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AXIOHM TRANSACTION SOLUTIONS, INC.
AXIOHM IPB, INC.
STADIA COLORADO CORP.
COGNITIVE SOLUTIONS, INC.
SENIOR SUBORDINATED NOTES
AND
NEW SENIOR SUBORDINATED NOTES
9 3/4% SENIOR SUBORDINATED NOTES DUE 2007
INDENTURE
Dated as of October 2, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
as Trustee
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TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . 19
Section 1.03. Incorporation by Reference of Trust Indenture Act . . . . 19
Section 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . 20
ARTICLE II.
THE NOTES
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . 20
Section 2.02. Execution and Authentication. . . . . . . . . . . . . . . 21
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . 21
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . 22
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . 22
Section 2.07. Replacement Notes . . . . . . . . . . . . . . . . . . . . 35
Section 2.08. Outstanding Notes . . . . . . . . . . . . . . . . . . . . 35
Section 2.09. Treasury Notes. . . . . . . . . . . . . . . . . . . . . . 35
Section 2.10. Temporary Notes . . . . . . . . . . . . . . . . . . . . . 36
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . 36
Section 2.13. Cusip Numbers . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE III.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . . . . 37
Section 3.02. Selection of Notes to be Redeemed . . . . . . . . . . . . 37
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . 37
Section 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . 38
Section 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . 38
Section 3.06. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . 39
Section 3.07. Optional Redemption . . . . . . . . . . . . . . . . . . . 39
Section 3.08. Mandatory Redemption. . . . . . . . . . . . . . . . . . . 39
Section 3.09. Offer to Purchase by Application of Excess Proceeds . . . 39
i
ARTICLE IV.
COVENANTS
Section 4.01. Payment of Notes. . . . . . . . . . . . . . . . . . . . . 41
Section 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . 41
Section 4.03. Reports . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.04. Compliance Certificate. . . . . . . . . . . . . . . . . . 42
Section 4.05. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . . . . . . 43
Section 4.07. Restricted Payments . . . . . . . . . . . . . . . . . . . 44
Section 4.08. Dividend and Other Payment Restrictions AffectinG
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock. . . . . . . . . . . . . . . . . . . . . 47
Section 4.10. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.11. Transactions with affiliates. . . . . . . . . . . . . . . 51
Section 4.12. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.13. Line of Business. . . . . . . . . . . . . . . . . . . . . 52
Section 4.14. Corporate Existence . . . . . . . . . . . . . . . . . . . 52
Section 4.15. Offer to Repurchase Upon Change of Control. . . . . . . . 52
Section 4.16. No Senior Subordinated Debt . . . . . . . . . . . . . . . 54
Section 4.17. Designation of Unrestricted Subsidiaries. . . . . . . . . 54
Section 4.18. Payments for Consent. . . . . . . . . . . . . . . . . . . 55
ARTICLE V.
SUCCESSORS
Section 5.01. Merger, consolidation, or Sale of Assets. . . . . . . . . 55
Section 5.02. Successor Corporation Substituted . . . . . . . . . . . . 55
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . 56
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 58
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 59
Section 6.05. Control by majority . . . . . . . . . . . . . . . . . . . 59
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . 59
Section 6.07. Rights of Holders of Notes to Receive Payment . . . . . . 60
Section 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . 60
Section 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . 60
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . 61
ARTICLE VII.
ii
TRUSTEE
Section 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 61
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . 63
Section 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . 63
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . 64
Section 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . 64
Section 7.06. Reports by Trustee to Holders of the Notes. . . . . . . . 64
Section 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . 64
Section 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . 65
Section 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . 66
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . 66
Section 7.11. Preferential Collection of Claims Against Company . . . . 67
ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.02. Legal Defeasance and Discharge. . . . . . . . . . . . . . 67
Section 8.03. Covenant Defeasance . . . . . . . . . . . . . . . . . . . 67
Section 8.04. Conditions to Legal or Covenant Defeasance. . . . . . . . 68
Section 8.05. Deposited Money and Government Securities to be
held in Trust; Other Miscellaneous Provisions. . . . . . 69
Section 8.06. Repayment to Company. . . . . . . . . . . . . . . . . . . 70
Section 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE IX.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes . . . . . . . . . . . 71
Section 9.02. With Consent of Holders of Notes. . . . . . . . . . . . . 71
Section 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . 73
Section 9.04. Revocation and Effect of Consents . . . . . . . . . . . . 73
Section 9.05. Notation on or Exchange of Notes. . . . . . . . . . . . . 73
Section 9.06. Trustee to Sign Amendments, etc . . . . . . . . . . . . . 74
Section 9.07. Execution of Supplemental Indenture . . . . . . . . . . . 74
ARTICLE X.
SUBORDINATION
Section 10.01. Agreement to Subordinate. . . . . . . . . . . . . . . . . 74
Section 10.02. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . 74
Section 10.03. Default on Designated Senior Debt . . . . . . . . . . . . 75
Section 10.04. Acceleration of Notes . . . . . . . . . . . . . . . . . . 76
Section 10.05. When Distribution Must be Paid Over . . . . . . . . . . . 76
iii
Section 10.06. Notice by Company . . . . . . . . . . . . . . . . . . . . 76
Section 10.07. Subrogation . . . . . . . . . . . . . . . . . . . . . . . 76
Section 10.08. Relative Rights . . . . . . . . . . . . . . . . . . . . . 77
Section 10.09. Subordination May Not be Impaired by Company. . . . . . . 77
Section 10.10. Distribution or Notice to Representative. . . . . . . . . 77
Section 10.11. Rights of Trustee and Paying Agent. . . . . . . . . . . . 77
Section 10.12. Authorization to Effect Subordination . . . . . . . . . . 78
Section 10.13. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 78
Section 10.14. Reliance by Holders of Senior Debt on Subordination
Provisions . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE XI. GUARANTEE OF THE NOTES . . . . . . . 78
Section 11.01. Subsidiary Guarantee. . . . . . . . . . . . . . . . . . . 78
Section 11.02. Execution and Delivery of Subsidiary Guarantee. . . . . . 80
Section 11.03. Guarantors may Consolidate, etc. on Certain Terms . . . . 80
Section 11.04. Releases Following Sale of Assets.. . . . . . . . . . . . 81
Section 11.05. Additional Guarantors.. . . . . . . . . . . . . . . . . . 82
Section 11.06. Limitation on Guarantor Liability.. . . . . . . . . . . . 83
Section 11.07. Trustee to Include Paying Agent . . . . . . . . . . . . . 83
ARTICLE XII.
SUBORDINATION
Section 12.01. Agreement to Subordinate. . . . . . . . . . . . . . . . . 83
Section 12.02. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . 83
Section 12.03. Default on Designated Guarantor Senior Debt.. . . . . . . 84
Section 12.04. Acceleration of Notes.. . . . . . . . . . . . . . . . . . 85
Section 12.05. When Distribution Must be Paid Over.. . . . . . . . . . . 85
Section 12.06. Notice by Guarantor.. . . . . . . . . . . . . . . . . . . 86
Section 12.07. Subrogation.. . . . . . . . . . . . . . . . . . . . . . . 86
Section 12.08. Relative Rights.. . . . . . . . . . . . . . . . . . . . . 86
Section 12.09. Subordination may not be Impaired by Guarantors . . . . . 86
Section 12.10. Distribution or Notice to Representative. . . . . . . . . 87
Section 12.11. Rights of Trustee and Paying Agent. . . . . . . . . . . . 87
Section 12.12. Authorization to Effect Subordination . . . . . . . . . . 87
Section 12.13. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 87
Section 12.14. Reliance by Holders of Guarantor Senior Debt on
Subordination Provisions . . . . . . . . . . . . . . . . 88
ARTICLE XIII.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . 88
Section 13.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 13.03. Communication by Holders of Notes With Other
holders of notes . . . . . . . . . . . . . . . . . . . . 89
iv
Section 13.04. Certificate and Opinion as to Conditions Precedent. . . . 89
Section 13.05. Statements Required in Certificate or Opinion . . . . . . 90
Section 13.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . 90
Section 13.07. No Personal Liability of Directors, Officers,
Employees and Stockholders . . . . . . . . . . . . . . . 90
Section 13.08. Consent to Jurisdiction; Service or Process . . . . . . . 90
Section 13.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.10. No Adverse Interpretation of Other Agreements . . . . . . 91
Section 13.11. Successors. . . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.12. Severability. . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.13. Counterpart Originals . . . . . . . . . . . . . . . . . . 91
Section 13.14. Table of Contents, Headings, etc. . . . . . . . . . . . . 91
v
EXHIBITS
Exhibit A FORM OF 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 SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
vi
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1) . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . 7.10
(b). . . . . . . . . . . . . . . 7.10
(c). . . . . . . . . . . . . . . N.A.
311 (a). . . . . . . . . . . . . . . 7.11
(b). . . . . . . . . . . . . . . 7.11
(c). . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . 2.05
(b). . . . . . . . . . . . . . . 11.03
(c). . . . . . . . . . . . . . . 11.03
313 (a). . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . 7.07
(c). . . . . . . . . . . . . . . 7.06;11.02
(d). . . . . . . . . . . . . . . 7.06
314 (a). . . . . . . . . . . . . . . 4.03;11.02
(b). . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . N.A.
(d). . . . . . . . . . . . . . . N.A.
(e). . . . . . . . . . . . . . . 11.05
(f). . . . . . . . . . . . . . . N.A.
315 (a). . . . . . . . . . . . . . . 7.01
(b). . . . . . . . . . . . . . . 7.05,11.02
(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). . . . . . . . . . . . . . . 11.01
(b). . . . . . . . . . . . . . . N.A.
(c). . . . . . . . . . . . . . . 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
INDENTURE dated as of October 2, 1997 by and among Axiohm Transaction
Solutions, Inc., a California corporation (the "Company"), Axiohm IPB, Inc.,
a Delaware corporation ("IPB"), Stadia Colorado Corp., a Colorado corporation
("Stadia"), Cognitive Solutions, Inc., a California corporation ("Cognitive"
and, together with IPB and Stadia, the "Guarantors") and The Bank of New
York, a New York banking corporation as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 9 3/4% Senior Subordinated Notes due 2007 (the "Senior Subordinated
Notes") and the new 9 3/4% Senior Subordinated Notes due 2007 (the "New
Senior Subordinated Notes" and, together with the Senior Subordinated Notes,
the "Notes"):
ARTICLE I.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means the global note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with and registered in the name of the Depositary or its nominee that will be
issued in a denomination equal to the outstanding principal amount of the
Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
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,
including, without limitation, Indebtedness incurred in connection with, or
in contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"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" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean 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
securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures
of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition
of any assets or
1
rights (including, without limitation, by way of a sale and leaseback)
(PROVIDED THAT the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as
a whole will be governed by Section 4.15 hereof and/or Article 5 hereof and
not by the provisions of Section 4.10), and (ii) the issue or sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of any of
the Company's Restricted Subsidiaries, in the case of either clause (i) or
(ii), whether in a single transaction or a series of related transactions (a)
that have a fair market value in excess of $1.0 million or (b) for Net
Proceeds in excess of $1.0 million. Notwithstanding the foregoing: (i) a
transfer of assets by the Company to a Guarantor or by a Guarantor to the
Company or another Guarantor or by a non-Guarantor Foreign Subsidiary to
another non-Guarantor Foreign Subsidiary, (ii) an issuance of Equity
Interests by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary, (iii) a Restricted Payment that is permitted by Section 4.07
hereof, (iv) a transfer of Capital Stock of a Foreign Subsidiary for cash
and/or Indebtedness permitted by clause (xv) of Section 4.09 hereof and (v) a
disposition of inventory or Cash Equivalents in the ordinary course of
business, will, in each case, not be deemed to be Asset Sales.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"BORROWING BASE" means, with respect to any Restricted Subsidiary that
is a Foreign Subsidiary and is not a Guarantor, the sum of (x) 75% of the net
book value of the non-Affiliate accounts receivable of such Restricted
Foreign Subsidiary in accordance with GAAP and (y) 40% of the net book value
of the inventory of such Restricted Foreign Subsidiary in accordance with
GAAP.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL MARKET TRANSACTION" means (i) any direct or indirect public
offering or private placement of subordinated debt or equity securities of
the Company or any of its Subsidiaries or (ii) the incurrence of any other
Indebtedness by the Company or any of its Subsidiaries, or any direct or
indirect parent holding company of the Company (other than Permitted Debt);
PROVIDED, that, in each case, either such transaction does not violate the
New Credit Facility or the Indebtedness under the New Credit Facility has
been paid in full and all commitments thereunder have been terminated.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of corporate stock, (iii) in the case of a partnership or limited
2
liability company, partnership or membership interests (whether general or
limited) and (iv) 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 (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of
deposit, time deposits and eurodollar time deposits with maturities of not
more than one year from the date of acquisition, bankers' acceptances with
maturities of not more than one year from the date of acquisition and
overnight bank deposits, in each case with any lender party to the New Credit
Facility or any Permitted Refinancing Indebtedness or with any domestic
commercial bank having capital and surplus in excess of $500.0 million and a
▇▇▇▇▇▇▇▇ Bank Watch Rating of "B" or better, (iv) repurchase obligations with
a term of not more than thirty days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper rated at least P-2 by ▇▇▇▇▇'▇ Investors Service, Inc. or at
least A-2 by Standard & Poor's Ratings Services with maturities of not more
than 270 days from the date of acquisition, (vi) readily marketable direct
obligations issued by any State of the United States of America or any
political subdivision thereof having maturities of not more than one year
from the date of acquisition and rated at least A by ▇▇▇▇▇'▇ Investors
Service, Inc. or A by Standard & Poor's Corporation, and (vii) investment
funds investing 95% of their assets in securities of the types described in
clauses (i)-(vi) above.
"CEDEL" means Cedel Bank, societe anonyme.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, 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 assets of the Company and its Restricted
Subsidiaries taken as a whole to any "person" (as such term is used in
Section 13(d)(3) of the Exchange Act) (other than persons who are, or groups
of persons who are, made up entirely of Principals and/or their Related
Parties); (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company; (iii) 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 one or more
Principals or their respective Related Parties, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition), directly or indirectly, of more than
35% of the total of the Voting Stock of the Company (measured by voting power
rather than number of shares), PROVIDED, that no Principal and his Related
Parties beneficially own (as so defined), directly or indirectly, in the
aggregate a greater percentage of the total voting power of the Voting Stock
of the Company than such other person or have the right or ability by voting
power, contract or otherwise, to elect or designate for election a majority
of the Board of Directors of the Company (for purposes of this clause (iii),
such other person shall be deemed to beneficially own any Voting Stock of a
person held by another person (a "parent corporation"), if such other
3
person "beneficially owns" (as so defined), directly or indirectly, more than
50% of the voting power of the Voting Stock of such parent corporation and
the Principals and the Related Parties "beneficially own" (as so defined),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of such parent corporation than such other
person and do not have the right or ability by voting power, contract or
otherwise, to elect or designate for election a majority of the Board of
Directors of such parent corporation), (iv) the first day on which a majority
of the members of the Board of Directors of the Company are not Continuing
Directors; or (v) 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 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 conversion or exchange).
"COMPANY" means Axiohm Transaction Solutions, Inc., a California
corporation, until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i)
an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) 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 included in computing
such Consolidated Net Income, plus (iii) 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, commissions, discounts
and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing
such Consolidated Net Income, plus (iv) 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 period to the extent
that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income, minus (v) non-cash items
increasing such Consolidated Net Income for such period, in each case, on a
consolidated basis and determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a
4
consolidated basis, determined in accordance with GAAP; provided that (i) the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be included
only to the extent of the amount of dividends or distributions paid in cash
to the referent Person or a Restricted Subsidiary, (ii) the Net Income of any
Restricted Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions 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, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, (iv) the
cumulative effect of a change in accounting principles shall be excluded and
(v) the Net Income (or loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the Company or one of its
Subsidiaries.
"CONTINUING DIRECTOR" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture, (ii) 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 (iii) was elected to such Board of
Directors with the approval of the holders of 80% or more of the voting
securities held by the Principals and their Related Parties.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall 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 the Credit Agreement, dated as of the date
hereof, among the Company, ▇▇▇▇▇▇ Brothers Inc., as arranger, ▇▇▇▇▇▇
Commercial Paper Inc., as syndication agent and administrative agent and the
lenders from time to time party thereto, as such agreement may be amended,
restated, modified, renewed, refunded, replaced or refinanced from time to
time thereafter, including any appendices, exhibits or schedules to any of
the foregoing, as the same may be in effect from time to time, in each case,
as such agreements may be amended, modified, supplemented, renewed, refunded,
replaced, refinanced, extended or restated from time to time (whether with
the original agents and lenders or other agents and lenders or otherwise, and
whether provided under the original credit agreement or other credit
agreements or otherwise), including any appendices, exhibits or schedules to
any of the foregoing.
"DARDEL" means Dardel Technologies S.A., a French corporation.
"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 2.07 hereof, in
the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of
5
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 GUARANTOR SENIOR DEBT" means with respect to any
Guarantor (i) any Indebtedness of such Guarantor outstanding under the Credit
Agreement and (ii) any other Guarantor Senior Debt permitted under this
Indenture, which, at the date of determination, has an aggregate principal
amount outstanding of, or under which at the date of creation thereof or
determination, the holders thereof are committed to lend, at least $25.0
million and is specifically designated by the Guarantor in the instrument
evidencing or governing such Guarantor Senior Debt as "Designated Guarantor
Senior Debt" for purposes of this Indenture.
"DESIGNATED SENIOR DEBT" means (i) any Indebtedness outstanding
under the Credit Agreement and (ii) any other Senior Debt permitted under
this Indenture, which, at the date of determination, has an aggregate
principal amount outstanding of, or under which at the date of creation
thereof or determination, the holders thereof are committed to lend, at least
$25.0 million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Debt as "Designated Senior Debt" for
purposes of this Indenture.
"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 at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof,
in whole or in part, on or prior to the date that is 91 days after the date
on which the Notes mature, except to the extent that such Capital Stock is
solely redeemable with, or solely exchangeable for, any Capital Stock of such
Person that is not Disqualified Stock.
"DOMESTIC SUBSIDIARY" means a Subsidiary that is formed under the
laws of the United States of America or of a state or territory thereof.
"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).
"EUROCLEAR" means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer
pursuant to Section 2.07(f).
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
6
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth
in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date hereof, until such amounts are repaid.
"FIXED CHARGES" means, with respect to any Person for any period,
the sum, without duplication, of (i) 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, commissions, discounts
and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), (ii) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period, (iii) 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) and (iv) the product of (a) all dividend
payments, whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividend payments on
Equity Interests payable solely in Equity Interests 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 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
for such period. In the event that the Company or any of its Restricted
Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other
than revolving credit borrowings) or issues preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but 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 shall be calculated giving pro forma effect to
such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that
have been made by the Company or any of its Restricted Subsidiaries,
including through mergers or consolidations and including any related
financing transactions and including the Merger as an acquisition by the
Company, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to
have occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income, (ii) 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, shall be
excluded,
7
and (iii) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges will not be obligations of
the referent Person or any of its Restricted Subsidiaries following the
Calculation Date.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"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 on the date hereof.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.07(b)(iv),
2.07(d)(ii) or 2.07(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.07(g)(ii), 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 for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"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, letters of
credit and reimbursement agreements in respect thereof), of all or any part
of any Indebtedness.
"GUARANTOR" means each of (i) Axiohm IPB, Inc., Stadia Colorado
Corp. and Cognitive Solutions, Inc. and (ii) any other subsidiary that
executes a Subsidiary Guarantee in accordance with the provisions of this
Indenture, and their respective successors and assigns.
"GUARANTOR SENIOR DEBT" means with respect to each Guarantor (i)
all Indebtedness of such Guarantor outstanding under the New Credit Facility
permitted under the covenant described above under Section 4.09 hereof, (ii)
any other Indebtedness permitted to be incurred by such Guarantor under the
terms of this Indenture, unless the instrument under which such Indebtedness
is incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Notes, and (iii) all Obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing,
Guarantor Senior Debt will not include (w) any liability for federal, state,
local or other taxes owed or owing by the Company, (x) any Indebtedness of
the Guarantor to the Company or other Affiliates, (y) any trade payables, or
(z) any Indebtedness of the type described in clause (ii), or any Obligations
with respect thereto, that is incurred in violation of this Indenture;
PROVIDED, THAT this clause (z) shall not be read to negate the requirement in
clause (i) in the preceding sentence that Indebtedness outstanding under the
New
8
Credit Facility be permitted under Section 4.09 hereof, to qualify as
Guarantor Senior Debt.
"HEDGING OBLIGATIONS" means, with respect to any Person, the net
payment Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii)
other agreements or arrangements in the ordinary course of business designed
to protect such Person against fluctuations in commodity prices, interest
rates or currency exchange rates.
"HOLDER" means a Person in whose name a Note is registered.
"IAI GLOBAL NOTE" means the global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, as well
as all Indebtedness (of the types described above) of others secured by a
Lien on any asset of such Person (whether or not such Indebtedness is assumed
by such Person) and, to the extent not otherwise included, the Guarantee by
such Person of any Indebtedness of any other Person. The amount of any
Indebtedness outstanding as of any date shall be (i) the accreted value
thereof in the case of any Indebtedness that does not require current
payments of interest and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"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 PURCHASER" means ▇▇▇▇▇▇ Brothers Inc.
"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.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness), advances or capital
contributions (excluding commission, travel and entertainment, relocation,
and similar advances to officers and employees made in the ordinary
9
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 of its Restricted Subsidiaries
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 direct or indirect
Restricted Subsidiary of the Company, the Company or such Restricted
Subsidiary, as the case may be, shall 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 the 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 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 nature thereof, any option or other agreement to
sell or give a security interest in any asset and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"MERGER AGREEMENT" means the Agreement and Plan of Merger, dated as
of July 14, 1997 among DH Technology, Inc., Axiohm S.A. and AX Acquisition
Corporation, as in effect on the date hereof.
"NET CASH PROCEEDS" means the aggregate cash proceeds received from
any Capital Market Transaction, in each case net of (i) all commissions
(including any underwriter's discounts); (ii) other ordinary and reasonable
fees and expenses (including legal fees and expenses) incurred as a
consequence of such Capital Market Transaction and (iii) in the case of a
Capital Market Transaction of the nature described in clause (ii) of the
definition thereof, any required repayment of Senior Debt that is actually
made with such proceeds.
"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, excluding, however, (i)
any gain (but not loss), together with any related provision for
10
taxes on such gain (but not loss), realized in connection with (a) any Asset
Sale (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries and (ii)
any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but
not loss).
"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 non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting, investment banking and brokers fees and sales commissions)
and any relocation expenses incurred as a result thereof, taxes paid or
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), and any reserve for
adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP.
"NEW CREDIT FACILITY" means the Credit Agreement, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time.
"NEW SENIOR SUBORDINATED NOTES" means the Company's 9 3/4% New
Senior Subordinated Notes due 2007 to be issued pursuant to this Indenture
(i) in the Exchange Offer or (ii) upon the request of any holder of Senior
Subordinated Notes covered by a Shelf Registration Statement, in exchange for
such Senior Subordinated Notes.
"NON-RECOURSE DEBT" means Indebtedness (i) 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; (ii) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of
the Company or any of its Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and (iii) as to which the lenders have
been notified in writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries; PROVIDED,
HOWEVER, that Indebtedness that would otherwise be Non-Recourse Debt but for
the reason that the Company or a Restricted Subsidiary may be directly or
indirectly liable as a guarantor, such Indebtedness will be considered
Non-Recourse Debt if the guarantee of such Indebtedness was permitted at the
time of its incurrence by Sections 4.07 and 4.09 hereof.
"NON-U.S. PERSON" means a person who is not a U.S. Person.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to
the Notes in global
11
form, or any successor entity thereto.
"NOTES" means the Senior Subordinated Notes and the New Senior
Subordinated Notes.
"OBLIGATIONS" means any principal, premium, if any, interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or its Subsidiaries
whether or not a claim for post-filing interest is allowed in such
proceeding), penalties, fees, charges, expenses, indemnifications,
reimbursement obligations, damages (including Liquidated Damages), guarantees
and other liabilities or amounts payable under the documentation governing
any Indebtedness or in respect thereof.
"OFFERING" means the Offering of the Senior Subordinated Notes by
the Company.
"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 Vice-President or any Assistant
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 DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, respectively (and,
with respect to DTC, shall include Euroclear and Cedel).
"PARTICIPATING BROKER-DEALER" has the meaning set forth in the
Registration Rights Agreement
"PERMITTED BUSINESS" means (i) the lines of business conducted by
the Company and its Subsidiaries on the date hereof or to which the Company's
or its Subsidiaries' technology is applicable; (ii) the design, manufacture
and sale of input or output devices (including printers) or other devices
related to, involved with or used in the processing of commercial, retail,
point-of-sale, industrial or financial transactions or to bar coding or item
identification; and (iii) any business reasonably related or incidental
thereto or which is an extension thereof, including, without limitation, the
design and sale of ancillary software, electronic components, the sale of
consumable products, or the provision of related services.
"PERMITTED INVESTMENTS" means (i) any Investment in the Company or
in a Guarantor; (ii) any Investment in Cash Equivalents or deposit accounts
maintained in the ordinary course of business; (iii) any Investment by the
Company or any Restricted Subsidiary of the Company, if as
12
a result of such Investment (a) such Person becomes a Guarantor 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 Guarantor; (iv) 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; (v) any acquisition of assets solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company; (vi) any Investment received involuntarily; (vii) any
Investment received in connection with or as a result of a bankruptcy,
workout or reorganization of any Person; (viii) advances and extensions of
credit in the nature of accounts receivable arising from the sale or lease of
goods or services or the licensing of property in the ordinary course of
business; (ix) other Investments by the Company or any Restricted Subsidiary
in any Person having an aggregate fair market value (measured as of the date
each such Investment is made and without giving effect to subsequent changes
in value), when taken together with all other Investments made pursuant to
this clause (ix) that are at the time outstanding (net of returns of capital,
dividends paid on Investments and repurchases of Investments), not to exceed
$5.0 million; (x) Investments in the form of intercompany Indebtedness or
Guarantees of Indebtedness permitted under clauses (vi), (vii) and (xi) of
Section 4.09 hereof; (xi) Investments arising in connection with Hedging
Obligations that are incurred in the ordinary course of business for the
purpose of fixing or hedging currency, commodity or interest rate risk
(including with respect to any floating rate Indebtedness that is permitted
by the terms of this Indenture to be outstanding) in connection with the
conduct of the business of the Company and its Subsidiaries and not for
speculative purposes; and (xii) any Investment existing on the date hereof
and any amendment, modification, restatement, supplement, extension, renewal,
refunding, replacement, refinancing, in whole or in part, thereof.
"PERMITTED LIENS" means (i) Liens securing Senior Debt or Guarantor
Senior Debt of the Company or its Restricted Subsidiaries; (ii) Liens
securing Indebtedness that is pari passu in right of payment with the Notes,
provided that the Notes are equally and ratably secured; (iii) Liens existing
on the date hereof; (iv) Liens on property of a Person existing at the time
such Person or such Person's parent corporation becomes a Subsidiary of the
Company or any Subsidiary of the Company; PROVIDED THAT such Liens were in
existence prior to the contemplation of such transaction and do not extend to
any assets other than those of such Person; (v) Liens on property existing at
the time of acquisition thereof by the Company or any Subsidiary of the
Company, PROVIDED THAT such Liens were in existence prior to the
contemplation of such acquisition and extend only to the property so acquired
and the proceeds thereof; (vi) Liens to secure any Permitted Refinancing
Indebtedness incurred to refinance any Indebtedness secured by any Lien
referred to in the foregoing clauses (i) through (v), PROVIDED, HOWEVER, that
such new Lien shall be limited to all or part of the same property that
secured the original Lien (PROVIDED THAT such Liens may extend to
after-acquired property, including any assets or Capital Stock of any
subsequently formed or acquired Subsidiary, if such original Lien included
such property or assets as collateral) and the Indebtedness secured by such
Lien at such time is not increased to any amount greater than permitted under
clauses (ii), (iii) and (xiv) of Section 4.09 hereof; or, in the case of
other Senior Debt, or, in the case of other Indebtedness, the outstanding
principal amount or, if greater, committed amount of the Indebtedness
described under clauses (i) through (v), as the case may be, at the time the
original Lien became a Permitted Lien; (vii) Liens in favor
13
of the Company or any Guarantor; (viii) Liens incurred in the ordinary course
of business of the Company or any Restricted Subsidiary with respect to
obligations that do not exceed $5.0 million in the aggregate at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially
detract from the value of the property or materially impair the use thereof
in the operation of business by the Company or such Restricted Subsidiary;
(ix) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds, deposits to secure the performance of bids,
trade contracts, government contracts, leases or licenses or other
obligations of a like nature incurred in the ordinary course of business
(including, without limitation, landlord Liens on leased properties); (x)
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 prosecuted, PROVIDED THAT any
reserve or other appropriate provision as shall be required to conform with
GAAP shall have been made therefor; (xi) Liens to secure Indebtedness
(including Capital Lease Obligations) permitted by clause (xii) of the second
paragraph of Section 4.09 hereof covering only the assets acquired with such
Indebtedness, together with any additions and accessions thereto and
replacements, substitutions and proceeds (including insurance proceeds)
thereof; (xii) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary course
of business in respect of obligations not overdue for a period in excess of
60 days or which are being contested in good faith by appropriate proceedings
promptly instituted and diligently prosecuted; PROVIDED, that any reserve or
other appropriate provision as shall be required to conform with GAAP shall
have been made therefor; (xiii) easements, rights-of-way, zoning and similar
restrictions and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of business,
which do not in any case materially detract from the value of the property
subject thereto or do not interfere with or adversely affect in any material
respect the ordinary conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole; (xiv) Liens in favor of customs and
revenue authorities to secure payment of customs duties in connection with
the importation of goods in the ordinary course of business and other similar
Liens arising in the ordinary course of business; (xv) leases or subleases
granted to third Persons not interfering with the ordinary course of business
of the Company or its Restricted Subsidiaries; (xvi) Liens (other than any
Lien imposed by ERISA or any rule or regulation promulgated thereunder)
incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance, and other types of social
security; (xvii) deposits made in the ordinary course of business to secure
liability to insurance carriers, and Liens on the proceeds of insurance
granted to insurance carriers solely to secure the payment of financed
premiums; (xviii) any attachment or judgment Lien not constituting an Event
of Default under clause (i) of Section 6.01 hereof; (xix) any interest or
title of a lessor or sublessor under any operating lease; (xx) Liens arising
by virtue of any common law, statutory or contractual provision relating to
bankers' liens, rights of set-off or similar rights and remedies as to
deposit or securities accounts maintained in the ordinary course of business;
(xxi) Liens in favor of a trustee under any indenture securing amounts due to
the trustee in connection with its services under such indenture; and (xxii)
Liens under licensing agreements for use of intellectual property entered
into in the ordinary course of business.
14
"PERMITTED PROCEEDS" means (i) any Net Cash Proceeds from a Capital
Market Transaction and (ii) the proceeds from any trust created as described
under Article VIII hereof PROVIDED THAT such trust at the time of its
creation does not violate the New Credit Facility.
"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; PROVIDED THAT: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus accrued and
unpaid interest on, any other Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith, including any premiums on principal) except
in the case of revolving indebtedness under clause (iii) of Section 4.09
hereof may be refinanced up to the limitations described in such clause
(iii); (ii) such Permitted Refinancing Indebtedness has a final maturity date
later 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; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to any
other Indebtedness, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of the Indebtedness
extended, refinanced, renewed, replaced, defeased or refunded, and is
subordinated in right of payment to, or is ranked in right of payment with
respect to, the Notes 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 (iv) such
Indebtedness is incurred either by the Company or a 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, limited liability company,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"PRINCIPAL" means each of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ Gibier or ▇▇▇▇▇▇▇
▇▇▇▇▇.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.07(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"PUBLIC EQUITY OFFERING" means any underwritten primary public
offering of the Common Stock or other Voting Stock of the Company, pursuant
to an effective registration statement (other than a registration statement
on Form ▇-▇, ▇▇▇▇ ▇-▇, or any successor or similar form) under the Securities
Act.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of
15
October 2, 1997, by and 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.
"REGULATION S" means Regulation S promulgated under the Securities
Act.
"REGULATION S GLOBAL NOTE" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of and registered in the
name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule
903 of Regulation S.
"RELATED PARTY" means, with respect to any Principal, (i) any
spouse or immediate family member (in the case of an individual) of such
Principal or (ii) a Person, the beneficiaries, stockholders, partners,
owners, members or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons
referred to in the immediately preceding clause (i).
"REPRESENTATIVE" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.
"RESPONSIBLE OFFICER" means when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee including
any vice president, assistant vice president, secretary, assistant secretary,
treasurer, assistant treasurer, trust officer or any other officer of the
Trustee who (a) customarily performs functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of such person's knowledge of
and familiarity with the particular subject and (b) who shall have direct
responsibility for the administration of this Indenture.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PERIOD" means the 40-day restricted period as defined
in Regulation S.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary; provided that, on the
Effective Date of this Indenture, all Subsidiaries of the Company shall be
Restricted Subsidiaries of the Company.
"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.
16
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" means (i) all Indebtedness outstanding under the New
Credit Facility permitted under the covenant described above under Section
4.09 hereof, (ii) any other Indebtedness permitted to be incurred by the
Company under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity with
or subordinated in right of payment to the Notes, and (iii) all Obligations
with respect to the foregoing. Notwithstanding anything to the contrary in
the foregoing, Senior Debt will not include (w) any liability for federal,
state, local or other taxes owed or owing by the Company, (x) any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates,
(y) any trade payables, or (z) any Indebtedness of the type described in
clause (ii), or any Obligations with respect thereto, that is incurred in
violation of this Indenture; PROVIDED, THAT this clause (z) shall not be read
to negate the requirement in clause (i) in the preceding sentence that
Indebtedness outstanding under the New Credit Facility be permitted under
Section 4.09 hereof, to qualify as Senior Debt.
"SENIOR SUBORDINATED NOTES" means Notes evidenced by Restricted
Global Notes or Restricted Definitive Notes.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the 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 hereof.
"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.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) 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 such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"SUBSIDIARY GUARANTEE" means any guarantee of the Notes by a
Guarantor.
17
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that do not
bear and are not required to bear the Private Placement Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note in the
form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the
name of the Depositary, representing a series of Notes that do not bear the
Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated
by a resolution of the Board of Directors as an Unrestricted Subsidiary; but
only to the extent that such Subsidiary: (i) has no Indebtedness other than
Non-Recourse Debt; (ii) 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; (iii) 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; and (iv) has not
guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries;
"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 to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment, by (ii)
the then outstanding principal amount of such Indebtedness.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
18
"Affiliate Transaction" . . . . . . . . . . . . . 4.11
"Asset Sale Offer". . . . . . . . . . . . . . . . 3.09
"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
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 means the Company and any successor obligor
upon the Notes.
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.
19
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE II.
THE NOTES
SECTION 2.01. . . . . . . . . . . . . . . . . . . . . FORM
AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof. The aggregate principal amount of Notes outstanding shall
not exceed $120 million plus the aggregate principal amount of any Note replaced
pursuant to Section 2.07 that is held by a bona fide purchaser.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend and
the "Schedule of Exchanges in the Global Note" attached thereto). Notes issued
in definitive form shall be substantially in the form of Exhibit A attached
hereto (but without the Global Note Legend and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect
20
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Note Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) EUROCLEAR AND CEDEL PROCEDURES APPLICABLE. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel
Bank" and "Customer Handbook" of Cedel Bank shall be applicable to transfers
of beneficial interests in Global Notes that are held by Participants through
Euroclear or Cedel Bank.
SECTION 2.02. . . . . . . . . . . . . . . . . . . . .
EXECUTION AND AUTHENTICATION.
An Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer, authenticate Notes for original issue up to the aggregate principal
amount stated in paragraph 4 of the Notes. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided
in Section 2.07 hereof.
The 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 or
an Affiliate of the Company.
SECTION 2.03. . . . . . . . . . . . . . . . . . . . .
REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company
21
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. . . . . . . . . . . . . . . . . . . . .
PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall 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 Liquidated Damages, 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) shall have no further liability for the money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying
Agent. Upon any bankruptcy or reorganization proceeding relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. . . . . . . . . . . . . . . . . . . . .
HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
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. All Global
Notes will be exchanged by the Company for Definitive Notes if (i) the
Company delivers to the Trustee written notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer
a clearing agency registered
22
under the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 90 days after the date of such notice from
the Depositary or (ii) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for Definitive
Notes and delivers a written notice to such effect to the Trustee or (iii)
there shall have occurred and be continuing a Default or an Event of Default
with respect to the Notes. Upon the occurrence of either of the preceding
events in (i), (ii) or (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
2.11 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to Section 2.07 or
2.11 hereof, shall be authenticated and delivered in the form of, and shall
be, a Global Note. A Global Note may not be exchanged for another 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
shall be effected through the Depositary, in accordance with the provisions
of this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well
as one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest
in the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; PROVIDED,
HOWEVER, that prior to the expiration of the Restricted Period,
transfers of beneficial interests in the Regulation S Global Note may
not be made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Unrestricted
Global Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the Registrar
either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such
increase or (B)
23
(1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in
(1) above. 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)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Notes contained in this
Indenture 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.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL
NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion Counsel required by item (3)
thereof, if applicable.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED
GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE. A
beneficial interest in any Restricted Global Note may be exchanged by
any holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the exchange
or transfer complies with the requirements of Section 2.06(b)(ii) above
and:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer, is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the
24
Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
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
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the Securities
Act.
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.
(i) RESTRICTED BENEFICIAL INTERESTS TO RESTRICTED DEFINITIVE
NOTES. 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:
25
(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 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule
904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if applicable;
(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 Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the
Private Placement Legend and shall be subject to all restrictions on transfer
contained therein.
26
(ii) Notwithstanding 2.06(c)(i) hereof, a holder of a
beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer
such beneficial interest to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of such beneficial interest, in the case of an exchange, or the transferee,
in the case of a transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such 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;
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a Definitive Note that does not
bear the Private Placement Legend, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;
(3) and in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company, to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act.
(iii) If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the 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 pursuant to this Section 2.06(c)(iii) shall be
27
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 Definitive
Note issued in exchange for a beneficial interest pursuant to this section
2.06(c)(iii) shall not bear the Private Placement Legend. A beneficial
interest in an Unrestricted Global Note cannot be exchanged for a
Definitive Note bearing the Private Placement Legend or transferred to a
Person who takes delivery thereof in the form of a Definitive Note bearing
the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such 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 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such 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) thereof, if applicable;
(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
28
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 shall 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 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.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
is not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such 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
(2) if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests of if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to
29
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest in an Unrestricted Global Note is effected 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 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 shall register the
transfer or exchange of Definitive Notes. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized in writing. In addition, the
requesting Holder shall provide any additional certifications, documents and
information, as applicable, required pursuant to the following provisions of
this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and
registered in the name of Persons who take delivery thereof if the
Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904,
then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver (x) a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable.
30
(ii) Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
is not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications
in item (1)(a) thereof;
(2) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;
and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the Securities
Act, that the restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act, and such Restricted Definitive Note is being exchanged or
transferred in compliance with any applicable blue sky securities laws of
any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request for such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by
31
Persons that are not (x) broker-dealers, (y) Persons participating in the
distribution of the Exchange Notes or (z) Persons who are affiliates (as
defined in Rule 144) of the Company and accepted for exchange in the Exchange
Offer and (ii) Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in
the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee
shall cause the aggregate principal amount of the applicable Restricted
Global Notes to be reduced accordingly, and the Company shall execute and the
Trustee shall authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in substantially the
following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE THIRD SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"),
OR (C) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS
THAN $250,000, AN
32
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT (F) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED ON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes issued
in exchange therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE 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 AXIOHM TRANSACTION
SOLUTIONS, INC."
(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 shall
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 shall be reduced accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the
33
direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other
than any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10,
4.15 and 9.05 hereof).
(iii) The Registrar shall 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.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing 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.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange 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 so 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.
(vi) 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.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in
34
accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by an Officer of the Company, shall 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
reasonable expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes.
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.
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 bona fide 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 shall
be deemed to be no longer outstanding and shall 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
35
with the Company, shall be considered as though not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes that a Trustee
actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by an Officer of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes shall 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 shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return such
canceled Notes to the Company (subject to the record retention requirement of
the Exchange Act). 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 shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall 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 shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall 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) shall 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. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; PROVIDED that any such notice may state
that no representation is made as to the correctness or accuracy of such CUSIP
numbers either as printed on the Notes or as contained
36
in such notice and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any change in any "CUSIP" numbers.
ARTICLE III.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or by such other method the Trustee shall deem fair and
appropriate; PROVIDED THAT no Notes of $1,000 or less shall be redeemed in part.
In the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall 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, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall 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.
The notice shall identify the Notes to be redeemed (including CUSIP numbers) and
shall state:
(a) the redemption date;
37
(b) the redemption price;
(c) 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 thereof shall be issued in the name of the Holder thereof
upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes or portions thereof called for redemption ceases to
accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) 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 shall give the notice of redemption
in the Company's name and at its expense; PROVIDED, HOWEVER, that the Company
shall have 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 PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall 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 price of, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the
38
related interest payment date, then any accrued and unpaid 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 shall not be
so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case
at the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The optional redemption provisions shall be as stated in the
Definitive Notes, Restricted Definitive Notes and the Global Notes issued
pursuant to this Indenture, substantially in the form of Annex A hereto. Any
redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as described in Sections 4.10 and 4.15 hereof, the Company shall not
be 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 shall be
required to commence an offer to all Holders to purchase Notes (an "ASSET SALE
OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "OFFER PERIOD"). No later than five
Business Days after the termination of the Offer Period (the "PURCHASE DATE"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall 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 shall
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 shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
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Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) 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 shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall 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;
(g) that Holders shall 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;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall 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 shall, 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
40
tendered, all Notes tendered, and shall 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, shall
promptly (but in any case not later than five days after the Purchase Date)
mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon written request from the Company shall 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 shall
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 IV.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary 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 then due. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the 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 shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee
41
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 shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall give prompt written
notice to the 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.
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 shall furnish to the Holders
of Notes (i) 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;" that describes
the financial condition and results of operations of the Company and its
consolidated Subsidiaries (showing in reasonable detail, either on the face of
the financial statements or in the footnotes thereto and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) 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. In
addition, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information and reports with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA Section 314(a).
(b) For so long as any Notes remain outstanding, the Company shall furnish
to the Holders 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.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
42
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to a Responsible Officer of 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 shall have 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 Four or Article Five 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) The Company shall, so long as any of the Notes are outstanding,
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 shall pay, and shall 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 is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of,
43
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 (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been
enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any 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
to the direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company); (ii) 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; (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated in right of payment to the Notes, except a
payment of interest or principal at Stated Maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "RESTRICTED PAYMENTS"), unless, at
the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) 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 the first paragraph under Section 4.09(a)
hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the date hereof (excluding Restricted Payments permitted by clauses (ii),
(iii) and (vi) (to the extent such distribution is paid to the Company or a
Restricted Subsidiary) of the next succeeding paragraph), is less than the sum
of (i) 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 hereof to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are 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 (ii) 100% of the aggregate net
cash proceeds received by the Company from the issue or sale since the date
hereof of Equity Interests of the Company (other than Disqualified
44
Stock), or of Disqualified Stock or debt securities of the Company that have
been converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of
the Company and other than Disqualified Stock or convertible debt securities
that have been converted into Disqualified Stock), plus (iii) to the extent
that any Restricted Investment that was made after the date hereof is sold
for cash or otherwise liquidated or repaid for cash, the lesser of (A) the
cash return of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (B) the initial amount of such Restricted
Investment.
The foregoing provisions will not prohibit (i) the payment of any
dividend or the making of any payment or distribution within 60 days after
the date of declaration thereof, if at said date of declaration such payment
or distribution would have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other acquisition
of any Indebtedness subordinated in right of payment to the Notes or Equity
Interests of the Company in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified
Stock); PROVIDED THAT the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (c) (ii) of the preceding
paragraph; (iii) the defeasance, redemption, repurchase or other acquisition
of Indebtedness subordinated in right of payment to the Notes with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv)
the repurchase, redemption or other acquisition or retirement for value of
any Equity Interests of the Company or any Restricted Subsidiary held by any
employee or director of the Company (or any of its Subsidiaries), other than
a Principal, or any former employee or director of the Company (or any of its
Subsidiaries) issued pursuant to any management equity plan or stock option
plan or any other management or employee benefit plan or agreement; PROVIDED,
HOWEVER, that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests pursuant to this clause (iv) shall not
exceed $1.0 million in any twelve-month period and shall not exceed $3.0
million in the aggregate; (v) repurchases of Equity Interests deemed to occur
upon the cashless exercise of stock options; (vi) the payment of any dividend
by a Subsidiary of the Company to the holders of its Equity Interests on a
pro rata basis to all holders of Equity Interests, including the Company or
any Restricted Subsidiary of the Company; and (vii) payments in accordance
with the terms of the Merger Agreement; PROVIDED THAT with respect to clauses
(ii), (iii), (iv) and (v) above, no Default or Event of Default shall have
occurred and be continuing immediately after such transaction.
The amount of all Restricted Payments (other than cash) shall 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
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined by the
Board of Directors whose resolution with respect thereto shall be delivered
to the Trustee, such determination to be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if such fair market value exceeds $1.0 million. Not later than the
date of making any Restricted Payment, the Company
45
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, together with a
copy of any fairness opinion or appraisal required by this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any indebtedness owed to the Company
or any of its Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of
(a) Existing Indebtedness as in effect on the date hereof, (b) the New Credit
Facility as in effect as of the date hereof, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, PROVIDED THAT such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the New
Credit Facility as in effect on the date hereof, (c) this Indenture and the
Notes, (d) applicable law, (e) 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 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 such Person's Subsidiaries, or the property or assets of the Person or
such Person's Subsidiaries, so acquired, PROVIDED THAT, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture
to be incurred, (f) by reason of customary non-assignment, subletting and
restriction on transfer provisions or restrictions on cash or other deposits
or net worth under leases, licenses or other contracts entered into in the
ordinary course of business, PROVIDED THAT such restrictions are limited to
the property or assets that are the subject of such lease, license or
contract and not in connection with a financing transaction, (g) any
restriction on cash deposits by reason of customary security deposits entered
into in the ordinary course of business, (h) any restriction with respect to
a Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary pending the closing of such sale or disposition, (i) purchase
money obligations for property acquired in the ordinary course of business
that impose restrictions of the nature described in clause (iii) above on the
property so acquired, together with any accessions and additions thereto,
replacements and substitutions therefor and the proceeds (including insurance
proceeds thereof), (j) Indebtedness of Guarantors, PROVIDED THAT such
Indebtedness was permitted to be incurred pursuant to this Indenture, or (k)
Permitted Refinancing Indebtedness, PROVIDED THAT the restrictions contained
in the agreements governing such Permitted Refinancing Indebtedness are no
more restrictive than those contained
46
in the agreements governing the Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED
STOCK.
(a) The Company shall not, and shall 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 that 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) or issue
shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least 2.00 to 1.00, 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 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) shall not apply to the
incurrence of any of the following items of Indebtedness (collectively,
"PERMITTED DEBT"):
(i) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the Subsidiary Guarantees;
(ii) the incurrence by the Company of term Indebtedness under the
New Credit Facility and related Guarantees under the New Credit
Facility; PROVIDED that the aggregate principal amount of all term
Indebtedness outstanding under the New Credit Facility after giving
effect to such incurrence, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (ii) does not exceed an
amount equal to $50.0 million less the aggregate amount of all
repayments, optional or mandatory (other than repayments in connection
with the incurrence of Permitted Refinancing Indebtedness), of the
principal of any term Indebtedness under the New Credit Facility that
have been made since the date hereof;
(iii) the incurrence by the Company of revolving credit
Indebtedness under the New Credit Facility, letters of credit (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) and related Guarantees under the New Credit
Facility; PROVIDED that the aggregate principal amount of all revolving
Indebtedness (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) outstanding under the New Credit
Facility after giving effect to such incurrence,
47
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this
clause (iii), does not exceed $35.0 million, less the amount outstanding
under clause (xiv) below and the aggregate amount of Asset Sale proceeds
applied to repay and permanently reduce the availability of revolving
credit Indebtedness under the New Credit Facility pursuant to Section
4.10;
(iv) the incurrence by the Company and its Restricted Subsidiaries
of the Existing Indebtedness;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the normal
course of business for the purpose of fixing or hedging currency,
commodity or interest rate risk (including with respect to any floating
rate Indebtedness that is permitted by the terms of this Indenture to be
outstanding) in connection with the conduct of their respective
businesses and not for speculative purposes;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between the Company and a
Restricted Subsidiary or between one Restricted Subsidiary and another;
PROVIDED, HOWEVER, that (a) if the Company is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated in liquidation
to the prior payment in full in cash of all Obligations with respect to
the Notes and this Indenture; (b) if a Restricted Subsidiary, that is
not a Guarantor, is the obligor on such Indebtedness, such Indebtedness
owning to the Company or any Guarantor, together with all intercompany
Indebtedness owing from all Restricted Subsidiaries that are not
Guarantors to the Company or a Guarantor, does not exceed $5.0 million
in aggregate principal amount at any time outstanding; and (c) (A) any
subsequent event or 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 (B) any sale or
other transfer of any such Indebtedness to a Person that is not either
the Company or a Guarantor shall 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
(vi);
(vii) the Guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09; PROVIDED, that the Guarantee of any Indebtedness of a Restricted
Subsidiary that is not or is no longer a Guarantor shall be deemed a
Restricted Investment at the time of such Guarantee or at the time such
Restricted Subsidiary's Guarantor status terminates in an amount equal
to the maximum principal amount so guaranteed, for so long as, and to
the extent that, such Guarantee remains outstanding;
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of bid, performance, or advance
payment bonds and appeal and surety bonds;
48
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund or replace Indebtedness
that was permitted by this Indenture to be incurred;
(x) the incurrence by the Company or any of the Guarantors of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
other Indebtedness incurred pursuant this clause (x), not to exceed the
difference of (a) $15.0 million less (b) the outstanding aggregate
principal amount incurred pursuant to clause (xi) below;
(xi) the incurrence by Restricted Subsidiaries that are not
Guarantors of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any other Indebtedness incurred pursuant to this clause (xi) not
to exceed $5.0 million;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment 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 Indebtedness
incurred pursuant to this clause (xii), not to exceed $5.0 million at
any time outstanding; PROVIDED, HOWEVER, that the Company and its
Restricted Subsidiaries may incur any amount of additional Indebtedness
of the type specified above in this clause (xii) so long as the sole
recourse of the obligee with respect to such Indebtedness is to the
property financed and any accessions and additions thereto, replacements
and substitutions therefor and the proceeds (including insurance
proceeds thereof);
(xiii) the issuance by a Restricted Subsidiary that is a Guarantor
of preferred stock to the Company or to any of its Restricted
Subsidiaries that are Guarantors; PROVIDED, HOWEVER, that any subsequent
event or issuance or transfer of any Equity Interests that results in
the owner of such preferred stock ceasing to be the Company or any of
its Restricted Subsidiaries that are Guarantors or any subsequent
transfer of such preferred stock to a Person, other than the Company or
one of its Restricted Subsidiaries that are Guarantors, shall be deemed
to be an issuance of preferred stock by such Subsidiary that was not
permitted by this clause (xiii);
(xiv) the incurrence by Foreign Subsidiaries that are not holding
companies or by Axiohm S.A. of Indebtedness under the New Credit
Facility or any Permitted Refinancing Indebtedness; PROVIDED, HOWEVER,
that the aggregate principal amount of outstanding Indebtedness incurred
pursuant to this clause (xiv) does not exceed $15.0
49
million at any time; and PROVIDED, FURTHER, that out of the total
Indebtedness permitted pursuant to this clause (xiv), no more than $5.0
million of Indebtedness can be incurred by any such Foreign Subsidiary
that is not Axiohm S.A.; and
(xv) the incurrence by a Restricted Subsidiary that is a Foreign
Subsidiary and is not a Guarantor of Indebtedness in an amount not to
exceed the Borrowing Base of such Restricted Subsidiary; PROVIDED, that
none of the Company or any other such Restricted Subsidiary shall be
obligated, directly or indirectly, to pay principal, premium, interest
or other amounts thereon or in respect thereof (including by way of net
worth requirements, equity keepwells etc.).
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xv) above or
is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company shall, in its sole discretion, classify such item of
Indebtedness in any manner that complies with this Section 4.09 and such item
of Indebtedness will be treated as having been incurred pursuant to only one
of such clauses or pursuant to the first paragraph hereof. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an incurrence of
Indebtedness for purposes of this Section 4.09.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale or issue Equity Interests in any of
its Restricted Subsidiaries or sell Equity Interests in any of its Restricted
Subsidiaries, unless (i) the Company (or the Restricted Subsidiary, as the
case may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value (which, in the case of any Asset Sale
involving shares or assets having a fair market value in excess of $2.0
million, shall be evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) at least
85% of the consideration therefor received by the Company or such Restricted
Subsidiary is in the form of cash; PROVIDED THAT the amount of (x) 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
contingent liabilities and liabilities that are by their terms subordinated
to the Notes or any Guarantee thereof) that are assumed by the transferee of
any such assets such that the Company or such Restricted Subsidiary has no
further liability shall be deemed to be cash for purposes of this provision,
(y) any securities, notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are immediately
converted by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received), shall be deemed to be cash for purposes of this
provision and (z) the licensing of intellectual property which does not
constitute the transfer of substantially all of the economic value of such
property and does not limit the Company's use of such intellectual property
for Permitted Businesses shall be deemed to comply with clause (ii) above if
the payments thereon are in cash over time.
50
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to repay
term Indebtedness under the New Credit Facility or other Senior Debt, (b) to
repay and permanently reduce the availability of revolving credit
Indebtedness under the New Credit Facility or (c) to the acquisition of a
controlling interest in another business or of all or substantially all of
the assets of another business, or to the making of a capital expenditure or
the acquisition of other long-term assets, in each case in Permitted
Businesses. Pending the final application of any such Net Proceeds, the
Company may temporarily reduce revolving Indebtedness or otherwise invest
such 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 first sentence of this paragraph will be deemed to constitute "EXCESS
PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company shall make an Asset Sale Offer pursuant to Section 3.09 hereof to
purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds, at an offer price in cash in an amount equal to 100% of
the aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase, in accordance
with the procedures set forth in Section 4.09 hereof. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company may use any remaining Excess Proceeds
for general corporate purposes. Upon completion of such offer to purchase,
the amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of their respective 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 of the foregoing, an "AFFILIATE
TRANSACTION"), unless (i) such 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 (ii) 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 $2.5 million, a resolution of its Board of Directors set forth
in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $10.0
million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an investment banking
firm (or, if an investment banking firm is generally not qualified to give
such an opinion, by an appraisal firm) of national standing; PROVIDED THAT
none of the following shall be deemed to be Affiliate Transactions: (1) any
employment agreement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business that has been approved by a
majority of the disinterested members of the Board of Directors; PROVIDED
that any such employment agreement providing for aggregate remuneration of
under $200,000 shall not require any such Board of Directors approval;
51
(2) transactions between or among the Company and/or its Restricted
Subsidiaries that are on fair and reasonable terms; (3) Restricted Payments
that are permitted by Section 4.07; (4) fees and compensation paid to members
of the Board of Directors of the Company and of its Subsidiaries in their
capacity as such, to the extent such fees and compensation are reasonable and
customary; (5) advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business and consistent with past practices; (6) maintenance in the ordinary
course of business of customary benefit programs or arrangements for
employees, officers or directors, including vacation plans, health and life
insurance plans, deferred compensation plans and retirement or savings plans
and similar plans; (7) fees and compensation paid to, and indemnity provided
on behalf of, officers, directors or employees of the Company or any of its
Restricted Subsidiaries, to the extent such fees and compensation are
reasonable and customary as determined by the Board of Directors of the
Company or of any such Restricted Subsidiary; and (8) payments in accordance
with the terms of the Merger Agreement.
SECTION 4.12. LIENS.
The Company shall not and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind securing
Indebtedness or trade payables (other than Permitted Liens) upon any of their
respective 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. LINE OF BUSINESS.
The Company shall not, and shall not permit any Restricted
Subsidiary 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 (i) its
corporate existence, and the corporate, partnership or other existence of
each of its 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 (ii) the rights (charter and statutory), licenses and
franchises of the Company and its 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
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and its Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders of the Notes.
52
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes
(the "CHANGE OF CONTROL OFFER") at an offer price in cash equal to 101% of
the aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase (the "CHANGE OF
CONTROL PAYMENT"). Within 30 days following any Change of Control, the
Company shall send by first class mail a notice to each Holder stating: (1)
the transaction or transactions that constitute a Change of Control, that the
Change of Control Offer is being made pursuant to this Section 4.15 and that
all Notes tendered shall 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 shall 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 shall cease to accrue interest after the Change of Control Payment
Date; (5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer shall 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 shall 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
shall 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
shall comply with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control. The notice shall contain all other
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Change of Control Offer. The Change of Control Offer shall
be made available to all Holders. 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 shall 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 shall be payable to Holders who tender Notes pursuant to the Change
of Control Offer. Other than as specifically provided in this Section 4.15,
any purchase pursuant to this Section 4.15 shall be made pursuant to Sections
3.01 through 3.06 hereof.
(b) On the Change of Control Payment Date, the Company shall, 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 thereof so tendered and (3) deliver or cause
53
to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered by such
Holder, if any; PROVIDED THAT each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with
the provisions of this Section 4.15, the Company shall either repay all
outstanding Senior Debt or 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. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company shall 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 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.16. NO SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, (i) the
Company shall 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 and senior in any respect in right of payment to the Notes
and (ii) no Guarantor shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to its Senior Debt and senior in any respect in right of
payment to its Subsidiary Guarantee.
SECTION 4.17. DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
Any designation of an Unrestricted Subsidiary by the Board of Directors
shall 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 terms of this Indenture governing the designation of
Unrestricted Subsidiaries and was permitted by Section 4.07 hereof. If, at
any time, any Unrestricted Subsidiary fails to meet the foregoing requirements
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall 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, the Company shall be in default
of such covenant). The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED
THAT such designation shall 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 shall only be permitted if
(i) such Indebtedness is
54
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 (ii) no Default or Event of Default would be in existence
following such designation.
SECTION 4.18. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any notes for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is
offered to be paid or is paid to all Holders of the Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
ARTICLE V.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof
or the District of Columbia; (ii) the entity or Person formed by or surviving
any such consolidation or merger (if other than the Company) or the entity or
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Notes and this Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the
case of a merger of the Company with or into a Restricted Subsidiary of the
Company, the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction 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.
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 accordance with 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
55
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 and
interest on the Notes except in the case of a sale of all of the Company's
assets that meets the requirements of Section 5.01 hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An Event of Default occurs if:
(i) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages, if any, with respect to, the Notes
(whether or not prohibited by the subordination provisions of this
Indenture);
(ii) the Company defaults in the payment when due of the principal
of or premium, if any, on the Notes (whether or not prohibited by the
subordination provisions of this Indenture) when the same becomes due and
payable at maturity upon redemption (including in connection with an offer to
purchase) or otherwise;
(iii) the Company fails to comply with the provisions of Section
5.01;
(iv) the Company or any of its Subsidiaries fails for 30 days to
comply with the provisions of Sections 4.07, 4.09, 4.10 or 4.15;
(v) the Company fails for 60 days after notice to comply with any
of its other agreements in this Indenture or the Notes;
(vi) 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 Subsidiaries
(or the payment of which is guaranteed by the Company or any of its
Subsidiaries), whether such Indebtedness or guarantee now exists, or is
created after the date hereof, which default (a) is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness by the
expiration of the applicable grace period, if any, provided in such
Indebtedness on the date of such default (a "PAYMENT DEFAULT") or (b) results
in the acceleration of such Indebtedness prior to its express maturity, and,
in the case of each of clauses (a) and (b) above, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates without duplication $5.0 million or
more;
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(vii) the Company or any of its Subsidiaries fails to pay final
judgments aggregating in excess of $5.0 million, which judgments are not
paid, discharged or stayed, for a period of 60 consecutive days;
(viii) except as permitted by this Indenture, any Subsidiary
Guarantee 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 authorized to act on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee;
(ix) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, 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
(x) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, 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 Subsidiaries that, taken as a
whole, 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 Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; or
(c) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
SECTION 6.02. ACCELERATION.
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If any Event of Default (other than an Event of Default specified in
clause (ix) or (x) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) 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
immediately. Notwithstanding the foregoing, if an Event of Default specified
in clause (ix) or (x) of Section 6.01 hereof with respect to the Company or
any Significant Subsidiary or any group of Subsidiaries that, taken as a
whole would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable without further action or notice. Holders of the Notes
may not enforce this Indenture or the Notes except as provided herein.
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.
In case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent
premium shall also become and be immediately due and payable, to the extent
permitted by law, anything in this Indenture or in the Notes to the contrary
notwithstanding. If an Event of Default occurs prior to October 1, 2002 by
reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on 1997 of the years
set forth below, as set forth below, expressed as percentages of principal
amount that would otherwise be due but for the provisions of this sentence,
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to
the date of payment:
YEAR PERCENTAGE
---- ----------
1997 . . . . . . . . . . . . . . . . . . 113.000%
1998 . . . . . . . . . . . . . . . . . . 111.375%
1999 . . . . . . . . . . . . . . . . . . 109.75%
2000 . . . . . . . . . . . . . . . . . . 108.125%
2001 . . . . . . . . . . . . . . . . . . 106.500%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available
58
remedy to collect the payment of principal, premium, 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 Liquidated Damages, 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:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) 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;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any, claim, loss, liability, damage or expense, including counsel to
the Trustee's reasonable fees and expenses;
59
(d) 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
(e) 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.
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 Liquidated
Damages, 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(i) or (ii) 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 for the whole amount
of principal of, premium and Liquidated Damages, 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
60
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 pursuant to this Article, it shall pay
out the money 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;
SECOND: to the holders of Senior Debt to the extent required by Article
10 or 12 hereof;
THIRD: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any
and interest, respectively;
FOURTH: without duplication, to the Holders of the Notes for any other
Obligations owing to the Holders under this Indenture and the Notes; and
FIFTH: to the Company, the Guarantors 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 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 VII.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
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(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall 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
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions whether in their original or facsimile form furnished to the
Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
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; but in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
grossly negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk
62
its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder. The Trustee shall be under no obligation to
exercise any of its rights and powers under this Indenture at the request of
any Holders, unless such Holder shall have offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
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 shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its selection and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith 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 shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall 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 shall have offered to the
Trustee reasonable security or indemnity against any and all costs, expenses
and liabilities that might be incurred by it in compliance with such request
or direction.
(g) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such
a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Notes and this Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
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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 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 shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the 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 shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not
be responsible for any statement or recital herein or any statement in the
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 shall 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, 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.
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 shall 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 shall comply with TIA Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange
on which the Notes are listed in accordance with TIA Section 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or delisted therefrom.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Company shall
64
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 shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and any predecessor against any
and all claims, losses, liabilities, damages 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 (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company 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 gross
negligence or bad faith. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel of its
selection and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture and the resignation or removal
of the Trustee.
To secure the Company's payment obligations in this Section, the Trustee
shall 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 shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(ix) or (x) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration
under any applicable Federal or State bankruptcy, solvency or otherwise
similar law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section.
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 Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the
65
Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) 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;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
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 Notes of at least 10% in principal amount of the then
outstanding Notes may at the expense of the Company petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may at the expense of the Company petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee,
PROVIDED all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement
of the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall 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 shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing
66
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 shall 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 VIII.
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 Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that the
Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes 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 shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.04 hereof, and as more fully set
forth in such Section, payments in respect of the principal of, premium, if
any, interest and Liquidated Damages, if any, on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations
in connection therewith and (d) this Article Eight. Subject to compliance
with this Article Eight, the Company may
67
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 shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13 and 4.15 hereof with respect to the outstanding
Notes on and after the date the conditions set forth below are satisfied
(hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall
not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03
hereof, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, Sections 6.01(v) through 6.01(vii) hereof shall not constitute
Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, 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, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, interest and
Liquidated Damages, if any, on the outstanding Notes on the stated maturity
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;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States 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
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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;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that, subject
to customary assumptions and exclusions, 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;
(d) 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)
or insofar as Sections 6.01(ix) or 6.01(x) hereof is concerned, at any time
in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall 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;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, subject to customary assumptions and exclusions,
after the 91st day following the deposit, the trust funds will not be subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding creditors of
the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that, subject to
customary assumptions and exclusions, there has been compliance with all
conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance.
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 shall be held in trust and applied by the Trustee, in accordance
69
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, if any, and
interest, but such money need not be segregated from other funds except to
the extent required by law.
The Company shall 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.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall 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(a) 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, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall
be paid to the Company on its request or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter,
as a secured creditor, 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, shall 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 shall 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 obligations under this
Indenture and the Notes shall 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
70
may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Note following 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
held by the Trustee or Paying Agent.
ARTICLE IX.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture, the Notes or the Subsidiary
Guarantees without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) 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;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes by a successor to the Company pursuant to Article
Five hereof;
(d) 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;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(f) to allow any Guarantor to guarantee the Notes.
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 shall join with the Company 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 shall 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 and the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding
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(including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for 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, 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 or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange
offer for Notes). In addition, any amendment to the provisions of Article 10
or 12 hereof shall require the consent of the Holders of at least 75% in
aggregate principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for Notes) if
such amendment would adversely affect the rights of Holders of the Notes. In
addition, without the consent of at least 662/3% in principal amount of the
Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for Notes), no waiver or amendment to this
Indenture may make any change in the provisions of Section 4.15 hereof that
adversely affects the rights of any Holder of 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 shall 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 shall not
be obligated to, enter into such amended or supplemental Indenture.
It shall not be 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 shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall 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, shall 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 may waive compliance in a particular instance 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):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
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(b) reduce the principal of or change the fixed maturity of any
Note or alter the provisions with respect to the redemption of the Notes
(other than provisions relating to Sections 3.09, 4.10 and 4.15 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, interest or Liquidated Damages, if any, 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);
(e) make any Note payable in money other than that stated in the
Notes;
(f) 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 premium, if any, interest or Liquidated Damages,
if any, on the Notes;
(g) waive a redemption payment with respect to any Note (other than
a payment required by Sections 4.10 or 4.15 hereof); or
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall 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.
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 the waiver, supplement
or amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
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 authenticate new Notes
that reflect the amendment, supplement or
73
waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental Indenture
until the Board of Directors approves it. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject
to Section 7.01) shall be fully protected in relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such
amended or supplemental indenture is authorized or permitted by this
Indenture.
SECTION 9.07. EXECUTION OF SUPPLEMENTAL INDENTURE.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modification
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
ARTICLE X.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that the
Obligations evidenced by the Notes shall be subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment in full in cash of all Senior Debt, whether outstanding on the date
hereof or hereafter incurred, assumed or guaranteed, and that the
subordination is for the benefit of the holders of 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:
(a) the holders of Senior Debt shall be entitled to receive
payment in full in cash of all Obligations due in respect of such Senior Debt
(including interest after the
74
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not an allowable claim) before the Holders of Notes
shall be entitled to receive any payment with respect to the Notes (provided
that Holders may receive Permitted Proceeds); and
(b) until all Obligations with respect to Senior Debt are paid in
full, in cash, any distribution to which Holders of the Notes would be
entitled but for this Article 10 (other than Permitted Proceeds as provided
in (a) above) shall be made to the holders of Senior Debt.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution to the Trustee or
any Holder of Notes or in respect of Obligations with respect to the Notes
and may not acquire from the Trustee or any Holder any securities for cash or
property (other than Permitted Proceeds) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:
(i) a default in the payment of the principal of, premium,
if any, or interest on Designated Senior Debt occurs or any other
default on Designated Senior Debt occurs and the maturity of such
Designated Senior Debt is accelerated in accordance with its terms; or
(ii) a default other than a payment default with respect to
Designated Senior Debt occurs and is continuing that then permits
holders of the Designated Senior Debt to accelerate its maturity and
the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the Representative of the holders of such Designated
Senior Debt. Not more than one Payment Blockage Notice may be given in
any consecutive 360-day period, irrespective of the number of defaults
with respect to such Designated Senior Debt during such period;
PROVIDED, that in no event may the total number of days during which
any payment blockage period or periods is in effect exceed 179 days in
the aggregate during any 360 consecutive day period. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Article 10
unless and until all scheduled payments of principal, premium, if any,
and interest on the Notes that have come due have been paid in full,
in cash. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall
be, or be made, the basis for a subsequent Payment Blockage Notice.
The Company shall resume payments on and distributions in respect of the
Notes and may acquire them upon the earliest of:
1. the date upon which the default is cured or waived by
written notice to the Trustee and the Company from the Person or Persons
who gave such Payment Blockage Notice and in the case of Designated Senior
Debt that has been accelerated, such acceleration has been rescinded;
2. in the case of a default referred to in clause (ii) above,
179 days after the date on which the applicable Payment Blockage Notice is
received, unless the
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maturity of any Designated Senior Debt has been accelerated and such
acceleration has not been rescinded; and
3. the payment in full of such Designated Senior Debt, if
this Indenture otherwise permits the payment, distribution or acquisition
at the time of such payment or acquisition.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders 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 that because of this Article 10 should
not have been made to the Trustee or such Holder, such payment shall be held
by the Trustee or such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered, upon written request, to, the holders of Senior
Debt as their interests may appear or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of all Obligations 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 such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt, and shall not be liable to any such
holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any
holders of Senior Debt shall be entitled by virtue of this Article 10, 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 shall 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 shall 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 shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes)
76
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 shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest 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 or
interest 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 shall 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.
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 shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the 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.
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Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Trustee shall 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 a Responsible Officer of the
Trustee shall have received at its Corporate Trust Office at least three
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to
violate this Article 10. Only the Company, a Representative or a holder of
Senior Debt may give the notice. Nothing in this Article 10 shall 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 a Representative of Designated Senior Debt are hereby
authorized to file an appropriate claim for and on behalf of the Holders of
the Notes.
SECTION 10.13. AMENDMENTS.
Any amendment to the provisions of this Article 10 shall require the
consent of the Holders of at least 75% in aggregate principal amount of the
Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for Notes) if such amendment would adversely
affect the rights of Holders of the Notes.
SECTION 10.14. RELIANCE BY HOLDERS OF SENIOR DEBT ON SUBORDINATION
PROVISIONS.
Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt, whether such Senior
Debt was created or acquired before or after the issuance of the Senior
Subordinated Notes, to acquire and continue to hold such Senior Debt and such
holder of Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold such Senior
Debt.
ARTICLE XI.
GUARANTEE OF THE NOTES
SECTION 11.01. SUBSIDIARY GUARANTEE.
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Subject to Section 11.06 hereof, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note
authenticated and made available for delivery by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes and the Obligations of the
Company hereunder and thereunder, that: (a) the principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal, premium, if any, (to the extent permitted by law) interest
on any interest, if any, and Liquidated Damages, if any, on the Notes, and
all other payment Obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full and performed, all in
accordance with the terms hereof and thereof; and (b) 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, subject to any
applicable grace period, whether at stated maturity, by acceleration,
redemption or otherwise. Failing payment when so 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. An Event of Default under this Indenture or the Notes shall
constitute an event of default under the Subsidiary Guarantees, and shall
entitle the Holders to accelerate the Obligations of the Guarantors hereunder
in the same manner and to the same extent as the Obligations of the Company.
The Guarantors hereby agree that their Obligations hereunder shall be
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 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 covenants that this Subsidiary Guarantee will not
be discharged except by complete performance of the Obligations contained in
the Notes and this Indenture. If any Holder or the Trustee is required by
any court or otherwise to return to the Company, the Guarantors, or any Note
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 Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor
agrees that so long as any Obligations on the Notes are outstanding it shall
not be entitled to, and hereby waives, any right of subrogation in relation
to the Holders in respect of any 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, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of this Subsidiary 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 hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution
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from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Subsidiary Guarantees.
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form of EXHIBIT E shall be endorsed by an Officer of
such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor, by manual
or facsimile signature, by an Officer of such Guarantor.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth
in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates
the Note on which a Subsidiary Guarantee is endorsed, the Subsidiary
Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
set forth in this Indenture on behalf of the Guarantors.
SECTION 11.03. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) Notwithstanding Section 11.03(b), (i) any Guarantor may
consolidate with, merge into or transfer all or a part of its properties and
assets to the Company or any other Guarantor, (ii) any Guarantor may merge
with an Affiliate that has no significant assets or liabilities and was
incorporated solely for purpose of reincorporating such Guarantor in another
State of the United States; PROVIDED THAT such merged entity continues to be
a Guarantor; and (iii) any Foreign Guarantor may reorganize or otherwise
change its legal status or form even if it would not remain a Guarantor after
such reorganization or other change of legal status or form.
(b) Except as provided in Section 11.03(a) hereof or in a
transaction referred to in Section 11.04 hereof, no Guarantor may consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person), another corporation, Person or entity(except the Company or another
Guarantor), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets to another corporation, Person or
entity unless: (i) subject to the provisions of Section 11.04, the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the obligations of such Guarantor pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee in the Form of EXHIBIT F hereto, under the Notes and this Indenture;
(ii) immediately after giving effect to such transaction, no Default or Event
of Default exists; and (iii) (a) the Company would be permitted by virtue of
the Company's pro forma Fixed Charge Coverage Ratio, immediately after giving
effect to such transaction, to incur at least
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$1.00 of additional Indebtedness (other than Permitted Debt) pursuant to the
Fixed Charge Coverage Ratio set forth in Section 4.09(a) hereof or (b) would
have a pro forma Fixed Charge Coverage Ratio that is equal to or greater than
the actual Fixed Charge Coverage Ratio for the same four-quarter period.
(c) In the 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 substantially in the
form of EXHIBIT H hereto, of the Subsidiary 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
shall succeed to and be substituted for the Guarantor with the same effect as
if it had been named herein as a Guarantor; PROVIDED that, solely for
purposes of computing Consolidated Net Income for purposes of clause (b) of
the first paragraph of Section 4.07 hereof, the Consolidated Net Income of
any Person other than the Company and its Restricted Subsidiaries shall only
be included for periods subsequent to the effective time of such merger,
consolidation, combination or transfer of assets. Such successor Person
thereupon may cause to be signed any or all of the Subsidiary 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 of the
Subsidiary Guarantees so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Subsidiary Guarantees had been issued at the
date of the execution hereof.
SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any sale of assets (including, if applicable, all of
the Capital Stock of any Guarantor), any Liens in favor of the Trustee in the
assets sold thereby shall be released; PROVIDED that, in the event of an
Asset Sale, the Net Proceeds from such sale or other disposition are treated
in accordance with the provisions of Section 4.10 hereof. If the assets sold
in such sale or other disposition include all or substantially all of the
assets of any Guarantor or all of the Capital Stock of any Guarantor, then
such Guarantor (in the event of a sale or other disposition of all of the
Capital Stock of such Guarantor) or the Person acquiring the property (in the
event of a sale or other disposition of all or substantially all of the
assets of a Guarantor) shall be released from and relieved of its Obligations
under its Subsidiary Guarantee or Section 11.03 hereof, as the case may be;
PROVIDED that (i) in the event of an Asset Sale, the Net Proceeds from such
sale or other disposition are treated in accordance with the provisions of
Section 4.10 hereof and (ii) the Company is in compliance with all other
provisions of this Indenture applicable to such disposition. Upon delivery
by the Company to the Trustee of an Officers' Certificate to the effect of
the foregoing, the Trustee shall execute any documents reasonably required in
order to evidence the release of any Guarantor from its Obligation under its
Subsidiary Guarantee. Any Guarantor not released from its Obligations under
its Subsidiary Guarantee shall remain liable for the full amount of principal
of, premium, if any, interest and Liquidated Damages, if any, on the Notes
and for the other Obligations of such Guarantor under this Indenture as
provided in this Article 11.
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SECTION 11.05. ADDITIONAL GUARANTORS.
(a) If the Company or any of its Domestic Subsidiaries shall
acquire or create another Domestic Subsidiary after the date of the
Indenture, then such newly acquired or created Domestic Subsidiary shall (i)
execute a supplemental indenture substantially in the form of Exhibit F and
in form and substance satisfactory to the Trustee providing that such
Domestic Subsidiary shall become a Guarantor under the Indenture and (ii)
deliver an opinion of counsel to the effect INTER ALIA, that such
supplemental indenture has been duly authorized and executed by such Domestic
Subsidiary and constitutes the legal, valid, binding and enforceable
obligation of such Person (subject to such customary exceptions concerning
creditors rights', fraudulent transfers, public policy and equitable
principles as may be acceptable to the Trustee in its discretion), PROVIDED,
HOWEVER, this Section 11.05(a) shall not apply to any Domestic Subsidiary
that has been properly designated as an Unrestricted Subsidiary in accordance
with Section 4.17 hereof for so long as it continues to constitute an
Unrestricted Subsidiary.
(b) In addition, if an election is made to treat Dardel, Axiohm
S.A. or any other Foreign Subsidiary as a partnership or a branch for United
States federal income tax purposes, within five (5) days after the election
is made, Dardel, Axiohm S.A., or any other Foreign Subsidiary, as the case
may be, shall (i) execute a supplemental indenture substantially in the form
of Exhibit F and in form and substance satisfactory to the Trustee providing
that Dardel, Axiohm S.A. or any other Foreign Subsidiary, as the case may be,
shall become a Guarantor under the Indenture, (ii) execute any other
necessary documentation to be executed by a Guarantor and (iii) deliver an
opinion of counsel to the effect INTER ALIA, that such supplemental indenture
has been duly authorized and executed by Dardel and/or Axiohm S.A., as the
case may be, and constitutes the legal, valid, binding and enforceable
obligation of such Person (subject to such customary exceptions concerning
creditors rights', fraudulent transfers, public policy and equitable
principles as may be acceptable to the Trustee in its discretion), PROVIDED,
HOWEVER, that if Dardel, Axiohm S.A. or any other Foreign Subsidiary shall
cease to be treated as a partnership or a branch of the Company and Dardel,
Axiohm S.A. or any other Foreign Subsidiary, as the case may be, is no longer
a guarantor of any Indebtedness under the New Credit Facility, then, as of
the date such status as a partnership or a branch and as a guarantor under
the New Credit Facility terminates, such Subsidiary's status as a Guarantor
under the Indenture shall also terminate; PROVIDED, that if such Subsidiary
remains a Restricted Subsidiary, that it complies with paragraph Section
11.05(c) hereof.
(c) A Foreign Guarantor may not cease to be a Guarantor and remain
a Restricted Subsidiary of the Company, unless (a) all Investments made in
such Foreign Guarantor by the Company or any Restricted Subsidiary from the
date it became a Guarantor and which remain then outstanding shall be deemed
to be Restricted Investments made at the time the Foreign Guarantor ceased to
be a Guarantor; (b) any transaction that would have been an Asset Sale if the
Foreign Guarantor had not been a Guarantor at the time of such transaction
would comply with Section 4.10 hereof at the time the Foreign Guarantor
ceased to be a Guarantor; (c) all Indebtedness incurred by such Foreign
Guarantor and that is then outstanding shall be deemed to be Indebtedness
incurred by a Restricted Subsidiary that is not a Guarantor at the time the
Foreign Guarantor ceases to be a Guarantor; (d) after giving effect
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to such deemed Restricted Investments, deemed Asset Sales and deemed
incurrences of Indebtedness, there would not have occurred and be continuing
any Default or Event of Default; and (e) such Foreign Guarantor concurrent
with its ceasing to be a Guarantor of the Notes ceases to be a guarantor of
the New Credit Facility.
SECTION 11.06. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under
the Notes and this Indenture and (ii) the amount, if any, which would not
have (A) rendered such Guarantor "insolvent" (as such term is defined in the
United States Bankruptcy Code and in the Debtor and Creditor Law of the State
of New York) or (B) left such Guarantor with unreasonably small capital at
the time its Subsidiary Guarantee of the Notes was entered into; PROVIDED
that, it will be a presumption in any lawsuit or other proceeding in which a
Guarantor is a party that the amount guaranteed pursuant to the Subsidiary
Guarantee is the amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Guarantor, or debtor in possession or
trustee in bankruptcy of the Guarantor, otherwise proves in such a lawsuit
that the aggregate liability of the Guarantor is the amount set forth in
clause (ii) above. In making any determination as to solvency or sufficiency
of capital of a Guarantor in accordance with the previous sentence, the right
of such Guarantor to contribution from other Guarantors, and any other rights
such Guarantor may have, contractual or otherwise, shall be taken into
account.
SECTION 11.07. TRUSTEE TO INCLUDE PAYING AGENT
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 11 shall in each case (unless the context
shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully and for all intents and purposes as
if such Paying Agent were named in this Article 11 in place of the Trustee.
ARTICLE XII.
SUBORDINATION
SECTION 12.01. AGREEMENT TO SUBORDINATE.
The Guarantors agree, and each Holder by accepting a Note agrees, that
the Obligations evidenced by the Subsidiary Guarantees shall be subordinated
in right of payment, to the extent and in the manner provided in this Article
12, to the prior payment in full in cash of all Guarantor Senior Debt,
whether outstanding on the date hereof or hereafter incurred, assumed or
guaranteed, and that the subordination is for the benefit of the holders of
Guarantor Senior Debt.
SECTION 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of any Guarantor in a liquidation or
dissolution of
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such Guarantor or in a bankruptcy, reorganization, insolvency, receivership
or similar proceeding relating to such Guarantor or its property, in an
assignment for the benefit of creditors or any marshaling of such Guarantor's
assets and liabilities:
(a) the holders of Guarantor Senior Debt shall be entitled to
receive payment in full in cash of all Obligations due in respect of such
Guarantor Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Guarantor Senior Debt,
whether or not an allowable claim) before the Holders of Notes shall be
entitled to receive any payment under the Subsidiary Guarantee of such
Guarantor (provided that Holders may receive Permitted Proceeds); and
(b) until all Obligations with respect to Guarantor Senior Debt
are paid in full, in cash, any distribution to which Holders of the Notes
would be entitled but for this Article 12 (other than Permitted Proceeds as
provided in (a) above) shall be made to the holders of Guarantor Senior Debt.
SECTION 12.03. DEFAULT ON DESIGNATED GUARANTOR SENIOR DEBT.
The Guarantors may not make any payment or distribution to the Trustee
or any Holder of Notes or in respect of Obligations in respect of such
Guarantor's Subsidiary Guarantee and may not acquire from the Trustee or any
Holder any securities for cash or property (other than Permitted Proceeds)
until all principal and other Obligations with respect to the Guarantor
Senior Debt have been paid in full if:
(i) a default in the payment of the principal of, premium, if
any, or interest on Designated Guarantor Senior Debt occurs or any other
default on Designated Guarantor Senior Debt occurs and the maturity of
such Designated Guarantor Senior Debt is accelerated in accordance with
its terms; or
(ii) a default other than a payment default with respect to
Designated Guarantor Senior Debt occurs and is continuing that then permits
holders of the Designated Guarantor Senior Debt to accelerate its maturity
and the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the Representative of the holders of such Designated
Guarantor Senior Debt. Not more than one Payment Blockage Notice may be
given in any consecutive 360-day period, irrespective of the number of
defaults with respect to such Designated Guarantor Senior Debt during such
period; PROVIDED, that in no event may the total number of days during
which any payment blockage period or periods is in effect exceed 179 days
in the aggregate during any 360 consecutive day period. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment Blockage
Notice shall be effective for purposes of this Article 12 unless and until
all scheduled payments of principal, premium, if any, and interest on the
Notes and the Subsidiary Guarantees that have come due have been paid in
full, in cash. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice.
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The Guarantors shall resume payments on and distributions in respect of
their Subsidiary Guarantees upon the earliest of:
1. the date upon which the default is cured or waived by
written notice to the Trustee and the Guarantors from the Person or Persons
who gave such Payment Blockage Notice and in the case of Designated
Guarantor Senior Debt that has been accelerated, such acceleration has been
rescinded;
2. in the case of a default referred to in clause (ii) above,
179 days after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Designated Guarantor Senior Debt has
been accelerated and such acceleration has not been rescinded; and
3. the payment in full of such Designated Guarantor Senior
Debt, if this Indenture otherwise permits the payment, distribution or
acquisition at the time of such payment or acquisition.
SECTION 12.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Guarantors shall promptly notify holders of Guarantor Senior Debt of the
acceleration.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to a Subsidiary Guarantee that because of this
Article 12 should not have been made the Trustee or such Holder, such payment
shall be held by the Trustee or such Holder, in trust for the benefit of, and
shall be paid forthwith over and delivered, upon written request, to, the
holders of Guarantor Senior Debt as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to
which Guarantor Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Guarantor 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
Guarantor Senior Debt.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Guarantor Senior Debt, and
shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or the Guarantors or any other Person
money or assets to which any holders of Guarantor Senior Debt shall be
entitled by virtue of this Article 12, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 12.06. NOTICE BY GUARANTOR.
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The Guarantors shall promptly notify the Trustee and the Paying Agent of
any facts known to the Guarantors that would cause a payment of any
Obligations with respect to the Subsidiary Guarantees to violate this Article
12, but failure to give such notice shall not affect the subordination of the
Subsidiary Guarantees to the Guarantor Senior Debt as provided in this
Article 12.
SECTION 12.07. SUBROGATION.
After all Guarantor Senior Debt is paid in full and until the Subsidiary
Guarantees are paid in full, Holders of Notes shall be subrogated (equally
and ratably with all other Indebtedness pari passu with the Notes) to the
rights of holders of Guarantor Senior Debt to receive distributions
applicable to Guarantor Senior Debt to the extent that distributions
otherwise payable to the Holders of Notes have been applied to the payment of
Guarantor Senior Debt. A distribution made under this Article 12 to holders
of Guarantor Senior Debt that otherwise would have been made to Holders of
Notes is not, as between the Guarantors and Holders, a payment by the
Guarantors on the Subsidiary Guarantees.
SECTION 12.08. RELATIVE RIGHTS.
This Article 12 defines the relative rights of Holders of Notes and
holders of Guarantor Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Guarantors and Holders of Notes, the
obligation of the Guarantors, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with the terms of the
Subsidiary Guarantees;
(2) affect the relative rights of Holders of Notes and creditors of
the Guarantors other than their rights in relation to holders of Guarantor
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 Guarantor Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Guarantors fail because of this Article 12 to pay principal of or
interest on a Subsidiary Guarantee on the due date, the failure is still a
Default or Event of Default.
SECTION 12.09. SUBORDINATION MAY NOT BE IMPAIRED BY GUARANTORS.
No right of any holder of Guarantor Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Guarantor or any Holder or by the failure of
the Guarantors or any Holder to comply with this Indenture.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
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Whenever a distribution is to be made or a notice given to holders of
Guarantor Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Guarantors referred to
in this Article 12, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the
Holders of Notes for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Guarantor Senior Debt
and other Indebtedness of the Guarantors, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 12.
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other provision
of this Indenture, the Trustee shall 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 a Responsible Officer of the
Trustee shall have received at its Corporate Trust Office at least three
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to
violate this Article 12. Only the Guarantors, a Representative or a holder
of Guarantor Senior Debt may give the notice. Nothing in this Article 12
shall 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 Guarantor
Senior Debt with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 12.12. 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 12, 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 a Representative of Designated Guarantor Senior Debt are
hereby authorized to file an appropriate claim for and on behalf of the
Holders of the Notes.
SECTION 12.13. AMENDMENTS.
Any amendment to the provisions of this Article 12 shall require the
consent of the Holders of at least 75% in aggregate principal amount of the
Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for Notes) if such
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amendment would adversely affect the rights of Holders of the Notes.
SECTION 12.14. RELIANCE BY HOLDERS OF GUARANTOR SENIOR DEBT ON
SUBORDINATION PROVISIONS.
Each Holder by accepting a Subsidiary Guarantee acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Guarantor Senior Debt,
whether such Guarantor Senior Debt was created or acquired before or after
the issuance of the Subsidary Guarantees, to acquire and continue to hold
such Guarantor Senior Debt and such holder of Guarantor Senior Debt shall be
deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold such Guarantor Senior Debt.
ARTICLE XIII.
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 shall control.
SECTION 13.02. NOTICES.
Any notice or communication by the Company 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:
Axiohm Transaction Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
If to the Trustee:
The Bank of New York
21st Floor West, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
The Company 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) shall
be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, 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 shall 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 shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.
89
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:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall 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
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall 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.
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)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) 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.
90
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or the Guarantors, as such, shall have any
liability for any obligations of the Company under the Notes, the Subsidiary
Guarantees, this Indenture 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. Such waiver
may not be effective to waive liabilities under the federal securities laws
and it is the view of the Commission that such a waiver is against public
policy.
SECTION 13.08. CONSENT TO JURISDICTION; SERVICE OR PROCESS.
(a) The parties hereto hereby irrevocably submit to the
jurisdiction of the United States District Court for the Southern District of
New York (or, if subject matter jurisdiction in that court is not available,
in any state court located within the City of New York) over any dispute
arising out of or relating to this Indenture and each party hereby
irrevocably agrees that all claims in respect of such dispute shall be heard
and determined in such court. The parties hereby irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such
dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law.
(b) Each of the parties hereto hereby consents to process being
served by any party to this Indenture in any suit, action or proceeding of
the nature specified in subsection (a) above by mailing a copy thereof in
accordance with the provisions of Section 13.02 hereof.
SECTION 13.09. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE
SUBSIDIARY GUARANTEES.
SECTION 13.10. 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 13.11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and
the Notes shall bind their respective successors and assigns. All agreements
of the Trustee in this Indenture shall bind its successors and assigns.
SECTION 13.12. SEVERABILITY.
91
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 13.13. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
92
SIGNATURES
Dated as of October 2, 1997
AXIOM TRANSACTION SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
AXIOM IPB, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
STADIA COLORADO CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
COGNITIVE SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
94
EXHIBIT A
(Face of Note)
CUSIP/CINS ____________
9 3/4% Senior Subordinated Notes due 2007
No. ___ $__________
AXIOHM TRANSACTION SOLUTIONS, INC.
promises to pay to _________________________________________________
or registered assigns,
the principal sum of ________________________________________________
Dollars on ___________, 2007.
Interest Payment Dates: __________, and __________
Record Dates: __________, and __________
Dated: October 2, 1997
AXIOHM TRANSACTION SOLUTIONS, INC.
By:______________________________
Name:
Title:
(SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:__________________________________
▇-▇
▇-▇
(Back of Note)
9 3/4% Senior Subordinated Notes due 2007
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY,
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH IN THE THIRD SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) (A "QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT)
(AN "IAI"), OR (C) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR
ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED ON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.
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THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE 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 AXIOHM TRANSACTION SOLUTIONS, INC.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Axiom Transaction Solutions, Inc., a California
corporation (the "Company"), promises to pay interest on the principal amount
of this Note at 9 3/4% per annum from October 2, 1998 until maturity and
shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of
the Registration Rights Agreement referred to below. The Company will pay
interest and Liquidated Damages, if any, semi-annually in arrears on April 1
and October 1 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date"). Interest on
the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; PROVIDED
that if there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date; PROVIDED, FURTHER, that the first
Interest Payment Date shall be April 1, 1998. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue principal and premium, if any, from time to time on demand at a
rate that is 1% per annum in excess of the interest rate on the Notes then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time
to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons
who are registered Holders of Notes at the close of business on the March 15
or September 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, if
any, interest and Liquidated Damages, if any, at the office or agency of the
Company maintained for such purpose within or without the City and State of
New York, or, at the option of the Company, payment of interest and
Liquidated Damages may be made by check mailed to the Holders at their
addresses set forth in the register of Holders, and provided that payment by
wire transfer of immediately available funds will be required with respect to
principal of premium, interest,
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Liquidated Damages, if any, on, all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
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 October 2, 1997 ("Indenture") between the Company, the Guarantors 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 general unsecured
obligations of the Company.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section, the Company
shall not have the option to redeem the Notes pursuant to Section 4.07 of the
Indenture prior to October 1, 2002. Thereafter, the Company shall 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
Liquidated Damages, if any, thereon, to the applicable redemption date, if
redeemed during the twelve-month period beginning on October 1 of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2002 . . . . . . . . . . . . . 104.875%
2003 . . . . . . . . . . . . . 103.250%
2004 . . . . . . . . . . . . . 101.625%
2005 and thereafter. . . . . . 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section,
prior to October 1, 2000, the Company may redeem on any one or more occasions
up to 35% of the original aggregate principal amount of the Notes initially
issued at a redemption price of 109.750% of the
A-5
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the redemption date, with the net cash proceeds
of any Public Equity Offering of common stock of the Company; PROVIDED THAT
at least 65% of the aggregate principal amount of the Notes originally issued
under this Indenture remain outstanding immediately after the occurrence of
each such redemption; and PROVIDED, FURTHER, THAT each such redemption shall
occur within 60 days of the date of the closing of such Public Equity
Offering.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with
respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon thr occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) such each Holder's
Notes (the "Change of Control Offer") at a price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company shall
send by first class mail a notice to each Holder setting forth the procedures
governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales,
within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $5 million, the Company shall commence an offer to all
Holders of Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of
purchase, in accordance with the procedures set forth in the Indenture. To
the extent that the aggregate amount of Notes tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company (or such Subsidiary)
may use such deficiency for general corporate purposes. If the aggregate
principal amount of Notes surrendered by Holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes 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
A-6
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, it 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.
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 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 any existing default or compliance with any provision
of the Indenture or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes. Without the
consent of any Holder of a Note, the Indenture 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 obligations to Holders of the
Notes in case of a merger or consolidation or sale of assets, 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 comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act or to allow any Guarantor to guarantee the
Notes.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages, if any, 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 to comply with Section 5.01 of the Indenture,
(iv) failure by the Company to comply with the provisions of Sections 4.07,
4.09, 4.10 or 4.15 of the Indenture which failure remains uncured for 30
days; (v) failure by the Company for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes
then outstanding to comply with certain other agreements in the Indenture, or
the Notes; (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; (vii) certain final judgments for
the payment of money that remain undischarged for a period of 60 days; and
(viii) certain events of bankruptcy or insolvency with respect to the Company
or any of its
A-7
Significant Subsidiaries. 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.
Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Notes will
become due and payable without further action or 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. 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.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or the Guarantors, as such, shall
not have any liability for any obligations of the Company under the Notes,
the Subsidiary 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.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF 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 shall have all the rights set forth in the Registration
Rights Agreement dated as of October 2, 1997, between the Company and the
parties named on the signature pages thereof (the "Registration Rights
Agreement").
A-8
18. 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:
Axiohm Transaction Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_______________________________________________________
To transfer this Note on the books of the Company. The agent may substitute
another to act for him.
------------------------------------------------------------------------------
Date:
--------------
Your Signature:
----------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
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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 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 Note)
Tax Identification No.:_________
Signature Guarantee.
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE (1)
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 Signature of
Amount of decrease in Amount of increase in of this authorized signatory
Principal Amount Principal Amount Global Note of
of of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- --------------------- --------------------- ----------------------- ---------------------
--------------------
(1) THIS SHOULD BE INCLUDED ONLY IF THE NOTE ISSUED IN GLOBAL FORM.
A-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Axiohm Transaction Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York.
Re: 9 3/4% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of October 2, 1997
(the "Indenture"), between Axiohm Transaction Solutions, Inc., as issuer (the
"Company"), Axiohm IPB, Inc. ("IPB"), Stadia Colorado Corp. ("Stadia"),
Cognitive Solutions, Inc. ("Cognitive" and, together with IPB and Stadia, the
"Guarantors") and The Bank of New York], as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the
Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies
that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer" within
the meaning of Rule 144A in a transaction meeting the requirements of Rule
144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the 144A
B-1
Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or
through the facilities of a designated offshore securities market and neither
such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements
of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (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. 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 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;
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
B-2
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)
if such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on transfer enumerated in
the 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. 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. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes and in
the Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903
or Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted
B-3
Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
Name:
Title:
Dated
B-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
Axiohm Transaction Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York.
Re: 9 3/4% Senior Subordinated Notes due 2007
(CUSIP )
Reference is hereby made to the Indenture, dated as of October 2, 1997
(the "Indenture"), between Axiohm Transaction Solutions, Inc., as issuer (the
"Company"), Axiohm IPB, Inc. ("IPB"), Stadia Colorado Corp. ("Stadia"),
Cognitive Solutions, Inc. ("Cognitive" and, together with IPB and Stadia, the
"Guarantors") and The Bank of New York], as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the
Indenture.
, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of $
in such Note[s] or interests (the "Exchange"). In connection with the
Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest
in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE
C-1
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest
is being acquired in compliance with any applicable blue sky securities laws
of any state of the United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for
the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Note
is being acquired in compliance with any applicable blue sky securities laws
of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange
of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the
Owner's own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the Restricted
Definitive Note issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Definitive Note and in the Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest
in the [CHECK ONE] / / 144A Global Note, / /
C-2
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 of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global Note
and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Owner]
By:
Name:
Title:
Dated ,
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Axiohm Transaction Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York.
Re: 9 3/4% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of October 2, 1997
(the "Indenture"), between Axiohm Transaction Solutions, Inc., as issuer (the
"Company"), Axiohm IPB, Inc. ("IPB"), Stadia Colorado Corp. ("Stadia"),
Cognitive Solutions, Inc. ("Cognitive" and, together with IPB and Stadia, the
"Guarantors") and The Bank of New York], as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes or any interest therein except
in compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we should sell the Notes
or any interest therein, we will do so only (A) to the Company or any
subsidiary thereof, (B) in
D-1
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and
to the Company a signed letter substantially in the form of this letter and,
if such transfer is in respect of a principal amount of Notes, at the time of
transfer of less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such transfer is in compliance
with the Securities Act, (D) outside the United States in accordance with
Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144 under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing the Definitive Note or beneficial
interest in a Global Note from us in a transaction meeting the requirements
of clauses (A) through (E) of this paragraph a notice advising such purchaser
that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company
may reasonably require 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. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein
acquired by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
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
SUBSIDIARY GUARANTEE
Subject to Section 11.06 of the Indenture, each Guarantor hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and made available for delivery by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes and the Obligations of the Company
under the Notes or under the Indenture, that: (a) the principal of, premium,
if any, interest and Liquidated Damages, if any, on the Notes will be
promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration, redemption or otherwise, and interest
on overdue principal, premium, if any, (to the extent permitted by law)
interest on any interest, if any, and Liquidated Damages, if any, on the
Notes and all other payment Obligations of the Company to the Holders or the
Trustee under the Indenture or under the Notes will be promptly paid in full
and performed, all in accordance with the terms thereof; and (b) in case of
any extension of time of payment or renewal of any Notes or any of such other
payment Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject
to any applicable grace period, whether at stated maturity, by acceleration,
redemption or otherwise. Failing payment when so 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.
The obligations of the Guarantors to the Holders and to the Trustee
pursuant to this Subsidiary Guarantee and the Indenture are expressly set
forth in Article 11 and Article 12 of the Indenture, and reference is hereby
made to such Indenture for the precise terms of this Subsidiary Guarantee.
The terms of Articles 11 and 12 of the Indenture are incorporated herein by
reference. This Subsidiary Guarantee is subject to release as and to the
extent provided in Section 11.04 of the Indenture. The obligations of the
Guarantors to the Holders and to the Trustee pursuant to the Subsidiary
Guarantee and the Indenture are expressly subordinated to the extent set
forth in Article 12 of the Indenture and reference is hereby made to such
Indenture for the precise terms of such subordination.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon each Guarantor and its respective successors and
assigns to the extent set forth in the Indenture until full and final payment
of all of the Company's Obligations under the Notes and the Indenture and
shall inure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized signatories.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and the Indenture and
E-1
(ii) the amount, if any, which would not have (A) rendered such Guarantor
"insolvent" (as such term is defined in the United States Bankruptcy Code and
in the Debtor and Creditor Law of the State of New York) or (B) left such
Guarantor with unreasonably small capital at the time its Subsidiary
Guarantee of the Notes was entered into; PROVIDED that, it will be a
presumption in any lawsuit or other proceeding in which a Guarantor is a
party that the amount guaranteed pursuant to the Subsidiary Guarantee is the
amount set forth in clause (i) above unless any creditor, or representative
of creditors of such Guarantor, or debtor in possession or trustee in
bankruptcy of such Guarantor, otherwise proves in such a lawsuit that the
aggregate liability of the Guarantor is limited to the amount set forth in
clause (ii) above. The Indenture provides that, in making any determination
as to the solvency or sufficiency of capital of a Guarantor in accordance
with the previous sentence, the right of such Guarantor to contribution from
other Guarantors and any other rights such Guarantor may have, contractual or
otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
[GUARANTOR]
By:_________________________
Name:
Title:
E-2
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______ __, 1997 between Guarantor (the "New Guarantor"), a subsidiary of
Axiohm Transaction Solutions, Inc., a California corporation (the "Company"),
and The Bank of New York, as trustee under the indenture referred to below
(the "Trustee"). Capitalized terms used herein and not defined herein shall
have the meaning ascribed to them in the Indenture (as defined below).
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 September 30, 1997,
providing for the issuance of an aggregate principal amount of $100,000,000
of __% Senior Subordinated Notes due 2007 (the "Notes");
WHEREAS, Section 11.05 of the Indenture provides that under certain
circumstances the Company may cause, and Section 11.03 of the Indenture
provides that under certain circumstances the Company must cause, certain of
its subsidiaries to execute and deliver to the Trustee a supplemental
indenture pursuant to which such subsidiaries shall unconditionally guarantee
all of the Company's Obligations under the Notes pursuant to a Subsidiary
Guarantee on the terms and conditions set forth herein; 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 New
Guarantor 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 SUBSIDIARY GUARANTEE. The New Guarantor hereby agrees,
jointly and severally with all other Guarantors, to guarantee the Company's
Obligations under the Notes and the Indenture on the terms and subject to the
conditions set forth in Article 11 and Article 12 of the Indenture and to be
bound by all other applicable provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of any Guarantor, as
such, shall have any liability for any obligations of the Company or any
Guarantor under the Notes, any Subsidiary
F-1
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 by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
without regard to conflicts shall govern and be used to construe this
Supplemental Indenture.
5. 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.
6. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7. 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 correctness of the
recitals of fact contained herein, all of which recitals are made solely by
the New Guarantor.
F-2
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: ________________ [NAME OF NEW GUARANTOR]
By:____________________________
Name:
Title:
Dated: ________________ THE BANK OF NEW YORK
as Trustee
By:____________________________
Name:
Title:
F-3
G-1