transfer Association Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Trustee in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-11
SCHEDULE OF EXCHANGES OF NOTES/1/
The following exchanges of a part of this Global Note for Physical Notes or a
part of another Global Note have been made:
Principal amount of
this Global Note
Amount of decrease Amount of increase following such Signature of
in principal amount in principal amount decrease (or authorized officer of
Date of Exchange of this Global Note of this Global Note increase) Trustee
-------------------- ---------------------- --------------------- --------------------- -----------------------
_______________________
/1/For Global Notes
A-12
EXHIBIT B
SUPPLEMENTAL INDENTURE
dated as of __________, ____
among
CHESAPEAKE CORPORATION,
The Guarantor(s) Party Hereto
and
THE BANK OF NEW YORK,
as Trustee
_______________________
10 3/8%
Senior Subordinated Notes due 2011
THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), entered into
as of __________, ____, among Chesapeake Corporation, a Virginia corporation
(the "Company"), [insert each Guarantor executing this Supplemental Indenture
and its jurisdiction of incorporation] (each an "Undersigned") and THE BANK OF
NEW YORK, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company, the Guarantors party thereto and the Trustee entered
into the Indenture, dated as of November 19, 2001 (the "Indenture"), relating to
the Company's 10 3/8% Senior Subordinated Notes due 2011 (the "Notes");
WHEREAS, as a condition to the Trustee entering into the Indenture and the
purchase of the Notes by the Holders, the Company agreed pursuant to the
Indenture to cause Restricted Subsidiaries to provide Guaranties in certain
circumstances.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, the parties to this
Supplemental Indenture hereby agree as follows:
Section 1. Capitalized terms used herein and not otherwise defined herein
are used as defined in the Indenture.
Section 2. Each Undersigned, by its execution of this Supplemental
Indenture, agrees to be a Guarantor under the Indenture and to be bound by the
terms of the Indenture applicable to Guarantors, including, but not limited to,
Article 11 thereof.
Section 3. This Supplemental Indenture shall be governed by and construed
in accordance with the laws of the State of New York.
Section 4. This Supplemental Indenture may be signed in various
counterparts which together will constitute one and the same instrument.
Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and the Indenture and this Supplemental Indenture will henceforth be
read together.
B-1
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
CHESAPEAKE CORPORATION, as Issuer
By:________________________________
Name:
Title:
[GUARANTOR]
By:________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:________________________________
Name:
Title:
B-2
EXHIBIT C
RESTRICTED LEGEND
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER
(1) REPRESENTS THAT
(A) IT IS NOT AN AFFILIATE (WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT) OF THE COMPANY AND IT IS NOT ACTING ON THE COMPANY'S
BEHALF, AND
(B) (i) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED
INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH
SUCH ACCOUNT, OR
(ii) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE
MEANING OF RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR
(iii) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT) AND
(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT
IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND ONLY
(A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME
EFFECTIVE UNDER THE SECURITIES ACT,
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT,
C-1
(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT,
(E) IN A PRINCIPAL AMOUNT OF NOT LESS THAN (Pounds)100,000, TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO
THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY
BE OBTAINED FROM THE TRUSTEE) RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS NOTE, OR
(F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE COMPANY
RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
C-2
EXHIBIT D
GLOBAL LEGEND
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
BANK OF NEW YORK, AS COMMON DEPOSITORY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF THE BANK OF NEW YORK (DEPOSITORY) NOMINEES LIMITED OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE BANK
OF NEW YORK, AS COMMON DEPOSITORY (AND ANY PAYMENT IS MADE TO THE BANK OF NEW
YORK (DEPOSITORY) NOMINEES LIMITED OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE BANK OF NEW YORK, AS COMMON DEPOSITORY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, THE BANK OF NEW YORK
(DEPOSITORY) NOMINEES LIMITED, HAS A BENEFICIAL INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF THE BANK OF NEW YORK (DEPOSITORY) NOMINEES LIMITED OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER
PROVISIONS OF THE INDENTURE.
D-1
EXHIBIT E
Regulation S Certificate
_________, ____
The Bank of ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Corporate Trust Administration
Re: Chesapeake Corporation
10 3/8% Senior Subordinated
Notes due 2011 (the "Notes")
Issued under the Indenture (the "Indenture") dated as
as of November 19, 2001 relating to the Notes
--------------------------------------------------------
Dear Sirs:
Terms are used in this Certificate as used in Regulation S ("Regulation S")
under the Securities Act of 1933, as amended (the "Securities Act"), except as
otherwise stated herein.
[CHECK A OR B AS APPLICABLE.]
[_] A. This Certificate relates to our proposed transfer of (Pounds)____
principal amount of Notes issued under the Indenture. We hereby
certify as follows:
1. The offer and sale of the Notes was not and will not be made
to a person in the United States (unless such person is
excluded from the definition of "U.S. person" pursuant to
Rule 902(k)(2)(vi) or the account held by it for which it is
acting is excluded from the definition of "U.S. person"
pursuant to Rule 902(k)(2)(i) under the circumstances
described in Rule 902(g)(3)) and such offer and sale was not
and will not be specifically targeted at an identifiable
group of U.S. citizens abroad.
2. Unless the circumstances described in the parenthetical in
paragraph 1 above are applicable, either (a) at the time the
buy order was originated, the buyer was outside the United
States or we and any person acting on our behalf reasonably
E-1
believed that the buyer was outside the United States or (b)
the transaction was executed in, on or through the
facilities of a designated offshore securities market, and
neither we nor any person acting on our behalf knows that
the transaction was pre-arranged with a buyer in the United
States.
3. Neither we, any of our affiliates, nor any person acting on
our or their behalf has made any directed selling efforts in
the United States with respect to the Notes.
4. The proposed transfer of Notes is not part of a plan or
scheme to evade the registration requirements of the
Securities Act.
5. If we are a dealer or a person receiving a selling
concession, fee or other remuneration in respect of the
Notes, and the proposed transfer takes place during the
Restricted Period (as defined in the Indenture), or we are
an officer or director of the Company or an Initial
Purchaser (as defined in the Indenture), we certify that the
proposed transfer is being made in accordance with the
provisions of Rule 904(b) of Regulation S.
[_] B. This Certificate relates to our proposed exchange of (Pounds)____
principal amount of Notes issued under the Indenture for an equal
principal amount of Notes to be held by us. We hereby certify as
follows:
1. At the time the offer and sale of the Notes was made to us,
either (i) we were not in the United States or (ii) we were
excluded from the definition of "U.S. person" pursuant to
Rule 902(k)(2)(vi) or the account held by us for which we
were acting was excluded from the definition of "U.S.
person" pursuant to Rule 902(k)(2)(i) under the
circumstances described in Rule 902(g)(3); and we were not a
member of an identifiable group of U.S. citizens abroad.
2. Unless the circumstances described in paragraph 1(ii) above
are applicable, either (a) at the time our buy order was
originated, we were outside the United States or (b) the
transaction was executed in, on or through the facilities of
a designated offshore securities market and we did not pre-
arrange the transaction in the United States.
E-2
3. The proposed exchange of Notes is not part of a plan or
scheme to evade the registration requirements of the
Securities Act.
You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate 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,
[NAME OF SELLER (FOR TRANSFERS)
OR OWNER (FOR EXCHANGES)]
By:_______________________________
Name:
Title:
Address:
Date:_____________________________
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
_________, ____
The Bank of ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Corporate Trust Administration
Re: Chesapeake Corporation
10 3/8% Senior Subordinated
Notes due 2011 (the "Notes")
Issued under the Indenture (the "Indenture") dated as
as of November 19, 2001 relating to the Notes
------------------------------------------------------
Ladies and Gentlemen:
This Certificate relates to:
[CHECK A OR B AS APPLICABLE.]
[_] A. Our proposed purchase of (Pounds)____ principal amount of Notes
issued under the Indenture.
[_] B. Our proposed exchange of (Pounds)____ principal amount of Notes
issued under the Indenture for an equal principal amount of Notes to
be held by us.
We and, if applicable, each account for which we are acting in the
aggregate owned and invested more than $100,000,000 in securities of issuers
that are not affiliated with us (or such accounts, if applicable), as of
_________, 200_, which is a date on or since close of our most recent fiscal
year. We and, if applicable, each account for which we are acting, are a
qualified institutional buyer within the meaning of Rule 144A ("Rule 144A")
under the Securities Act of 1933, as amended (the "Securities Act"). If we are
acting on behalf of an account, we exercise sole investment discretion with
respect to such account. We are aware that the transfer of Notes to us, or such
exchange, as applicable, is being made in reliance upon the exemption from the
provisions of Section 5 of the Securities Act provided by Rule 144A. Prior to
the date of this Certificate we have received such information regarding the
Company as we have requested pursuant to Rule 144A(d)(4) or have determined not
to request such information.
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You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate 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,
[NAME OF PURCHASER (FOR
TRANSFERS) OR OWNER (FOR
EXCHANGES)]
By: _____________________________
Name:
Title:
Address:
Date: _________________________
F-2
EXHIBIT G
Institutional Accredited Investor Certificate
The Bank of New York
One Canada Square
London E14 5AL
Attention: Corporate Trust Administration
Re: Chesapeake Corporation
10 3/8% Senior Subordinated
Notes due 2011 (the "Notes")
Issued under the Indenture (the "Indenture") dated as
as of November 19, 2001 relating to the Notes
-----------------------------------------------------
Ladies and Gentlemen:
This Certificate relates to:
[CHECK A OR B AS APPLICABLE.]
[_] A. Our proposed purchase of (Pounds)____ principal amount of Notes
issued under the Indenture.
[_] B. Our proposed exchange of (Pounds)____ principal amount of Notes
issued under the Indenture for an equal principal amount of Notes
to be held by us.
We hereby confirm that:
1. We are an institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933,
as amended (the "Securities Act") (an "Institutional Accredited
Investor").
2. Any acquisition of Notes by us will be for our own account or for
the account of one or more other Institutional Accredited Investors
as to which we exercise sole investment discretion.
3. We have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
an investment in the Notes and we and any accounts for which we are
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acting are able to bear the economic risks of and an entire loss of
our or their investment in the Notes.
4. We are not acquiring the Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or
the securities laws of any State of the United States or any other
applicable jurisdiction; provided that the disposition of our
property and the property of any accounts for which we are acting
as fiduciary will remain at all times within our and their control.
5. We acknowledge that the Notes have not been registered under the
Securities Act and that the Notes may not be offered or sold within
the United States or to or for the benefit of U.S. persons except
as set forth below.
6. The principal amount of Notes to which this Certificate relates is
at least equal to (Pounds)100,000.
We agree for the benefit of the Company, on our own behalf and on behalf
of each account for which we are acting, that such Notes may be offered, sold,
pledged or otherwise transferred only in accordance with the Securities Act and
any applicable securities laws of any State of the United States and only (a) to
the Company, (b) pursuant to a registration statement which has become effective
under the Securities Act, (c) to a qualified institutional buyer in compliance
with Rule 144A under the Securities Act, (d) in an offshore transaction in
compliance with Rule 904 of Regulation S under the Securities Act, (e) in a
principal amount of not less than (Pounds)100,000, to an Institutional
Accredited Investor that, prior to such transfer, delivers to the Trustee a duly
completed and signed certificate (the form of which may be obtained from the
Trustee) relating to the restrictions on transfer of the Notes or (f) pursuant
to an exemption from registration provided by Rule 144 under the Securities Act
or any other available exemption from the registration requirements of the
Securities Act.
Prior to the registration of any transfer in accordance with (c) or (d)
above, we acknowledge that a duly completed and signed certificate (the form of
which may be obtained from the Trustee) must be delivered to the Trustee. Prior
to the registration of any transfer in accordance with (e) or (f) above, we
acknowledge that the Company reserves the right to require the delivery of such
legal opinions, certifications or other evidence as may reasonably be required
in order to determine that the proposed transfer is being made in compliance
with the Securities Act and applicable state securities laws. We acknowledge
that no representation is made as to the availability of any Rule 144 exemption
from the registration requirements of the Securities Act.
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We understand that the Trustee will not be required to accept for
registration of transfer any Notes acquired by us, except upon presentation of
evidence satisfactory to the Company and the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that the
Notes acquired by us will be in the form of definitive physical certificates and
that such certificates will bear a legend reflecting the substance of the
preceding paragraph. We further agree to provide to any person acquiring any of
the Notes from us a notice advising such person that resales of the Notes are
restricted as stated herein and that certificates representing the Notes will
bear a legend to that effect.
We agree to notify you promptly in writing if any of our acknowledgments,
representations or agreements herein ceases to be accurate and complete.
We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any account for which we are acting.
You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate 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,
[NAME OF PURCHASER (FOR
TRANSFERS) OR OWNER (FOR
EXCHANGES)]
By: ____________________________
Name:
Title:
Address:
Date: ____________________
G-3
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
By: _____________________________
Date: ___________________________
Taxpayer ID number: _____________
G-4