CONFORMED COPY
EXHIBIT 4.1
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NATIONAL WATERWORKS, INC.
SERIES A AND SERIES B
10.50% SENIOR SUBORDINATED NOTES DUE 2012
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INDENTURE
Dated as of November 22, 2002
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▇▇▇▇▇ FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)........................................... 7.10
(a)(2)........................................... 7.10
(a)(3)........................................... N.A.
(a)(4)........................................... N.A.
(a)(5)........................................... 7.10
(b).............................................. 7.10
(c).............................................. N.A.
311(a).............................................. 7.11
(b).............................................. 7.11
(c).............................................. N.A.
312(a).............................................. 2.05
(b).............................................. 13.03
(c).............................................. 13.03
313(a).............................................. 7.06
(b)(1)........................................... N.A.
(b)(2)........................................... 7.06; 7.07
(c).............................................. 7.06; 13.02
(d).............................................. 7.06
314(a).............................................. 4.03; 13.02; 13.053
(b).............................................. N.A.
(c)(1)........................................... 13.04
(c)(2)........................................... 13.04
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 13.05
(f).............................................. N.A.
315(a).............................................. 7.01
(b).............................................. 7.05,13.02
(c).............................................. 7.01
(d).............................................. 7.01
(e).............................................. 6.11
316(a) (last sentence).............................. 2.09
(a)(1)(A)........................................ 6.05
(a)(1)(B)........................................ 6.04
(a)(2)........................................... N.A.
(b).............................................. 6.07
(c).............................................. 2.12
317(a)(1)........................................... 6.08
(a)(2)........................................... 6.09
(b).............................................. 2.04
318(a).............................................. 13.01
(b).............................................. N.A.
(c).............................................. 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions........................................................................... 1
Section 1.02 Other Definitions..................................................................... 26
Section 1.03 Incorporation by Reference of Trust Indenture Act..................................... 26
Section 1.04 Rules of Construction................................................................. 26
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating....................................................................... 27
Section 2.02 Execution and Authentication.......................................................... 28
Section 2.03 Registrar and Paying Agent............................................................ 29
Section 2.04 Paying Agent to Hold Money in Trust................................................... 29
Section 2.05 Holder Lists.......................................................................... 29
Section 2.06 Transfer and Exchange................................................................. 29
Section 2.07 Replacement Notes..................................................................... 42
Section 2.08 Outstanding Notes..................................................................... 42
Section 2.09 Treasury Notes........................................................................ 42
Section 2.10 Temporary Notes....................................................................... 42
Section 2.11 Cancellation.......................................................................... 43
Section 2.12 Defaulted Interest.................................................................... 43
Section 2.13 Issuance of Additional Notes.......................................................... 43
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.................................................................... 43
Section 3.02 Selection of Notes to Be Redeemed or Purchased........................................ 44
Section 3.03 Notice of Redemption.................................................................. 44
Section 3.04 Effect of Notice of Redemption........................................................ 45
Section 3.05 Deposit of Redemption or Purchase Price............................................... 45
Section 3.06 Notes Redeemed or Purchased in Part................................................... 46
Section 3.07 Optional Redemption................................................................... 46
Section 3.08 No Mandatory Redemption............................................................... 47
Section 3.09 Offer to Purchase by Application of Excess Proceeds................................... 47
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes...................................................................... 48
Section 4.02 Maintenance of Office or Agency....................................................... 49
Section 4.03 Reports............................................................................... 49
Section 4.04 Compliance Certificate................................................................ 50
Section 4.05 Taxes................................................................................. 50
Section 4.06 Stay, Extension and Usury Laws........................................................ 51
Section 4.07 Restricted Payments................................................................... 51
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries............. 54
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Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock............................ 56
Section 4.10 Asset Sales........................................................................... 59
Section 4.11 Transactions with Affiliates.......................................................... 61
Section 4.12 Liens................................................................................. 63
Section 4.13 Business Activities................................................................... 63
Section 4.14 Corporate Existence................................................................... 63
Section 4.15 Offer to Repurchase Upon Change of Control............................................ 63
Section 4.16 No Senior Subordinated Debt........................................................... 65
Section 4.17 Future Subsidiary Guarantees.......................................................... 65
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries............................... 65
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.............................................. 66
Section 5.02 Successor Corporation Substituted..................................................... 67
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..................................................................... 67
Section 6.02 Acceleration.......................................................................... 69
Section 6.03 Other Remedies........................................................................ 69
Section 6.04 Waiver of Past Defaults............................................................... 70
Section 6.05 Control by Majority................................................................... 70
Section 6.06 Limitation on Suits................................................................... 70
Section 6.07 Rights of Holders of Notes to Receive Payment......................................... 71
Section 6.08 Collection Suit by Trustee............................................................ 71
Section 6.09 Trustee May File Proofs of Claim...................................................... 71
Section 6.10 Priorities............................................................................ 71
Section 6.11 Undertaking for Costs................................................................. 72
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee..................................................................... 72
Section 7.02 Rights of Trustee..................................................................... 73
Section 7.03 Individual Rights of Trustee.......................................................... 73
Section 7.04 Trustee's Disclaimer.................................................................. 74
Section 7.05 Notice of Defaults.................................................................... 74
Section 7.06 Reports by Trustee to Holders of the Notes............................................ 74
Section 7.07 Compensation and Indemnity............................................................ 74
Section 7.08 Replacement of Trustee................................................................ 75
Section 7.09 Successor Trustee by Merger, etc...................................................... 76
Section 7.10 Eligibility; Disqualification......................................................... 76
Section 7.11 Preferential Collection of Claims Against Company..................................... 76
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.............................. 76
Section 8.02 Legal Defeasance and Discharge........................................................ 76
Section 8.03 Covenant Defeasance................................................................... 77
Section 8.04 Conditions to Legal or Covenant Defeasance............................................ 78
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Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions............................................................................ 79
Section 8.06 Repayment to Company.................................................................. 79
Section 8.07 Reinstatement......................................................................... 80
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes................................................... 80
Section 9.02 With Consent of Holders of Notes...................................................... 81
Section 9.03 Compliance with Trust Indenture Act................................................... 82
Section 9.04 Revocation and Effect of Consents..................................................... 82
Section 9.05 Notation on or Exchange of Notes...................................................... 83
Section 9.06 Trustee to Sign Amendments, etc....................................................... 83
ARTICLE 10.
SUBORDINATION
Section 10.01 Agreement to Subordinate.............................................................. 83
Section 10.02 Liquidation; Dissolution; Bankruptcy.................................................. 84
Section 10.03 Default on Designated Senior Debt..................................................... 84
Section 10.04 Acceleration of Notes................................................................. 85
Section 10.05 When Distribution Must Be Paid Over................................................... 85
Section 10.06 Notice by Company..................................................................... 86
Section 10.07 Subrogation........................................................................... 86
Section 10.08 Relative Rights....................................................................... 86
Section 10.09 Subordination May Not Be Impaired by Company.......................................... 86
Section 10.10 Distribution or Notice to Representative.............................................. 86
Section 10.11 Rights of Trustee and Paying Agent.................................................... 87
Section 10.12 Authorization to Effect Subordination................................................. 87
Section 10.13 Amendments............................................................................ 87
ARTICLE 11.
NOTE GUARANTEES
Section 11.01 Guarantee............................................................................. 87
Section 11.02 Subordination of Note Guarantee....................................................... 88
Section 11.03 Limitation on Guarantor Liability..................................................... 89
Section 11.04 Execution and Delivery of Note Guarantee.............................................. 89
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms.................................... 89
Section 11.06 Release of Guarantor.................................................................. 90
ARTICLE 12.
satisfaction and discharge
Section 12.01 Satisfaction and Discharge............................................................ 91
Section 12.02 Application of Trust Money............................................................ 92
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.......................................................... 92
Section 13.02 Notices............................................................................... 92
Section 13.03 Communication by Holders of Notes with Other Holders of Notes......................... 93
Section 13.04 Certificate and Opinion as to Conditions Precedent.................................... 93
Section 13.05 Statements Required in Certificate or Opinion......................................... 94
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Section 13.06 Rules by Trustee and Agents........................................................... 94
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders.............. 94
Section 13.08 Governing Law......................................................................... 94
Section 13.09 No Adverse Interpretation of Other Agreements......................................... 94
Section 13.10 Successors............................................................................ 94
Section 13.11 Severability.......................................................................... 95
Section 13.12 Counterpart Originals................................................................. 95
Section 13.13 Table of Contents, Headings, etc...................................................... 95
EXHIBITS
Exhibit A1 FORM OF NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of November 22, 2002 between National Waterworks,
Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders (as defined) of the
10.50% Series A Senior Subordinated Notes due 2012 (the "Series A Notes") and
the 10.50% Series B Senior Subordinated Notes due 2012 issued in the Exchange
Offer or Shelf Registration pursuant to the Exchange and Registration Rights
Agreement (the "Series B Notes" and, together with the Series A Notes, the
"Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time
such other Person is merged with or into, or became a Subsidiary of,
such specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with
or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Acquisition" means the purchase by the Company of substantially all of
the assets and businesses of, and the assumption of certain liabilities and
obligations of, U.S. Filter Distribution Group, Inc. to occur on the date of
this Indenture.
"Acquisition Agreement" means that certain Asset Purchase Agreement,
dated as of September 12, 2002, by and among United States Filter Corporation,
U.S. Filter Distribution Group, Inc. and Blue Acquisition Corp. (which has
subsequently changed its name to National Waterworks, Inc.)
"Additional Notes" means additional Notes (other than the Initial Notes
and the Exchange Notes issued with respect to the Initial Notes) issued from
time to time under this Indenture in accordance with Sections 2.02, 2.13 and
4.09 hereof, as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings. No Person (other than the Company or any
Subsidiary of the Company) in whom a Receivables Subsidiary
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makes an Investment in connection with a Qualified Receivables Transaction will
be deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Premium" means, with respect to any Note on any applicable
redemption date, the greater of:
(1) 1.0% of the then outstanding principal amount of the
Note; and
(2) the excess of:
(a) the present value at such redemption date of
(i) the redemption price of the Note at December 1, 2007 (such
redemption price being set forth in the table appearing in
Section 3.07 hereby) plus (ii) all required interest payments
due on the Note through December 1, 2007 (excluding accrued
but unpaid interest), computed using a discount rate equal to
the Treasury Rate as of such redemption date plus 50 basis
points; over
(b) the then outstanding principal amount of the
Note.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Sale" means:
(1) the sale, lease (other than an operating lease
entered into in the ordinary course of business), conveyance or other
disposition of any assets or rights of the Company or any Restricted
Subsidiary; provided that the sale, conveyance or other disposition of
all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by Section
4.15 or Section 5.01 here and not by Section 4.10 hereof; and
(2) the issuance of Equity Interests in any of the
Company's Restricted Subsidiaries or the sale of Equity Interests in
any of its Subsidiaries (in each case other than directors' qualifying
Equity Interests or Equity Interests required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary).
Notwithstanding the preceding, the following items will not be deemed
to be Asset Sales:
(1) any single transaction or series of related
transactions that involves assets or rights having a fair market value
of less than $2.0 million;
(2) a transfer of assets between or among the Company and
its Restricted Subsidiaries,
(3) an issuance of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;
(4) the sale or lease of inventory or accounts receivable
in the ordinary course of business or accounts receivable in connection
with the compromise, settlement or collection thereof;
2
(5) the sale or disposition of obsolete, damaged or worn
out equipment or property in the ordinary course of business or any
other property that is uneconomic or no longer useful to the conduct of
the Company's business;
(6) the sale or other disposition of cash or Cash
Equivalents;
(7) sales of accounts receivable and related assets of
the type specified in the definition of "Qualified Receivables
Transaction" to a Receivables Subsidiary for the fair market value
thereof, including cash in an amount at least equal to 75% of the book
value thereof as determined in accordance with GAAP, it being
understood that, for the purposes of this clause (7), notes received in
exchange for the transfer of accounts receivable and related assets
will be deemed cash if the Receivables Subsidiary or other payor is
required to repay said notes as soon as practicable from available cash
collections less amounts required to be established as reserves
pursuant to contractual agreements with entities that are not
Affiliates of the Company entered into as part of a Qualified
Receivables Transaction; or
(8) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors
of the corporation;
(2) with respect to a partnership or limited liability
company, the managing general partner or partners or the managing
member or members or any controlling committee of partners or members,
as applicable; and
(3) with respect to any other Person, any similar
governing body.
"Broker-Dealer" has the meaning set forth in the Exchange and
Registration Rights Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the stated maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
3
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or
limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality of the United States government (provided that the full
faith and credit of the United States is pledged in support of those
securities) having maturities of not more than six months from the date
of acquisition;
(3) marketable general obligations issued by any state of
the United States or any political subdivision of any such state or any
public instrumentality thereof maturing within one year of the date of
acquisition and at the time of acquisition rated "A" or better from
either of ▇▇▇▇▇'▇ Investors Service Inc. or Standard & Poor's Rating
Services;
(4) certificates of deposit, time deposits and eurodollar
time deposits or bankers acceptances' with maturities of one year or
less from the date of acquisition, and overnight bank deposits, in each
case, with any lender party to the Credit Agreement or with any
commercial bank having capital and surplus in excess of $500.0 million;
(5) repurchase obligations with a term of not more than
six months for underlying securities of the types described in clauses
(2), (3) and (4) above entered into with any financial institution
meeting the qualifications specified in clause (4) above;
(6) commercial paper rated at the time of acquisition
thereof at least A-1 or the equivalent by ▇▇▇▇▇'▇ Investors Service,
Inc. or at least P-1 or the equivalent by Standard & Poor's Rating
Services (or carrying an equivalent rating by a nationally recognized
rating agency if both the two named agencies cease publishing ratings
of investments) and in each case maturing within one year after the
date of acquisition; and
(7) interests in investment companies or money market
funds at least 95% of the assets of which constitute cash and Cash
Equivalents of the kinds described in clauses (1) through (7) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) (A) prior to the first public offering of Capital
Stock of either Holdings or the Company, the first day on which
Holdings ceases to own 100% of the outstanding Voting Stock of the
Company, and (B) after the first public offering of Capital Stock of
either Holdings or the
4
Company, (i) if such public offering is of Holdings' Capital Stock, the
first day on which Holdings ceases to own 100% of the outstanding
Voting Stock of the Company or (ii) if such public offering is of the
Company's Capital Stock, the date on which any person (as defined in
clause (2) below), other than the Permitted Holders or a Permitted
Group, becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the Voting Stock of the Company, measured by voting power
rather than number of shares;
(2) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially all of
the properties or assets of the Company and its Restricted
Subsidiaries, taken as a whole, to any "person" (as that term is used
in Section 13(d)(3) of the Exchange Act) other than a Permitted Holder
or a Permitted Group;
(3) the adoption of a plan relating to the liquidation or
dissolution of Holdings or the Company;
(4) (A) prior to the first public offering of Capital
Stock of either Holdings or the Company, the consummation of any
transaction (including, without limitation, any merger or
consolidation) the result of which is that any person (as defined
above), other than a Permitted Holder or a Permitted Group, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of Holdings, measured by voting power rather than number
of shares, and (B) after the first public offering of Capital Stock of
either Holdings or the Company, (i) if such public offering is of
Holdings' Capital Stock, the consummation of any transaction
(including, without limitation, any merger or consolidation) the result
of which is that any person (as defined above), other than a Permitted
Holder or a Permitted Group, becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of Holdings, measured
by voting power rather than number of shares, or (ii) if such public
offering is of the Company's Capital Stock, the consummation of any
transaction (including, without limitation, any merger or
consolidation) the result of which is that any person (as defined
above), other than a Permitted Holder or a Permitted Group, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of Holdings or the Company, as the case may be, in each
case measured by voting power rather than number of shares;
(5) (A) prior to the first public offering of Capital
Stock of either Holdings or the Company, the first day on which a
majority of the members of the Board of Directors of Holdings are not
Continuing Directors and (B) after the first public offering of Capital
Stock of either Holdings or the Company, (i) if such public offering is
of Holdings' Capital Stock, the first day on which a majority of the
members of the Board of Directors of Holdings are not Continuing
Directors, or (ii) if such public offering is of the Company's Capital
Stock, the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or
(6) (A) prior to the first public offering of Capital
Stock of either Holdings or the Company, Holdings consolidates with, or
merges with or into, any Person, or any Person consolidates with, or
merges with or into, Holdings, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of Holdings or
such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where the Voting
Stock of Holdings outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified
Stock) of the surviving or transferee Person constituting a majority of
the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance)
and (B) after the first public
5
offering of Capital Stock of either Holdings or the Company, (i) if
such public offering is of Holdings' Capital Stock, Holdings
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, Holdings, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock
of Holdings or such other Person is converted into or exchanged for
cash, securities or other property, other than any such transaction
where the Voting Stock of Holdings outstanding immediately prior to
such transaction is converted into or exchanged for Voting Stock (other
than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock
of such surviving or transferee Person (immediately after giving effect
to such issuance), or (ii) if such public offering is of the Company's
Capital Stock, the Company consolidates with, or merges with or into,
any Person, or any Person consolidates with, or merges with or into,
the Company, in any such event pursuant to a transaction in which any
of the outstanding Voting Stock of the Company or such other Person is
converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of the Company
outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance).
"Clearstream" means Clearstream Banking, S.A.
"Commodity Price Protection Agreement" means with respect to any Person
any forward contract, commodity swap, commodity option or other similar
agreement or arrangement relating to, or the value of which is dependent upon or
which is designed to protect such Person against, fluctuations in commodity
prices.
"Company" means National Waterworks, Inc., and any and all successors
thereto.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(2) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to commissions, discounts
and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations), to the extent that
any such expense was deducted in computing such Consolidated Net
Income; plus
(3) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such
6
period, to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net
Income; minus
(4) non-cash items increasing such Consolidated Net
Income for such period, other than the accrual of revenue in the
ordinary course of business,
in each case, on a consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
will be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted
Subsidiary of the Person (and if such Net Income is a loss will be
included only to the extent that such loss has been funded with cash by
the specified Person or a Restricted Subsidiary of the specified
Person);
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or
similar distributions or the making of loans or intercompany advances
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) any net gain or loss realized upon the sale or other
disposition of any asset of such Person or its Restricted Subsidiaries
(including pursuant to a Sale/Leaseback Transaction) that is not sold
or otherwise disposed of in the ordinary course of business and any net
gain or loss realized upon the sale or other disposition of any Equity
Interest of any Person will be excluded;
(4) any extraordinary gain or loss will be excluded;
(5) any noncash compensation charges or other non-cash
expenses or charges arising from the grant of or issuance or repricing
of stock, stock options or other equity-based awards or any amendment,
modification, substitution or change of any such stock, stock options
or other equity-based awards will be excluded;
(6) any non-recurring fees, charges or other expenses
made or incurred in connection with the Acquisition and the
transactions contemplated thereby within 180 days of the date of this
Indenture will be excluded;
(7) the cumulative effect of a change in accounting
principles will be excluded;
(8) for purposes of Section 4.07 only, the total amount
of cash tax savings generated during the applicable period attributable
to the depreciation and amortization resulting from the step-up in the
basis for tax purposes of the assets acquired in the Acquisition
(including, without limitation, intangible assets such as goodwill)
will be added to "Consolidated Net Income" so long as such addition
will not result in double-counting; and
7
(9) any non-cash goodwill impairment charges subsequent
to the date of this Indenture resulting from the application of SFAS
No. 142 will be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Holdings who:
(1) was a member of such Board of Directors on the date
of this Indenture; or
(2) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination
or election; or
(3) was nominated for election or appointed to such Board
of Directors by a Permitted Holder or a Permitted Group.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, dated as of
November 22, 2002 by and among the Company, Holdings, UBS AG, Stamford Branch,
JPMorgan Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. and the lenders
from time to time thereunder, providing for up to $250.0 million of term loans
and $75.0 million of revolving credit borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, supplemented,
renewed, refunded, replaced, restructured, restated or refinanced from time to
time (including any agreement extending the maturity thereof or increasing the
amount of available borrowings thereunder or adding Restricted Subsidiaries of
the Company as additional borrowers or guarantors thereunder) whether with the
original agents and lenders or otherwise and whether provided under the original
credit agreement or other credit agreements or otherwise.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, supplemented, renewed, refunded, replaced,
restructured or refinanced in whole or in part from time to time (including any
agreement extending the maturity thereof or increasing the amount of available
borrowings thereunder or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder).
"Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreements, futures contract, options contract,
synthetic cap or other similar agreement or arrangement to which such Person is
a party or of which it is a beneficiary for the purpose of hedging foreign
currency risk.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A1 hereto except that
8
such Note shall not bear the Global Note Legend and shall not have the "Schedule
of Exchanges of Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Non-cash Consideration" means the fair market value of
noncash consideration received by the Company or one or more of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate setting
forth the basis of valuation.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit
Agreement; and
(2) any other Senior Debt permitted under this Indenture,
the principal amount of which is $25.0 million or more and that has
been designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable or exercisable, in each case at the option of the holder of the
Capital Stock), or upon the happening of any event (other than an event solely
within the control of the issuer thereof), matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature; provided, however,
that any class of Capital Stock that, by its terms, authorizes the issuer
thereof to satisfy in full its obligations with respect to payment of dividends
or upon maturity, redemption (pursuant to a sinking fund or otherwise) or
repurchase thereof or otherwise by delivery of Capital Stock that is not
Disqualified Stock, and that is not convertible, puttable or exchangeable for
Disqualified Stock or Indebtedness, shall not be deemed Disqualified Stock so
long as such issuer satisfies its obligations with respect thereto solely by the
delivery of Capital Stock that is not Disqualified Stock. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless the Company has first
complied with the provisions set forth in Sections 3.09, 4.10 and 4.15 hereof,
as applicable.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means a public or private sale for cash of Capital
Stock (other than Disqualified Stock).
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
9
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated as of November 22, 2002 among the Company
and the other parties named on the signature pages thereof, as such agreement
may be amended, modified or supplemented from time to time, and, with respect to
any Additional Notes, one or more registration rights agreements among the
Company and the other parties thereto, as such agreement(s) may be amended,
modified or supplemented from time to time, relating to rights given by the
Company to the purchasers of Additional Notes to register such Additional Notes
under the Securities Act.
"Exchange Notes" means the Series B Notes issued in an Exchange Offer
pursuant to Section 2.06(f) hereof or issued pursuant to the Shelf Registration
Statement.
"Exchange Offer" has the meaning set forth in the Exchange and
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Exchange and Registration Rights Agreement.
"Existing Indebtedness" means the Indebtedness of the Company (other
than Indebtedness under the Credit Agreement) in existence on the date of this
Indenture.
"Fee Agreement" means that certain Fee Agreement, dated as of September
30, 2002, by and among National Waterworks, Inc., THL Managers V, LLC and ▇.▇.
▇▇▇▇▇▇ Partners, LLC.
"Fixed Charges" means, with respect to any specified Person and its
Restricted Subsidiaries for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed
interest with respect to commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is
called upon; plus
(4) commissions, discounts, yield and other financing
fees and financing charges incurred in connection with any transaction
(including, without limitation, a Qualified Receivables Transaction)
pursuant to which such Person or any of its Restricted Subsidiaries may
sell, convey or otherwise transfer or grant a security interest in any
accounts receivable or related assets of the type specified in the
definition of "Qualified Receivables Transaction;" plus
(5) the product of (a) all dividends, whether paid or
accrued and whether or not in cash, on any series of Disqualified Stock
of such Person or preferred stock of any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely
in Equity Interests of the
10
Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the
then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems Disqualified Stock
of such Person or preferred stock of a Restricted Subsidiary of such Person
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified
Person or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date will be given
pro forma effect as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such
reference period will be calculated on a pro forma basis in accordance
with Regulation S-X under the Securities Act and may include operating
expense reductions (net of continuing associated expenses but excluding
non-recurring associated expenses) for such period resulting from the
acquisition which is being given pro forma effect to that either (a)
would be permitted pursuant to Rule 11-02 of Regulation S-X under the
Securities Act or (b) have been realized or for which substantially all
the steps necessary for realization have been taken or at the time of
determination are reasonably expected to be taken within six months
following any such acquisition, including, but not limited to, the
execution or termination of any contracts, the termination of any
personnel or the closing of any facility, as applicable, provided that
such adjustments shall be calculated on an annualized basis and will be
set forth in an Officers' Certificate signed by the Company's chief
financial officer and another Officer which states in detail (i) the
amount of such adjustment or adjustments, (ii) that such adjustment or
adjustments are based on the reasonable good faith beliefs of the
officers executing such Officers' Certificate at the time of such
execution and (iii) that such adjustment or adjustments and the plan or
plans related thereto have been reviewed and approved by the Board of
Directors. Any such Officer's Certificate will be provided to the
Trustee if the Company incurs any Indebtedness or takes any other
action under this Indenture in reliance thereon;
(2) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date,
will be excluded; and
(3) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be excluded,
but only to the extent that the obligations giving rise to such Fixed
Charges will
11
not be obligations of the specified Person or any of its Restricted
Subsidiaries following the Calculation Date.
In addition, to the extent not covered by the foregoing, if the
Acquisition has occurred in the four-quarter period used to determine the Fixed
Charge Coverage Ratio, then the Fixed Charge Coverage Ratio shall be determined
giving pro forma effect to the Acquisition on the same basis given in the
Offering Circular.
If any Indebtedness bears a floating rate of interest, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Hedging Obligation applicable to such Indebtedness if such
Hedging Obligation has a remaining term as at the date of determination in
excess of 12 months).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means:
(1) each of the Company's Domestic Subsidiaries, if any;
and
(2) any other Subsidiary that executes a Note Guarantee
in accordance with the provisions of this Indenture and their
respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements;
(2) any Currency Agreement or Commodity Price Protection
Agreement; and
(3) other agreements or arrangements of a similar
character designed to protect such Person against fluctuations in
interest rates.
12
"Holder" means a Person in whose name a Note is registered.
"Holdings" means National Waterworks Holdings, Inc.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes transferred to Institutional
Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the deferred and unpaid balance of the
purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable;
(6) amounts outstanding and other obligations of such
Person in respect of a Qualified Receivables Transaction; or
(7) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes (i) all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person); provided, however, that the amount of Indebtedness of
such Person shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness of such other
Persons; and (ii) to the extent not otherwise included, the Guarantee by the
specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case
of any Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together
with any interest on the Indebtedness that is more than 30 days past
due, in the case of any other Indebtedness.
In addition, for purposes of determining the outstanding principal
amount of any particular Indebtedness incurred pursuant to Section 4.09 hereof:
(1) Guarantees or obligations in respect of letters of
credit relating to Indebtedness which is otherwise included in the
determination of a particular amount of Indebtedness shall not be
double-counted;
13
(2) the principal amount of any Disqualified Stock of the
Company or preferred stock of a Restricted Subsidiary of the Company
shall be the greater of the maximum mandatory redemption or purchase
price (not including, in either case, any redemption or purchase
premium) or the maximum liquidation preference; and
(3) the principal amount of Indebtedness, Disqualified
Stock of the Company or preferred stock of a Restricted Subsidiary of
the Company issued at a price less than the principal amount thereof,
maximum fixed redemption or repurchase price thereof or liquidation
preference thereof, as applicable, will be equal to the amount of the
liability or obligation in respect thereof determined in accordance
with GAAP.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $200,000,000.00 aggregate principal
amount of Series A Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇.▇. ▇▇▇▇▇▇ Securities
Inc. and UBS Warburg LLC.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding payroll, travel and similar advances to officers and
employees to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company will be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the
14
nature thereof, any option or other agreement to sell or give a security
interest in and, except in connection with any Qualified Receivables
Transaction, any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Management Agreement" means that certain Management Agreement dated as
of November 22, 2002, by and among National Waterworks, Inc., THL Managers V,
LLC, and ▇.▇. ▇▇▇▇▇▇ Partners, LLC.
"Net Cash Proceeds" with respect to any issuance or sale of Equity
Interests, means the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, underwriters or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any Designated Non-cash Consideration or other non-cash
consideration received in any Asset Sale), net of the direct costs, fees and
expenses relating to such Asset Sale, including, without limitation:
(1) legal, accounting and investment banking fees and all
other professionals' and advisors' fees;
(2) sales commissions, title and recording expenses and
any relocation expenses incurred as a result of the Asset Sale;
(3) taxes paid or payable or required to be accrued as a
result of the Asset Sale, in each case, after taking into account any
available tax credits or deductions and any tax sharing arrangements;
(4) amounts required to be applied to the repayment of
Indebtedness (including all interest, premium, penalties, breakage,
indemnities and fees in connection therewith), other than Indebtedness
under a Credit Facility, secured by a Lien on the asset or assets that
were the subject of such Asset Sale;
(5) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as
a result of such Asset Sale; and
(6) any appropriate amounts to be provided by the seller
as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed of in such Asset
Sale and retained by the Company or any of its Restricted Subsidiaries
after such Asset Sale or as a reserve established in accordance with
GAAP, for adjustment in the sales prices of the asset or assets but
only for so long as such reserve is required in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its
Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a
guarantor or otherwise, or (c) constitutes the lender;
15
(2) no default with respect to which (including any
rights that the holders of the Indebtedness may have to take
enforcement action against an Unrestricted Subsidiary) would permit
upon notice, lapse of time or both any holder of any other Indebtedness
of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated maturity;
and
(3) as to which the lenders have been notified or
acknowledged in writing that they will not have any recourse to the
stock (other than the stock of an Unrestricted Subsidiary pledged by
the Company or any of its Restricted Subsidiaries) or assets of the
Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes, the Additional Notes and the Exchange Notes shall
be treated as a single class for all purposes under this Indenture, and unless
the context otherwise requires, all references to the Notes shall include the
Initial Notes, any Additional Notes and the Exchange Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Circular" means that certain offering circular of the
Company, dated as of November 14, 2002.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means any business that derives a majority of its
revenues from the businesses engaged in by the Company and its Restricted
Subsidiaries on November 22, 2002 and/or activities that are reasonably similar,
ancillary, complementary or related to, or a reasonable extension, development
or expansion of, the businesses in which the Company and its Restricted
Subsidiaries are engaged on November 22, 2002, including without limitation,
acting as a distributor for industrial, electric, utility or similar products.
16
"Permitted Business Unit" means a store, branch, distribution center,
region or other similar unit of a Permitted Business or the operations and
assets of any of the foregoing.
"Permitted Group" means the group of investors that is party to the
Stockholders Agreement, as the same may be amended, modified or supplemented
from time to time, provided that no single Person together with its Affiliates
(other than Permitted Holders referred to in clauses (1) and (2) of the
definition of Permitted Holders) Beneficially Owns more of the Voting Stock of
the Company or Holdings (as applicable) that is Beneficially Owned by such group
of investors than is then collectively Beneficially Owned by the Permitted
Holders referred to in clauses (1) and (2) of the definition of Permitted
Holders.
"Permitted Holder" means:
(1) ▇.▇. ▇▇▇▇▇▇ Partners, LLC and its Affiliates (without
giving effect to the proviso in the second sentence of the definition
of Affiliate);
(2) ▇▇▇▇▇▇ ▇. ▇▇▇ Partners, L.P. and its Affiliates
(without giving effect to the proviso in the second sentence of the
definition of Affiliate); and
(3) any Person acting in the capacity of underwriter in
connection with a public or private offering of the Company's or
Holdings' Equity Interests.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such
Investment:
(a) such Person becomes a Restricted Subsidiary
of the Company; or
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and
in compliance with Section 4.10 hereof;
(5) any acquisition of assets or Equity Interests solely
in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company;
(6) any Investments received in compromise of obligations
of such persons incurred in the ordinary course of trade creditors or
customers that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) receivables owing to the Company or any Restricted
Subsidiary and prepaid expenses if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may
include
17
such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;
(9) advances, loans or extensions of credit to suppliers
and vendors in the ordinary course of business;
(10) deposits, bid bonds and performance bonds with
governmental authorities made in the ordinary course of business;
(11) Investments existing on the date of this Indenture
and Investments contributed to the common equity capital of the Company
subsequent to the date of this Indenture;
(12) endorsements of negotiable instruments and documents
in the ordinary course of business;
(13) Investments of a Person or any of its Subsidiaries
existing at the time such Person becomes a Restricted Subsidiary of the
Company or at the time such Person merges or consolidates with the
Company or any of its Restricted Subsidiaries, in either case in
compliance with this Indenture, provided that such Investments were not
made by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the
Company or such merger or consolidation;
(14) the acquisition by a Receivables Subsidiary in
connection with a Qualified Receivables Transaction of Equity Interests
of a trust or other Person established by such Receivables Subsidiary
to effect such Qualified Receivables Transaction, and any other
Investment by the Company or a Restricted Subsidiary of the Company in
a Receivables Subsidiary or any Investment by a Receivables Subsidiary
in any other Person in connection with a Qualified Receivables
Transaction; provided, that such other Investment is in the form of a
note or other instrument that the Receivables Subsidiary or other
Person is required to repay as soon as practicable from available cash
collections less amounts required to be established as reserves
pursuant to contractual agreements with entities that are not
Affiliates of the Company entered into as part of a Qualified
Receivables Transaction;
(15) other Investments in any Person having an aggregate
fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (15)
since the date of this Indenture, not to exceed $20.0 million; and
(16) repurchases of the Notes as long as the repurchased
Notes are cancelled promptly after purchase.
"Permitted Junior Securities" means:
(1) Equity Interests in the Company or any Guarantor; or
(2) debt securities that are subordinated to all Senior
Debt (and any debt securities issued in exchange for Senior Debt) to
substantially the same extent as, or to a greater extent than, the
Notes and the Notes Guarantees are subordinated to Senior Debt under
this Indenture;
18
provided that the term "Permitted Junior Securities" shall not include any
securities distributed pursuant to a plan of reorganization if the Indebtedness
under the Credit Agreement is treated as part of the same class as the Notes for
purposes of such plan of reorganization.
"Permitted Liens" means:
(1) Liens on assets of the Company or any Guarantor
securing Senior Debt that was permitted by the terms of this Indenture
to be incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property or assets of a Person existing at
the time such Person is merged with or into or consolidated with the
Company or any Subsidiary of the Company; provided that such Liens were
in existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or the Subsidiary;
(4) Liens on property existing at the time of acquisition
of the property by the Company or any Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation
of such acquisition;
(5) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds, supply bonds,
construction bonds or other obligations of a like nature incurred in
the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of Section 4.09(b) hereof covering
only the assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been made
therefor;
(9) Liens on assets of a Receivables Subsidiary incurred
in connection with a Qualified Receivables Transaction;
(10) Liens incurred in the ordinary course of business of
the Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $10.0 million at any one time
outstanding;
(11) judgment Liens not giving rise to an Event of Default
so long as such Liens are adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment have not been finally terminated or the period within which
such proceedings may be initiated has not expired;
(12) Liens arising solely by virtue of any statutory or
common law provisions relating to banker's Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a depositary institution; provided that:
19
(a) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board, and
(b) such deposit account is not intended by the
Company or any of its Restricted Subsidiaries to provide
collateral to the depository institution;
(13) Liens securing the Notes and any Note Guarantees; and
(14) any interest or title of a lessor under any Capital
Lease Obligation or operating lease.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or if issued with original
discount, the aggregate issue price) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value,
if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses, premiums and defeasance
costs incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date no earlier than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes or the Note Guarantees, such Permitted Refinancing
Indebtedness is subordinated in right of payment to, the Notes or the
Notes Guarantees, as the case may be, on terms at least as favorable to
the Holders of Notes as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(4) such Indebtedness is incurred either by the Company
or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Purchase Agreement" means that certain Purchase Agreement, dated as of
November 14, 2002, among the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions entered into by the Company or any of its Restricted Subsidiaries
pursuant to which the Company or any of its Restricted Subsidiaries sells,
conveys or otherwise transfers to (i) a Receivables Subsidiary (in the case of
20
a transfer by the Company or any of its Restricted Subsidiaries) and (ii) any
other Person (in the case of a transfer by a Receivables Subsidiary), or grants
a security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts receivable and
other assets which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable.
"Receivables Subsidiary" means a Subsidiary of the Company which
engages in no activities other than in connection with the financing of accounts
receivable and which is designated by the Board of Directors of the Company (as
provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness
or any other Obligations (contingent or otherwise) of which (i) is guaranteed by
the Company or any Restricted Subsidiary of the Company (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Receivables
Transaction), (ii) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to customary
representations, warranties, covenants and indemnities entered into in
connection with a Qualified Receivables Transaction or (iii) subjects any
property or asset of the Company or any Restricted Subsidiary of the Company
(other than accounts receivable and related assets as provided in the definition
of "Qualified Receivables Transaction"), directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to representations,
warranties, covenants and indemnities entered into in the ordinary course of
business in connection with a Qualified Receivables Transaction, (b) with which
neither the Company nor any Restricted Subsidiary of the Company has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable and (c) with which neither the
Company nor any Restricted Subsidiary of the Company has any obligation to
maintain or preserve such Subsidiary's financial condition or cause such
Subsidiary to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Company will be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of November 22, 2002, by and among National Waterworks
Holdings, Inc. and the stockholders listed in Annex 1 thereto.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee upon expiration of the Restricted Period and
for which interests in the Regulation S Temporary Global Note may be exchanged
as provided in Section 2.01(c) hereof.
"Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A2 hereto deposited with or on behalf of and registered in
the name of the Depositary or its nominee,
21
issued in a denomination equal to the outstanding principal amount of Notes
initially sold in reliance on Rule 903 of Regulation S.
"Representative" means the trustee, agent or representative (if any)
for an issuer of Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means one or more Definitive Notes bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of such Person
that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such Person,
other than leases between the Company and a Wholly Owned Restricted Subsidiary
or between Wholly Owned Restricted Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(1) all Indebtedness of the Company or any Guarantor
outstanding under Credit Facilities (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization of
the Company or any Guarantor, regardless of whether or not a claim for
post-filing interest is allowed in such proceedings);
(2) all Hedging Obligations permitted to be incurred
under the terms of this Indenture;
(3) any other Indebtedness of the Company or any
Guarantor permitted to be incurred under the terms of this Indenture,
unless the instrument under which such Indebtedness is
22
incurred expressly provides that it is on a parity with or subordinated
in right of payment to the Notes or any Note Guarantee; and
(4) all Obligations with respect to the items listed in
the preceding clauses (1), (2) and (3).
Notwithstanding anything to the contrary in the preceding, Senior Debt will not
include:
(1) any liability for federal, state, local or other
taxes owed or owing by the Company;
(2) any intercompany Indebtedness of the Company or any
of its Subsidiaries to the Company or any of its Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in
violation of this Indenture.
"Shelf Registration" has the meaning set forth in the Exchange and
Registration Rights Agreement.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Exchange and Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Special Interest" means all Special Interest then owing pursuant to
Section 2(c) of the Exchange and Registration Rights Agreement.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Stockholders' Agreement" means that certain Stockholders' Agreement,
dated as of November 22, 2002, by and among National Waterworks Holdings, Inc.
and the stockholders and investors that are party thereto.
"Subscription and Stock Purchase Agreement" means those certain
Executive Subscription and Stock Purchase Agreements each dated as of November
22, 2002, by and between National Waterworks Holdings, Inc. and the executives
that are party thereto.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association, partnership, limited
liability company or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees of the corporation, association or
other business entity is at the time owned
23
or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person (or a combination thereof);
and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person
or one or more Subsidiaries of that Person (or any combination
thereof).
"Tax Sharing Agreement" means that certain Tax Sharing Agreement, dated
as of November 22, 2002, by and among National Waterworks Holdings, Inc. and
those direct or indirect domestic subsidiaries of National Waterworks Holdings,
Inc. that are parties thereto.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transactions" has the meaning set forth under "Offering Circular
Summary - The Transactions" in the Offering Circular.
"Treasury Rate" means, as of the applicable redemption date, the yield
to maturity as of such redemption date of United States Treasury securities with
a constant maturity (as compiled and published in the most recent Federal
Reserve Statistical Release H.15 (519) that has become publicly available at
least two Business Days prior to such redemption date (or, if such Statistical
Release is no longer published, any publicly available source of similar market
data)) most nearly equal to the period from such redemption date to December 1,
2007; provided, however, that if the period from such redemption date to
December 1, 2007 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year will be used.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Global Note" means a permanent Global Note substantially
in the form of Exhibit A1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing Notes that do not bear and are not required to
bear the Private Placement Legend and do not include any references to "Special
Interest."
""Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend and do not
include any references to "Special Interest."
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement
or understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
24
(3) is a Person with respect to which neither the Company
nor any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results;
(4) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company
or any of its Restricted Subsidiaries; and
(5) either (a) has at least one director on its Board of
Directors that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries or (b) has at least one executive
officer that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of such Section. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time, entitled generally to vote in the election of
the Board of Directors of such Person (without regard to the occurrence of any
contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (x)
the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (y) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Restricted Subsidiary
of such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person or by such Person and one or more Wholly Owned Restricted Subsidiaries of
such Person.
25
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"............................................................. 4.11
"Asset Sale Offer".................................................................. 3.09
"Authentication Order".............................................................. 2.02
"Change of Control Offer"........................................................... 4.15
"Change of Control Payment"......................................................... 4.15
"Change of Control Payment Date".................................................... 4.15
"Covenant Defeasance"............................................................... 8.03
"DTC"............................................................................... 2.03
"Event of Default".................................................................. 6.01
"Excess Proceeds"................................................................... 4.10
"incur"............................................................................. 4.09
"Legal Defeasance".................................................................. 8.02
"Offer Amount"...................................................................... 3.09
"Offer Period"...................................................................... 3.09
"Paying Agent"...................................................................... 2.03
"Permitted Debt".................................................................... 4.09
"Purchase Date"..................................................................... 3.09
"Registrar"......................................................................... 2.03
"Restricted Payments"............................................................... 4.07
"Series A Notes".................................................................... preamble
"Series B Notes".................................................................... preamble
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Guarantors, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
26
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and
transactions; and
(7) references to sections of or rules under the
Securities Act will be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication will be substantially in the form of Exhibit A1 or A2 hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note will be dated the date of its authentication.
The Notes shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global and Definitive Notes. Notes issued in global form will
be substantially in the form of Exhibit A1 or A2 attached hereto (including the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Notes issued in definitive form will be
substantially in the form of Exhibit A1 attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note will represent such of the
outstanding Notes as will be specified therein and each shall provide that it
represents the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby will be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Temporary Global Notes. Notes initially offered and sold in
reliance on Regulation S will be issued initially in the form of the Regulation
S Temporary Global Note, which will be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee, at its New York office, as
custodian for the Depositary, and registered in the name of the Depositary or
the nominee of the Depositary for the accounts of designated agents holding on
behalf of Euroclear or Clearstream, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Upon termination of the
Restricted Period, interests in the Regulation S Temporary Global Note may be
exchanged for
27
interests in the Regulation S Permanent Global Note upon the receipt by the
Trustee of written certification from Euroclear or Clearstream, as the case may
be, that Euroclear or Clearstream has received written certification from
beneficial owners of the Regulation S Temporary Global Notes that the Note or
Notes with respect to which such certifications are made are not owned by or for
persons who are U.S. Persons or for purposes of resale directly or indirectly to
a U.S. Person or to a person within the United States or its possessions (except
to the extent of any beneficial owners thereof who acquired an interest therein
during the Restricted Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(b) hereof). Prior to the exchange of
interests in the Regulation S Temporary Global Notes for interests in the
Regulation S Permanent Global Note as provided above, neither the Holder nor the
beneficial owners of the Regulation S Temporary Global Note shall be entitled to
receive payment of interest thereon.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Upon the exchange of all interests in the Regulation S
Temporary Global Notes for interests in the Regulation S Permanent Global Notes
as described above, the Trustee will cancel the Regulation S Temporary Global
Note. The aggregate principal amount of the Regulation S Temporary Global Note
and the Regulation S Permanent Global Notes may from time to time be increased
or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided. After the Restricted Period, beneficial
interests in the Regulation S Permanent Global Notes may be held through other
organizations participating in the DTC system.
(d) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream Banking" and "Customer Handbook" of Clearstream will be applicable
to transfers of beneficial interests in the Regulation S Temporary Global Note
and the Regulation S Permanent Global Notes that are held by Participants
through Euroclear or Clearsteam.
Section 2.02 Execution and Authentication.
Two Officers must sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature of a Responsible Officer of the Trustee will be
conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed
by two Officers (an "Authentication Order"), authenticate Notes for original
issue up to $200,000,000 aggregate principal amount of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Sections 2.07 and 2.13 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders, the
Company or an Affiliate of the Company.
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Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without prior notice to any Holder. The Company will
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Restricted Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
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
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Special Interest, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. A beneficial
interest in a Global Note may not be exchanged for a Definitive Note unless (i)
the Depositary (x) notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Note or (y) has ceased to be a clearing
agency registered under the Exchange Act and, in either case, the Company fails
to appoint a successor
29
depositary within 120 days after the date of such notice from the Depositary,
(ii) in the case of a Global Note held for an account of Euroclear or
Clearstream, Euroclear or Clearstream, as the case may be, (A) is closed for
business for a continuous period of 14 days (other than by reason of statutory
or other holidays) or (B) announces an intention permanently to cease business
or does in fact do so or (iii) there shall have occurred and be continuing an
Event of Default with respect to the Notes; provided that in no event shall the
Regulation S Temporary Global Note be exchanged by the Company for Definitive
Notes prior to (x) the expiration of the Restricted Period and (y) the receipt
by the Trustee of any certificates required pursuant to Rule 903(b)(3)(ii)(B)
under the Securities Act.
Upon the occurrence of either of the preceding events in clauses (i)
through (iii) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Trustee. Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will be subject to restrictions on transfer set forth
herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also will require compliance with either
subparagraph (1) or (2) below, as applicable, as well as one or more of the
other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global
Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend; provided, however, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Regulation
S Temporary Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser)
and the interest transferred shall be held immediately thereafter
through Euroclear or Clearstream. Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note.
(2) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(1) above, the transferor of such beneficial interest must
deliver to the Registrar either:
(A) both:
(i) a written order from a Participant
or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be
transferred or exchanged; and
(ii) instructions given in accordance
with the Applicable Procedures containing information
regarding the Participant account to be credited with
such increase; or
30
(B) subject to Section 2.06(a), both:
(i) a written order from a Participant
or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to
be transferred or exchanged; and
(ii) instructions given by the
Depositary to the Registrar containing information
regarding the Person in whose name such Definitive
Note shall be registered to effect the transfer or
exchange referred to in (i) above; provided that in
no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the
Regulation S Temporary Global Note prior to (A) the
expiration of the Restricted Period and (B) the
receipt by the Registrar of any certificates required
pursuant to Rule 903 under the Securities Act.
Upon consummation of an Exchange Offer by the Company in accordance with Section
2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall be deemed to
have been satisfied upon receipt by the Registrar of the instructions contained
in the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any Restricted Global
Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(2)(A) above
and the Registrar receives the following:
(A) if the transferee will take delivery in the
form of a beneficial interest in the 144A Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transferee will take delivery in the
form of a beneficial interest in the Regulation S Temporary
Global Note or the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications and, if applicable,
opinion of counsel required by item (2) thereof; and
(C) if the transferee will take delivery in the
form of a beneficial interest in the IAI Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates
and opinion of counsel required by item (3) thereof, if
applicable.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(2)(A) above and:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Exchange and Registration Rights Agreement and the holder of
the
31
beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that (x)
any Exchange Notes received by it are being acquired in the
ordinary course of business, and (y) it is not (i) a
Broker-Dealer, (ii) a Person participating in the
distribution of the Notes or Exchange Notes or (iii) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Exchange
and Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Exchange and Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(a)
thereof; or
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), an
opinion of counsel in form reasonably acceptable to the
Company and the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. Subject to Section 2.06(a) hereof, if any
holder of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or
to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt
by the Registrar of the following documentation:
32
(A) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications and, if applicable, opinion of counsel required
by item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications and opinion of counsel
required by item (3)(a) thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and opinion of counsel required by item (3)(d)
thereof;
(F) if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Restricted Definitive Note issued in exchange for a beneficial interest
in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall
bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Global
Note to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and
(C) hereof, a beneficial interest in the Regulation S Temporary Global
Note may not be exchanged for a Definitive Note or transferred to a
Person who takes delivery thereof in the form of a Definitive Note
prior to (A) the expiration of the Restricted Period and (B) the
receipt by the Registrar of any certificates required pursuant to Rule
33
903(b)(3)(ii)(B) under the Securities Act, except in the case of a
transfer pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 903 or Rule 904.
(3) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Exchange
and Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that (x) any Exchange Notes
received by it are being acquired in the ordinary course of
business, and (y) it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Notes or Exchange
Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Exchange
and Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Exchange and Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b)
thereof; or
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), an
opinion of counsel in form reasonably acceptable to the
Registrar and the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. Subject to Section 2.06(a) hereof, if
any holder of a beneficial interest in an Unrestricted Global Note
proposes to exchange such beneficial interest for an Unrestricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note,
then, upon satisfaction of the conditions set forth in Section
2.06(b)(2) hereof, the Trustee will cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company will execute and the Trustee
will authenticate and deliver to the Person designated in the
instructions an
34
Unrestricted Definitive Note in the appropriate principal amount. Any
Unrestricted Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will be registered in such
name or names and in such authorized denomination or denominations as
the holder of such beneficial interest requests through instructions to
the Registrar from or through the Depositary and the Participant or
Indirect Participant. The Trustee will deliver such Unrestricted
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will not bear the Private
Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests
in Restricted Global Notes. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial interest
in a Restricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications and, if applicable, opinion of counsel required
by item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications and opinion of counsel
required by item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and opinion of counsel required by item (3)(d)
thereof;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
35
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(2) Restricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Exchange
and Registration Rights Agreement and the Holder, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that (x) any
Exchange Notes received by it are being acquired in the
ordinary course of business, and (y) it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Notes or Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Exchange
and Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Exchange and Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive
Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit
B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), an
opinion of counsel in form reasonably acceptable to the
Registrar and the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
36
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar will register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder must present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule
903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications and opinion of counsel, if applicable, required
by item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and opinion of counsel required by item (3)
thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be exchanged by
the Holder thereof for an Unrestricted Definitive Note or transferred
to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Exchange
and Registration Rights Agreement and the Holder, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that (x) any
Exchange Notes received by it are being acquired in the
ordinary course of business, and (y) it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Notes or Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Exchange
and Registration Rights Agreement;
37
(C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Exchange and Registration
Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(ii) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications and opinion of counsel
required by item (4) thereof;
and, in each such case set forth in this subparagraph (D), an
opinion of counsel in form reasonably acceptable to the
Registrar and the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Exchange and Registration Rights Agreement, the Company will
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered into the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal
that (A) any Exchange Notes received by it are being acquired in the
ordinary course of business, (B) they are not Broker-Dealers, (C) they
are not participating in a distribution of the Exchange Notes and (D)
they are not affiliates (as defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer by Persons
that certify in the applicable Letters of Transmittal that (A) any
Exchange Notes received by it are being acquired in the ordinary course
of business, (B) they are not Broker-Dealers, (C) they are not
participating in a distribution of the Exchange Notes and (D) they are
not affiliates (as defined in Rule 144) of the Company.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
38
(g) Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and all
Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF
AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS (1) IN THE CASE OF RULE 144A AND IAI
NOTES, TWO YEARS OR (2) IN THE CASE OF REGULATION S NOTES, 40 DAYS, AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR
ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501 (a) (1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $100,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
(B) Notwithstanding the foregoing, any Global
Note or Definitive Note issued pursuant to subparagraphs
(b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f)
39
of this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) will not bear the Private
Placement Legend.
(2) Global Note Legend. Each Global Note will bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note will bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a
40
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note will be increased accordingly and an
endorsement will be made on such Global Note by the Trustee or by the Depositary
at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges,
the Company will execute and the Trustee will authenticate Global Notes
and Definitive Notes upon receipt of an Authentication Order in
accordance with Section 2.02 or at the Registrar's request.
(2) No service charge will be made to a Holder of a
Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(3) The Registrar will not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(5) The Company will not be required:
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to exchange
any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next succeeding interest
payment date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(7) The Trustee will authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(8) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
41
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee and the Company receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company will issue and the Trustee,
upon receipt of an Authentication Order, will authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Note is replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(a) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
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Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes will be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13 Issuance of Additional Notes.
The Company shall be entitled, subject to its compliance with Section
4.09, to issue Additional Notes under this Indenture which shall have identical
terms as the Initial Notes issued on the date of this Indenture, other than with
respect to the date of issuance and issue price. The Initial Notes issued on the
date of this Indenture, any Additional Notes and all Exchange Notes issued with
respect thereto shall be treated as a single class for all purposes under this
Indenture.
With respect to any Additional Notes, the Company shall set forth in a
resolution of the Board of Directors and an Officers' Certificate, a copy of
each which shall be delivered to the Trustee, the following information:
(a) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;
(b) the issue price, the issue date and the CUSIP number of such
Additional Notes; and
(c) whether such Additional Notes shall be transfer restricted
Notes and issued in the form of Initial Notes as set forth in Section 2.02 of
this Indenture or shall be issued in the form of Exchange Notes.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
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If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes (or portion of
Notes) for redemption or purchase as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national
securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. No
Notes of $1,000 or less can be redeemed in part. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Notes called for
redemption or purchase also apply to portions of Notes called for redemption or
purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Sections 3.09 and 4.15 hereof, at least 30
days but not more than 60 days before a redemption date, the Company will mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of the Notes or a
satisfaction and discharge of this Indenture pursuant to Articles 8 or 12 of
this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
44
(3) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
On the redemption or purchase price date, the Company will deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption or
purchase price of and accrued interest and Special Interest, if any, on all
Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent
will promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest and Special Interest, if
any, on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest, including, if
applicable, Special Interest will cease to accrue on the Notes or the portions
of Notes called for redemption or purchase. If a Note is redeemed or purchased
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest, including, if applicable,
Special Interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption or purchase is not so paid upon surrender for redemption or purchase
because of the failure of the Company to comply with the preceding paragraph,
interest, including, if applicable, Special Interest shall be paid on the unpaid
principal, from the redemption or purchase date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Notes and in Section 4.01 hereof.
45
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to December 1, 2005, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount of
Notes issued under this Indenture at a redemption price of 110.50% of the
principal amount thereof, plus accrued and unpaid interest and Special Interest,
if any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), with the Net Cash Proceeds from one or more Equity Offerings by the
Company or Holdings (so long as such Net Cash Proceeds are contributed by
Holdings to the Company as common equity); provided that:
(1) at least 65% of the aggregate principal amount of
Notes issued under this Indenture remains outstanding immediately after
such redemption (excluding any Notes held by the Company and its
Subsidiaries); and
(2) the redemption must occur within 60 days of the date
of the closing of such Equity Offering.
(b) The Notes may be redeemed, in whole or in part, at any time
prior to December 1, 2007, at the option of the Company upon not less than 30
nor more than 60 days prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest and Special Interest, if any, to, the applicable redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
(c) Except pursuant to the preceding paragraphs, the Notes are not
redeemable at the Company's option prior to December 1, 2007.
(d) On or after December 1, 2007 the Company may redeem all or a
part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Special Interest, if any, thereon, to the
applicable redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the twelve-month period beginning on December 1 of the
years indicated below:
Year Percentage
---- ----------
2007............................................................................. 105.2
2008............................................................................. 103.5
2009............................................................................. 101.7
2010 and thereafter.............................................................. 100.00%
(e) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof. Unless the
Company defaults in payment of the redemption price, on and after the redemption
date, interest will cease to accrue on the Notes or portions thereof called for
redemption.
46
Section 3.08 No Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or to redeem with the Excess Proceeds of Asset Sales. The Asset Sale Offer will
be completed no earlier than 30 days and no later than 60 days after notice of
the Asset Sale Offer is provided to the Holders, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
three Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company will apply all Excess Proceeds (the "Offer Amount") to the
purchase of Notes and such other pari passu Indebtedness (on a pro rata basis,
if applicable) or, if less than the Offer Amount has been tendered, all Notes
and other Indebtedness tendered in response to the Asset Sale Offer. Payment for
any Notes so purchased will be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Special Interest, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest or Special Interest, if any, will be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the
Asset Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment
will continue to accrue interest;
(4) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer
will cease to accrue interest, and Special Interest, if any, after the
Purchase Date;
(5) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may elect to have Notes purchased in
integral multiples of $1,000 only;
(6) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by book-entry transfer,
to the Company, a Depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before
the Purchase Date;
47
(7) that Holders will be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and
other pari passu Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company will select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal
amount of Notes and such other pari passu Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Special Interest, if any, on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest and
Special Interest, if any, will be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest and Special Interest, if any, then due. The Company will
pay all Special Interest, if any, in the same manner on the dates and in the
amounts set forth in the Exchange and Registration Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
at the rate equal to 1% per annum in excess of the then applicable interest rate
on the Notes to the extent lawful; it will pay interest (including post-
48
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest, if any (without regard to any
applicable grace period), at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the 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 at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company 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.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company will furnish to the
Holders of Notes, within the time periods specified in the SEC's rules and
regulations:
(1) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms
10-Q and 10-K if the Company were required to file such forms,
including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified
independent accountants; and
(2) all current reports that would be required to be
filed with the SEC on Form 8-K if the Company were required to file
such reports.
provided, however, if the Exchange Offer Registration Statement as declared
effective by the SEC includes audited financial statements of the Company for
the year ending December 31, 2002, then the first such reports required to be
filed and furnished to the Holders of the Notes by the Company following the
issue date of the Notes shall be the Form 10-Q for the quarter ending March 31,
2003. In addition, if at any time Holdings becomes a Guarantor of the Notes
(there being no obligation of Holdings to do so) and complies with the
requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any
successor provision), the reports, information and other documents required to
be filed and furnished to Holders of the Notes pursuant to this Section 4.03
may, at the option of the Company, be filed by and be those of Holdings rather
than the Company.
49
In addition, following the consummation of the Exchange Offer
contemplated by the Exchange and Registration Rights Agreement, whether or not
required by the SEC, the Company will file a copy of all of the information and
reports referred to in clauses (1) and (2) above with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company will at all times comply with TIA Section 314(a).
(b) For so long as any Notes remain outstanding and constitute
Registrable Securities (as defined in the Exchange and Registration Rights
Agreement), the Company will furnish to the Holders of such Notes and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default has occurred, describing all
such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 Taxes.
The Company and each of the Guarantors will pay, and will cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment would not
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole.
50
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, 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 has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend on, or make any other
payment or distribution on account of, the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or to the
direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (in each case,
other than dividends or distributions payable (a) in Equity Interests
(other than Disqualified Stock) of the Company or (b) to the Company or
a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company held by Persons
other than the Company or a Restricted Subsidiary of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Note Guarantees,
except a payment of interest or principal at the Stated Maturity
thereof (other than:
(A) the purchase, repurchase or other acquisition
of any such subordinated Indebtedness purchased in
anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due
within one year of the date of acquisition, and
(B) intercompany Indebtedness described in clause
(6) of Section 4.09(b) hereof); or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(1) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment;
51
(2) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09(a) hereof; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (2), (3), (4), (6), (7), (9),
(10) and (11) of paragraph (b) below, is less than the sum, without
duplication, of:
(A) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the
date of this Indenture to the end of the Company's most
recently ended fiscal quarter for which consolidated financial
statements of the Company are publicly available at the time
of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such
deficit), plus
(B) 100% of the aggregate Net Cash Proceeds
received by the Company subsequent to the date of this
Indenture (i) as a contribution to its common equity capital
or (ii) from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or (iii) as a result
of the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt
securities of the Company or any Restricted Subsidiary of the
Company that have been converted into or exchanged for such
Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the
Company), except any Net Cash Proceeds that have been utilized
for any other purpose under this Section 4.07 (other than
pursuant to clause (12) of Section 4.07(b) below), plus
(C) 100% of the fair market value, as determined
in good faith by the Board of Directors of the Company, such
determination to be conclusive and evidenced by an Officer's
Certificate delivered to the Trustee, of any Permitted
Business (including Capital Stock of a Permitted Business that
is or becomes a Restricted Subsidiary) received by the Company
or a Restricted Subsidiary of the Company as consideration for
the issuance by the Company subsequent to the date of this
Indenture of Capital Stock (other than Disqualified Stock) of
the Company or as a contribution to the common equity capital
of the Company, plus
(D) to the extent that the Company or a
Restricted Subsidiary of the Company receives cash in respect
of any Restricted Investment that was made subsequent to the
date of this Indenture, the lesser of (i) the amount of cash
received with respect to such Restricted Investment (less the
cost of disposition, if any) and (ii) the initial amount of
such Restricted Investment, plus
(E) to the extent that any Unrestricted
Subsidiary of the Company is redesignated as a Restricted
Subsidiary after the date of this Indenture, the lesser of (i)
the fair market value of the Company's Investment in such
Subsidiary as of the date of such redesignation and (ii) such
fair market value as of the date on which such Subsidiary was
originally designated as an Unrestricted Subsidiary.
(b) The provisions of Section 4.07(a) will not prohibit:
52
(1) the payment of any dividend or other distribution
within 60 days after the date of declaration thereof, if at the date of
declaration the dividend payment or other distribution would have
complied with the provisions of this Indenture;
(2) so long as no Default has occurred and is continuing
or would be caused thereby, the making of any Restricted Payment with
the Net Cash Proceeds of a substantially concurrent sale (other than to
a Restricted Subsidiary of the Company) of Equity Interests of the
Company (other than Disqualified Stock) or contribution to the common
equity capital of the Company to the extent not previously utilized for
any other purpose under this Section 4.07;
(3) so long as no Default has occurred and is continuing
or would be caused thereby, the redemption, repurchase, defeasance or
other acquisition of subordinated Indebtedness of the Company or any
Restricted Subsidiary of the Company, in exchange for, or with the net
cash proceeds from a substantially concurrent issuance or sale of,
Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a
pro rata basis;
(5) so long as no Default has occurred and is continuing
or would be caused thereby, the payment of dividends, other
distributions or amounts to Holdings in amounts equal to the amounts
expended by Holdings to purchase, repurchase, retire or otherwise
acquire for value Equity Interests of Holdings owned by employees,
former employees, directors, former directors, consultants or former
consultants of Holdings, the Company or any of its Subsidiaries (or
permitted transferees, assigns, estates or heirs of such employees,
former employees, directors, former directors, consultants or former
consultants); provided, however, that the aggregate amount paid, loaned
or advanced to Holdings pursuant to this clause (5) will not, in the
aggregate, exceed $3.0 million per fiscal year of the Company (with
amounts not used in any fiscal year carried forward to the next fiscal
year and no further), plus the net proceeds of any key person life
insurance received by the Company after the date of this Indenture,
plus amounts contributed by Holdings to the common equity capital of
the Company after the date of this Indenture as a result of the sale of
Capital Stock (other than Disqualified Stock) to employees, officers,
directors and consultants to the extent not previously utilized for any
other purpose under this Section 4.07;
(6) the payment of any dividends, distributions or other
advances by the Company to Holdings to permit Holdings to pay franchise
taxes and other fees and expenses required to maintain its existence
and to provide for all other actual operating costs of Holdings,
including, without limitation, in respect of director fees and
expenses, administrative, legal and accounting services, of up to $1.0
million per fiscal year;
(7) the repurchase of Capital Stock deemed to occur upon
exercise of stock options, warrants or other convertible securities to
the extent the shares of such Capital Stock represent a portion of the
exercise price of such options, warrants or convertible securities;
(8) so long as no Default has occurred and is continuing
or would be caused thereby, the declaration and payment of dividends or
distributions to holders of any class or series of Disqualified Stock
of the Company or preferred stock of its Restricted Subsidiaries issued
after the date of this Indenture pursuant to Section 4.09 hereof.
(9) any payments made, or the performance of any of the
transactions contemplated, in connection with the Acquisition and the
financing thereof and described in the Offering
53
Circular under the headings "Management" and "Certain Relationships and
Related Party Transactions;"
(10) so long as no Default has occurred and is continuing
or would be caused thereby, any redemption, repurchase, retirement,
defeasance or other acquisition for value of Disqualified Stock of the
Company or a Restricted Subsidiary made by exchange for, or out of the
net cash proceeds of the substantially concurrent sale of, Disqualified
Stock of the Company or such Restricted Subsidiary, as the case may be;
provided that any such new Disqualified Stock is issued by the issuer
of the Disqualified Stock being redeemed, repurchased, retired,
defeased or otherwise acquired for value and that such new Disqualified
Stock is issued pursuant to Section 4.09 hereof;
(11) so long as no Default has occurred and is continuing
or would be caused thereby, other Restricted Payments in an aggregate
amount not to exceed $15.0 million since the date of this Indenture; or
(12) so long as no Default has occurred and is continuing
or would be caused thereby, the payment of dividends on the Company's
common stock (or dividends, distributions or advances to Holdings or
any other direct or indirect parent of the Company to allow Holdings or
such other direct or indirect parent to pay dividends on its common
stock), following the first public offering of the Company's common
stock (or of Holding's or such other direct or indirect parent's common
stock, as the case may be) after the date of this Indenture, of,
whichever is earlier, (i) in the case of the first public offering of
the Company's common stock, up to 6% per annum of the Net Cash Proceeds
received by the Company in such public offering or (ii) in the case of
the first public offering of Holdings' or such other direct of indirect
parent's common stock, up to 6% per annum of the amount contributed by
Holdings (or contributed directly or indirectly by such other direct or
indirect parent, as the case may be) to the Company from the Net Cash
Proceeds received by Holdings or such other direct or indirect parent
in such public offering.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined by the Company's Board of Directors,
whose determination with respect thereto shall be conclusive, and evidenced by a
resolution to be delivered to the Trustee. For the avoidance of doubt, the
transactions contemplated by the Acquisition Agreement, the Credit Agreement,
the Purchase Agreement, the Exchange and Registration Rights Agreement, the
Stockholders Agreement, the Tax Sharing Agreement, the Registration Rights
Agreement, the Management Agreement, the Subscription and Stock Purchase
Agreement and the Fee Agreement will be addressed under Section 4.11 hereof and
will not be considered to be Restricted Payments.
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or
54
participation in, or measured by, its profits, or pay any indebtedness
owed to the Company or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) will not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the date of this Indenture and any
amendments, modifications, restatements, renewals, increases,
extensions, supplements, refundings, replacements or refinancings of
any of the foregoing, provided that the amendments, modifications,
restatements, renewals, increases, extensions, supplements, refundings,
replacement or refinancings of such instrument are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such agreement on the date
of this Indenture;
(2) this Indenture, the Notes and the Note Guarantees;
(3) applicable law or any applicable rule or regulation;
(4) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(5) customary non-assignment provisions in leases,
licenses or similar contracts entered into in the ordinary course of
business or that restrict the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or similar
contract;
(6) purchase money obligations for property acquired in
the ordinary course of business that restrict the transfer of such
property; provided that any such encumbrance or restriction is released
to the extent the underlying Lien is released or the related
Indebtedness is repaid;
(7) any agreement for the sale or other disposition of a
Restricted Subsidiary or the assets of a Restricted Subsidiary pending
the sale or other disposition of such assets or Restricted Subsidiary;
(8) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
55
(9) Liens securing Indebtedness otherwise permitted to be
incurred under Section 4.12 and Section 4.09 hereof that limit the
right of the debtor to dispose of or transfer the assets subject to
such Liens;
(10) any transfer of, agreement to transfer, or option or
right with respect to, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture;
(11) provisions with respect to the disposition or
distribution of assets or property and other customary provisions in
joint venture agreements, asset sale agreements, stock sale agreements
and other similar agreements entered into in the ordinary course of
business;
(12) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
(13) Indebtedness permitted to be incurred pursuant to
clause (4) of Section 4.09(b) hereof for property acquired in the
ordinary course of business that only imposes encumbrances or
restrictions on the property so acquired;
(14) net worth provisions in leases and other agreements
entered into by the Company or any Restricted Subsidiary in the
ordinary course of business;
(15) Indebtedness or other contractual requirements of a
Receivables Subsidiary in connection with a Qualified Receivables
Transaction, provided that such restrictions apply only to such
Receivables Subsidiary; and
(16) agreements governing Indebtedness permitted to be
incurred pursuant to Section 4.09 hereof, provided that the provisions
relating to such encumbrance or restriction contained in such
Indebtedness, taken as a whole, are not materially more restrictive to
the Company, as determined by the Board of Directors of the Company in
their reasonable and good faith judgment, than the provisions contained
in the Credit Agreement or this Indenture as in effect on the date of
this Indenture.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company or any
Guarantor may incur Indebtedness (including Acquired Debt), the Company may
issue Disqualified Stock and any Guarantor may issue preferred stock, if the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which consolidated financial statements are publicly
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Stock or preferred stock is issued would have
been at least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the preferred stock or Disqualified Stock had been issued,
as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
56
(1) the incurrence by the Company or any Guarantor of
Indebtedness and letters of credit under Credit Facilities, in an
aggregate principal amount at any one time outstanding under this
clause (1) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and the
Guarantors thereunder) not to exceed the $325.0 million less
(A) the aggregate amount of all Net Proceeds of
Asset Sales applied by the Company or any of its Restricted
Subsidiaries since the date of this Indenture to repay term
Indebtedness under a Credit Facility or to repay revolving
credit Indebtedness and effect a corresponding commitment
reduction thereunder, in each case, pursuant to Section 4.10
hereof and less
(B) the amount of Indebtedness incurred and
outstanding in connection with a Qualified Receivables
Transaction pursuant to clause (13) of this paragraph;
(2) the incurrence by the Company of Existing
Indebtedness;
(3) the incurrence by the Company of Indebtedness
represented by the Notes to be issued on the date of this Indenture and
the Exchange Notes to be issued pursuant to the Exchange and
Registration Rights Agreement and the incurrence by any Guarantor of
Indebtedness represented by any Note Guarantee related to the Notes or
the Exchange Notes;
(4) the incurrence by the Company or any Guarantor of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations (including borrowings under a
Credit Facility) or Acquired Debt, in each case, incurred for the
purpose of financing all or any part of the purchase price or cost of
construction, development, maintenance, upgrade or improvement of
property, plant, equipment or assets (in each case whether through the
direct purchase of assets or through the purchase of Capital Stock of
the Person owning such assets) used in the business of the Company or
such Restricted Subsidiary, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (4), not to
exceed, at any time outstanding, $15 million;
(5) the incurrence by the Company or any Guarantor of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by this Indenture to
be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), or
(15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany Indebtedness between or among
the Company and any of its Restricted Subsidiaries (other than a
Receivables Subsidiary); provided, however, that:
(A) if the Company or any Guarantor is the
obligor on such Indebtedness, such Indebtedness must be
expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes, in the case of the
Company, or the Note Guarantee, in the case of a Guarantor;
and
(B) (i) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or a Restricted
Subsidiary of the Company and (ii) any sale or other transfer
of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary of the Company; will
57
be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as
the case may be, that was not permitted by this clause (6);
(7) shares of preferred stock of a Restricted Subsidiary
issued to the Company or another Restricted Subsidiary; provided that
any subsequent transfer of any Equity Interests or any other event
which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such
shares of preferred stock (except to the Company or any another
Restricted Subsidiary) shall be deemed, in each case, to be an issuance
of preferred stock;
(8) the incurrence by the Company or any Guarantor of
Hedging Obligations in the ordinary course of business or as may be
required in connection with any Senior Debt and not for speculative
purposes;
(9) the guarantee by the Company or any Guarantor of
Indebtedness of the Company or a Guarantor that was permitted to be
incurred by another provision of this Section 4.09;
(10) Indebtedness of the Company or any of its Restricted
Subsidiaries in respect of workers' compensation claims, self-insurance
obligations, indemnities, performance bonds, bankers' acceptances,
letters of credit and surety, appeal or similar bonds provided by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business and, in any such case, any reimbursement obligations in
connection therewith;
(11) Indebtedness of the Company or any Restricted
Subsidiary to the extent the net proceeds thereof are promptly
deposited to defease all outstanding Notes in full as pursuant to
Section 8.02 hereof;
(12) contingent liabilities arising out of endorsements of
checks and other negotiable instruments for deposit or collection or
overdraft protection in the ordinary course of business;
(13) the incurrence by a Receivables Subsidiary of
Indebtedness in a Qualified Receivables Transaction; provided that such
Indebtedness is non-recourse to the Company or any of its Restricted
Subsidiaries (except to the extent of customary representations,
warranties, covenants and indemnities entered into in connection with a
Qualified Receivables Transaction);
(14) obligations of the Company and its Restricted
Subsidiaries arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price
or similar obligations, in each case incurred or assumed in connection
with the disposition of any business, assets or a Subsidiary of the
Company in accordance with the terms of this Indenture, other than
Guarantees by the Company or any Restricted Subsidiary of the Company
of Indebtedness incurred by any Person acquiring all or any portion of
such business, assets or a Subsidiary of the Company for the purpose of
financing such acquisition; provided, however, that the maximum
aggregate liability in respect of all such obligations shall not exceed
the gross proceeds, including the fair market value as determined in
good faith by a majority of the Board of Directors of the Company of
non-cash proceeds (the fair market value of such non-cash proceeds
being measured at the time it is received and without giving effect to
any subsequent changes in value), actually received by the Company and
its Restricted Subsidiaries in connection with such disposition; and
58
(15) the incurrence by the Company or any of its
Restricted Subsidiaries of additional Indebtedness, the issuance by the
Company of Disqualified Stock or the issuance by a Restricted
Subsidiary of preferred stock in an aggregate principal amount or
liquidation preference at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness, Disqualified Stock or preferred stock incurred pursuant
to this clause (15), not to exceed $30.0 million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (15) above,
or is entitled to be incurred pursuant to Section 4.09(a), the Company will be
permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 4.09. Indebtedness under Credit Facilities
outstanding on the date on which Notes are first issued and authenticated under
this Indenture will initially be deemed to have been incurred pursuant to clause
(1) of Section 4.09(b). Indebtedness permitted by this Section 4.09 need not be
permitted by reference to one provision permitting such Indebtedness but may be
permitted in part by one such provision and in part by one or more other
provisions of this Section 4.09 permitting such Indebtedness.
The accrual of interest, the accretion or amortization of original
issue discount, the payment of interest and dividends on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment or accrual
of dividends on Disqualified Stock or preferred stock in the form of additional
shares of the same class of Disqualified Stock or preferred stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
or preferred stock for purposes of this Section 4.09.
Section 4.10 Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as
the case may be) receives consideration (including by way of relief
from, or by any other person assuming sole responsibility for, any
liabilities, contingent or otherwise) at the time of the Asset Sale at
least equal to the fair market value of the assets or Equity Interests
issued or sold or otherwise disposed of;
(2) in the case of Asset Sales involving consideration in
excess of $10.0 million, the fair market value is determined by the
Company's Board of Directors and evidenced by a resolution of the Board
of Directors set forth in an Officers' Certificate delivered to the
Trustee promptly after the consummation of such Asset Sale; and
(3) at least 75% of the consideration received in the
Asset Sale by the Company or such Restricted Subsidiary is in the form
of (A) cash or Cash Equivalents, (B) all or substantially all of the
assets of one or more Permitted Business Units, (C) Capital Stock in
one or more Persons engaged in a Permitted Business that are or thereby
become Restricted Subsidiaries of the Company, or (D) any combination
of the items referred to in clauses (A) through (C) above. For purposes
of this provision, each of the following will be deemed to be cash:
(A) any liabilities, as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet, of the
Company or any Restricted Subsidiary (other than liabilities
that are by their terms subordinated to the Notes or any Note
Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary
59
novation agreement that releases the Company or such
Restricted Subsidiary from further liability;
(B) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from
such transferee that are promptly converted by the Company or
such Restricted Subsidiary into cash, to the extent of the
cash received in that conversion; and
(C) any Designated Non-cash Consideration
received by the Company or any of its Restricted Subsidiaries
in the Asset Sale having an aggregate fair market value, taken
together with all other Designated Non-cash Consideration
received pursuant to this clause (C) that is at the time
outstanding, not to exceed $5.0 million (with the fair market
value of each item of Designated Non-cash Consideration being
measured at the time received and without giving effect to
subsequent changes in value).
Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company (or such Restricted Subsidiary, as the case may
be) may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid
is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto;
(2) to acquire all or substantially all of the assets of,
or a majority of the Voting Stock of, another Permitted Business;
(3) to acquire all or substantially all of the assets of
one or more Permitted Business Units;
(4) to make a capital expenditure; or
(5) to acquire other long-term assets that are used or
useful in a Permitted Business;
it being understood that the Company may apply Net Proceeds received by any of
its Restricted Subsidiaries in any of the foregoing manners and any Restricted
Subsidiary of the Company may apply Net Proceeds received by the Company or
another Restricted Subsidiary of the Company in any of the foregoing manners.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." On the
366th day after an Asset Sale, if the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company will make an Asset Sale Offer to all Holders
of Notes and all holders of any other Indebtedness that is pari passu with the
Notes containing provisions similar to those set forth in this Indenture with
respect to offers to purchase or redeem such indebtedness with the proceeds of
sales of assets in accordance with Section 3.09 hereof to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of principal amount plus accrued and unpaid interest and
Special Interest, if any, to the date of purchase, and will be payable in cash.
If any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
this Indenture. If the
60
aggregate principal amount of Notes and other pari passu Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
will select the Notes and such other pari passu Indebtedness to be purchased on
a pro rata basis on the basis of the aggregate principal amount of tendered
Notes and pari passu Indebtedness, if any. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds will be reset at zero.
The Company will comply with the requirements of Section 14(e) of and
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection
with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of Section 3.09 or 4.10 of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under the those provisions of this Indenture by
virtue of such conflict.
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by
the Company or such Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with
clause (1) of this Section 4.11(a) and that such Affiliate
Transaction has been approved by a majority of the
disinterested members of the Board of Directors in good faith;
and
(B) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $20.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a) hereof:
(1) any employment agreement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of
business;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries;
(3) transactions with a Person that is an Affiliate of
the Company solely because the Company owns an Equity Interest in, or
controls, such Person;
61
(4) payment of reasonable directors fees to Persons who
are not employees of Holdings, the Company or its Subsidiaries and
other reasonable fees, compensation, benefits and indemnities paid or
entered into by the Company or its Restricted Subsidiaries in the
ordinary course of business to or with the officers, directors or
employees of the Company and its Restricted Subsidiaries;
(5) sales, grants, awards or issuances of Equity
Interests (other than Disqualified Stock), including the exercise of
options and warrants, to Affiliates, officers, directors or employees
of the Company or any contribution to the common equity capital of the
Company by Affiliates of the Company;
(6) transactions involving the Company or any of its
Restricted Subsidiaries, on the one hand, and JPMorgan Securities Inc.,
JPMorgan Chase Bank or Chase Lincoln First Commercial Corp. on the
other hand, in connection with this offering, the Acquisition and
transactions related thereto, the Credit Agreement and any amendment,
modification, supplement, extension, refinancing, replacement,
work-out, restructuring and other transactions related thereto, or any
management, financial advisory, financing, underwriting or placement
services or any other investment banking, banking or similar services,
which payments are approved by a majority of the disinterested members
of the Board of Directors in good faith;
(7) as long as the Company is a member of a consolidated
(or combined) group filing a consolidated (or combined) return of which
Holdings is the parent, payments pursuant to the tax allocation
agreement as in effect on the date of this Indenture (or as the same
may be amended, modified or replaced from time to time so long as any
such amendment, modification or replacement, taken as a whole, is no
less favorable to the Holders than the contract or agreement as in
effect on the date of this Indenture) to permit Holdings to pay taxes
that are then due and owing and are attributable to the operations of
the Company;
(8) Restricted Payments and Permitted Investments (other
than Permitted Investments contemplated by clause (15) of the
definition of "Permitted Investments") that are permitted by Section
4.07 hereof.
(9) transactions effected as part of a Qualified
Securitization Transaction permitted under the Section 4.09 hereof.
(10) the existence or performance by the Company or any of
its Restricted Subsidiaries of the provisions of the Acquisition
Agreement, the Credit Agreement, the Purchase Agreement, the Exchange
and Registration Rights Agreement, the Stockholders Agreement, the
Registration Rights Agreement, the Subscription and Stock Purchase
Agreement, the Fee Agreement and any other agreements (other than the
Management Agreement, which is addressed in clause (11) below)
described under the caption "Management" or "Certain Relationships and
Related Party Transactions" of the Offering Circular or any amendment
thereto or replacement agreement therefor or any transaction
contemplated thereby so long as such amendment or replacement is not
more disadvantageous to the Holders of the Notes in any material
respect than the original agreement as in effect on the date of this
Indenture; and
(11) so long as no Default has occurred and is continuing
or would be caused thereby, the existence or performance by the Company
or any of its Restricted Subsidiaries of the provisions of the
Management Agreement described under the caption "Certain Relationships
and Related Party Transactions" of the Offering Circular any amendment
thereto or replacement agreement therefor or any transaction
contemplated thereby so long as such amendment or
62
replacement is not more disadvantageous to the Holders of the Notes in
any material respect than the original agreement as in effect on the
date of this Indenture.
Section 4.12 Liens.
The Company will not and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness (other than
Permitted Liens) upon any of their property or assets, now owned or hereafter
acquired, unless all payments due under this Indenture and the Notes are secured
on an equal and ratable basis with the obligations so secured until such time as
such obligations are no longer secured by a Lien.
Section 4.13 Business Activities.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate,
partnership or other existence of each of its Restricted Subsidiaries,
in accordance with the respective organizational documents (as the same
may be amended from time to time) of the Company or any such
Subsidiary; and
(2) the rights (charter and statutory) and material
licenses and franchises of the Company and its Restricted Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Restricted Subsidiaries, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes; provided, further, however, that a determination of the Board of
Directors of the Company shall not be required in the event of a merger or
consolidation, or sale of all or substantially all of the assets, of one or more
Restricted Subsidiaries of the Company with or into or to another Restricted
Subsidiary of the Company organized under the laws of the United States or a
State thereof or the District of Columbia, in accordance with the terms of this
Indenture.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control and the Company
does not exercise its option to redeem the Notes pursuant to Section 3.07
hereof, the Company will make an offer (a "Change of Control Offer") to each
Holder to repurchase all or any part (equal to $1,000 or an integral multiple of
$1,000) of each Holder's Notes at a purchase price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and Special
Interest, if any, on the Notes repurchased, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) (the "Change of
Control Payment"). Within 30 days following any Change of Control, the Company
will mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and stating:
63
(1) that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Notes tendered will be
accepted for payment;
(2) the purchase price and the purchase date, which shall
be no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment pursuant
to the Change of Control Offer will cease to accrue interest and
Special Interest, if any, after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing
his election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in
part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof.
The Company will comply with the requirements of Section 14(e) of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change in Control. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Section 4.15, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this Section 4.15 by virtue of such conflict.
(b) On the Change of Control Payment Date, the Company will, to
the extent lawful:
(1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(3) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be
64
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any; provided that each
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
In the event that at the time of the Change of Control the terms of any
agreement governing Senior Debt of the Company or its Subsidiaries restrict or
prohibit the repurchase of Notes pursuant to this Section 4.15, then prior to
the mailing of notice to Holders of Notes provided for above, but in any event
within 60 days following a Change of Control, the Company will either (1) repay
all outstanding Senior Debt or offer to repay all such Senior Debt and repay the
Indebtedness of each lender who has accepted the offer or (2) obtain the
requisite consents, if any, under all agreements governing outstanding Senior
Debt to permit the repurchase of Notes required by this Section 4.15.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and purchases all Notes validly tendered
and not withdrawn under the Change of Control Offer.
Section 4.16 No Senior Subordinated Debt.
The Company will not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of the Company and senior in any respect in
right of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to the Senior Debt of such Guarantor and senior in
any respect in right of payment to such Guarantor's Note Guarantee.
Section 4.17 Future Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or
creates another Domestic Subsidiary or if any Restricted Subsidiary becomes a
Domestic Subsidiary after the date of this Indenture, then that newly acquired
or created Domestic Subsidiary (other than a Receivables Subsidiary) will become
a Guarantor and execute a supplemental indenture and deliver an Opinion of
Counsel satisfactory to the Trustee within 20 Business Days of the date on which
it was acquired or created or became a Domestic Subsidiary, provided, however,
that all Subsidiaries that have properly been designated as Unrestricted
Subsidiaries in accordance with this Indenture for so long as they continue to
constitute Unrestricted Subsidiaries will not have to comply with the
requirements of this Section 4.17. Each Note Guarantee will be limited to an
amount not to exceed the maximum amount that can be Guaranteed by that Domestic
Subsidiary without rendering the Note Guarantee, as it relates to such Domestic
Subsidiary, void or voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. The forms of such Note Guarantee and supplemental indenture
are attached as Exhibits E and F hereto, respectively.
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if no Default has occurred and is continuing at the time
of the designation and if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the
65
designation and will reduce the amount available for Restricted Payments under
Section 4.07(a) or Permitted Investments, as determined by the Company. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. In addition, no such designation may be made unless the
proposed Unrestricted Subsidiary does not own any Capital Stock in any
Restricted Subsidiary that is not simultaneously subject to designation as an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly, consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation), or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:
(1) either:
(A) the Company is the surviving corporation; or
(B) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other
disposition has been made is either (i) a corporation
organized or existing under the laws of the United States, any
state of the United States or the District of Columbia or (ii)
a partnership or limited liability company organized or
existing under the laws of the United States, any state
thereof or the District of Columbia that has at least one
Restricted Subsidiary that is a corporation organized or
existing under the laws of the United Sates, any state thereof
or the District of Columbia, which corporation becomes a
co-issuer of the Notes pursuant to a supplemental indenture
duly and validly executed by the Trustee;
(2) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
has been made assumes all the obligations of the Company under the
Notes, this Indenture and the Exchange and Registration Rights
Agreement pursuant to agreements reasonably satisfactory to the
Trustee;
(3) immediately after such transaction, no Default or
Event of Default exists; and
(4) the Company, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company),
or to which such sale, assignment, transfer, conveyance or other
disposition has been made would, on the date of such transaction after
giving pro forma effect thereto and any related financing transactions
as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09(a) hereof.
Notwithstanding clauses (3) and (4) above, the Company may merge a
consolidate with a Restricted Subsidiary incorporated solely for the purpose of
organizing the Company in another jurisdiction.
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In addition, the Company will not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Restricted Subsidiaries.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of, premium, if any, and interest, including Special Interest, if any,
on the Notes except in the case of a sale of all of the Company's assets in a
transaction that is subject to, and that complies with the provisions of,
Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) the Company defaults for 30 days in the payment when
due of interest on, or Special Interest with respect to, the Notes
whether or not prohibited by the subordination provisions of this
Indenture;
(2) the Company defaults in the payment when due (at
maturity, upon redemption or otherwise) of the principal of, or
premium, if any, on the Notes, including in connection with an Asset
Sale Offer or Change of Control Offer, whether or not prohibited by the
subordination provisions of this Indenture;
(3) the Company or any of its Restricted Subsidiaries
fails to comply with the provisions of Section 5.01 hereof;
(4) the Company or any of its Restricted Subsidiaries
fail to comply for 30 days after written notice referred to in Section
6.02 hereof (specifying the default and demanding that the same be
remedied) with any obligations under Sections 4.10 and 4.15 hereof (in
each case, other than a failure to purchase the Notes, which is covered
by clause (2) above) and Sections 4.07 and 4.09 hereof;
(5) the Company or any of its Restricted Subsidiaries
fail to observe or perform any other covenant, representation, warranty
or other agreement in this Indenture or the Notes or the Note
Guarantees for 60 days after written notice referred to in Section 6.02
hereof (specifying the default and demanding that the same be
remedied);
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(6) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary (or the payment of which is guaranteed by the
Company, any of its Significant Subsidiaries or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary) whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, if that
default:
(A) is caused by a failure to pay principal of,
or interest or premium, if any, on such Indebtedness within
any applicable grace period provided in such Indebtedness (a
"Payment Default"); or
(B) results in the acceleration of such
Indebtedness prior to its expressed maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other Indebtedness
contemplated by clause (A) or (B) above, aggregates $15.0 million or
more and such default continues for 10 days after receipt of written
notice referred to in Section 6.02 hereof (specifying the default and
demanding that the same be remedied);
(7) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Significant Subsidiaries or any group
of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary, which judgment or judgments are
not paid, discharged or stayed for a period of 60 days; provided that
the aggregate of all such undischarged judgments exceeds $15.0 million
(net of any amounts covered by insurance or pursuant to which the
Company is indemnified or for which payments are guaranteed in
accordance with the Acquisition Agreement, to the extent that the third
party under such agreement honors its obligations thereunder);
(8) the Company or any of its Significant Subsidiaries or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary pursuant to or within the meaning
of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a custodian of
it or for all or substantially all of its property,
(D) makes a general assignment for the benefit of
its creditors, or
(E) generally is not paying its debts as they
become due; or
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
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(A) is for relief against the Company or any of
its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken together, would constitute a
Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or any of
its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken together, would constitute a
Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries
or any group of Restricted Subsidiaries that, taken together,
would constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company or any
of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken together, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; and
(10) except as permitted by this Indenture, any Note
Guarantee of a Guarantor that is a Significant Subsidiary or Note
Guarantees of any group of Guarantors that, taken together, would
constitute a Significant Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor that is a Significant
Subsidiary, any group of Guarantors that, taken together, would
constitute a Significant Subsidiary or any Person acting on behalf of
any such Guarantor or group, shall deny or disaffirm its obligations
under its Note Guarantee and such default continues for ten days after
receipt of the notice referred to in Section 6.02 hereof.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately, and upon any such declaration, the
Notes shall become due and payable immediately; provided, that so long as any
Indebtedness permitted to be incurred pursuant to the Credit Agreement is
outstanding, such acceleration will not be effective until the earlier of (1)
the acceleration of such Indebtedness under the Credit Agreement or (2) five
Business Days after receipt by the Company of written notice of such
acceleration. A Default under clauses (4), (5), (6) or (10) of Section 6.01
hereof will not constitute an Event of Default until the Trustee notifies the
Company or the Holders of at least 25% in aggregate principal amount of the
outstanding Notes notify the Company and the Trustee of the Default and the
Company or its Subsidiary, as applicable, does not cure such Default within the
time specified in clauses (4), (5), (6) or (10) after receipt of such notice.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
Section 6.03 Other Remedies.
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If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Special
Interest, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this 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. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Special Interest, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(1) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(3) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
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A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Special Interest,
if any, and interest on the Note, on or after the respective due dates expressed
in the Note (including in connection with an offer to purchase), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company or any other obligor on the
Notes for the whole amount of principal of, premium and Special Interest, if
any, and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money or property pursuant to this Article
6, it shall pay out the money or property in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
71
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Special Interest, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Special Interest, if any and interest, respectively; and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee will exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of a Default:
(1) the duties of the Trustee will be determined solely
by the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
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(2) the Trustee will not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee will not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to
expend or risk its own funds or incur any liability. The Trustee will be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder has offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee will not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
will not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel will be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will
not be responsible for the misconduct or negligence of any agent (other than an
agent who is an employee of the Trustee) appointed with due care.
(d) 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 the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
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 any
Affiliate of the Company with the same rights it would
73
have if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium or Special
Interest, if any, or interest on any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA Section 313(b)(2) to the extent applicable. The Trustee
will also transmit by mail all reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the
Holders of Notes will be mailed by the Trustee to the Company and filed by the
Trustee with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA Section 313(d). The Company will promptly notify the Trustee
when the Notes are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation will not be limited by any law on
compensation of a trustee of an express trust. The Company will reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses will include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Company and the Guarantors (including this Section 7.07) and
defending itself against any claim
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(whether asserted by the Company, the Guarantors or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee will
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company will not relieve the Company or
any of the Guarantors of their obligations hereunder. The Company or the
Guarantors will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Company will pay the reasonable
fees and expenses of such counsel. Neither the Company nor any Guarantor need
pay for any settlement made without its consent, which consent will not be
unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture. The
Company and the Guarantors need not reimburse any expense or indemnity against
any loss or liability incurred by the Trustee as a result its negligence or bad
faith.
(d) To secure the Company's payment obligations in this Section
7.07, the Trustee will have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(8) or (9) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company will promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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(d) If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has
been a Holder for at least six months, fails to comply with Section 7.10, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
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Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and the Guarantors will be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes (including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which will survive until otherwise terminated or discharged
hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium and
Special Interest, if any, on such Notes when such payments are due from
the trust referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Guarantors' obligations
in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations contained in:
(1) Sections 3.09, 4.03, 4.05, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof;
(2) the operation of the default provisions specified in
clauses (3) (with respect to an Asset Sale Offer or a Change of Control
Offer only), (4), (5), (6), (7) and, with respect to Significant
Subsidiaries only, clauses (8) and (9) of Section 6.01 hereof; and
(3) clause (4) of Section 5.01 hereof
with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes will thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants and provisions,
but will continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Notes will not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Note Guarantees, the Company and the
Guarantors may omit to comply with and will have no liability in respect of any
term, condition or limitation set forth in any such
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covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply will not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes and Note Guarantees will be unaffected thereby.
The Company may exercise its Legal Defeasance option notwithstanding
its prior exercise of its Covenant Defeasance option. If the Company exercises
its Legal Defeasance option, payment of the Notes may not be accelerated because
of an Event of Default with respect to the Notes. If the Company exercises its
Covenant Defeasance option, payment of the Notes may not be accelerated because
of an Event of Default specified in clause (3) (with respect to an Asset Sale
Offer or a Change of Control Offer only), (4), (5), (6), (7) or (9) (with
respect to Significant Subsidiaries or a group which constitutes a Significant
Subsidiary only) under "Events of Default" above or because of the failure of
the Company to comply with clause (4) of Section 5.01 hereof.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders, cash in United
States dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium and Special Interest, if any, and interest on
the outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(2) in the case of an election under Section 8.02 hereof,
the Company has delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that:
(A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has
been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof,
the Company must deliver to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
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(4) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit);
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound and is not prohibited by
Article 10 hereof;
(6) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3 hereof.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Special Interest, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium or Special
Interest, if any, or interest on any Note and remaining unclaimed for two years
after such principal, premium or Special Interest, if any, or interest has
79
become due and payable shall be paid to the Company on its request or (if then
held by the Company) will be discharged from such trust; and the Holder of such
Note will thereafter be permitted to look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantor's obligations under this
Indenture and the Notes and the Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
Special Interest, if any, or interest on any Note following the reinstatement of
its obligations, the Company will be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees or the Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or
in place of certificated Notes or to alter the provisions of Article 2
hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;
(3) to provide for the assumption of the Company's or any
Guarantor's obligations to the Holders of the Notes by a successor to
the Company or a Guarantor pursuant to Article 5 or Article 11 hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Note;
(5) to add a Guarantor;
(6) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
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(7) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture as of the
date hereof; or
(8) to make any change in the subordination provisions of
this Indenture that would limit or terminate the benefits available to
any holder of Senior Debt of the Company (or any Representative) under
such subordination provisions; or
(9) to secure the Notes and the Note Guarantees.
However, no amendment may be made to the subordination provisions of
this Indenture that adversely affects the rights of any holder of Senior Debt of
the Company or any Guarantor then outstanding unless the holders of such Senior
Debt (or any group or Representative thereof authorized to give a consent)
consent to such change.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15 hereof), the Note Guarantees and the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes
(including, without limitation, Additional Notes, if any) then outstanding
voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium or Special Interest, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Note Guarantees or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes). Section 2.08 hereof shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.
It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.
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After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance or generally by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity
of any Note or alter or waive any of the provisions with respect to the
redemption of the Notes except as provided above with respect to
Sections 3.09, 4.10 and 4.15 hereof;
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of or premium or Special Interest, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the Holders
of at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted
from such acceleration);
(5) make any Note payable in money other than that stated
in the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, or interest or premium or Special
Interest, if any, on the Notes;
(7) make any change in Section 6.04 or 6.07 hereof or in
the foregoing amendment and waiver provisions;
(8) waive a redemption payment with respect to any Note
(other than a payment required by Sections 3.09, 4.10 and 4.15 hereof);
(9) impair the right of any Holder to receive payment of
principal of, and interest or any Special Interest on, such Holder's
Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's Notes;
or
(10) release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture, except in accordance with
the terms of this Indenture.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
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(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date on which the Trustee receives an Officers'
Certificate from the Company certifying that the requisite number of consents
have been received. When an amendment, supplement or waiver becomes effective,
it shall bind every Holder. An amendment, supplement or waiver becomes effective
upon the (i) receipt by the Company or the Trustee of the requisite number of
consents, (ii) satisfaction of conditions to effectiveness as set forth in this
Indenture and any indenture supplemental hereto containing such amendment or
waiver and (iii) execution of such amendment or waiver (or supplemental
indenture) by the Company, any Guarantors and the Trustee.
(b) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders of the Notes entitled to give
their consent or take any other action described above or required or permitted
to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Holders of Notes at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders of Notes after such record date. No such consent shall be
valid or effective for more then 120 days after such record date.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
and the Guarantors may not sign an amendment or supplemental Indenture until the
Board of Directors approves it. In executing any amended or supplemental
indenture, the Trustee will be entitled to receive and (subject to Section 7.01
hereof) will be fully protected in relying upon, in addition to the documents
required by Section 13.04 hereof, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental Indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01 Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all Senior Debt of the Company (whether outstanding on
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the date hereof or hereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of such Senior Debt.
Section 10.02 Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(1) holders of Senior Debt will be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any bankruptcy proceeding
at the rate specified in the applicable Senior Debt whether or not such
interest is an allowed claim in any such proceeding) before the Holders
of Notes will be entitled to receive any payment or distribution with
respect to the Notes (except that Holders of Notes may receive and
retain Permitted Junior Securities and payments made from any
defeasance trust created pursuant to Section 8.01 hereof); and
(2) until all Obligations with respect to Senior Debt (as
provided in clause (1) above) are paid in full, any distribution to
which Holders would be entitled but for this Article 10 will be made to
holders of Senior Debt (except that Holders of Notes may receive and
retain Permitted Junior Securities and payments made from any
defeasance trust created pursuant to Section 8.01 hereof), as their
interests may appear.
Section 10.03 Default on Designated Senior Debt.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes, may
not make any deposits with the Trustee pursuant to Section 8.01 hereof and may
not acquire from the Trustee or any Holder any Notes for cash or property (other
than Permitted Junior Securities and payments made from any defeasance trust
created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:
(1) payment default on Designated Senior Debt occurs and
is continuing; or
(2) any other default occurs and is continuing on any
series of Designated Senior Debt that permits holders of that series of
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of such default (a "Payment Blockage Notice") from
the Company or the holders of, or the Representative of, any Designated
Senior Debt. If the Trustee receives any such Payment Blockage Notice,
no subsequent Payment Blockage Notice will be effective for purposes of
this Section unless and until (A) at least 365 days have elapsed since
the delivery of the immediately prior Payment Blockage Notice and (B)
all scheduled payments of principal, premium and Special Interest, if
any, and interest on the Notes that have come due have been paid in
full in cash.
Not more than one Payment Blockage Notice may be given in any
consecutive 365-day period, irrespective of the number of defaults with
respect to all Designated Senior Debt during such period, provided that
if any Payment Blockage Notice is delivered to the Trustee by or on
behalf of the Representative of Designated Senior Debt of the Company
(other than the holders of Indebtedness under the Credit Agreement), a
Representative of holders of Indebtedness under the Credit Agreement
may give another Payment Blockage Notice within such period. However,
in
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no event may the total number of days during which any payment blockage
period or periods on the Notes is in effect exceed 179 days in the
aggregate during any consecutive 365-day period, and there must be at
least 186 days during any consecutive 365-day period during which no
payment blockage period is in effect.
The failure to make any payment on the Notes by reason of the
subordination provisions of this Indenture will not be construed as
preventing the occurrence of an Event of Default with respect to the
Notes by reason of the failure to make a required payment. Upon
termination of any period of payment blockage, the Company will be
required to resume making any and all required payments under the
Notes, including any missed payments. No nonpayment default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee will be, or be made, the basis for a
subsequent Payment Blockage Notice.
(b) The Company may and will resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:
(1) in the case of a payment default on Designated Senior
Debt, upon the date upon which such default is cured or waived, or
(2) in the case of a nonpayment default on Designated
Senior Debt, upon the earlier of the date on which such nonpayment
default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Debt has been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition. Notwithstanding the foregoing, the
Company may make payment on the Notes if the Company and the Trustee receive
written notice approving such payment from the Representative of the Designated
Senior Debt with respect to which either of the events set forth in clauses (1)
and (2) of this paragraph has occurred and is continuing.
Section 10.04 Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of Default,
the Company will promptly notify the Representative of Senior Debt of the
acceleration.
Section 10.05 When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes (other than Permitted Junior Securities
and payments made from any defeasance trust created pursuant to Section 8.01
hereof) at a time when the payment is prohibited by these subordination
provisions and the Trustee or such Holder, as applicable, has actual knowledge
that such payment is prohibited by Section 10.02 or 10.03 hereof, such payment
will be held by the Trustee or such Holder, in trust for the benefit of, and
will be paid forthwith over and delivered, upon written request, to, the holders
of Senior Debt as their interests may appear or their Representative under the
agreement, indenture or other document (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Obligations with respect to Senior Debt remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only those obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied
85
covenants or obligations with respect to the holders of Senior Debt will be read
into this Indenture against the Trustee. 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 the Trustee pays over or distributes to or on behalf of Holders
or the Company or any other Person money or assets to which any holders of
Senior Debt are then entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
Section 10.06 Notice by Company.
The Company will promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice will not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
Section 10.07 Subrogation.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes will be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
Section 10.08 Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture will:
(1) impair, as between the Company and Holders of Notes,
the obligation of the Company, which is absolute and unconditional, to
pay principal of, premium and interest and Special Interest, if any, on
the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of,
premium or interest or Special Interest, if any, on a Note on the due date, the
failure is still a Default or Event of Default.
Section 10.09 Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes may be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
Section 10.10 Distribution or Notice to Representative.
86
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes will be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
Section 10.11 Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee will not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee has received at its Corporate
Trust Office at least five Business Days prior to the date of such payment
written notice of facts that would cause the payment of any Obligations with
respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 will impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 10.12 Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.13 Amendments.
No amendment or modification may be made to the provisions of this
Article 10 that adversely affects the rights of any holder of Senior Debt of the
Company then outstanding without the written consent of the holders of such
Senior Debt or any group or Representative thereof authorized to give consent.
In addition, any amendment to, or waiver of, the provisions of this Article 10
that adversely affects the rights of the Holders of the Notes will require the
consent of the Holders of at least 75% in aggregate principal amount of Notes
then outstanding voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes).
ARTICLE 11.
NOTE GUARANTEES
Section 11.01 Guarantee.
87
(a) Subject to this Article 11, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium and Special Interest, if
any, and interest on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any,
if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder
are unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
Section 11.02 Subordination of Note Guarantee.
88
The Obligations of each Guarantor under its Note Guarantee pursuant to
this Article 11 will be junior and subordinated to the Senior Debt of such
Guarantor on the same basis as the Notes are junior and subordinated to Senior
Debt of the Company. For the purposes of the foregoing sentence, the Trustee and
the Holders will have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.
Section 11.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.
Section 11.03 Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit E hereto will be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Domestic
Subsidiary after the date of this Indenture, if required by Section 4.17 hereof,
the Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.17 hereof and this Article 11, to the extent applicable.
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor, unless:
(1) immediately after giving effect to such transaction,
no Default or Event of Default exists; and
89
(2) either:
(a) subject to Section 11.06 hereof, the Person
acquiring the property in any such sale or disposition or the Person
formed by or surviving any such consolidation or merger, if other than
such Guarantor, unconditionally assumes all the obligations of that
Guarantor under this Indenture, the Notes and the Note Guarantee
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee on the terms set forth herein or therein;
and
(b) in the case of a sale or disposition
constituting an Asset Sale, the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of
this Indenture, including without limitation, Sections 3.09 and 4.10
hereof.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person will succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 11.05 Release of Guarantor.
(a) In the event of any sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the Capital
Stock of any Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) a Subsidiary of the Company, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the Capital Stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Note Guarantee; provided that
the Net Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of this Indenture, including without limitation
Sections 3.09 and 4.10 hereof. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including without limitation Sections 3.09 and 4.10 hereof, the
Trustee will execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Note Guarantee.
(b) If the Company designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary in accordance with the applicable
provisions of this Indenture, such Guarantor will be released and relieved of
any obligations under its Note Guarantee.
90
(c) The Guarantors will be released and relieved of any
obligations under their Note Guarantees upon any legal defeasance in accordance
with the terms of this Indenture.
(d) A Guarantor will be released and relieved of any obligations
under its Note Guarantee if such Guarantor is or becomes a Receivables
Subsidiary.
Any Guarantor not released from its obligations under its Note
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes and the Note Guarantees issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated
(except lost, stolen or destroyed Notes that have been replaced or paid
and Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Company) have been delivered to the
Trustee for cancellation; or
(b) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason of the
mailing of a notice of redemption or otherwise or will become due and
payable within one year and the Company or any Guarantor has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust solely for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient without consideration of
any reinvestment of interest, to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for cancellation
for principal, premium and Special Interest, if any, and accrued
interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or will occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward
the payment of the Notes at maturity or the redemption date, as the
case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
91
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties will control.
Section 13.02 Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
National Waterworks, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
With a copy to:
O'Melveny & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
92
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Trustee:
Well Fargo Bank Minnesota, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Services
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 13.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have
been satisfied; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 13.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
93
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Note Guarantees, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. 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. The waiver may not be effective
to waive liabilities under the federal securities laws.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors.
94
All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.06.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes or Note
Guarantees 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 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 13.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
95
SIGNATURES
Dated as of November 22, 2002
NATIONAL WATERWORKS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO
Attest:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Notary Public
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
96
EXHIBIT A1
[Face of Note]
================================================================================
CUSIP/ISIN: ▇▇▇▇▇▇▇▇▇ / US638477AA74 [Rule 144A Note]
CUSIP/ISIN: ▇▇▇▇▇▇▇▇▇ / US638477AC31 [IAI Note]
10.50% [Series A] [Series B] Senior Subordinated Notes due 2012
No. ___ $____________
NATIONAL WATERWORKS, INC.
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of___________________________________________________________
Dollars on December 1, 2012.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: November 22, 2002
NATIONAL WATERWORKS, INC.
By: ________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: President, Chief Executive Officer
and Director
By: ________________________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By: ___________________________________
Authorized Signatory
================================================================================
A1-1
[Back of Note]
10.50% [Series A] [Series B] Subordinated Notes due 2012
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
[Insert the Unit Legend, if applicable pursuant to the provisions of the
Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. National Waterworks, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 10.50% per annum from November 22, 2002 until
maturity and shall pay the Special Interest, if any, payable pursuant
to Section 2(c) of the Exchange and Registration Rights Agreement
referred to below. The Company will pay interest and Special Interest,
if any, semi-annually in arrears on June 1 and December 1 of each year,
or if any such day is not a Business Day, on the next succeeding
Business Day (each, an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be June 1, 2003.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium,
if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect to the extent lawful; it will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Special
Interest, if any, (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
(2) METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Special Interest, if any, to
the Persons who are registered Holders of Notes at the close of
business on the May 15 or November 15 next preceding the Interest
Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The
Notes will be payable as to principal, premium and Special Interest, if
any, and interest at the office or agency of the Company maintained for
such purpose within or without the City and State of New York, or, at
the option of the Company, payment of interest and Special Interest, if
any, may be made by check mailed to the Holders at their addresses set
forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect
to principal of and interest, premium and Special Interest, if any, on,
all Global Notes and any other Notes with a principal amount greater
than $5.0 million if the Holder of such Note will have provided wire
transfer instructions to the Company or the Paying Agent. Such payment
will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private
debts.
(3) PAYING AGENT AND REGISTRAR. Initially, ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, the Trustee under the Indenture,
will act as Paying Agent and Registrar. The
A1-2
Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(4) INDENTURE. The Company issued the Notes under an
Indenture dated as of November 22, 2002 (the "Indenture") between the
Company and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms.
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are unsecured obligations of the
Company. The Company shall be entitled to issue Additional Notes
pursuant to Section 2.13 of the Indenture.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and
(c) of this Paragraph 5, the Company will not have the option to redeem
the Notes prior to December 1, 2007. On or after December 1, 2007, the
Company will have the option to redeem the Notes, in whole or in part,
upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Special Interest, if any, thereon
to the applicable redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the twelve-month
period beginning on December 1 of the years indicated below:
Year Percentage
---- ----------
2007............................................................ 105.2
2008............................................................ 103.5
2009............................................................ 101.7
2010 and thereafter............................................. 100.00%
(b) Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, at any time prior to December 1,
2005, the Company may redeem Notes on any one or more occasions with
the Net Cash Proceeds from one or more Equity Offerings by the Company
or Holdings (so long as such Net Cash Proceeds are contributed by
Holdings to the Company as common equity) at a redemption price equal
to 110.50% of the aggregate principal amount thereof, plus accrued and
unpaid interest and Special Interest, if any, thereon to the applicable
redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date); provided that at least 65% in aggregate principal amount
of the Notes issued under the Indenture remains outstanding immediately
after the occurrence of such redemption (excluding the Notes held by
the Company and its Subsidiaries) and that such redemption occurs
within 60 days of the date of the closing of such Equity Offering.
(c) Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, the Notes may be redeemed, in
whole or in part, at any time prior to December 1, 2007, at the option
of the Company upon not less than 30 nor more than 60 days prior
notice, at a redemption price equal to 100% of the principal amount of
the Notes redeemed plus the Applicable Premium as of, and accrued and
unpaid interest and Special Interest, if any, thereon to the applicable
redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date).
A1-3
(6) NO MANDATORY REDEMPTION. The Company will not be
required to make mandatory redemption on sinking fund payments with
respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company
will be required to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price equal to 101% of
the aggregate principal amount thereof plus accrued and unpaid interest
and Special Interest thereon, if any, to the date of purchase (subject
to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture. Holders of Notes that are the subject of an offer to
purchase will receive a Change of Control Offer from the Company prior
to any related purchase date and may elect to have such Notes purchased
by completing the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes.
(b) If the Company or a Restricted Subsidiary
consummates any Asset Sales, on the 366th day after an Asset Sale, if
the aggregate amount of Excess Proceeds exceeds $15.0 million, the
Company will make an Asset Sale Offer to all Holders of Notes and all
holders of any other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or to redeem with the Excess Proceeds of
Asset Sales pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes and other pari passu Indebtedness
that may be purchased out of the Excess Proceeds at an offer price in
cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Special Interest thereon, if any, to
the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes and other pari passu Indebtedness tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Company (or
such Subsidiary) may use such deficiency for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes
and other pari passu Indebtedness surrendered by holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and other pari passu Indebtedness to be purchased on a pro rata
basis. Holders of Notes that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company prior to any related
purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption
date to each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for
redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or
A1-4
register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date or any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being
redeemed in part.
(10) PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture , the Note Guarantees or the Notes may be
amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class, and any existing
default or compliance with any provision of the Indenture, the Note
Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent
of any Holder of a Note, the Indenture, the Note Guarantees or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the assumption of the
Company's or any Guarantor's obligations to Holders of the Notes in
case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture
of any such Holder, to add a Guarantor, to comply with the requirements
of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act, to provide for the Issuance of
Additional Notes in accordance with the limitations set forth in the
Indenture, to make any change in the subordination provisions of the
Indenture that would limit or terminate the benefits available to any
holder of Senior Debt or to secure the Notes and the Note Guarantees.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Special
Interest on the Notes; (ii) default in payment when due of principal of
or premium, if any, on the Notes when the same becomes due and payable
at maturity, upon redemption (including in connection with an offer to
purchase) or otherwise, (iii) failure by the Company or any of its
Restricted Subsidiaries to comply with Section 5.01 of the Indenture;
(iv) failure by the Company or any of its Restricted Subsidiaries for
30 days after written notice to comply with Sections 4.10 and 4.15 of
the Indenture (in each case, other than a failure to purchase the
Notes, which is covered by clause (ii) above) and Sections 4.07 and
4.09 of the Indenture; (v) failure by the Company or any of its
Restricted Subsidiaries for 60 days after written notice to comply with
certain other agreements in the Indenture, the Notes or the Note
Guarantees; (vi) default under certain other agreements relating to
Indebtedness of the Company which default results in the acceleration
of such Indebtedness prior to its express maturity and such default
continues for 10 days after written notice; (vii) certain final
judgments for the payment of money that remain undischarged for a
period of 60 days; (viii) certain events of bankruptcy or insolvency
with respect to the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary; and (ix) except as permitted by the Indenture,
any Note Guarantee of a Guarantor that is a Significant Subsidiary or
Note Guarantees of any Group of Guarantors that, taken together, would
constitute a Significant Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor or any Person acting on
its behalf shall deny or disaffirm its obligations under such
Guarantor's Note Guarantee. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal
A1-5
amount of the then outstanding Notes may declare all the Notes to be
due and payable provided, that so long as any Indebtedness permitted to
be incurred pursuant to the Credit Agreement is outstanding, such
acceleration will not be effective until the earlier of (1) the
acceleration of such Indebtedness under the Credit Agreement or (2)
five Business Days after receipt by the Company of written notice of
such acceleration. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding
Notes will become due and payable without further action or notice. A
Default under clauses (iv), (v), (vi) or (ix) will not constitute an
Event of Default until the Trustee notifies the Company or the Holders
of at least 25% in aggregate principal amount of the outstanding Notes
notify the Company and the Trustee of the Default and the Company or
its Subsidiary, as applicable, does not cure such default within the
time specified in clauses (iv), (v), (vi) or (ix) after receipt of such
notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with
the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
(13) SUBORDINATION. Payment of principal, interest and
premium and Special Interest, if any, on the Notes is subordinated to
the prior payment of Senior Debt on the terms provided in the
Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company or any of the
Guarantors, as such, will not have any liability for any obligations of
the Company or such Guarantor under the Notes, the Note Guarantees or
the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
A1-6
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes will have all the rights
set forth in the Exchange and Registration Rights Agreement dated as of
November 22, 2002, among the Company and the other parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes will have the
rights set forth in one or more registration rights agreements, if any,
among the Company, any Guarantors and the other parties thereto,
relating to rights given by the Company and any Guarantors to the
purchasers of any Additional Notes (collectively, the "Registration
Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the
Notes and the Trustee may use CUSIP numbers in notices of redemption as
a convenience to Holders. No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
National Waterworks, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
A1-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: _________________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*: ____________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A1-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_______________
Date: _______________
Your Signature: _________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.: ________________
Signature Guarantee*: ___________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A1-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
Amount of decrease in Amount of increase in of this Global Note
Principal Amount Principal Amount following such Signature of authorized
of of decrease officer of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
* This schedule should be included only if the Note is issued in global form.
A1-10
EXHIBIT A2
[Face of Regulation S Temporary Global Note]
================================================================================
CUSIP: ▇▇▇▇▇▇▇▇▇
ISIN: USU6374XAA73
10.50% [Series A] [Series B] Senior Subordinated Notes due 2012
No. ___ $__________
NATIONAL WATERWORKS, INC.
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of __________________________________________________________
Dollars on December 1, 2012.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: November 22, 2002
NATIONAL WATERWORKS, INC.
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: President, Chief Executive Officer
and Director
By: __________________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By: _________________________
Authorized Signatory
================================================================================
A2-1
[Back of Regulation S Temporary Global Note]
10.50% [Series A] [Series B] Subordinated Notes due 2012
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF
AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS (1) IN THE CASE OF RULE 144A NOTES AND
IAI NOTES, TWO YEARS OR (2) IN THE CASE OF REGULATION S NOTES, 40 DAYS, AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY
A2-2
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501 (a)
(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $100,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. National Waterworks, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 10.50% per annum from November 22, 2002 until
maturity and shall pay the Special Interest, if any, payable pursuant
to Section 2(c) of the Exchange and Registration Rights Agreement
referred to below. The Company will pay interest and Special Interest,
if any, semi-annually in arrears on June 1 and December 1 of each year,
or if any such day is not a Business Day, on the next succeeding
Business Day (each, an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be June 1, 2003.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium,
if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect to the extent lawful; it will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Special
Interest, if any, (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day months
Until this Regulation S Temporary Global Note is exchanged for
one or more Regulation S Permanent Global Notes, the Holder hereof
shall not be entitled to receive payments of interest hereon; until so
exchanged in full, this Regulation S Temporary Global Note shall in all
other respects be entitled to the same benefits as other Notes under
the Indenture.
A2-3
(2) METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Special Interest, if any, to
the Persons who are registered Holders of Notes at the close of
business on the May 15 or November 15 next preceding the Interest
Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The
Notes will be payable as to principal, premium and Special Interest, if
any, and interest at the office or agency of the Company maintained for
such purpose within or without the City and State of New York, or, at
the option of the Company, payment of interest and Special Interest, if
any, may be made by check mailed to the Holders at their addresses set
forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect
to principal of and interest, premium and Special Interest, if any, on,
all Global Notes and any other Notes with a principal amount greater
than $5.0 million if the Holder of such Note will have provided wire
transfer instructions to the Company or the Paying Agent. Such payment
will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private
debts.
(3) PAYING AGENT AND REGISTRAR. Initially, ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, the Trustee under the Indenture,
will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company or
any of its Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an
Indenture dated as of November 22, 2002 (the "Indenture") between the
Company and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms.
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are unsecured obligations of the
Company. The Company shall be entitled to issue Additional Notes
pursuant to Section 2.13 of the Indenture.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and
(c) of this Paragraph 5, the Company will not have the option to redeem
the Notes prior to December 1, 2007. On or after December 1, 2007, the
Company will have the option to redeem the Notes, in whole or in part,
upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Special Interest, if any, thereon
to the applicable redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the twelve-month
period beginning on December 1 of the years indicated below:
Year Percentage
---- ----------
2007.............................................................. 105.2
2008.............................................................. 103.5
2009.............................................................. 101.7
2010 and thereafter............................................... 100.00%
(b) Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, at any time prior to December 1,
2005, the Company may redeem Notes on any one or more
A2-4
occasions with the Net Cash Proceeds from one or more Equity Offerings
by the Company or Holdings (so long as such Net Cash Proceeds are
contributed by Holdings to the Company as common equity) at a
redemption price equal to 110.50% of the aggregate principal amount
thereof, plus accrued and unpaid interest and Special Interest, if any,
thereon to the applicable redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided that at least 65% in
aggregate principal amount of the Notes issued under the Indenture
remains outstanding immediately after the occurrence of such redemption
(excluding the Notes held by the Company and its Subsidiaries) and that
such redemption occurs within 60 days of the date of the closing of
such Equity Offering.
(c) Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, the Notes may be redeemed, in
whole or in part, at any time prior to December 1, 2007, at the option
of the Company upon not less than 30 nor more than 60 days prior
notice, at a redemption price equal to 100% of the principal amount of
the Notes redeemed plus the Applicable Premium as of, and accrued and
unpaid interest and Special Interest, if any, thereon to the applicable
redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date).
(6) NO MANDATORY REDEMPTION.
The Company will not be required to make mandatory redemption
on sinking fund payments with respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company
will be required to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price equal to 101% of
the aggregate principal amount thereof plus accrued and unpaid interest
and Special Interest thereon, if any, to the date of purchase (subject
to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture. Holders of Notes that are the subject of an offer to
purchase will receive a Change of Control Offer from the Company prior
to any related purchase date and may elect to have such Notes purchased
by completing the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes.
(b) If the Company or a Restricted Subsidiary
consummates any Asset Sales, on the 366th day after an Asset Sale, if
the aggregate amount of Excess Proceeds exceeds $15.0 million, the
Company will make an Asset Sale Offer to all Holders of Notes and all
holders of any other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or to redeem with the Excess Proceeds of
Asset Sales pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes and other pari passu Indebtedness
that may be purchased out of the Excess Proceeds at an offer price in
cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Special Interest thereon, if any, to
the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes and other pari passu Indebtedness tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Company (or
such Subsidiary) may use such
A2-5
deficiency for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and other pari passu
Indebtedness surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and other pari
passu Indebtedness to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption
date to each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for
redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date or any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being
redeemed in part.
This Regulation S Temporary Global Note is exchangeable in
whole or in part for one or more Global Notes only (i) on or after the
termination of the 40-day restricted period (as defined in Regulation
S) and (ii) upon presentation of certificates (accompanied by an
opinion of counsel, if applicable) required by Article 2 of the
Indenture. Upon exchange of this Regulation S Temporary Global Note for
one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Global Note.
(10) PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture , the Note Guarantees or the Notes may be
amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class, and any existing
default or compliance with any provision of the Indenture, the Note
Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent
of any Holder of a Note, the Indenture, the Note Guarantees or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the assumption of the
Company's or any Guarantor's obligations to Holders of the Notes in
case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture
of any such Holder, to add a Guarantor, to comply with the requirements
of
A2-6
the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act, to provide for the Issuance of
Additional Notes in accordance with the limitations set forth in the
Indenture, to make any change in the subordination provisions of the
Indenture that would limit or terminate the benefits available to any
holder of Senior Debt or to secure the Notes and the Note Guarantees.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Special
Interest on the Notes; (ii) default in payment when due of principal of
or premium, if any, on the Notes when the same becomes due and payable
at maturity, upon redemption (including in connection with an offer to
purchase) or otherwise, (iii) failure by the Company or any of its
Restricted Subsidiaries to comply with Section 5.01 of the Indenture;
(iv) failure by the Company or any of its Restricted Subsidiaries for
30 days after written notice to comply with Sections 4.10 and 4.15 of
the Indenture (in each case, other than a failure to purchase the
Notes, which is covered by clause (ii) above) and Sections 4.07 and
4.09 of the Indenture; (v) failure by the Company or any of its
Restricted Subsidiaries for 60 days after written notice to comply with
certain other agreements in the Indenture, the Notes or the Note
Guarantees; (vi) default under certain other agreements relating to
Indebtedness of the Company which default results in the acceleration
of such Indebtedness prior to its express maturity and such default
continues for 10 days after written notice; (vii) certain final
judgments for the payment of money that remain undischarged for a
period of 60 days; (viii) certain events of bankruptcy or insolvency
with respect to the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary; and (ix) except as permitted by the Indenture,
any Note Guarantee of a Guarantor that is a Significant Subsidiary or
Note Guarantees of any Group of Guarantors that, taken together, would
constitute a Significant Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor or any Person acting on
its behalf shall deny or disaffirm its obligations under such
Guarantor's Note Guarantee. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be
due and payable provided, that so long as any Indebtedness permitted to
be incurred pursuant to the Credit Agreement is outstanding, such
acceleration will not be effective until the earlier of (1) the
acceleration of such Indebtedness under the Credit Agreement or (2)
five Business Days after receipt by the Company of written notice of
such acceleration. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding
Notes will become due and payable without further action or notice. A
Default under clauses (iv), (v), (vi) or (ix) will not constitute an
Event of Default until the Trustee notifies the Company or the Holders
of at least 25% in aggregate principal amount of the outstanding Notes
notify the Company and the Trustee of the Default and the Company or
its Subsidiary, as applicable, does not cure such default within the
time specified in clauses (iv), (v), (vi) or (ix) after receipt of such
notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with
the Indenture,
A2-7
and the Company is required upon becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
(13) SUBORDINATION. Payment of principal, interest and
premium and Special Interest, if any, on the Notes is subordinated to
the prior payment of Senior Debt on the terms provided in the
Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company or any of the
Guarantors, as such, will not have any liability for any obligations of
the Company or such Guarantor under the Notes, the Note Guarantees or
the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes will have all the rights
set forth in the Exchange and Registration Rights Agreement dated as of
November 22, 2002, among the Company and the other parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes will have the
rights set forth in one or more registration rights agreements, if any,
among the Company, any Guarantors and the other parties thereto,
relating to rights given by the Company and any Guarantors to the
purchasers of any Additional Notes (collectively, the "Registration
Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the
Notes and the Trustee may use CUSIP numbers in notices of redemption as
a convenience to Holders. No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
National Waterworks, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇-▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
A2-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: _________________________________
(Insert assignee's legal name)
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: ____________________________
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee*: ___________________
* Participant in a recognized Signature Guarantee Medallion Program
(or other signature guarantor acceptable to the Trustee).
A2-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_______________
Date: ______________
Your Signature: _____________________________
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.: _____________________
Signature Guarantee*: _________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-11
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:
Principal Amount
Amount of decrease in Amount of increase in of this Global Note
Principal Amount Principal Amount following such Signature of authorized
of of decrease officer of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
A2-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
NATIONAL WATERWORKS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 10.50% Series A Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of November 22,
2002 (the "Indenture"), between National Waterworks, Inc., as issuer (the
"Company"), and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a Person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States,
B-1
(ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). In the case of clause (iv) above,
such certification shall be supported by an opinion of counsel provided by the
Transferor or Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note , the Regulation S
Temporary Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act. In addition, this
certification shall be supported by an opinion of counsel provided by
the Transferor or Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is
in compliance with the Securities Act and that the restrictions on
transfer contained in the Indenture and in the Private Placement
Legend are no longer required in order to maintain compliance with
the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) an opinion of counsel provided by the Transferor or
the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the
B-2
Private Placement Legend printed on the IAI Global Note and/or the
Definitive Notes and in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. In addition, there is attached to this certification the opinion
of counsel required by the Indenture that such transfer is in compliance with
the Securities Act and that the restrictions on transfer contained in the
Indenture and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. In addition, there is attached to this
certification the opinion of counsel required by the Indenture that such
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained in the Indenture and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. In addition, there is attached to this
certification the opinion of counsel required by the Indenture that such
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained in the Indenture and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive Notes and
in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
B-3
[Insert Name of Transferor]
By:__________________________________________
Name:
Title:
Dated: _______________________
TO BE COMPLETED BY TRANSFEREE IF TRANSFER PURSUANT TO RULE 144A
The undersigned represents and warrants that it is purchasing
the Notes for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" with the meaning of the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying on the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
[Insert Name of Transferor]
By:__________________________________________
Name:
Title:
Dated: _______________________
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP
_________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP
_________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP
_________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
NATIONAL WATERWORKS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 10.50% Series A Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of November 22,
2002 (the "Indenture"), between National Waterworks, Inc., as issuer (the
"Company"), and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States. In addition, there
is attached to this certification the opinion of counsel required by the
Indenture that such exchange is in compliance with the Securities Act and that
the restrictions on transfer contained in the Indenture and in the Private
Placement Legend are no longer required in order to maintain compliance with the
Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky
C-1
securities laws of any state of the United States. In addition, there is
attached to this certification the opinion of counsel required by the Indenture
that such exchange is in compliance with the Securities Act and that the
restrictions on transfer contained in the Indenture and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States. In addition, there is attached to this certification the
opinion of counsel required by the Indenture that such exchange is in compliance
with the Securities Act and that the restrictions on transfer contained in the
Indenture and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States. In addition, there
is attached to this certification the opinion of counsel required by the
Indenture that such exchange is in compliance with the Securities Act and that
the restrictions on transfer contained in the Indenture and in the Private
Placement Legend are no longer required in order to maintain compliance with the
Securities Act.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms
C-2
of the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:__________________________________________
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
NATIONAL WATERWORKS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 10.50% Series A Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of November 22,
2002 (the "Indenture"), between National Waterworks, Inc., as issuer (the
"Company"), and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) pursuant to a registration statement that has been declared
effective under the Securities Act, (C) for so long as the Notes are eligible
for resale pursuant to Rule 144A under the Securities Act, to a person we
reasonably believe is a "Qualified Institutional Buyer" as defined in Rule 144A
under the Securities Act that purchases for its own account or for the account
of a Qualified Institutional Buyer to whom notice is given that the transfer is
being made in reliance on Rule 144A, (D) pursuant to offers and sales that occur
outside the United States within the meaning of Regulation S under the
Securities Act, (E) to an institutional "Accredited Investor" within the meaning
of Rule 501 (a) (1), (2), (3) or (7) under the Securities Act that is an
institutional Accredited Investor acquiring the Notes for its own account or for
the account of such an institutional Accredited Investor, in each case in a
minimum principal amount of the Notes of $100,000, for investment purposes and
not with a view to or for offer or sale in connection with any distribution in
violation of the Securities Act, or (F) pursuant to another available exemption
from the registration requirements of the Securities Act, subject to the
Company's and the Trustee's right prior to any such offer, sale or transfer
pursuant to clauses (D),
D-1
(E) or (F) to require the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them, and we
further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (F) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment for an indefinite period of time, including a
complete loss of such investment.
5. We are acquiring the Notes or beneficial interest therein for
our own account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion and are purchasing for our account or for the account of such an
institutional "accredited investor" at least $100,000 principal amount of Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:__________________________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of November 22, 2002 (the "Indenture")
between National Waterworks, Inc. (the "Company") and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as trustee (the "Trustee"), (a) the due and
punctual payment of the principal of, premium and Special Interest, if any, and
interest on the Notes (as defined in the Indenture), whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal of and interest on the Notes, if any, if lawful, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and
the Indenture are expressly set forth in Article 11 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Note
Guarantee, including provisions providing that this Note Guarantee of a
Guarantor is subordinated in right of payment to the prior payment of all Senior
Debt of such Guarantor. Each Holder of a Note, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that the Indebtedness evidenced by this Note Guarantee shall cease to
be so subordinated and subject in right of payment upon any defeasance of this
Note in accordance with the provisions of the Indenture.
[NAME OF GUARANTOR(S)]
By:__________________________________________
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY FUTURE GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among _______________(the "Guaranteeing Subsidiary"), a
subsidiary of National Waterworks, Inc. (or its permitted successor), a Delaware
corporation (the "Company"), the Company and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of November 22, 2002 providing
for the issuance of an aggregate principal amount of up to $200,000,000 of
10.50% Senior Subordinated Notes due 2012 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with any other Guarantors, to jointly
and severally Guarantee to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its
successors and assigns, the Notes or the obligations of the
Company hereunder or thereunder, that:
(i) the principal of, and premium and Special
Interest, if any, and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal
of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, the
same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately.
F-1
(b) The obligations hereunder shall be
unconditional, irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, the absence of
any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or
defense of a Guarantor.
(c) The following is hereby waived: diligence,
presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged
except by complete performance of the obligations contained in
the Notes and the Indenture, and the Guaranteeing Subsidiary
accepts all obligations of a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by
any court or otherwise to return to the Company, the
Guarantors, or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or
such Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be
entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the
purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration
in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such
obligations as provided in Article 6 of the Indenture, such
obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of
this Note Guarantee.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the
Holders under the Note Guarantee.
(i) Pursuant to Section 11.03 of the Indenture,
after giving effect to any maximum amount and all other
contingent and fixed liabilities that are relevant under any
applicable Bankruptcy Law or fraudulent conveyance laws, and
after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other
Guarantor under Article 11 of the Indenture, this new Note
Guarantee shall be limited to the maximum amount permissible
such that the obligations of such Guarantor under this Note
Guarantee will not constitute a fraudulent transfer or
conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Note Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee.
F-2
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) Except as otherwise provided in Section 11.06
of the Indenture, the Guaranteeing Subsidiary may not sell or
otherwise dispose of all substantially all of its assets to,
or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person, other than
the Company or another Guarantor unless:
(i) immediately after giving effect to such
transaction, no Default or Event of Default exists; and
(ii) either (A) subject to Sections 11.05 and
11.06 of the Indenture, the Person acquiring the property in
any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally
assumes all the obligations of that Guarantor, pursuant to a
supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes, the Indenture
and the Note Guarantee on the terms set forth herein or
therein; or (B) in the case of a sale or disposition
constituting an Asset Sale, the Net Proceeds of such sale or
other disposition are applied in accordance with the
applicable provisions of the Indenture, including without
limitation, Sections 3.09 and 4.10 thereof.
(b) In case of any such consolidation, merger,
sale or conveyance and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of
the Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a
Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Note Guarantees to be endorsed upon
all of the Notes issuable under the Indenture which
theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Note Guarantees so issued
shall in all respects have the same legal rank and benefit
under the Indenture as the Note Guarantees theretofore and
thereafter issued in accordance with the terms of the
Indenture as though all of such Note Guarantees had been
issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 and
Section 11.06 of Article 11 of the Indenture, and
notwithstanding clauses (i) and (ii) of clause (a) above,
nothing contained in the Indenture or in any of the Notes
shall prevent any consolidation or merger of a Guarantor with
or into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Company or
another Guarantor.
5. RELEASES.
(a) In the event of any sale or other disposition
of all or substantially all of the assets of any Guarantor, by
way of merger, consolidation or otherwise, or a sale or other
disposition of all of the capital stock of any Guarantor, in
each case to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of the
Company, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of
all of the Capital Stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any
F-3
obligations under its Note Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture,
including without limitation Sections 3.09 and 4.10 of the
Indenture. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including
without limitation Sections 3.09 and 4.10 of the Indenture,
the Trustee shall execute any documents reasonably required in
order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.
(b) If the Company designates any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary
in accordance with the applicable provisions of the Indenture,
such Guarantor will be released and relieved of any
obligations under its Note Guarantee.
(c) The Guarantors will be released and relieved
of any obligations under their Note Guarantees upon any legal
defeasance in accordance with the terms of this Indenture.
(d) A Guarantor will be released and relieved of
any obligations under its Note Guarantee if such Guarantor is
or becomes a Receivables Subsidiary.
(e) Any Guarantor not released from its
obligations under its Note Guarantee shall remain liable for
the full amount of principal of and interest on the Notes and
for the other obligations of any Guarantor under the Indenture
as provided in Article 11 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Note
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
F-4
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
NATIONAL WATERWORKS, INC.
By: _______________________________
Name:
Title:
[EXISTING GUARANTORS]
By: _______________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Authorized Signatory
F-5