1
EXHIBIT 4.1
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇, ▇▇▇.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ TRUST COMPANY
OF NEW YORK
as Trustee
--------------------
INDENTURE
Dated as of November 6, 1996
--------------------
$90,000,000
11-3/8% Senior Subordinated Notes due 2006
Series B 11-3/8% Senior Subordinated Notes due 2006
===============================================================
2
CROSS-REFERENCE TABLE
TIA Indenture
Section Section_
310(a)(1) .......................................... 7.10
(a)(2) .......................................... 7.10
(a)(3) .......................................... N.A.
(a)(4) .......................................... N.A.
(a)(5) .......................................... 7.08; 7.10
(b) ............................................. 7.08; 7.10;
11.02
(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) .......................................... 7.06
(c) ............................................. 7.06; 11.02
(d) ............................................. 7.06
314(a) ............................................. 4.06; 4.09;
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)
(b) ............................................. 7.05; 11.02
(c) ............................................. 7.01(a)
(d) ............................................. 7.01(c)
(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) ............................................. 9.04
317(a)(1) .......................................... 6.08
(a)(2) .......................................... 6.09
(b) ............................................. 2.04
318(a) ............................................. 11.01
(c) ............................................. 11.01
-------------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of this Indenture.
3
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions ...................................... 1
Section 1.02 Incorporation by Reference of TIA ................ 22
Section 1.03 Rules of Construction ............................ 23
ARTICLE TWO
THE NOTES
Section 2.01 Form and Dating .................................. 24
Section 2.02 Execution and Authentication;
Aggregate Principal Amount...................... 25
Section 2.03 Registrar and Paying Agent ....................... 26
Section 2.04 Paying Agent To Hold Assets in
Trust........................................... 27
Section 2.05 Noteholder Lists ................................. 27
Section 2.06 Transfer and Exchange ............................ 27
Section 2.07 Replacement Notes ................................ 28
Section 2.08 Outstanding Notes ................................ 29
Section 2.09 Treasury Notes ................................... 29
Section 2.10 Temporary Notes .................................. 30
Section 2.11 Cancellation ..................................... 30
Section 2.12 Defaulted Interest ............................... 30
Section 2.13 CUSIP Number ..................................... 31
Section 2.14 Deposit of Monies ................................ 31
Section 2.15 Restrictive Legends .............................. 32
Section 2.16 Book-Entry Provisions for Global
Security........................................ 34
Section 2.17 Special Transfer Provisions ...................... 36
Section 2.18 Liquidated Damages Under Registra-
tion Rights Agreement........................... 39
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee ............................... 39
Section 3.02 Selection of Notes To Be Redeemed ................ 39
Section 3.03 Notice of Redemption ............................. 40
Section 3.04 Effect of Notice of Redemption ................... 41
Section 3.05 Deposit of Redemption Price ...................... 41
Section 3.06 Notes Redeemed in Part ........................... 42
4
ARTICLE FOUR
COVENANTS
Section 4.01 Payment of Notes ................................. 42
Section 4.02 Maintenance of Office or Agency .................. 43
Section 4.03 Corporate Existence .............................. 43
Section 4.04 Payment of Taxes and Other Claims ................ 43
Section 4.05 Maintenance of Properties and
Insurance....................................... 44
Section 4.06 Compliance Certificate; Notice of
Default......................................... 44
Section 4.07 Compliance with Laws ............................. 45
Section 4.08 Waiver of Stay, Extension or Usury
Laws............................................ 45
Section 4.09 Provision of Financial Statements
and Information................................. 45
Section 4.10 Limitation on Incurrence of
Indebtedness.................................... 46
Section 4.11 Limitation on Restricted Payments ................ 50
Section 4.12 Limitation on Liens .............................. 54
Section 4.13 Limitation on Dividends and Other
Payment Restrictions Affecting..................
Restricted Subsidiaries......................... 54
Section 4.14 Limitation on Transactions with
Affiliates...................................... 56
Section 4.15 Change of Control ................................ 57
Section 4.16 Limitation on Asset Sales ........................ 59
Section 4.17 Limitation on Designation of Unre-
stricted Subsidiaries........................... 62
Section 4.18 Limitation on Incurrence of Senior
Subordinated Indebtedness....................... 64
Section 4.19 Guarantees ....................................... 64
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Merger, Consolidation and Sale of
Assets.......................................... 65
Section 5.02 Successor Corporation Substituted ................ 67
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default ................................ 67
Section 6.02 Acceleration ..................................... 69
Section 6.03 Other Remedies ................................... 70
Section 6.04 Waiver of Past Defaults .......................... 70
Section 6.05 Control by Majority .............................. 71
Section 6.06 Limitation on Suits .............................. 71
Section 6.07 Rights of Holders To Receive
Payment......................................... 72
5
Section 6.08 Collection Suit by Trustee ....................... 72
Section 6.09 Trustee May File Proofs of Claim ................. 72
Section 6.10 Priorities ....................................... 73
Section 6.11 Undertaking for Costs ............................ 74
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee ................................ 74
Section 7.02 Rights of Trustee ................................ 75
Section 7.03 Individual Rights of Trustee ..................... 77
Section 7.04 Trustee's Disclaimer ............................. 77
Section 7.05 Notice of Default ................................ 78
Section 7.06 Reports by Trustee to Holders .................... 78
Section 7.07 Compensation and Indemnity ....................... 78
Section 7.08 Replacement of Trustee ........................... 80
Section 7.09 Successor Trustee by Merger, Etc ................. 81
Section 7.10 Eligibility; Disqualification .................... 81
Section 7.11 Preferential Collection of Claims
Against Company 81
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.01 Satisfaction and Discharge of
Indenture 82
Section 8.02 Defeasance or Covenant Defeasance ................ 83
Section 8.03 Application of Trust Money ....................... 86
Section 8.04 Repayment to the Company ......................... 86
Section 8.05 Reinstatement .................................... 87
Section 8.06 Acknowledgment of Discharge by
Trustee......................................... 87
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders ....................... 88
Section 9.02 With Consent of Holders .......................... 89
Section 9.03 Compliance with TIA .............................. 90
Section 9.04 Revocation and Effect of Consents ................ 91
Section 9.05 Notation on or Exchange of Notes ................. 92
Section 9.06 Trustee To Sign Amendments, Etc .................. 92
ARTICLE TEN
SUBORDINATION OF SECURITIES
Section 10.01 Notes Subordinate to Senior Debt ................. 92
Section 10.02 Payment Over of Proceeds Upon Dis-
solution, Etc................................... 93
6
Section 10.03 Suspension of Payment When Desig-
nated Senior Debt in Default 94
Section 10.04 Payment Permitted if No Default .................. 96
Section 10.05 Subrogation to Rights of Holders of
Senior Debt 96
Section 10.06 Provisions Solely to Define Rela-
tive Rights 96
Section 10.07 Trustee to Effectuate Subordination .............. 97
Section 10.08 No Waiver of Subordination Provi-
sions 97
Section 10.09 Notice to Trustee ................................ 98
Section 10.10 Reliance on Judicial Order or Cer-
tificate of Liquidating Agent 99
Section 10.11 Rights of Trustee as a Holder of
Senior Debt; Preservation of
Trustee's Rights 99
Section 10.12 Article Applicable to Paying Agents .............. 100
Section 10.13 No Suspension of Remedies ........................ 100
Section 10.14 Trustee's Relation to Holders of
Senior Debt..................................... 100
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 TIA Controls ..................................... 101
Section 11.02 Notices .......................................... 101
Section 11.03 Communications by Holders with
Other Holders 102
Section 11.04 Certificate and Opinion as to Con-
ditions Precedent 103
Section 11.05 Statements Required in Certificate
or Opinion 103
Section 11.06 Rules by Trustee, Paying Agent,
Registrar 103
Section 11.07 Legal Holidays ................................... 103
Section 11.08 Governing Law .................................... 104
Section 11.09 No Adverse Interpretation of Other
Agreements 104
Section 11.10 No Recourse Against Others ....................... 104
Section 11.11 Successors ....................................... 104
Section 11.12 Duplicate Originals .............................. 104
Section 11.13 Severability ..................................... 104
Section 11.14 Independence of Covenants ........................ 105
Signatures
Exhibit A - Form of Initial Note ............................. A-1
Exhibit B - Form of Exchange Note ............................ B-1
Exhibit C - Form of Certificate To Be Delivered in
Connection with Transfers to Non-QIB
Accredited Investors............................ C-1
7
Exhibit D - Form of Certificate To Be Delivered in
Connection with Transfers Pursuant
to Regulation S..................................... D-1
Note: This Table of Contents shall not, for any purpose,
be deemed to be part of this Indenture.
8
INDENTURE, dated as of November 6, 1996, between International Knife
& Saw, Inc., a Delaware corporation (the "Company"), and United States Trust
Company of New York, a New York banking corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 11-3/8%
Senior Subordinated Notes due 2006 (the "Initial Notes") and Series B 11-3/8%
Senior Subordinated Notes due 2006 to be issued in exchange for the Initial
Notes pursuant to the Registration Rights Agreement (the "Exchange Notes" and,
together with the Initial Notes, the "Notes") and, to provide therefor, the
Company has duly authorized the execution and delivery of this Indenture. All
things necessary to make the Notes, when duly issued and executed by the
Company, and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid and binding agreement of the
Company, have been done.
Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accredited Investor" means an "accredited investor" as that term is
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Acquired Debt" means, with respect to any specified Person,
Indebtedness of any other Person (the "Acquired Person") existing at the time
the Acquired Person merges with or into, or becomes a Restricted Subsidiary of,
such specified Person, including Indebtedness incurred in connection with, or in
contemplation of, the Acquired Person merging with or into, or becoming a
Restricted Subsidiary of, such specified Person; provided, however, that
Indebtedness of such Acquired Person which is redeemed, defeased, retired or
otherwise repaid at the time of or immediately upon consummation of the
transactions by which such Acquired Person merges with or into or becomes a
Restricted Subsidiary of such specified Person shall not be Acquired Debt.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or
9
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") of any Person means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.16(a).
"Asset Sale" means (i) any sale, lease, conveyance or other
disposition by the Company or any Restricted Subsidiary of any assets (including
by way of a sale-and-leaseback) other than in the ordinary course of business,
or (ii) the issuance or sale of Capital Stock of any Restricted Subsidiary, in
the case of each of (i) and (ii), whether in a single transaction or a series of
related transactions, to any Person (other than to the Company or a Restricted
Subsidiary and other than directors' qualifying shares) for Net Proceeds in
excess of $250,000.
"Asset Sale Offer" has the meaning provided in Section 4.16(c).
"Asset Sale Offer Purchase Date" has the meaning provided in Section
4.16(d).
"Asset Sale Offer Trigger Date" has the meaning provided in Section
4.16(c).
"Authenticating Agent" has the meaning provided in Section 2.02.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, as to (a) any corporate Person, the
board of directors of such Person or any duly authorized committee thereof, (b)
any partnership, limited liability company or comparably organized Person which
is ultimately controlled by a corporate general partner, managing member or
other corporation, the "Board of Directors" of such corporation as specified in
clause (a) of this definition and (c) any partnership, limited liability company
or comparably organized Person which is ultimately controlled by individuals,
such controlling individuals.
10
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors.
"Business Day" means a day that is not a Legal Holiday.
"Capital Lease Obligation" of any Person means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease for property leased by such Person that would at such time be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person, including any Preferred Stock.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or ▇▇▇▇▇'▇ Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Rating Services or at least P-1 from ▇▇▇▇▇'▇
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
(or, with respect to foreign banks, similar instruments) maturing within one
year from the date of acquisition thereof issued by any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or any member of the European Economic Community or any U.S. branch of
a foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $200 million; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (iv) above; and (vi) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(i) through (v) above.
"Cash Flow" means, with respect to any period, Consolidated Net
Income for such period, plus, to the extent deducted in computing such
Consolidated Net Income: (i) extra-
11
ordinary net losses, plus (ii) provision for taxes based on income or profits
and any provision for taxes utilized in computing the extraordinary net losses
under clause (i) hereof, plus (iii) Consolidated Interest Expense, plus (iv)
depreciation, amortization and all other non-cash charges (including
amortization of goodwill and other intangibles and any last-in, first-out (LIFO)
provisions).
"Change of Control" means the occurrence of any of the following
events after the Issue Date: (i) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) (other than one or more
Permitted Holders) is or becomes (including by merger, consolidation or
otherwise) the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have beneficial ownership
of all shares that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the voting power of the total outstanding Voting
Stock of the Company or IKS Holdings; (ii) after the consummation of an initial
public offering of any class of common stock of the Company or IKS Holdings,
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of the Company (together with any
new directors who have been appointed by CVC, Citicorp N.A. or any Affiliate of
CVC, or any new directors whose election to such Board of Directors, or whose
nomination for election by the stockholders of the Company, was approved by a
vote of 66 2/3% of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board of Directors of the Company then in office; (iii) the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the terms of this Indenture); or (iv) the sale or other
disposition (including by merger, consolidation or otherwise) of all or
substantially all of the Capital Stock or assets of the Company to any Person or
group (as defined in Rule 13d-5 of the Exchange Act) (other than to one or more
of the Permitted Holders) as an entirety or substantially as an entirety in one
transaction or a series of related transactions.
"Change of Control Offer" has the meaning provided in Section
4.15(a).
"Change of Control Purchase Date" has the meaning provided in
Section 4.15(b).
"Commission" means the Securities and Exchange Commission, as from
time to time constituted or, if at any time after the execution of this
Indenture such Commission is not
12
existing and performing the duties now assigned to it under the TIA, then the
body performing such duties at such time.
"Common Stock" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of such Person's
common stock whether now outstanding or issued after the Issue Date.
"Company" means the party named as such in the first paragraph of
this Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Consolidated Cash Flow Coverage Ratio" means, for any period, the
ratio of (i) the aggregate amount of Cash Flow for such period, to (ii)
Consolidated Interest Expense for such period, determined on a pro forma basis
after giving pro forma effect to (i) the incurrence of the Indebtedness giving
rise to the calculation of the Consolidated Cash Flow Coverage Ratio and (if
applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was incurred, and the
application of such proceeds occurred, at the beginning of such period; (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Company and
its Restricted Subsidiaries since the first day of such period as if such
Indebtedness was incurred, repaid or retired at the beginning of such period
(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average balance of
such Indebtedness at the end of each month during such period); (iii) in the
case of Acquired Debt, the related acquisition as if such acquisition had
occurred at the beginning of such period; and (iv) any acquisition or
disposition by the Company and its Restricted Subsidiaries of any company or any
business or any assets out of the ordinary course of business, or any related
repayment of Indebtedness, in each case since the first day of such period,
assuming such acquisition or disposition had been consummated on the first day
of such period.
"Consolidated Interest Expense" means, with respect to any period,
the sum of (i) the interest expense of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (a) amortization of
debt discount, (b) the net payments, if any, under interest rate contracts
(including amortization of discounts), (c) the interest portion of any deferred
payment obligation and (d) accrued interest, plus (ii) the interest component of
the Capital Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and its Restricted Subsidiaries during such period, and
all capitalized interest of the Company and its Restricted Subsidiaries, plus
(iii) all dividends paid during such period by the Company and its Restricted
Subsidiaries with respect to any Disqualified Stock (other than by any
Restricted Subsidiary to the Company or any other Restricted Subsidiary and
other
13
than any dividend paid in Capital Stock (other than Disqualified Stock)), in
each case, as determined on a consolidated basis in accordance with GAAP
consistently applied.
"Consolidated Net Income" means, with respect to any period, the net
income (or loss) of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied,
adjusted to the extent included in calculating such net income (or loss), by
excluding, without duplication, (i) all extraordinary gains and losses (less all
fees and expenses relating thereto), (ii) the portion of net income (or loss) of
the Company and its Restricted Subsidiaries allocable to interests in
unconsolidated Persons or Unrestricted Subsidiaries, except to the extent of the
amount of dividends or distributions actually paid to the Company or its
Restricted Subsidiaries by such other Person during such period, (iii) for
purposes of Section 4.11, net income (or loss) of any Person combined with the
Company or any of its Restricted Subsidiaries on a "pooling-of-interests" basis
attributable to any period prior to the date of combination, (iv) net gains and
losses (less all fees and expenses relating thereto) in respect of disposition
of assets (including, without limitation, pursuant to sale and leaseback
transactions) other than in the ordinary course of business, (v) the net income
of any Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income to the
Company is not at the time permitted, 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, or (vi) the cumulative non-cash effect of any
change in accounting principle.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Stock of such Person.
"covenant defeasance" has the meaning provided in Section 8.02(b).
"Currency Agreement Obligations" means the obligations of any person
under a foreign exchange contract, currency swap agreement or other similar
agreement or arrangement to protect such person against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"CVC" means Citicorp Venture Capital Ltd., a New York corporation.
14
"Default" means any event that is, or after the giving of notice or
passage of time or both would be, an Event of Default.
"Default Interest Payment Date" has the meaning provided in
Section 2.12.
"defeasance" has the meaning provided in Section 8.02(a).
"Designated Senior Debt" means (i) the Indebtedness under the Senior
Credit Facility, and (ii) any other Senior Debt of the Company permitted to be
incurred under this Indenture the principal amount of which is $25 million or
more at the time of the designation of such Senior Debt as "Designated Senior
Debt" by the Company in a written instrument delivered to the Trustee.
"Designation" has the meaning provided in Section 4.17(a).
"Designation Amount" has the meaning provided in Section 4.17(a).
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Stock" means (i) any Preferred Stock of any Restricted
Subsidiary and (ii) that portion of any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof (other than upon a change of control of the
Company in circumstances where the Holders of the Notes would have similar
rights), in whole or in part on or prior to the stated maturity of the Notes.
"Dollars" and "$" means lawful money of the United States of
America.
"DTC" means The Depository Trust Company, its nominees and
successors.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.16(b).
15
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"Existing Indebtedness" has the meaning provided in Section
4.10(b)(iii).
"Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"Foreign Subsidiary" means a Restricted Subsidiary not organized
under the laws of the United States or any political subdivision thereof and the
operations of which are located entirely outside the United States.
"GAAP" means generally accepted accounting principles in the United
States 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 may be approved by a significant segment of
the accounting profession in the United States of America, which are applicable
as of the Issue Date and consistently applied.
"German Subsidiary Facilities" means one or more credit facilities
of IKS Klingelnberg GmbH, as the same may be amended, modified, renewed,
refunded, replaced or refinanced from time to time, including (i) any related
notes, letters of credit, 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, and (ii)
any notes, guarantees, collateral documents, instruments and agreements executed
in connection with any such amendment, modification, renewal, refunding,
replacement or refinancing.
"Global Note" has the meaning provided in Section 2.01.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection or deposit 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.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
16
"IKS Holdings" means The Klingelnberg Corporation, a Delaware
corporation, and its successors.
"incur" has the meaning provided in Section 4.10(a).
"Indebtedness" means, with respect to any Person, without
duplication, and whether or not contingent, (i) all indebtedness of such Person
for borrowed money or which is evidenced by a note, bond, debenture or similar
instrument, (ii) all obligations of such Person to pay the deferred or unpaid
purchase price of property or services, which purchase price is due more than
six months after the date of placing such property in service or taking delivery
and title thereto or the completion of such service, (iii) all Capital Lease
Obligations of such Person, (iv) all obligations of such Person in respect of
letters of credit or bankers' acceptances issued or created for the account of
such Person, (v) to the extent not otherwise included in this definition, all
net obligations of such Person under Interest Rate Agreement Obligations or
Currency Agreement Obligations of such Person, (vi) all liabilities of others of
the kind described in the preceding clause (i), (ii) or (iii) secured by any
Lien on any property owned by such Person; provided, however, if the obligations
secured by a Lien (other than a Permitted Lien not securing any liability that
would itself constitute Indebtedness) on any assets or property have not been
assumed by such Person in full or are not such Person's legal liability in full,
the amount of such Indebtedness for purposes of this definition shall be limited
to the lesser of the amount of Indebtedness secured by such Lien and the Fair
Market Value of the property subject to such Lien, (vii) all Disqualified Stock
issued by such Person and all Preferred Stock issued by a Subsidiary of such
Person, and (viii) to the extent not otherwise included, any guarantee by such
Person of any other Person's indebtedness or other obligations described in
clauses (i) through (vii) above. "Indebtedness" of the Company and the
Restricted Subsidiaries shall not include current trade payables incurred in the
ordinary course of business and payable in accordance with customary practices,
and non-interest bearing installment obligations and accrued liabilities
incurred in the ordinary course of business which are not more than 90 days past
due. The principal amount outstanding of any Indebtedness issued with original
issue discount is the accreted value of such Indebtedness. Notwithstanding the
foregoing, Indebtedness shall not include Indebtedness arising from the honoring
by a bank or other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business; provided that such Indebtedness is extinguished within 3 Business Days
of the incurrence thereof.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
17
"Independent Director" means a director of the Company other than a
director (i) who (apart from being a director of the Company or any Subsidiary
of the Company) is an employee, associate or Affiliate of the Company or a
Subsidiary of the Company, or (ii) who is a director, employee, associate or
Affiliate of another party (other than the Company or any of its Subsidiaries)
to the transaction in question.
"Initial Notes" has the meaning provided in the preamble to this
Indenture.
"Initial Purchasers" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. Incorporated and
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
"interest" on the Notes means interest (including Liquidated
Damages) on the Notes.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Notes.
"Interest Rate Agreement Obligations" means, with respect to any
Person, the 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 designed to protect such Person against fluctuations
in interest rates.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person. "Investment" shall exclude travel and similar
advances to officers and employees of the Company in the ordinary course of
business and extensions of trade credit by the Company and its Restricted
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company or such Restricted Subsidiary, as the case may be. For
the purposes of Section 4.11, (i) "Investment" shall include and be valued at
the Fair Market Value of the net assets of any Restricted Subsidiary (to the
extent of the Company's equity interest in such Restricted Subsidiary) at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary
and shall exclude the Fair Market Value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary and (ii) the amount of any Investment shall be the
original cost of such Investment plus
18
the cost of all additional Investments by the Company or any of its Restricted
Subsidiaries, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, reduced by
the payment of dividends or distributions in connection with such Investment or
any other amounts received in respect of such Investment; provided, however,
that no such payment of dividends or distributions or receipt of any such other
amounts shall reduce the amount of any Investment if such payment of dividends
or distributions or receipt of any such amounts would be included in
Consolidated Net Income. If the Company or any Restricted Subsidiary of the
Company sells or otherwise disposes of any Common Stock of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, the Company no longer owns, directly or
indirectly, greater than 50% of the outstanding Common Stock of such Restricted
Subsidiary, the Company 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 Common
Stock of such Restricted Subsidiary not sold or disposed of.
"Issue Date" means November 6, 1996, the date the Notes are
originally issued under this Indenture.
"Legal Holiday" has the meaning provided in Section 11.07.
"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 owing under the
Registration Rights Agreement.
"Management Investors" means the management investors listed on
Schedule I to the Securities Purchase and Holders Agreement dated the Issue Date
among IKS Holdings, CVC, Diether Klingelnberg, ▇▇▇▇▇ Klingelnberg and such
management investors.
"Maturity Date" means November 15, 2006.
"Net Proceeds" means, with respect to any Asset Sale by any Person,
the aggregate cash or Cash Equivalent proceeds received by such Person and/or
its Affiliates in respect of such Asset Sale, which amount is equal to the
excess, if any, of (i) the cash or Cash Equivalent received by such Person
and/or its Affiliates (including any cash payments received by
19
way of deferred payment pursuant to, or monetization of, a note or installment
receivable or otherwise, but only as and when received) in connection with such
Asset Sale, over (ii) the sum of (a) the amount of any Indebtedness that is
secured by such asset and which is required to be repaid by such Person in
connection with such Asset Sale, plus (b) all fees, commissions and other
expenses incurred by such Person in connection with such Asset Sale, plus (c)
provision for taxes, including income taxes, directly attributable to the Asset
Sale or to required prepayments or repayments of Indebtedness with the proceeds
of such Asset Sale, plus (d) if such Person is a Restricted Subsidiary, any
dividends or distributions payable to holders of minority interests in such
Restricted Subsidiary from the proceeds of such Asset Sale, plus (e) appropriate
amounts to be provided by the Company or any Restricted Subsidiary as a reserve
against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale; provided that upon the release of
any such reserves, such amounts shall constitute "Net Proceeds" hereunder.
"Nonpayment Default" means any default (other than any Payment
Default) under any agreement governing Designated Senior Debt, beyond the
applicable grace period with respect thereto.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Notes" mean the Initial Notes and the Exchange Notes treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated October
31, 1996 of the Company relating to the offering of the Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer
20
and either an Assistant Treasurer or an Assistant Secretary of such Person and
otherwise complying with the requirements of Sections 11.04 and 11.05, as they
relate to the making of an Officers' Certificate.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee complying with the requirements of
Sections 11.04 and 11.05, as they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
"Payment Blockage Notice" has the meaning provided in Section 10.03.
"Payment Blockage Period" has the meaning provided in
Section 10.03.
"Payment Default" means any default in the payment of principal of
or interest on any Designated Senior Debt, beyond the applicable grace period
with respect thereto.
"Permitted Holders" means (i) CVC, (ii) Citicorp, N.A. or any other
Affiliate of CVC, (iii) any officer, employee or director of CVC, (iv) the
Management Investors and (v) in the case of any natural person specified in the
foregoing clauses, any spouse or lineal descendant (including by adoption) of
such person; provided, however, that in no event shall the persons specified in
clauses (iii) through (v) be deemed "Permitted Holders" with respect to more
than 30% of the voting power of the total outstanding Voting Stock of the
Company or IKS Holdings in the aggregate.
"Permitted Indebtedness" has the meaning provided in Section
4.10(b).
"Permitted Investments" means (i) any Investment in the Company or
any Wholly-Owned Restricted Subsidiary (other than a Foreign Subsidiary) and any
Investment (other than a transfer of property (excluding cash)) in a Foreign
Subsidiary that is a Wholly-Owned Restricted Subsidiary; (ii) any investment in
cash or Cash Equivalents; (iii) any Investment in a Person (an "Acquired
Person") if, as a result of such Investment, (a) the Acquired Person becomes a
Wholly-Owned Restricted Subsidiary, or (b) the Acquired Person either (1) is
merged, consolidated or amalgamated with or into the Company or one of its
Wholly-Owned Restricted Subsidiaries and the Company or such Wholly-Owned
Restricted Subsidiary is the Surviving Person, or (2) transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or one of
its
21
Wholly-Owned Restricted Subsidiaries; provided that any Investment pursuant to
this clause (iii) in a Person that is or becomes a Foreign Subsidiary shall not
constitute the transfer of property (other than cash); (iv) Investments in
accounts and notes receivable acquired in the ordinary course of business; (v)
any notes, obligations or other securities received in connection with an Asset
Sale that complies with Section 4.16 or any other disposition not constituting
an "Asset Sale"; (vi) Interest Rate Obligations and Currency Agreement
Obligations permitted pursuant to Section 4.10(b)(v); and (vii) investments in
or acquisitions of Capital Stock or similar interests in Persons (other than
Affiliates of the Company) received in the bankruptcy or reorganization of or by
such Person or any exchange of such investment with the issuer thereof or taken
in settlement of or other resolution of claims or disputes.
"Permitted Junior Securities" means any securities of the Company or
any other corporation that are equity securities or are subordinated in right of
payment to all Senior Debt that may at the time be outstanding to substantially
the same extent as, or to a greater extent than, the Notes are so subordinated
as provided in this Indenture.
"Permitted Liens" means (i) Liens on assets or property of the
Company that secure Senior Debt of the Company and Liens on assets or property
of a Restricted Subsidiary that secure Indebtedness of such Restricted
Subsidiary; (ii) Liens securing Indebtedness of a Person existing at the time
that such Person is merged into or consolidated with the Company or a Restricted
Subsidiary; provided, however, that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of such Person; (iii) Liens on property acquired by the Company
or a Restricted Subsidiary; provided, however, that such Liens were in existence
prior to the contemplation of such acquisition and do not extend to any other
property; (iv) Liens in respect of Interest Rate Obligations and Currency
Agreement Obligations permitted under this Indenture; (v) Liens in favor of the
Company or any Restricted Subsidiary; (vi) Liens existing or created on the
Issue Date; and (vii) Liens securing the Notes or the obligations of the Company
to the Trustee hereunder.
"Permitted Payments" has the meaning provided in Section 4.11(b).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Notes" has the meaning provided in Section 2.01.
22
"Preferred Stock" as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Capital Stock of any other class of such
Person.
"principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Placement Legend" means the legend initially set forth on
the Notes in the form set forth in Section 2.15.
"Public Equity Offering" means an underwritten public offering of
Capital Stock (other than Disqualified Capital Stock) of the Company or IKS
Holdings pursuant to an effective registration statement filed under the
Securities Act; provided, however, that in the event of a Public Equity Offering
by IKS Holdings, IKS Holdings shall contribute to the capital of the Company the
portion of the net cash proceeds of such Public Equity Offering necessary to pay
the aggregate redemption price, plus accrued and unpaid interest, if any, to the
redemption date, of the Notes to be redeemed pursuant to Paragraph 6(b) of the
Notes.
"Purchase Money Obligation" means any Indebtedness secured by a Lien
on assets related to the business of the Company or the Restricted Subsidiaries,
and any additions and accessions thereto, which are purchased, constructed or
improved by the Company or any Restricted Subsidiary at any time after the Issue
Date; provided, however, that (i) any security agreement or conditional sales or
other title retention contract pursuant to which the Lien on such assets is
created (collectively, a "Security Agreement") shall be entered into within 90
days after the purchase or substantial completion of the construction or
improvement of such assets and shall at all times be confined solely to the
assets so purchased, constructed or improved, any additions and accessions
thereto and any proceeds therefrom, (ii) at no time shall the aggregate
principal amount of the outstanding Indebtedness secured thereby be increased,
except in connection with the purchase of additions and accessions thereto and
except in respect of fees and other obligations in respect of such Indebtedness
and (iii) (A) the aggregate outstanding principal amount of Indebtedness secured
thereby (determined on a per asset basis in the case of any additions and
accessions) shall not at the time such Security Agreement is entered into exceed
100% of the purchase price or cost of construction or improvement to the Company
or any Restricted Subsidiary of the assets subject thereto or (B) the
Indebtedness secured thereby shall be with recourse solely to the assets so
purchased, constructed
23
or improved, any additions and accessions thereto and any proceeds therefrom.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Recapitalization" means the recapitalization of the Company
pursuant to that certain Agreement and Plan of Recapitalization dated September
17, 1996 by and among IKS Holdings, CVC, certain stockholders of IKS Holdings
and certain stockholders of the Company.
"Recapitalization Dividend" means the payment by the Company to IKS
Holdings on the Issue Date of amounts necessary to consummate the
Recapitalization.
"Record Date" means the Record Dates specified in the Notes;
provided, however, that if any such date is a Legal Holiday, the Record Date
shall be the first day immediately preceding such specified day that is not a
Legal Holiday.
"Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Notes.
"Redemption Price," when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Notes.
"Redesignation" has the meaning provided in Section 4.17(b).
"refinancing" has the meaning provided in Section 4.10(b)(vii).
"Refinancing Indebtedness" has the meaning provided in Section
4.10(b)(vii).
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated on or about the Issue Date between the Company and the Initial
Purchasers for the benefit of themselves and the Holders as the same may be
amended from time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"Required Filing Dates" has the meaning provided in Section 4.09(a).
"Restricted Investment" means an Investment other than a Permitted
Investment.
24
"Restricted Payment" means (i) any dividend or other distribution
declared or paid on any Capital Stock of the Company (other than (A) dividends
or distributions payable solely in Capital Stock (other than Disqualified Stock)
of the Company, (B) dividends or distributions payable to the Company or any
Restricted Subsidiary or (C) the Recapitalization Dividend); (ii) any payment to
purchase, redeem or otherwise acquire or retire for value any Capital Stock of
the Company (other than the Recapitalization Dividend); (iii) any payment to
purchase, redeem, defease or otherwise acquire or retire for value, prior to any
scheduled maturity, repayment or sinking fund payment, any Subordinated
Indebtedness other than the Recapitalization Dividend or a purchase, redemption,
defeasance or other acquisition or retirement for value that is paid for with
the proceeds of Refinancing Indebtedness that is permitted under Section
4.10(b)(vii); or (iv) any Restricted Investment.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means each direct or indirect Subsidiary of
the Company other than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Senior Credit Facility" means the Senior Credit Facility, entered
into on the Issue Date between the Company and the lenders named therein as the
same may be amended, modified, renewed, refunded, replaced or refinanced from
time to time, including (i) any related notes, letters of credit, 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, and (ii) any notes, guarantees, collateral
documents, instruments and agreements executed in connection with any such
amendment, modification, renewal, refunding, replacement or refinancing.
"Senior Debt" means the principal of and interest (including
post-petition interest) on, and all other amounts owing in respect of, (x) the
Senior Credit Facility and (y) any other Indebtedness incurred by the Company
(including, but not limited to, reasonable fees and expenses of counsel and all
other charges, fees and expenses incurred in connection with such Indebtedness),
unless the instrument creating or evidencing such Indebtedness or pursuant to
which such Indebtedness is
25
outstanding expressly provides that such Indebtedness is on a parity with or
subordinated in right of payment to the Notes. Notwithstanding the foregoing,
Senior Debt shall not include (i) any Indebtedness for federal, state, local or
other taxes, (ii) any Indebtedness of the Company to any of its Subsidiaries or
any of its Affiliates, (iii) any Indebtedness incurred for the purchase of goods
or materials, or for services obtained, in the ordinary course of business or
any obligations in respect of any such Indebtedness, (iv) any Indebtedness that
is incurred in violation of this Indenture, (v) Indebtedness evidenced by the
Notes or (vi) Indebtedness of the Company that is expressly subordinate or
junior in right of payment (other than as a result of the Indebtedness being
unsecured) to any other Indebtedness of the Company.
"Senior Representative" means the agent bank under the Senior Credit
Facility or any other representatives of the holders of Designated Senior Debt,
as the case may be.
"Significant Subsidiary" means any Restricted 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 S-X is in
effect on the Issue Date.
"Subordinated Indebtedness" means Indebtedness of the Company
subordinated in right of payment to the Notes.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding voting power of the Voting Stock of which is owned or
controlled, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof, or (ii) any limited partnership of which such Person or
any Subsidiary of such Person is a general partner, or (iii) any other Person
(other than a corporation or limited partnership) in which such Person or one or
more other Subsidiaries of such Person, or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has more than 50% of the
outstanding ownership or similar interests or has the power, by contract or
otherwise, to direct or cause the direction of the policies, management and
affairs thereof.
"Surviving Person" means, with respect to any Person involved in or
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
{{77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except
as otherwise provided in Section 9.03.
26
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer this Indenture or any part
thereof, or in the case of a successor trustee, an officer assigned to the
department, division or group performing the corporation trust work of such
successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means (i) Shanghai IKS Mechanical Blade
Company, Ltd., (ii) Shanghai IKS ▇▇▇▇ Mechanical Blade Company, Ltd. and (iii)
any other Subsidiary of the Company designated as such pursuant to and in
compliance with Section 4.17 and not redesignated a Restricted Subsidiary in
compliance with such covenant.
"U.S. Government Obligations" mean direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Voting Stock" of a Person means Capital Stock of such Person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
"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 scheduled payment
of principal, including payment at final maturity, in respect thereof, with (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
aggregate principal amount of such Indebtedness.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary
with respect to which all of the outstanding voting securities (other than
directors' qualifying
27
shares) of which are owned, directly or indirectly, by the Company or a
Surviving Person of any Disposition involving the Company, as the case may be.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
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 or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
1. a term has the meaning assigned to it;
2. an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the date hereof;
3. "or" is not exclusive;
4. words in the singular include the plural, and words in the
plural include the singular;
5. a reference to a Section or Article shall be to a Section or
Article of this Indenture;
6. "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
7. any reference to a statute, law or regulation means that
statute, law or regulation as amended and in effect from time to time and
includes any successor
28
statute, law or regulation; provided, however, that any reference to the
Bankruptcy Law shall mean the Bankruptcy Law as applicable to the relevant
case.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of Exhibit A hereto. The
Exchange Notes and the Trustee's certificate of authentication relating thereto
shall be substantially in the form of Exhibit B hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold to Accredited Investors or in reliance on
Rule 144A shall be issued initially in the form of one or more permanent global
Notes in registered form, substantially in the form set forth in Exhibit A (the
"Global Note"), deposited with the Trustee, as custodian for DTC, duly executed
by the Company and authenticated by the Trustee as hereinafter provided and
shall bear the legend set forth in Section 2.15(a) and (b). The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
DTC, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "Offshore
Physical Notes"), duly executed by the Company and authenticated by the Trustee
as hereinafter provided and shall bear the legend set forth in Section 2.15(a).
Notes offered and sold to Accredited Investors or in reliance on Rule 144A may
be issued, in the form of permanent certificated Notes in registered form, in
substantially the form set forth in Exhibit A (the "U.S. Physical Notes"), duly
executed by the Company and authenticated by the
29
Trustee as hereinafter provided and shall bear the legend set forth in
Section 2.15(a). The Offshore Physical Notes and the U.S. Physical Notes are
sometimes collectively herein referred to as the "Physical Notes."
SECTION 2.02. Execution and Authentication;
Aggregate Principal Amount.__
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or an Assistant Secretary (each of
whom shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note
was an Officer or Assistant Secretary at the time of such execution but no
longer holds that office or position at the time the Trustee authenticates the
Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue
in the aggregate principal amount not to exceed $90,000,000 and (ii) Exchange
Notes from time to time for issue only in exchange for a like principal amount
of Initial Notes, in each case upon a written order of the Company. Such order
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes or
Exchange Notes and whether the Notes are to be issued as Physical Notes or a
Global Note or such other information as the Trustee may reasonably request. The
aggregate principal amount of Notes outstanding at any time may not exceed
$90,000,000, except as provided in Section 2.07.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, 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 Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
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The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Note is registered as the owner of such
Note for the purpose of receiving payment of principal of and (subject to the
provisions of this Indenture and the Notes with respect to record dates)
interest on such Note, whether or not such Note is overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice of the contrary.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where (a) Notes may be presented or surrendered for registration of transfer or
for exchange ("Registrar"), (b) Notes may be presented or surrendered for
payment ("Paying Agent") and (c) notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Registrar shall keep
a register of the Notes and of their transfer and exchange. The Company, upon
prior written notice to the Trustee, may have one or more co-Registrars and one
or more additional Paying Agents reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional Paying Agent. The Company may act as its
own Paying Agent, except that for the purposes of payments on the Notes pursuant
to Sections 4.15 and 4.16, neither the Company nor any Affiliate of the Company
may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of demands and notices in connection with the Notes,
until such time as the Trustee has resigned or a successor has been appointed.
Any of the Registrar, the Paying Agent or any other agent may resign upon 30
days' notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Notes (whether such assets have
been distributed to it by the Company or any other obligor on the Notes), and
the Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other
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obligor on the Notes) in making any such payment. The Company at any time may
require a Paying Agent to distribute all assets held by it to the Trustee and
account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent, the
Paying Agent shall have no further liability for such assets.
SECTION 2.05. Noteholder 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
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee before each Record Date and at
such other times as the Trustee may request in writing a list as of such date
and in such form as the Trustee may reasonably require of the names and
addresses of the Holders, which list may be conclusively relied upon by the
Trustee.
SECTION 2.06. Transfer and Exchange.
When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company or the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made 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 exchanges (without
transfer to another Person) pursuant to Sections 2.02, 2.10, 3.06, 4.15, 4.16 or
9.05, in which event the Company shall be responsible for the payment of such
taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the close
of business on the day the Trustee receives notice of any redemption of Notes
and ending at the close of business on the day such notice of redemption is
mailed to the Holders, (ii) selected for redemption in whole
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or in part pursuant to Article Three, except the unredeemed portion of any Note
being redeemed in part and (iii) during a Change of Control Offer or an Asset
Sale Offer if such Note is tendered pursuant to such Change of Control Offer or
Asset Sale Offer and not withdrawn.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Notes may be
effected only through a book-entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book-entry system.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity of reasonable tenor,
sufficient in the reasonable judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. Every replacement Note shall constitute an
additional obligation of the Company.
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.09, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company) holds U.S. Legal Tender or U.S. Government Obligations
sufficient to pay all of the principal and interest due on the Notes payable on
that date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such Notes
cease to be outstanding and interest on them ceases to accrue.
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SECTION 2.09. Treasury Notes.
In determining (x) whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver, consent or notice or
(y) how much principal amount of Notes remains outstanding after a redemption
under Paragraph 6(b) of the Notes, Notes owned by the Company or an Affiliate
shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent under clause (x) above, only Notes which a
Trust Officer of the Trustee actually knows are so owned shall be so considered.
The Company shall notify the Trustee, in writing, when it or, to the Company's
knowledge, any of its Affiliates purchases or otherwise acquires Notes, of the
aggregate principal amount of such Notes so purchased or otherwise acquired.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes and
so indicates in the Officers' Certificate. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate upon receipt of a
written order of the Company pursuant to Section 2.02 definitive Notes in
exchange for temporary Notes.
SECTION 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Company, shall dispose,
in its customary manner, of all Notes surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.07, the Company may not issue new
Notes to replace Notes that it has paid or delivered to the Trustee for
cancellation. If the Company shall acquire any of the Notes, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
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SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which special record date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. 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 (a "Default
Interest Payment Date"), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such defaulted interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted interest as provided in this Section; provided, however, that
in no event shall the Company deposit monies proposed to be paid in respect of
defaulted interest later than 11:00 a.m. of the proposed Default Interest
Payment Date. At least 15 days before the subsequent special record date, the
Company shall mail (or cause to be mailed) to each Holder, as of a recent date
selected by the Company, with a copy to the Trustee, a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(i) shall be paid to
Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of any defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.
SECTION 2.13. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and, if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided, however, that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
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SECTION 2.14. Deposit of Monies.
Prior to 11:00 a.m. New York City time on each Interest Payment
Date, Maturity Date, Redemption Date, Change of Control Purchase Date and Asset
Sale Offer Purchase Date, the Company shall have deposited with the Paying Agent
in immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date, Maturity Date, Redemption Date, Change of
Control Purchase Date and Asset Sale Offer Purchase Date, as the case may be, in
a timely manner which permits the Paying Agent to remit payment to the Holders
on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Purchase Date and Asset Sale Offer Purchase Date, as the case may be.
SECTION 2.15. Restrictive Legends.
(a) Each Global Note and Physical Note that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") on the
face thereof until after the third anniversary of the Issue Date, unless
otherwise agreed by the Company and the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFF-SHORE TRANSACTION,
(2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO
THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇,
(▇) ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A
U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE
FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF
36
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT.
AS USED HEREIN, THE TERMS "OFF-SHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
EACH PURCHASER BY ITS PURCHASE OF THIS SECURITY SHALL BE DEEMED TO HAVE
REPRESENTED AND COVENANTED THAT EITHER (I) IT IS NOT ACQUIRING THE
SECURITY FOR OR ON BEHALF OF ANY PENSION OR WELFARE PLAN (AS DEFINED IN
SECTION 3 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
("ERISA")) OR (II) IF IT IS ACQUIRING THE SECURITY FOR OR ON BEHALF OF A
PENSION OR WELFARE PLAN, THE APPLICABLE CONDITIONS OF PROHIBITED
TRANSACTION EXEMPTION 91-38, 90-1, 84-14 OR 95-60 ISSUED BY THE DEPARTMENT
OF LABOR HAVE BEEN SATISFIED OR THE PLAN IS A GOVERNMENTAL PLAN THAT IS
NOT SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
(b) Each Global Note shall also bear the following legend on the
face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF
THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
37
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.17 OF THE INDENTURE.
SECTION 2.16. Book-Entry Provisions for Global Security.
(a) The Global Note initially shall (i) be registered in the name of
DTC or the nominee of such DTC, (ii) be delivered to the Trustee as custodian
for such DTC and (iii) bear legends as set forth in Section 2.15.
Members of, or participants in, DTC ("Agent Members") shall have no
rights under this Indenture with respect to any Global Note held on their behalf
by DTC, or the Trustee as its custodian, or under the Global Note, and DTC may
be treated by the Company, the Trustee and any Agent as the absolute owner of
the Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any Agent from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to DTC, its successors or their respective nominees.
Interests of beneficial owners in the Global Note may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of DTC
and the provisions of Section 2.17. In addition, Physical Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the Global Note if (i) DTC notifies the Company that it is unwilling or
unable to continue as DTC for the Global Note and a successor depositary is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a written
request from DTC to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall
38
(if one or more Physical Notes are to be issued) reflect on its books and
records the date and a decrease in the principal amount of the Global Note in an
amount equal to the principal amount of the beneficial interest in the Global
Note to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by DTC in exchange for its beneficial interest in the Global Note, an
equal aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered
in exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.17. Special Transfer Provisions.
(a) Transfers to Non-U.S. Persons. The following provisions shall
apply with respect to the registration of any proposed transfer of a Note
constituting a Restricted Security to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the third
anniversary of the Issue Date (provided, however, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the third anniversary
of the Issue Date) or (y) the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
the certificate, if any, required by paragraph (i) above and written
instructions given in accordance with the procedures of DTC and the
39
Registrar, then (x) the Registrar shall reflect on its books and records
the date and (if the transfer does not involve a transfer of outstanding
Physical Notes) a decrease in the principal amount of the Global Note in
an amount equal to the principal amount of the beneficial interest in the
Global Note to be transferred, and (y) the Company shall execute and the
Trustee shall authenticate and deliver one or more Physical Notes of like
tenor and amount.
(b) Transfers to Accredited Investors. The following provisions
shall apply with respect to any proposed transfer of a Note constituting a
Restricted Security to any Accredited Investor that is not a QIB:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the third
anniversary of the Issue Date (provided, however, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the third anniversary
of the Issue Date) or (y) the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C hereto; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of written instructions given in accordance with DTC's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Global Note in an amount
equal to the principal amount of the Physical Notes to be transferred, and
the Trustee shall cancel the Physical Notes so transferred.
(c) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it
40
exercises sole investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of written instructions given in accordance with DTC's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Global Note in an amount
equal to the principal amount of the Physical Notes to be transferred, and
the Trustee shall cancel the Physical Notes so transferred.
(d) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the requested transfer is after the third anniversary of the Issue
Date (provided, however, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Note, or portion thereof, at
any time prior to or on the third anniversary of the Issue Date), or (ii) there
is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to
the Company and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(e) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
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(f) Transfers of Notes Held by Affiliates. Any certificate (i)
evidencing a Note that has been transferred to an Affiliate of the Company
within three years after the Issue Date, as evidenced by a notation on the
Assignment Form for such transfer or in the representation letter delivered in
respect thereof, for so long as such Note is held by such Affiliate, or (ii)
evidencing a Note that has been acquired from an Affiliate (other than by an
Affiliate) in a transaction or a chain of transactions not involving any public
offering, shall, until three years after the last date on which the Company or
any Affiliate of the Company was an owner of such Note, in each case, bear the
legend in substantially the form set forth in Section 2.15(a), unless otherwise
agreed by the Company (with written notice thereof to the Trustee).
SECTION 2.18. Liquidated Damages Under Registration Rights
Agreement.
Under certain circumstances, the Company shall be obligated to pay
certain liquidated damages to the Holders, all as set forth in Section 4 of the
Registration Rights Agreement. The terms thereof are hereby incorporated herein
by reference.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01
at least 60 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.02. Selection of Notes To Be Redeemed.
If fewer than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed 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 listed on a national securities
exchange, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that if the Notes are redeemed pursuant to
Paragraph 6(b) of the Notes, the Notes shall be
42
redeemed solely on a pro rata basis or on as nearly a pro rata basis as
practicable (subject to the procedures of DTC or any other depositary), unless
such method is otherwise prohibited. If the Notes are listed on any national
securities exchange, the Company shall notify the Trustee of the requirements of
such exchange in respect of any redemption. The Trustee shall make the selection
from the Notes outstanding and not previously called for redemption and 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 in denominations of $1,000 may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Notes that have denominations
larger than $1,000. 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.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail to each Holder whose Notes are to be redeemed, with a copy to the
Trustee and any Paying Agent. At the Company's request, the Trustee shall give
the notice of redemption in the Company's name and at the Company's expense. The
Company shall provide such notices of redemption to the Trustee at least five
Business Days before the intended mailing date.
Each notice for redemption shall identify (including the CUSIP
number) the Notes to be redeemed and shall state:
1. the Redemption Date;
2. the Redemption Price and the amount of accrued interest, if any,
to be paid;
3. the name and address of the Paying Agent;
4. the subparagraph of the Notes pursuant to which such redemption
is being made;
5. that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
6. that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption Price plus accrued
interest, if any, upon surrender to the Paying Agent of the Notes
redeemed;
43
7. 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, and upon surrender of such Note, a new Note or Notes in
the aggregate principal amount equal to the unredeemed portion thereof
will be issued; and
8. if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price plus accrued interest thereon to the Redemption Date, but
installments of interest, the maturity of which is on or prior to the Redemption
Date, shall be payable to Holders of record at the close of business on the
relevant record dates referred to in the Notes.
SECTION 3.05. Deposit of Redemption Price.
On or before the Redemption Date and in accordance with Section 2.14
hereof, the Company shall deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Redemption Price plus accrued interest, if any, of all
Notes to be redeemed on that date. The Paying Agent shall promptly return to the
Company any U.S. Legal Tender so deposited which is not required for that
purpose, except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price plus accrued
interest, if any, interest on the Notes to be redeemed will cease to accrue on
and after the applicable Redemption Date, whether or not such Notes are
presented for payment.
SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.
44
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
(a) The Company shall pay the principal of and interest on the Notes
on the dates and in the manner provided in the Notes and in this Indenture.
(b) An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or any of its Affiliates) holds, prior to 11:00 a.m. New York City
time on that date, U.S. Legal Tender designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture or the Notes.
(c) The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
borne by the Notes. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
(d) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five or by Section 4.16,
the Company shall do or cause to be done, at its own cost and expense, all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each of the Subsidiaries in accordance
with the respective organizational documents of each such Subsidiary and the
material rights (charter and statutory) and franchises
45
of the Company and each such Subsidiary; provided, however, that the Company
shall not be required to preserve, with respect to itself, any material right or
franchise and, with respect to any Subsidiary, any such existence, material
right or franchise, if the Board of Directors of the Company shall determine in
good faith that the preservation thereof is no longer desirable in the conduct
of the business of the Company and the Subsidiaries, taken as a whole.
SECTION 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any
Subsidiary or properties of it or any Subsidiary and (ii) all material lawful
claims for labor, materials and supplies that, if unpaid, might by law become a
Lien upon the property of it or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate negotiations or
proceedings properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.
SECTION 4.05. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each Restricted Subsidiary
to, maintain all properties used or useful in the conduct of its business in
good working order and condition (subject to ordinary wear and tear) and make
all necessary repairs, renewals, replacements, additions, betterments and
improvements thereto; provided, however, that nothing in this Section 4.05 shall
prevent the Company or any Restricted Subsidiary from discontinuing the
operation and maintenance of any of its properties, if such discontinuance is
(i) in the ordinary course of business pursuant to customary business terms or
(ii) in the good faith judgment of the Board of Directors or other governing
body of the Company or the Restricted Subsidiary, as the case may be, desirable
in the conduct of their respective businesses and is not disadvantageous in any
material respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself
and each Restricted Subsidiary, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Company, are adequate and appropriate for the conduct of the business of the
Company and such Restricted Subsidiary in a prudent manner, with reputable
insurers or with the government of the United States of America or an agency or
instrumentality thereof, in
46
such amounts, with such deductibles, and by such methods as shall be customary,
in the good faith judgment of the Company, for companies similarly situated in
the industry and owning like properties.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 105 days after
the end of the Company's fiscal year, a certificate signed by the Chairman of
the Board of Directors, the Chief Executive Officer, the President or any Vice
President and by the Chief Financial Officer, Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of the Company (provided,
however, that one of such signatories shall be the Company's principal executive
officer, principal financial officer or principal accounting officer), as to
such Officers' knowledge of the Company's compliance with all conditions and
covenants under this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and in the event any Default exists,
such Officers shall specify the nature of such Default.
(b) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.02, by
registered or certified mail or by facsimile transmission followed by hard copy
by registered or certified mail an Officers' Certificate specifying such event,
notice or other action within five Business Days of its becoming aware of such
occurrence.
SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each Subsidiary to comply,
with all applicable statutes, rules, regulations, orders and restrictions of the
United States of America, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as would not singly or in the aggregate have a material
adverse effect on the financial condition, business or results of operations of
the Company and the Subsidiaries, taken as a whole.
SECTION 4.08. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other
47
law that would prohibit or forgive the Company from paying all or any portion of
the principal of or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.09. Provision of Financial Statements and Information.
(a) Following effectiveness of the Exchange Offer (as defined in the
Registration Rights Agreement), whether or not the Company is then subject to
Section 13(a) or 15(d) of the Exchange Act, the Company will file with the
Commission, so long as any Notes are outstanding, the annual reports, quarterly
reports and other periodic reports which the Company would have been required to
file with the Commission pursuant to such Section 13(a) or 15(d) if the Company
were so subject, and such documents shall be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by which the Company
would have been required so to file such documents if the Company were so
subject; provided the Commission will accept such filings. Upon qualification of
this Indenture under the TIA, the Company shall also comply with the provisions
of TIA { 314(a).
(b) The Company will also in any event (i) within 15 days of each
Required Filing Date, file with the Trustee, and supply the Trustee with copies
for delivery to the Holders of the Notes, the annual reports, quarterly reports
and other periodic reports which the Company would have been required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if
the Company were subject to such Sections and (ii) if the Commission will not
accept the filing of such documents promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents
to any prospective Holder of the Notes.
(c) Until the Company is subject to Section 13 or 15(d) of the
Exchange Act, the Company shall provide to any Holder or any beneficial owner of
Notes any information reasonably requested by such Holder or such beneficial
owner concerning the Company and its Subsidiaries (including financial
statements) necessary in order to permit such Holder or such beneficial owner to
sell or transfer Notes in compliance with Rule 144A under the Securities Act.
48
SECTION 4.10. Limitation on Incurrence of Indebtedness.___________
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, create, incur, issue, assume or directly or indirectly guarantee
or in any other manner become directly or indirectly liable for ("incur") any
Indebtedness (including Acquired Debt), except that the Company may incur
Indebtedness (including Acquired Debt) if, at the time of, and immediately after
giving pro forma effect to, such incurrence of Indebtedness, the Consolidated
Cash Flow Coverage Ratio of the Company for the most recently ended four fiscal
quarters would be at least 2.0 to 1.0 if incurred during the period from the
Issue Date through November 15, 1998, and 2.25 to 1.0 if incurred thereafter.
(b) The foregoing limitations will not apply to the incurrence of
any of the following (collectively, "Permitted Indebtedness"), each of which
shall be given independent effect:
(i) Indebtedness of the Company arising under the Senior Credit
Facility and Indebtedness of IKS Klingelnberg GmbH and its Subsidiaries
arising under the German Subsidiary Facilities, in an aggregate principal
amount not to exceed at any time outstanding the greater of (x) $30.0
million, less any permanent reduction in commitments thereunder, and (y)
the sum, at such time, of (I) 85% of the consolidated book value of net
accounts receivable of the Company and the Restricted Subsidiaries and
(II) 60% of the consolidated book value of inventory of the Company and
the Restricted Subsidiaries;
(ii) Indebtedness of the Company represented by the Initial Notes
and the Exchange Notes;
(iii) Indebtedness of the Company or any Restricted Subsidiary not
covered by any other clause of this paragraph which is outstanding on the
Issue Date ("Existing Indebtedness"), including certain Indebtedness of
IKS Klingelnberg GmbH under the German Subsidiary Facilities
outstanding on the Issue Date;
(iv) Indebtedness owed by any Restricted Subsidiary to the Company or
to another Restricted Subsidiary, or owed by the Company to any Restricted
Subsidiary; provided, however, that any such Indebtedness shall at all
times be held by a Person which is either the Company or a Restricted
Subsidiary; provided, further, however, that upon either (a) the transfer
or other disposition of any such Indebtedness to a Person other than the
Company or another Restricted Subsidiary or (b) the sale, transfer or
other disposition of shares of Capital Stock (including by consolidation
or merger) of any such Restricted Subsidiary
49
to a Person other than the Company or another Restricted Subsidiary, the
incurrence of such Indebtedness shall be deemed to be an incurrence that
is not permitted by this clause (iv);
(v) Indebtedness of the Company or any Restricted Subsidiary arising
with respect to Interest Rate Agreement Obligations and Currency Agreement
Obligations incurred for the purpose of fixing or hedging interest rate
risk or currency risk with respect to any fixed or floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or with respect to any receivable or liability the payment of
which is determined by reference to a foreign currency;
(vi) Indebtedness represented by performance, completion, guarantee,
surety and similar bonds provided by the Company or any Restricted
Subsidiary in the ordinary course of business consistent with past
practice;
(vii) Any Indebtedness incurred in connection with or given in
exchange for the renewal, extension, substitution, refunding, defeasance,
refinancing or replacement, in whole or in part, (a "refinancing") of any
Indebtedness incurred as permitted under Section 4.10(a) or any
Indebtedness described in clauses (ii) or (iii) above and this clause
(vii) ("Refinancing Indebtedness"); provided, however, that (a) the
principal amount of such Refinancing Indebtedness shall not exceed the
principal amount (or accreted amount, if less) of the Indebtedness so
refinanced (plus the premiums and reasonable expenses to be paid in
connection therewith, which, with respect to such premiums, shall not
exceed the stated amount of any premium or other payment required to be
paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced); (b) if the Weighted Average Life to
Maturity of the Indebtedness being refinanced is equal to or greater than
the Weighted Average Life to Maturity of the Notes, the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness
being refinanced; (c) with respect to Refinancing Indebtedness other than
Senior Debt incurred by the Company, such Refinancing Indebtedness shall
rank no more senior than, and, if applicable, shall be at least as
subordinated in right of payment to the Notes as, the Indebtedness being
refinanced; and (d) the obligor on such Refinancing Indebtedness shall be
the obligor on the Indebtedness being refinanced or the Company;
(viii) Indebtedness of the Company or any Restricted Subsidiary (a)
representing Capitalized Lease Obligations and any refinancings thereof
and/or (b) in respect of Purchase Money Obligations for property acquired,
constructed
50
or improved in the ordinary course of business and any refinancings
thereof, which taken together in the aggregate do not exceed $5.0 million
at any time outstanding;
(ix) commodity agreements entered into in the ordinary course of
business to protect against fluctuations in the prices of raw materials
and not for speculative purposes;
(x) Indebtedness incurred by the Company or any Restricted
Subsidiary constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims
or self-insurance, or other Indebtedness with respect to reimbursement
type obligations regarding workers' compensation claims or self-insurance;
(xi) (a) Guarantees by the Company of Indebtedness of a Restricted
Subsidiary permitted to be incurred under this Indenture, (b) Guarantees
by any Restricted Subsidiary in accordance with Section 4.19 and (c)
Guarantees by any Restricted Subsidiary of Senior Debt so long as such
Restricted Subsidiary executes a Guarantee of the Notes on a senior
subordinated basis;
(xii) Indebtedness of the Company or any Restricted Subsidiary arising
from agreements providing for indemnification, adjustment of purchase
price or similar obligations, in each case incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary,
other than Guarantees of Indebtedness incurred by any Person acquiring all
or any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition; provided that the maximum liability in respect
of such Indebtedness shall not exceed the gross proceeds actually received
by the Company and its Restricted Subsidiaries in connection with such
disposition; and
(xiii) Indebtedness of the Company or any Restricted Subsidiary in
addition to that described in clauses (i) through (xii) above, and any
renewals, extensions, substitutions, refinancings or replacements of such
Indebtedness, so long as the aggregate principal amount of all such
Indebtedness incurred pursuant to this clause (xiii) does not exceed $5.0
million at any one time outstanding (which may be, but shall not be
required to be, incurred, in whole or in part, under the Senior Credit
Facility or the German Subsidiary Facilities).
(c) For purposes of determining any particular amount of
Indebtedness under this Section 4.10, Guarantees, Liens or obligations with
respect to letters of credit
51
supporting Indebtedness otherwise included in the determination of such
particular amount shall not be included.
(d) Indebtedness of any Person which is outstanding at the time such
Person becomes a Restricted Subsidiary or is merged with or into or consolidated
with the Company or a Restricted Subsidiary shall be deemed to have been
incurred at the time such Person becomes a Restricted Subsidiary or is merged
with or into or consolidated with the Company or a Restricted Subsidiary, and
Indebtedness which is assumed at the time of the acquisition of any asset shall
be deemed to have been incurred at the time of such acquisition.
SECTION 4.11. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment, unless at
the time of and immediately after giving effect to the proposed Restricted
Payment (with the value of any such Restricted Payment, if other than cash, to
be determined reasonably and in good faith by the Board of Directors of the
Company):
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) the Company could incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.10(a); and
(iii) the aggregate amount of all Restricted Payments made after the
Issue Date shall not exceed the sum of:
(a) an amount equal to 50% of the Company's aggregate
cumulative Consolidated Net Income accrued on a cumulative basis
during the period (treated as one accounting period) beginning on
the Issue Date and ending on the date of such proposed Restricted
Payment (or, if such aggregate cumulative Consolidated Net Income
for such period shall be a deficit, minus 100% of such deficit);
plus
(b) the aggregate amount of all net cash proceeds received
since the Issue Date by the Company from the issuance and sale
(other than to a Restricted Subsidiary) of, or equity contribution
with respect to, Capital Stock (other than Disqualified Stock) and
the principal amount of Indebtedness of the Company or any
Restricted Subsidiary that has been converted into or exchanged for
Capital Stock (other than Disqualified Stock), in any such case to
the extent that such proceeds are not used (x) to redeem,
repurchase, retire or otherwise acquire
52
Capital Stock or any Indebtedness of the Company or any Restricted
Subsidiary pursuant to clause (ii) of the next paragraph or (y) to
make any Restricted Investment pursuant to clause (iv) of the next
paragraph; plus
(c) the amount of the net reduction in Investments in
Unrestricted Subsidiaries resulting from (x) the payment of
dividends or the repayment in cash of the principal of loans or the
cash return on any Investment, in each case to the extent received
by the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries, (y) the release or extinguishment of any guarantee of
Indebtedness of any Unrestricted Subsidiary, and (z) the
redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued as provided in the definition of "Investment"),
such aggregate amount of the net reduction in Investments not to
exceed in the case of any Unrestricted Subsidiary the amount of
Restricted Investments previously made by the Company or any
Restricted Subsidiary in such Unrestricted Subsidiary, which amount
was included in the calculation of the amount of Restricted
Payments; plus
(d) to the extent that any Restricted Investment that was made
after the Issue Date is sold for cash or otherwise liquidated or
repaid for cash, the amount of cash proceeds received with respect
to such Restricted Investment, net of taxes and the cost of
disposition, not to exceed the amount of Restricted Investments made
after the Issue Date.
(b) Section 4.11(a) shall not prohibit the following actions
(collectively, "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such payment would have
been permitted under this Indenture (which payment shall be deemed to have
been paid on such date of declaration for purposes of Section
4.11(a)(iii));
(ii) the redemption, repurchase, retirement or other acquisition of
any Capital Stock or any Indebtedness of the Company or any Restricted
Subsidiary in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Restricted Subsidiary) of, or equity
contribution with respect to, Capital Stock of the Company (other than any
Disqualified Stock);
(iii) any purchase or defeasance of Subordinated Indebtedness to the
extent required upon a Change of Control or Asset Sale (as defined
therein) by the indenture
53
or other agreement or instrument pursuant to which such Subordinated
Indebtedness was issued, but only if the Company (x) in the case of a
Change of Control, has complied with its obligations under Section 4.15 or
(y) in the case of an Asset Sale, has applied the Net Proceeds from such
Asset Sale in accordance with Section 4.16;
(iv) any Restricted Investment the sole consideration for which
consists of, or is made with the proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary) of, or equity contribution
with respect to, Capital Stock of the Company (other than any Disqualified
Stock);
(v) the making of payments by the Company to IKS Holdings in an
amount not in excess of the income tax liability that the Company and its
Subsidiaries would have been liable for if the Company and its
Subsidiaries had filed consolidated tax returns on a stand-alone basis;
(vi) distributions, loans or advances to IKS Holdings in an aggregate
amount not to exceed $50,000 per annum sufficient to permit IKS Holdings
to pay the ordinary operating expenses of IKS Holdings (including, without
limitation, reasonable directors' fees and expenses, indemnification
obligations and professional fees and expenses) directly related to IKS
Holdings' ownership of Capital Stock of the Company (other than any
expenses of CVC or any of its Affiliates);
(vii) payments to IKS Holdings in amounts and at times necessary to
permit the repurchase of Holdings Common Stock, Holdings Preferred Stock
and Holdings Debentures from directors, officers and employees of the
Company and its Subsidiaries who have died or whose employment has been
terminated; provided that such payments shall not exceed $500,000 in any
fiscal year plus any amount available for such payments hereunder since
the Issue Date which have not been used for such purpose; provided,
further, that in no event shall such payments exceed $2.0 million in any
fiscal year;
(viii) loans or advances to employees of the Company or any of its
Subsidiaries which loans or advances exist on the Issue Date, a loan to
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Company's President and Chief Executive Officer, to
pay income taxes which will be incurred by him in connection with the
Recapitalization not to exceed $250,000 and other loans or advances to
employees of the Company or any Subsidiary to pay reasonable relocation
expenses; and
(ix) Restricted Investments in an amount such that the sum of the
aggregate amount of Restricted Investments
54
made pursuant to this clause (ix) after the Issue Date does not exceed
$2.0 million at any one time outstanding;
provided, however, that in the case of clauses (iii), (vii), (viii) and (ix) of
this Section 4.11(b), no Default or Event of Default shall have occurred and be
continuing.
(c) For purposes of Section 4.11(a)(iii), the Permitted Payments
referred to in clauses (i), (vii) and (ix) of Section 4.11(b) shall be included
in the aggregate amount of Restricted Payments made since the Issue Date, and
any other Permitted Payments described above shall be excluded.
(d) Not later than thirty (30) days after the end of any fiscal
quarter of the Company during which any Restricted Payment or Restricted
Investment has been made, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment or Restricted Investment
complies with this Indenture and setting forth in reasonable detail the basis
upon which the required calculations were computed, which calculations may be
based upon the Company's latest available internal quarterly financial
statements.
SECTION 4.12. Limitation on Liens.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien securing Indebtedness that is pari passu with or subordinated in right
of payment to the Notes (other than Permitted Liens) on any asset now owned or
hereafter acquired, or any income or profits therefrom, or assign or convey any
right to receive income therefrom to secure any such Indebtedness, unless (i) if
such Lien secures Indebtedness which is pari passu with the Notes, then the
Notes are secured on an equal and ratable basis with the obligations so secured
until such time as such obligation is no longer secured by a Lien or (ii) if
such Lien secures Indebtedness which is subordinated to the Notes, any such Lien
shall be subordinated to a Lien granted to the Holders of the Notes in the same
collateral as that securing such Lien to the same extent as such subordinated
Indebtedness is subordinated to the Notes.
SECTION 4.13. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries.______
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause to become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to (i) pay dividends or make any other distributions
to the Company or any other Restricted Subsidiary on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed
55
to the Company or any other Restricted Subsidiary, (ii) make loans or advances
to, or issue Guarantees for the benefit of, the Company or any other Restricted
Subsidiary or (iii) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of:
(a) the Senior Credit Facility;
(b) any German Subsidiary Facility;
(c) applicable law;
(d) any instrument governing Indebtedness or Capital Stock of an
Acquired 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); provided, however, that no such
encumbrance or restriction is applicable to any Person, or the properties
or assets of any Person, other than the Acquired Person;
(e) by reason of customary non-assignment, subletting or net worth
provisions in leases or other agreements entered into the ordinary course
of business and consistent with past practices;
(f) Purchase Money Indebtedness for property acquired in the
ordinary course of business that impose restrictions only on the property
so acquired;
(g) an agreement for the sale or disposition of assets or the
Capital Stock of a Restricted Subsidiary; provided, however, that such
restriction or encumbrance is only applicable to such Restricted
Subsidiary or assets, as applicable, and such sale or disposition
otherwise is permitted by Section 4.16; provided, further, however, that
such restriction or encumbrance shall be effective only for a period from
the execution and delivery of such agreement through a termination date
not later than 270 days after such execution and delivery;
(h) this Indenture and the Notes;
(i) Indebtedness (including Refinancing Indebtedness) permitted to
be incurred subsequent to the Issue Date pursuant to Section 4.10;
provided, however, that any such restrictions are ordinary and customary
with respect to the type of Indebtedness being incurred;
(j) encumbrances and restrictions imposed by Liens incurred in
accordance with Section 4.12;
56
(k) customary provisions in joint venture agreements and other
similar agreements; and
(l) encumbrances and restrictions imposed by amendments,
restatements, renewals, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (a) through (k) above;
provided that such encumbrances and restrictions are, in the good faith
judgment of the Company's Board of Directors, no more restrictive, in any
material respect, than those contained in such contracts, instruments or
obligations immediately prior to such amendment, restatement, renewal,
replacement or refinancing.
SECTION 4.14. Limitation on Transactions with Affiliates.__________
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate of the Company unless (1) such transaction or series of transactions
is on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could reasonably be obtainable
at such time in a comparable transaction in arm's-length dealings with an
unrelated third party, and (2) the Company delivers to the Trustee (a) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $500,000, an Officers' Certificate certifying that such
transaction or series of related transactions complies with clause (1) above and
(b) with respect to any transaction or series of transactions involving
aggregate payments in excess of $2.0 million, an Officers' Certificate
certifying that such transaction or series of related transactions has been
approved by a majority of the members of the Board of Directors of the Company
(and approved by a majority of the Independent Directors or, in the event there
is only one Independent Director, by such Independent Director), and (c) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $5.0 million, an opinion as to the fairness to the Company
from a financial point of view issued by an investment banking firm of national
standing.
(b) Section 4.14(a) will not apply to (i) employment agreements or
compensation or employee benefit arrangements with any officer, director or
employee of the Company or any of its Restricted Subsidiaries entered into in
the ordinary course of business (including customary benefits thereunder and
including reimbursement or advancement of out-of-pocket expenses, and director's
and officer's liability insurance); (ii) any transaction entered into by or
among the Company or one of its Restricted Subsidiaries with one or more
Restricted
57
Subsidiaries of the Company; (iii) any transaction permitted by Section 4.11(b);
(iv) transactions permitted by, and complying with, Article Five; and (v)
transactions with suppliers or other purchases or sales of goods or services, in
each case in the ordinary course of business (including, without limitation,
pursuant to joint venture agreements) and otherwise in compliance with the terms
of this Indenture which, in the reasonable determination of the Board of
Directors of the Company, are on terms no less favorable to the Company or its
Restricted Subsidiaries than those that could reasonably have been obtained at
such time from an unaffiliated party.
SECTION 4.15. Change of Control.
(a) In the event of a Change of Control, each Holder shall have the
right, unless the Company has given a notice of redemption, subject to the terms
and conditions of this Indenture, to require the Company to offer to purchase
all or any portion (equal to $1,000 or an integral multiple thereof) of such
Holder's Notes at a purchase price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase, in accordance with the terms set forth below (a "Change of Control
Offer").
In the event of any Change of Control, the Company shall not, and
shall not cause or permit any of the Subsidiaries to, purchase, redeem or
otherwise acquire or retire any Indebtedness of the Company ranking junior or
subordinate to the Notes pursuant to any analogous provisions relating to such
Indebtedness until after the 91st day after the Change of Control Purchase Date
(as such date may be extended).
(b) On or before the 30th day following the occurrence of any Change
of Control, the Company shall mail, by first-class mail (with a copy to the
Trustee), to each Holder at such Holder's registered address a notice stating:
(i) that a Change of Control has occurred and that such Holder has the right to
require the Company to purchase all or a portion (equal to $1,000 or an integral
multiple thereof) of such Holder's Notes at a purchase price in cash equal to
101% of the aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control Purchase
Date"), which shall be a business day, specified in such notice, that is not
earlier than 30 days or later than 60 days from the date such notice is mailed;
(ii) the amount of accrued and unpaid interest, if any, as of the Change of
Control Purchase Date; (iii) that any Note not tendered will continue to accrue
interest; (iv) that, unless the Company defaults in the payment of the purchase
price for the Notes payable pursuant to the Change of Control Offer, any Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest on the Change of Control Purchase Date; (v) that Holders
electing to have a Note purchased pursuant to a Change of Control Offer will be
required to
58
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the second Business
Day prior to the Change of Control Purchase Date; (vi) that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later than
the second Business Day prior to the Change of Control Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased; (vii)
that Holders whose Notes are purchased only in part will be issued new Notes in
a principal amount equal to the unpurchased portion of the Notes surrendered;
provided, however, that each Note purchased and each new Note issued shall be in
an original principal amount of $1,000 or integral multiples thereof; (viii) the
circumstances and relevant facts regarding such Change of Control; and (ix) such
other information as may be required by applicable laws and regulations.
(c) On the Change of Control Purchase Date, the Company will (x)
accept for payment all Notes or portions thereof tendered pursuant to the Change
of Control Offer, (y) deposit with the Paying Agent U.S. Legal Tender Sufficient
to pay the aggregate purchase price of all Notes or portions thereof accepted
for payment, and (z) deliver or cause to be delivered to the Trustee all Notes
tendered pursuant to the Change of Control Offer. The Paying Agent shall
promptly mail to each Holder of Notes or portions thereof accepted for payment
an amount equal to the purchase price for such Notes plus accrued and unpaid
interest, if any, thereon, and the Trustee shall promptly authenticate and mail
to each Holder of Notes accepted for payment in part a new Note equal in
principal amount to any unpurchased portion of the Notes, and any Note not
accepted for payment in whole or in part shall be promptly returned to the
Holder of such Note. On and after a Change of Control Purchase Date, interest
will cease to accrue on the Notes or portions thereof accepted for payment,
unless the Company defaults in the payment of the purchase price therefor. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Purchase Date.
(d) The Company will comply with the applicable tender offer rules,
including the requirements of Section 14(e) and Rule 14e-1 under the Exchange
Act, and all other applicable securities laws and regulations in connection with
any Change of Control Offer and will be deemed not to be in violation of any of
the covenants under this Indenture to the extent such compliance is in conflict
with such covenants.
59
SECTION 4.16. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the fair market value (as evidenced by a resolution of
the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or other property sold or disposed of in the Asset Sale
and (ii) at least 75% of such consideration consists of either cash or Cash
Equivalents; provided, however, that for purposes of this Section 4.16, "cash"
shall include (x) the amount of any Indebtedness (other than any Indebtedness
that is by its terms subordinated to the Notes) of the Company or such
Restricted Subsidiary as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet or in the notes thereto that is assumed by the
transferee of any such assets or other property in such Asset Sale (and
excluding any liabilities that are incurred in connection with or in
anticipation of such Asset Sale), but only to the extent that such assumption is
effected on a basis such that there is no further recourse to the Company or any
of the Restricted Subsidiaries with respect to such liabilities and (y) any
notes, obligations or securities received by the Company or such Restricted
Subsidiary from such transferee that are converted within 60 days by the Company
or such Restricted Subsidiary into cash (to the extent of the cash received).
(b) Within 270 days after any Asset Sale, the Company or the
applicable Restricted Subsidiary may elect to apply the Net Proceeds from such
Asset Sale to (a) permanently reduce any Senior Debt of the Company or any
Indebtedness of the applicable Restricted Subsidiary and/or (b) make an
investment in, or acquire assets and properties that will be used in, the
business of the Company and the Restricted Subsidiaries existing on the Issue
Date or in businesses reasonably related thereto. Pending the final application
of any such Net Proceeds, the Company or any Restricted Subsidiary may
temporarily reduce Indebtedness of the Company under the Senior Credit Facility
or temporarily invest such Net Proceeds in any Investments described under
clauses (i) through (iii) of the definition of Permitted Investments. Any Net
Proceeds from an Asset Sale not applied or invested as provided in the first
sentence of this Section 4.16(b) within 270 days of such Asset Sale will be
deemed to constitute "Excess Proceeds."
(c) Each date that the aggregate amount of Excess Proceeds in
respect of which an Asset Sale Offer (as defined below) has not been made
exceeds $5.0 million shall be deemed an "Asset Sale Offer Trigger Date." As soon
as practicable, but in no event later than 20 business days after each Asset
Sale Offer Trigger Date, the Company shall commence an offer (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds. Any
60
Notes to be purchased pursuant to an Asset Sale Offer shall be purchased pro
rata based on the aggregate principal amount of Notes outstanding, and all Notes
shall be purchased at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of purchase. To the extent that any Excess Proceeds remain after completion of
an Asset Sale Offer, the Company may use the remaining amount for general
corporate purposes otherwise permitted by this Indenture. In the event that the
Company is prohibited under the terms of any agreement governing outstanding
Senior Debt of the Company from repurchasing Notes with Excess Proceeds pursuant
to an Asset Sale Offer as set forth in the first sentence of this Section
4.16(c), the Company shall promptly use all Excess Proceeds to permanently
reduce such outstanding Senior Debt of the Company. Upon the consummation of any
Asset Sale Offer, the amount of Excess Proceeds shall be deemed to be reset to
zero.
(d) Notice of an Asset Sale Offer shall be mailed, by first-class
mail (with a copy to the Trustee), by the Company not later than the 20th
business day after the related Asset Sale Offer Trigger Date to each Holder of
Notes at such Holder's registered address, stating: (i) that an Asset Sale Offer
Trigger Date has occurred and that the Company is offering to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds (to the extent provided in the immediately preceding paragraph), at an
offer price in cash in an amount equal to 100% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the date of the purchase (the
"Asset Sale Offer Purchase Date"), which shall be a business day, specified in
such notice, that is not earlier than 30 days or later than 60 days from the
date such notice is mailed, (ii) the amount of accrued and unpaid interest, if
any, as of the Asset Sale Offer Purchase Date, (iii) that any Note not tendered
will continue to accrue interest, (iv) that, unless the Company defaults in the
payment of the purchase price for the Notes payable pursuant to the Asset Sale
Offer, any Notes accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Asset Sale Offer Purchase Date, (v) that
Holders electing to have a Note purchased pursuant to a Asset Sale Offer will be
required to surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day prior to the Asset Sale Offer Purchase Date, (vi) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the second Business Day prior to the Asset Sale Offer Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased, (vii)
that Holders whose Notes are purchased only in part will be issued new Notes in
a principal amount equal to the
61
unpurchased portion of the Notes surrendered; provided, however, that each Note
purchased and each new Note issued shall be in an original principal amount of
$1,000 or integral multiples thereof, and (viii) such other information as may
be required by applicable laws and regulations.
(e) On the Asset Sale Offer Purchase Date, the Company will (i)
accept for payment the maximum principal amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer that can be purchased out of Excess
Proceeds from such Asset Sale that are to be applied to an Asset Sale Offer,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
aggregate purchase price of all Notes or portions thereof accepted for payment,
and (iii) deliver or cause to be delivered to the Trustee all Notes tendered
pursuant to the Asset Sale Offer. If less than all Notes tendered pursuant to
the Asset Sale Offer are accepted for payment by the Company for any reason
consistent with this Indenture, selection of the Notes to be purchased by the
Company shall be 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 or by lot; provided, however, that Notes
accepted for payment in part shall only be purchased in integral multiples of
$1,000. The Paying Agent shall promptly mail to each Holder of Notes or portions
thereof accepted for payment an amount equal to the purchase price for such
Notes plus accrued and unpaid interest, if any, thereon, and the Trustee shall
promptly authenticate and mail to such Holder of Notes accepted for payment in
part a new Note equal in principal amount to any unpurchased portion of the
Notes, and any Note not accepted for payment in whole or in part shall be
promptly returned to the Holder of such Note. On and after an Asset Sale Offer
Purchase Date, interest will cease to accrue on the Notes or portions thereof
accepted for payment, unless the Company defaults in the payment of the purchase
price therefor. The Company will publicly announce the results of the Asset Sale
Offer on or as soon as practicable after the Asset Sale Offer Purchase Date.
(f) This Section 4.16 will not apply to a transaction consummated in
compliance with Article Five.
(g) The Company will comply with the applicable tender offer rules,
including the requirements of Section 14(e) and Rule 14e-1 under the Exchange
Act, and all other applicable securities laws and regulations in connection with
any Asset Sale Offer and will be deemed not to be in violation of any of the
covenants under this Indenture to the extent such compliance is in conflict with
such covenants.
62
SECTION 4.17. Limitation on Designation of Unrestricted
Subsidiaries.__
(a) The Company shall not designate any Subsidiary of the Company
(other than a newly created Subsidiary in which no Investment has previously
been made) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") unless:
(i) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation;
(ii) immediately after giving effect to such Designation, the Company
would be able to incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under Section 4.10(a); and
(iii) the Company would not be prohibited under this Indenture from
making an Investment at the time of Designation in an amount (the
"Designation Amount") equal to the greater of (x) the book value of such
Restricted Subsidiary on such date and (y) the Fair Market Value of such
Restricted Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to have made
an Investment constituting a Restricted Payment pursuant to Section 4.11 for all
purposes of this Indenture in an amount equal to the Designation Amount.
(b) The Company shall not designate an Unrestricted Subsidiary as a
Restricted Subsidiary (a "Redesignation"), unless:
(i) no Default shall have occurred and be continuing at the time of
and after giving effect to such Redesignation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Redesignation shall be deemed to
have been incurred at such time and shall have been permitted to be
incurred for all purposes of this Indenture.
An Unrestricted Subsidiary shall be deemed to be redesignated as a
Restricted Subsidiary at any time if (a) the Company or any other Restricted
Subsidiary (i) provides credit support for, or a guarantee of, any Indebtedness
of such Unrestricted Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness) or (ii) is directly or indirectly
liable for any Indebtedness of such Unrestricted Subsidiary or (b) a default
with respect to any Indebtedness of such Unrestricted Subsidiary (including any
right which the holders thereof may have to take enforcement action against it)
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any Restricted
63
Subsidiary to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its final scheduled maturity,
except in the case of clause (a) to the extent permitted under Section 4.11.
(c) All Designations (other than with respect to the Company's
Subsidiaries in China) and Redesignations shall be evidenced by Board
Resolutions delivered to the Trustee certifying compliance with the foregoing
provisions. Subsidiaries that are not designated by the Board of Directors as
Restricted or Unrestricted Subsidiaries will be deemed to be Restricted
Subsidiaries. The Designation of a Restricted Subsidiary as an Unrestricted
Subsidiary shall be deemed a Designation of all of the Subsidiaries of such
Unrestricted Subsidiary as Unrestricted Subsidiaries.
SECTION 4.18. Limitation on Incurrence of Senior Subordinated
Indebtedness.________
The Company shall not, directly or indirectly, incur any
Indebtedness that is subordinated or junior in right of payment to any Senior
Debt of the Company and senior in any respect in right of payment to the Notes.
For purposes of this Section 4.18, no Indebtedness shall be deemed to be
subordinated in right of payment to any other Indebtedness by reason of the fact
that such other Indebtedness is secured by any Lien or is subject to a
Guarantee.
SECTION 4.19. Guarantees.
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property (other than cash) to any Restricted Subsidiary that
is not a Foreign Subsidiary, or if the Company or any of its Restricted
Subsidiaries shall organize, acquire or otherwise invest in another Restricted
Subsidiary that is not a Foreign Subsidiary, then such transferee or acquired or
other Restricted Subsidiary shall (i) execute and deliver to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Restricted Subsidiary shall unconditionally guarantee on a senior
subordinated basis all of the Company's obligations under the Notes and this
Indenture and (ii) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered by such
Restricted Subsidiary and constitutes a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary. The Indebtedness represented by any
such Guarantee will be subordinated on the same basis to senior Indebtedness of
the guarantor thereof as the Notes are subordinated to Senior Debt. The
obligations of each guarantor will be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
guarantor, result in the obligations of such guarantor under the Guarantee not
constituting a
64
fraudulent conveyance or fraudulent transfer under federal or state law. Any
such Guarantee will be released upon the sale of all of the Capital Stock, or
all or substantially all of the assets, of the applicable guarantor if such sale
is made in compliance with this Indenture.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
(a) The Company shall not, in any single transaction or series of
related transactions, consolidate or merge with or into (whether or not the
Company is the Surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets
(determined on a consolidated basis for the Company and its Restricted
Subsidiaries) in one or more related transactions to, another Person, and the
Company will not permit any Restricted Subsidiary to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the properties and assets of the Company and the Restricted Subsidiaries, taken
as a whole, to another Person, unless (i) the Surviving Person is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia; (ii) the Surviving Person (if other than the Company)
assumes all the obligations of the Company under the Notes, this Indenture and,
if then in effect, the Registration Rights Agreement pursuant to a supplemental
indenture or other written agreement, as the case may be, in a form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction, no
Default or Event of Default shall have occurred and be continuing; (iv)
immediately after giving effect to such transaction or series of related
transactions, (A) in the case of a transaction involving the Company, the
Surviving Person shall have a Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately prior to such transaction
or series of related transactions or (B) in the case of a transaction involving
a Restricted Subsidiary of the Company, the Surviving Person shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
such Restricted Subsidiary immediately prior to such transaction or series of
related transactions; and (v) after giving pro forma effect to such transaction,
the Surviving Person would be permitted to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10(a).
Notwithstanding clauses (iii), (iv) and (v) above, any Restricted Subsidiary
65
may consolidate with, merge into or transfer all or part of its properties and
assets to the Company or another Restricted Subsidiary.
In the event of any transaction (other than a lease) described in
and complying with the conditions listed in the immediately preceding paragraph
in which the Company is not the Surviving Person, such Surviving Person shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company, and the Company shall be discharged from its obligations under,
this Indenture, the Notes and the Registration Rights Agreement.
(b) In connection with any such consolidation, merger, amalgamation,
transfer, lease or disposition, the Company or such Person shall have delivered
to the Trustee (i) an Officers' Certificate and an Opinion of Counsel, each in
form and substance reasonably satisfactory to the Trustee, stating that such
consolidation, amalgamation, merger, sale, assignment, conveyance, transfer,
lease or disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Indenture
and that all conditions precedent therein provided for relating to such
transaction have been complied with, and (ii) if a supplemental indenture is
required in connection with such transaction, an Opinion of Counsel, in form and
substance reasonably satisfactory to the Trustee, that such supplemental
indenture constitutes the legal, valid, binding and enforceable obligation of
the Surviving Person.
(c) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries, the Capital Stock of which constitutes all or substantially
all of the properties and assets of the Company, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, amalgamation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all or substantially
all of the properties and assets of the Company in accordance with Section 5.01,
the Surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of the Company under this Indenture, with the same effect
as if such successor had been named as the Company in this Indenture; and
thereafter, except in the case of a lease, the Company shall be discharged from
all obligations and covenants under this Indenture and the Notes.
66
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
"Events of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) a default for 30 days in the payment when due of interest on, or
Liquidated Damages (if any) with respect to any Note, (whether or not
prohibited by Article Ten);
(ii) a default in the payment when due of principal on any Note
(whether or not prohibited by Article Ten), whether upon maturity,
acceleration, optional or mandatory redemption, required repurchase or
otherwise;
(iii) failure to perform or comply with any covenant, agreement or
warranty in this Indenture (other than the defaults specified in clauses
(i) and (ii) above) which failure continues for 60 days after written
notice thereof has been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the then outstanding Notes;
(iv) the occurrence of one or more defaults under any agreements,
indentures or instruments under which the Company or any Restricted
Subsidiary then has outstanding Indebtedness in excess of $5.0 million in
the aggregate and, if not already matured at its final maturity in
accordance with its terms, such Indebtedness shall have been accelerated
and such acceleration is not rescinded, annulled or cured within 10 days
thereafter;
(v) one or more judgments, orders or decrees for the payment of
money in excess of $5.0 million, either individually or in the aggregate,
shall be entered against the Company or any Restricted Subsidiary or any
of their respective properties and which judgments, orders or decrees are
not paid, discharged, bonded or stayed or stayed pending appeal for a
period of 60 days after their entry; or
(vi) the Company or any Significant Subsidiary shall (A) commence a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consent to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy
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Law, (C) consent to the appointment of a Custodian of it or for
substantially all of its property, (D) consent to or acquiesce in the
institution of a bankruptcy or an insolvency proceeding against it, (E)
make a general assignment for the benefit of its creditors, (F) admit in
writing its inability to pay its debts as they become due, or (G) take any
corporate action to authorize or effect any of the foregoing; or
(vii) a court of competent jurisdiction shall enter a judgment, decree
or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any Bankruptcy Law
which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any Significant Subsidiary, (B) appoint a Custodian of the
Company or any Significant Subsidiary or for substantially all of its
property or (C) order the winding-up or liquidation of its affairs; and
such judgment, decree or order shall remain unstayed and in effect for a
period of 60 consecutive days.
The Company shall provide an Officers' Certificate to the Trustee
within five days of the occurrence of any Default or Event of Default (provided,
however, that pursuant to Section 4.06 hereof the Company shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.
SECTION 6.02. Acceleration.
(a) If any Event of Default (other than as specified in clause (vi)
or (vii) of Section 6.01 with respect to the Company) occurs and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes may, and the Trustee at the request of such Holders
shall, declare all the Notes to be due and payable immediately by notice in
writing to the Company, and to the Company and the Trustee if by the Holders,
specifying the respective Event of Default and that such notice is a "notice of
acceleration," and the Notes shall become immediately due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
the events specified in clause (vi) or (vii) of Section 6.01 with respect to the
Company, the principal of, premium, if any, and any accrued interest on all
outstanding Notes shall ipso facto become immediately due and payable without
further action or notice.
(b) At any time after a declaration of acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in principal amount of the Notes outstanding,
by written notice to
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the Company and the Trustee, may rescind and annul such declaration and its
consequences if (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay (A) all sums paid or advanced by the Trustee and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, (B) all overdue interest (including any interest accrued
subsequent to an Event of Default specified in clause (vi) or (vii) of Section
6.01 hereof) on all Notes, (C) the principal of and premium, if any, on any
Notes which have become due otherwise than by such declaration or occurrence of
acceleration and interest thereon at the rate borne by the Notes, and (D) to the
extent that payment of such interest is lawful, interest upon overdue interest
at the rate borne by the Notes; and (ii) all Events of Default, other than the
non-payment of principal of Notes which have become due solely by such
declaration or occurrence of acceleration, have been cured or waived; and (iii)
the rescission would not conflict with any judgment, order or decree of any
court of competent jurisdiction.
(c) 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 this Indenture except (i) a continuing Default or Event of
Default in the payment of the principal of, or premium, if any, or interest on,
the Notes (which may be waived only with the consent of each Holder of Notes
affected), or (ii) in respect of a covenant or provision which under this
Indenture cannot be modified or amended without the consent of the Holder of
each Note outstanding.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of the principal of or 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 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. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 2.09, 6.07 and 9.02, prior to the declaration of
acceleration of the Notes, the Holders of not less than a majority in principal
amount of the outstanding
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Notes by written notice to the Trustee may on behalf of all of the Holders
waive any past Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Note as specified in
clauses (i) and (ii) of Section 6.01 or a Default in respect of any term or
provision of this Indenture that may not be modified or amended without the
consent of each Holder affected as provided in Section 9.02. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored
to their former positions and rights hereunder and under the Notes,
respectively. This paragraph of this Section 6.04 shall be in lieu of
{316(a)(1)(B) of the TIA and such {316(a)(1)(B) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Notes, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.03; provided, however, that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
Subject to Section 7.01, however, the Trustee may refuse to follow any
direction that the Trustee reasonably believes conflicts with any law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Holder or that exposes the Trustee to personal liability.
This Section 6.05 shall be in lieu of { 316(a)(1)(A) of the TIA, and such
{316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and
the Notes, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
No Holder shall have any right to institute any proceeding, judicial
or otherwise with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
outstanding Notes shall have made written
70
request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Notes.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture or of the
Notes, the right of any Holder to receive payment of the principal of and
interest on a Note, on or after the respective due dates expressed in such Note,
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 express prior
written consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (i) or (ii) of Section 6.01 of this Indenture occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company or any other obligor on the Notes for the
whole amount of the principal and accrued interest remaining unpaid, together
with interest on overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest as set forth in
Section 4.01 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 may 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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
71
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings 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, taxes, disbursements and advances of the Trustee, its
agent and counsel, and any other amounts due the Trustee under Section 7.07. The
Company's payment obligations under this Section 6.09 shall be secured in
accordance with the provisions of Section 7.07 hereunder. 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
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: subject to Article Ten, to Holders for amounts due and unpaid
on the Notes for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders 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 Trustee, a court in its
72
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.06, or a suit by a Holder or group of Holders of more than 10% in principal
amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture that are adverse to the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
73
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) 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 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01 and
Section 7.02.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets of the Trustee except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting 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 consult
with counsel of its selection and may require an Officers' Certificate or
an Opinion of Counsel, or both, which shall conform to Sections 11.04 and
11.05. 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 or upon the advice of counsel.
(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 that it takes or
omits to take in good faith which it
74
reasonably believes to be authorized or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon reasonable
notice to the Company, to examine the books, records, and premises of the
Company, personally or by agent or attorney and to consult with the
officers and representatives of the Company, including the Company's
accountants and attorneys.
(f) The Trustee shall not be deemed to have knowledge of any Default
or Event of Default (except default in the payment of moneys which are
required by a provision hereof to be paid to the Trustee or in the
delivery of any certificate, opinion or other document required to be
delivered to the Trustee by any provision hereof) unless the Trustee shall
receive from the Company or any Holder notice stating that a Default or
Event of Default has occurred and specifying the same.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with
such request, order or direction.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) Delivery of reports, information and documents to the Trustee
under Section 4.09 hereof is for informational purposes only and the
Trustee's receipt of the foregoing 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).
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SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary, or their respective Affiliates with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, and it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in this Indenture or the Notes other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
a Trust Officer has knowledge thereof (within the meaning of paragraph (f) of
Section 7.02), the Trustee shall mail to each Holder notice of the uncured
Default or Event of Default within 90 days after such Default or Event of
Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment, a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Asset Sale Offer Purchase Date pursuant to
an Asset Sale Offer or a Default in compliance with Article Five hereof, the
Trustee may withhold the notice if and so long as its Board of Directors, the
executive committee of its Board of Directors or a committee of its directors
and/or Trust Officers in good faith determines that withholding the notice is in
the interest of the Holders. The foregoing sentence of this Section 7.05 shall
be in lieu of the proviso to { 315(b) of the TIA and such proviso to { 315(b) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 of each year beginning with 1997,
the Trustee shall, to the extent that any of the events described in TIA
{313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA
{313(a). The Trustee also shall comply with TIA {{ 313(b), (c) and (d).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the
76
Commission and each stock exchange, if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA { 313(d).
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its 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 reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred or made by it in connection with the performance of its duties
under this Indenture. Such expenses shall include the reasonable fees and
expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders, Affiliates and directors and
officers for, and hold them harmless against, any and all loss, liability,
damage, claim or expense (including reasonable fees and expenses of counsel),
including taxes (other than taxes based on the income of the Trustee) incurred
by them except for such actions to the extent caused by any negligence, bad
faith or willful misconduct on their part, arising out of or in connection with
the acceptance or administration of this trust including the reasonable costs
and expenses of defending themselves against any claim (whether made by the
Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of their rights, powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. At the Trustee's sole discretion, the
Company shall defend the claim and the Trustee shall cooperate and may
participate in the defense; provided, however, that any settlement of a claim
shall be approved in writing by the Trustee. Alternatively, the Trustee may at
its option have separate counsel of its own choosing and the Company shall pay
the reasonable fees and expenses of such counsel.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(vi) or (vii) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
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The provisions of this Section 7.07 shall survive the termination of
this Indenture.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee
by so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other 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 notify each Holder of such
event and 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 Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, 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. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
shall continue for the benefit of the retiring Trustee, and the Company shall
pay to any such
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replaced or removed Trustee all amounts owed under Section 7.07 upon such
replacement or removal.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however, that
such corporation shall be otherwise qualified and eligible under this Article
Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA {{ 310(a)(1), (2) and (5). The Trustee (or, in the case of a
corporation included in a bank holding company system, the related bank holding
company) shall have a combined capital and surplus of at least $50 million as
set forth in its most recent published annual report of condition. In addition,
if the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA { 310(a)(2). The Trustee shall comply with TIA { 310(b);
provided, however, that there shall be excluded from the operation of TIA
{ 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA
{ 310(b)(1) are met. The provisions of TIA { 310 shall apply to the Company, as
obligor of the Notes.
SECTION 7.11. Preferential Collection of Claims Against Company.___
The Trustee shall comply with TIA { 311(a), excluding any creditor
relationship listed in TIA { 311(b). A Trustee who has resigned or been removed
shall be subject to TIA { 311(a) to the extent indicated therein. The provisions
of TIA { 311 shall apply to the Company, as obligor on the Notes.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Satisfaction and Discharge of Indenture.____________
(a) This Indenture shall be discharged and shall cease to be of
further effect (except as to surviving rights of
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registration of transfer or exchange of Notes herein expressly provided for) as
to all outstanding Notes and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(i) either
(1) all Notes theretofore authenticated and delivered (other
than (x) Notes which have been lost, stolen or destroyed and which
have been replaced or paid as provided in Section 2.07 hereof and
(y) Notes for whose payment money has theretofore been deposited in
trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the Trustee for
cancellation (other than (x) Notes which have been lost, stolen or
destroyed and which have been replaced or paid as provided in
Section 2.07 hereof and (y) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or discharged
from such trust) have been called for redemption pursuant to the
terms of this Indenture or have otherwise become due and payable,
and the Company, in each case, has irrevocably deposited or caused
to be deposited with the Trustee in trust for the purpose U.S. Legal
Tender sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and interest to
the date of such deposit;
(ii) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 7.07
hereof shall survive and, if money shall have been deposited with the Trustee
pursuant to clause (a)(i)(2) of this Section 8.01, the obligations of the
Trustee under Sections 8.03 and 8.04 shall survive.
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SECTION 8.02. Defeasance or Covenant Defeasance.
(a) Subject to the satisfaction of the conditions in Section 8.02(c)
hereof, the Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have the obligations of the Company discharged
with respect to the outstanding Notes ("defeasance"). Upon such defeasance, 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 8.04 hereof and the other
Sections of and matters under this Indenture referred to in (i) and (ii) below,
and to have satisfied all its other obligations under such Notes and this
Indenture, except for the following, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of Notes to
receive solely from the trust fund described in Section 8.02(c) and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due, (ii) the
Company's obligations under Sections 2.03, 2.05, 2.06, 2.07 and 4.02, (iii) the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including, without limitation, the Trustee's rights under Section 7.07, and (iv)
this Article Eight. Subject to compliance with this Article Eight, the Company
may exercise its option under this Section 8.02(a) notwithstanding the prior
exercise of its option under Section 8.02(b) with respect to the Notes.
(b) Subject to the satisfaction of the conditions in Section 8.02(c)
hereof, the Company may, at its option by Board Resolution, at any time, elect
to effect covenant defeasance ("covenant defeasance"). On and after the date
such conditions are satisfied, (i) the Company shall be released from its
obligations under any covenant or provision contained in Sections 4.04, 4.05,
4.06(a), 4.07 and 4.09 through 4.19, (ii) clauses (iii) through (vi) of Section
6.01 hereof shall not apply, and (iii) the provisions of Articles Five, Ten and
Eleven shall not apply, and the Notes shall thereafter be deemed to be not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants and the provisions of Articles Five, Ten and Eleven, but shall
continue to be deemed "outstanding" for all other purposes hereunder and subject
to any mandatory requirements of the TIA. For this purpose, such covenant
defeasance means that, with respect to the 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 Section or Article, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or Article or by
reason of any reference in any such Section or Article 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 clauses (iii) through
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(vi) of Section 6.01 hereof, but, except as specified above, the remainder of
this Indenture shall be unaffected thereby.
(c) In order to effect defeasance or covenant defeasance, the
following conditions must be satisfied:
(i) the Company shall have irrevocably deposited with the Trustee
(or another trustee satisfying the requirements of Section 7.10 hereof who
agrees to comply with the provisions of this Article Eight applicable to
it), as trust funds in trust, for the benefit of the Holders of such
Notes, U.S. Legal Tender, U.S. Government Obligations or a combination
thereof, in such amounts as will be sufficient (in the opinion of a
nationally recognized firm of independent public accountants or a
nationally recognized investment banking firm, as evidenced by a written
report), without consideration of reinvestment of interest of such U.S.
Government Obligations, to pay the principal of, premium, if any, and
interest on the outstanding Notes (except lost, stolen or destroyed Notes
which have been replaced or paid) to maturity or redemption, as the case
may be, and the Company shall have irrevocably instructed the Trustee (or
such other trustee) to apply such U.S. Legal Tender or U.S. Government
Obligations to said payments in respect of the Notes;
(ii) the Company shall have delivered to the Trustee one or more
Opinions of Counsel in the United States (which counsel or counsels shall
be independent of the Company) to the effect that:
(A) the Holders of the outstanding Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance or covenant defeasance, as the case may be, 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
defeasance or covenant defeasance, as the case may be, had not
occurred (which opinion, in the case of defeasance, shall be based
upon a ruling of the Internal Revenue Service or a change in
applicable Federal income tax law occurring after the Issue Date);
(B) the trust funds will not be subject to any rights of
holders of Indebtedness of the Company (other than Holders of the
Notes); and
(C) assuming no bankruptcy of the Company occurs between the
date of deposit and the 91st day following the deposit, after the
91st day following the deposit the trust funds will not be subject
to the effect of any applicable bankruptcy, insolvency,
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reorganization or similar laws affecting creditors' rights
generally;
(iii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, in the case of Section 6.01(vi)
or (vii), at any time during the period ending on the 91st day after the
date of such deposit;
(iv) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument to which the Company is a party or by which it is
bound;
(v) 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 defeating, hindering, delaying or defrauding any other creditors
of the Company or others;
(vi) no event or condition shall exist that would prevent the Company
from making payments of the principal of and interest on the Notes on the
date of such deposit or at any time during the period ending on the 91st
day after the date of such deposit; and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent (other than conditions requiring the passage of time) to either
defeasance or covenant defeasance, as the case may be, have been complied
with and that no violations under agreements governing any other
outstanding Indebtedness of the Company would result therefrom.
Opinions required to be delivered under this Section may have
qualifications customary for opinions of the type required.
SECTION 8.03. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Section 8.01 or 8.02,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of and interest on the Notes. The Trustee shall be under no obligation
to invest said U.S. Legal Tender or U.S. Government Obligations except as it may
agree in writing with the Company.
The Company shall pay, and indemnify the Trustee against, any tax,
fee or other charge imposed on or assessed against the Legal Tender or U.S.
Government Obligations
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deposited pursuant to Section 8.01 or 8.02 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 outstanding Notes.
SECTION 8.04. Repayment to the Company.
Subject to Sections 8.01 and 8.02, the Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess U.S. Legal Tender or
U.S. Government Obligations held by them at any time and thereupon shall be
relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for one year;
provided, however, that the Trustee or such Paying Agent, before being required
to make any payment, may at the expense of the Company cause to be published
once in a newspaper of general circulation in the City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein which shall be at least 30 days from the
date of such publication or mailing any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person.
SECTION 8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Section 8.01 or 8.02 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 or 8.02, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such U.S. Legal Tender or U.S. Government
Obligations in accordance with Section 8.01 or 8.02, as the case may be;
provided, however, that if the Company has made any payment of interest on or
principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. Legal Tender or U.S. Government Obligations
held by the Trustee or Paying Agent.
SECTION 8.06. Acknowledgment of Discharge by Trustee.
After (i) the conditions of Section 8.01 or 8.02(a) have been
satisfied, (ii) the Company has paid or caused to be paid all other sums payable
hereunder by the Company and (iii) the Company has delivered to the Trustee an
Officers'
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Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i), above, relating to the satisfaction and
discharge or defeasance of this Indenture have been complied with, the Trustee
upon request shall acknowledge in writing the discharge of the Company's
obligations under this Indenture except for those surviving obligations
specified in Section 8.01 or 8.02, as the case may be.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(ii) to effect the assumption by a successor Person of all
obligations of the Company under the Notes, this Indenture and, if still
in effect, the Registration Rights Agreement in the event of any
Disposition involving the Company in which the Company is not the
Surviving Person;
(iii) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(iv) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change that would provide any additional benefit
or rights to the Holders;
(vi) to provide for issuance of the Exchange Notes (which will have
terms substantially identical in all material respects to the Initial
Notes except that the transfer restrictions contained in the Initial Notes
will be modified or eliminated, as appropriate), and which will be treated
together with any outstanding Initial Notes, as a single issue of
securities;
(vii) to make any other change that does not adversely affect the
rights of any Holder under this Indenture; or
(viii) to release any Guarantee delivered pursuant to Section 4.19
that is permitted to be released under this Indenture;
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provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.01.
SECTION 9.02. With Consent of Holders.
(a) Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes), may amend or supplement this Indenture or the
Notes without notice to any other Holder. Subject to Section 6.02 and 6.07, the
Holder or Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes may waive compliance by the Company with any
provision of this Indenture or the Notes without notice to any other Holder.
(b) Notwithstanding Section 9.02(a) hereof, no amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, shall, without the prior
written consent of each Holder of each Note affected thereby:
(i) reduce the principal amount of the Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Note, or alter or waive the provisions with respect to the redemption of
the Notes in a manner adverse to the Holders of the Notes other than with
respect to a Change of Control Offer or an Asset Sale Offer;
(iii) reduce the rate of or change the time for payment of
interest on any Notes;
(iv) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest on the Notes (except that Holders of at
least a majority in aggregate principal amount of the then outstanding
Notes may (a) rescind an acceleration of the Notes that resulted from a
non-payment default and (b) waive the payment default that resulted from
such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or Events of Default or the rights of Holders to
receive payments of principal of, or premium, if any, or interest on, the
Notes;
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(vii) following the occurrence of a Change of Control, amend, change
or modify the Company's obligation to make and consummate a Change of
Control Offer in the event of a Change of Control or modify any of the
provisions or definitions with respect thereto in a manner adverse to the
Holders, or following the occurrence of an Asset Sale, amend, change or
modify the Company's obligation to make and consummate an Asset Sale Offer
or modify any of the provisions or definitions with respect thereto in a
manner adverse to the Holders; or
(viii) modify or change any of the provisions of this Indenture
relating to the subordination of the Notes in a manner adverse to the
Holders.
(c) It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders 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 supplemental indenture.
SECTION 9.03. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect; provided, however, that this
Section 9.03 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder 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. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, supplement
or waiver becomes
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effective upon receipt by the Trustee of such Officers' Certificate and evidence
of consent by the Holders of the requisite percentage in principal amount of
outstanding Notes.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes any change described in Section 9.02(b), in
which case, the amendment, supplement or waiver shall bind only each Holder of a
Note who has consented to it and every subsequent Holder of a Note or portion of
a Note that evidences the same debt as the consenting Holder's Note; provided,
however, that any such waiver shall not impair or affect the right of any Holder
to receive payment of principal of and interest on a Note, on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
SECTION 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee may require the Holder of such Note to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Note about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided, however, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture.
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Such Opinion of Counsel shall not be an expense of the Trustee or the Holders.
ARTICLE TEN
SUBORDINATION OF SECURITIES
SECTION 10.01. Notes Subordinate to Senior Debt.__________________
The Company covenants and agrees, and each Holder, by acceptance of
a Note likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article Ten, the Indebtedness represented by the
Notes and the payment of the principal of and interest on each and all of the
Notes are hereby expressly made subordinate and subject in right of payment as
provided in this Article Ten to the prior payment in full of all Senior Debt.
This Article Ten shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of or continue to hold
Senior Debt; and such provisions are made for the benefit of the holders of
Senior Debt; and such holders are made obligees hereunder and they or each of
them may enforce such provisions.
The provisions of this Article Ten shall not be applicable from and
after the date of an effective defeasance or covenant defeasance pursuant to
Section 8.02(a) or 8.02(b), respectively, of this Indenture.
SECTION 10.02. Payment Over of Proceeds upon Dissolution, Etc.____
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
(i) the holders of Senior Debt shall be entitled to receive payment
in full of all amounts due on or in respect of all Senior Debt, or
provision shall be made for such payment, before the Holders are entitled
to receive any payment or distribution of any kind or character (other
than in Permitted Junior Securities) on account of principal of or
interest on the Notes; and
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(ii) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (excluding Permitted
Junior Securities), by set-off or otherwise, to which the Holders or the
Trustee would be entitled but for the provisions of this Article Ten shall
be paid by the Custodian making such payment or distribution directly to
the holders of Senior Debt or their representative or representatives or
to the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Debt may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the Senior Debt
held or represented by each, to the extent necessary to make payment in
full of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Debt; and
(iii) in the event that, notwithstanding the foregoing provisions of
this Section 10.02, the Trustee or any Holder shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, in respect of principal of or
interest on the Notes before all Senior Debt is paid in full or payment
thereof provided for, then and in such event such payment or distribution
(excluding Permitted Junior Securities) shall be paid over or delivered
forthwith to the Custodian making payment or distribution of assets of the
Company for application to the payment of all Senior Debt remaining
unpaid, to the extent necessary to pay all Senior Debt in full, after
giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article Five shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Section 10.02 if the Person formed by such consolidation or the surviving entity
of such merger or the Person which acquires by conveyance, transfer or lease
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance, transfer or lease,
comply with the conditions set forth in Article Five.
SECTION 10.03. Suspension of Payment When Designated Senior Debt
in Default.______________
The Company shall not make any payment upon or in respect of the
Notes (except from the trust created pursuant to
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Section 8.02) if (i) a default in the payment of the principal of, premium, if
any, or interest on any Designated Senior Debt occurs and is continuing, whether
at maturity or on a date fixed for prepayment or by declaration of acceleration
or otherwise, or (ii) the Trustee has received written notice ("Payment Blockage
Notice") from the representative of any holders of Designated Senior Debt that a
Nonpayment Default has occurred and is continuing with respect to such
Designated Senior Debt that permits such holders to accelerate the maturity of
such Designated Senior Debt. Payments on the Notes shall resume (and all past
due amounts on the Notes, with interest thereon, shall be paid) (i) in the case
of a Payment Default in respect of any Designated Senior Debt, on the date on
which such Payment Default is cured or waived or otherwise ceases to exist; and
(ii) in the case of a Nonpayment Default in respect of any Designated Senior
Debt, on the earlier of (a) the date on which such Nonpayment Default is cured
or waived, or (b) 179 days after the date on which the Payment Blockage Notice
with respect to such Nonpayment Default was received by the Trustee, in each
case, unless the maturity of any Designated Senior Debt has been accelerated and
the Company has defaulted with respect to the payment of such Designated Senior
Debt, or (c) the date on which such Payment Blockage Period shall have been
terminated by written notice to the Company or the Trustee from the
representative of the holders of Designated Senior Debt initiating such Payment
Blockage Period. During any consecutive 365-day period, the aggregate number of
days in which payments due on the Notes may not be made as a result of
nonpayment defaults on Designated Senior Debt (a "Payment Blockage Period")
shall not exceed 179 days, and there shall be a period of at least 186
consecutive days in each consecutive 365-day period during which no Payment
Blockage Period is in effect. No event or circumstance that creates a Nonpayment
Default under any Designated Senior Debt that (i) gives rise to the commencement
of a Payment Blockage Period or (ii) exists at the commencement of or during any
Payment Blockage Period shall be made the basis for the commencement of any
subsequent Payment Blockage Period unless such default has been cured or waived
for a period of not less than 90 consecutive days. In no event shall a Payment
Blockage Period extend beyond 179 days from the date of the receipt of the
notice referred to in clause (2) of this Section 10.03(b). Any number of notices
of a Nonpayment Default may be given during a Payment Blockage Period; provided,
however, that no such notice shall extend such Payment Blockage Period beyond
the 179-day limit.
(a) In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or any Holder prohibited by the foregoing
provisions of this Section 10.03, then and in such event such payment shall be
paid over and delivered forthwith to the Senior Representative or other
representative of the holders of the Designated Senior Debt or the holders of
Senior Debt, as applicable, or as a court of competent jurisdiction shall
direct.
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SECTION 10.04. Payment Permitted if No Default.
Nothing contained in this Article Ten, elsewhere in this Indenture
or in any of the Notes shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 10.02 or under the conditions
described in Section 10.03, from making payments at any time of principal of or
interest on the Notes.
SECTION 10.05. Subrogation to Rights of Holders of Senior Debt.___
Subject to the payment in full of all Senior Debt, the Holders of
the Notes shall be subrogated to the rights of the holders of such Senior Debt
to receive payments and distributions of cash, property and securities
applicable to the Senior Debt until the principal of and interest on the Notes
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of Senior Debt of any cash, property or securities
to which the Holders or the Trustee would be entitled except for the provisions
of this Article Ten, and no payments over pursuant to the provisions of this
Article Ten to the holders of Senior Debt by Holders or the Trustee shall, as
among the Company, its creditors other than holders of Senior Debt and the
Holders, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.
SECTION 10.06. Provisions Solely to Define Relative Rights.______
The provisions of this Article Ten are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Debt on the other hand. Nothing contained in this Article Ten
or elsewhere in this Indenture or in the Notes is intended to or shall (a)
impair, as among the Company, its creditors other than holders of Senior Debt
and the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the Notes
as and when the same shall become due and payable in accordance with their
terms; or (b) affect the relative rights against the Company of the Holders of
the Notes and creditors of the Company other than the holders of Senior Debt; or
(c) prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture, subject to the
rights, if any, under this Article Ten of the holders of Senior Debt (1) in any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshaling of assets and liabilities of the
Company referred to in Section 10.02, to receive, pursuant to and in accordance
with such Section, cash, property and securities
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otherwise payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 10.03, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 10.03(c).
SECTION 10.07. Trustee to Effectuate Subordination.
Each Holder by acceptance of a Note authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article Ten and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding up, liquidation or reorganization of the
Company whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of the Company owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved.
SECTION 10.08. No Waiver of Subordination Provisions._____________
(a) No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Section 10.08(a), the holders
of Senior Debt may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders, without incurring responsibility to the
Holders and without impairing or releasing the subordination provided in this
Article Ten or the obligations hereunder of the Holders to the holders of Senior
Debt, do any one or more of the following: (1) change the manner, place or terms
of payment or extend the time of payment of, or renew or alter, Senior Debt or
any instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (3) release any Person
liable in any manner for the collection or payment of Senior Debt; and (4)
exercise or refrain from exercising any rights against the Company and any other
Person; provided, however, that in no event shall any such actions limit the
right of the Holders of the Notes to take any action to accelerate the maturity
of the Notes pursuant to Article Six of this Indenture or to pursue any rights
or remedies hereunder or under applicable laws if the taking of such action does
not otherwise violate the terms of this Article Ten.
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SECTION 10.09. Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Notes. Notwithstanding the provisions of
this Article or any provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Notes, unless and
until the Trustee shall have received written notice thereof from the Company or
a holder of Senior Debt or from any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section
10.09 at least three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Note), then,
anything herein contained to the contrary notwithstanding but without limiting
the rights and remedies of the holders of Senior Debt or any trustee, fiduciary
or agent therefor, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date; nor shall the
Trustee be charged with knowledge of the curing of any such default or the
elimination of the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and the Company by a Person representing himself
to be a holder of Senior Debt (or a trustee, fiduciary or agent therefor) to
establish that such notice has been given by a holder of Senior Debt (or a
trustee, fiduciary or agent therefor); provided, however, that failure to give
such notice to the Company shall not affect in any way the ability of the
Trustee to rely on such notice. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
94
SECTION 10.10. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee and the Holders of the Notes shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the Custodian making such payment or distribution, delivered to
the Trustee or to the Holders, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of 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 Ten; provided, however, that the foregoing
shall apply only if such court has been fully apprised of the provisions of this
Article Ten.
SECTION 10.11. Rights of Trustee as a Holder of Senior Debt;
Preservation of Trustee's Rights.______________
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Ten with respect to any Senior Debt which may
at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article Ten shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
SECTION 10.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting under this Indenture, the
term "Trustee" as used in this Article Ten shall in such case (unless the
context otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Section 10.11 hereof shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.
SECTION 10.13. No Suspension of Remedies.
Nothing continued in this Article Ten shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Notes pursuant to Article Six of this Indenture or to pursue any rights or
remedies hereunder or
95
under applicable law, subject to the rights, if any, under this Article Ten of
the holders, from time to time, of Senior Debt.
SECTION 10.14. Trustee's Relation to Holders of Senior Debt.______
With respect to the holders of Senior Debt, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Article against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and the Trustee shall not be liable
to any holder of Senior Debt if it shall mistakenly pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Debt shall be entitled by virtue of this Article or otherwise.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control; provided, however, that this Section
11.01 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.
SECTION 11.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company:
International Knife & Saw, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
96
if to the Trustee:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇/1626
Each of the Company and the Trustee by written notice to the other
may designate additional or different addresses for notices to such Person. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; and five (5)
calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
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, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA { 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of TIA
{312(c).
SECTION 11.04. 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 satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
97
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06 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 has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" as used with respect to a particular place of
payment, is a Saturday, a Sunday or a day on which banking institutions in New
York, New York or at such place of payment are not required to be open. If a
payment date is a Legal Holiday at such place, payment may be made at such place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
SECTION 11.08. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
98
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO ITS PRINCIPLES OF CONFLICT OF LAWS. Each of the parties hereto agrees
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Indenture.
SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any of the Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company or of the Trustee shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creations.
Each Holder by accepting a Note waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of the Notes.
SECTION 11.11. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 11.14. Independence of Covenants.
All covenants and agreements in this Indenture and the Notes shall
be given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception
99
to, or otherwise be within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
condition exists.
[Remainder of Page Intentionally Left Blank]
100
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
INTERNATIONAL KNIFE & SAW, INC.
By:
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
Name:
Title:
101
EXHIBIT A
INTERNATIONAL KNIFE & SAW, INC.
11-3/8% SENIOR SUBORDINATED NOTE DUE 2006
CUSIP No.: 459733 AA 9
No. $
INTERNATIONAL KNIFE & SAW, INC., a Delaware corporation (the
"Company", which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum of Dollars, on
November 6, 2006.
Interest Payment Dates: May 15 and November 15, commencing on May
15, 1997
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
INTERNATIONAL KNIFE & SAW, INC.
By:
Name:
Title:
By:
Name:
Title:
Certificate of Authentication
This is one of the 11-3/8% Senior Subordinated Notes due 2006
referred to in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:
Authorized Signatory
Date of Authentication:
102
(REVERSE OF SECURITY)
11-3/8% Senior Subordinated Note due 2006
1. Interest. INTERNATIONAL KNIFE & SAW, INC., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from November 6, 1996. The Company will pay interest semi-annually in
arrears on each Interest Payment Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful, from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, United States Trust
Company of New York (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice to
the Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of November 6, 1996 (the "Indenture"), between the Company and the Trustee.
This Note is one of a duly authorized issue of Initial Notes of the Company
designated as its 11-3/8% Senior Subordinated Notes due 2006 (the "Initial
Notes"). The Notes are limited in aggregate principal amount to $90,000,000. The
Notes include the Initial Notes and the Exchange Notes, as defined below, issued
in exchange for the Initial Notes pursuant to the Indenture. The Initial Notes
and the Exchange Notes are treated as a single class of securities under the
Indenture. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. 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 (15 U.S. Code {{ 77aaa-77bbbb) (the
103
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured obligations of the Company. Each Holder, by
accepting a Note, agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time in accordance with its
terms.
5. Subordination. The Notes are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full of all Senior Debt of the Company, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed. Each Holder by
his acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Redemption. (a) Optional Redemption. The Notes are redeemable, at
the Company's option, in whole or in part, at any time on and after November 15,
2001 at the redemption prices (expressed as percentages of the principal
amount of the Notes) if redeemed during the twelve-month period commencing on
November 15 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the Redemption Date:
Year Percentage
2001............................. 105.688%
2002............................. 103.792
2003............................. 101.896
2004 and thereafter.............. 100.000
(b) Optional Redemption Upon Public Equity Offerings. At any time or
from time to time on or prior to November 15, 1999, the Company may, at its
option, redeem up to $30 million aggregate principal amount of the Notes with
the net proceeds of one or more Public Equity Offerings, at a redemption price
equal to 111-3/8% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of redemption; provided, however, that (x) not
less than $60 million aggregate principal amount of the Notes is outstanding
immediately after giving effect to any such redemption (other than any Notes
owned by the Company or any of its Affiliates) and (y) such redemption is
effected within 90 days after the consummation of any such Public Equity
Offering.
The Notes are not entitled to the benefit of any sinking fund.
104
7. 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 of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such Redemption Date, then, unless the Company defaults
in the payment of such Redemption Price plus accrued interest, if any, the Notes
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights
Agreement dated as of the date of the Indenture, among the Company and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as initial purchasers of the
Initial Notes, the Company is obligated to consummate an exchange offer pursuant
to which the Holder of this Note shall have the right to exchange this Note for
the Company's Series B 11-3/8% Senior Subordinated Notes due 2006 (the "Exchange
Notes"), which shall have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects as the
Initial Notes. The Holders of the Initial Notes shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
10. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, and in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
11. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes,
105
subject to the provisions of the Indenture with respect to record dates for the
payment of interest.
12. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, or comply with Article Five of the Indenture or make any other change
that does not adversely affect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and the Subsidiaries to, among other things, incur
additional Indebtedness, make Restricted Payments or Restricted Investments,
create or incur Liens, enter into transactions with Affiliates, create dividend
or other payment restrictions affecting Subsidiaries and issue Preferred Stock
of Subsidiaries, and on the ability of the Company and the Subsidiaries to merge
or consolidate with any other Person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the assets of the Company and
the Subsidiaries. Such limitations are subject to a number of important
qualifications and exceptions. Pursuant to Section 4.06 of the Indenture, the
Company must annually report to the Trustee on compliance with such limitations.
16. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its
106
predecessor under the Notes and the Indenture, the predecessor, subject to
certain exceptions, will be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest when due, for any reason or a
Default in compliance with Article Five of the Indenture) if it determines that
withholding notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, the Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note 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.
20. Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note 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).
107
23. 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 as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note in larger type. Requests may be made to: International Knife & Saw, Inc.,
▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Chief Executive Officer.
108
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint, agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
Dated: Signed:
------------------ ----------------------------
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:
----------------------------
(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.)
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) November 6, 1999, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer:
109
[Check One]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"); or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of
which letter is attached to the Indenture as Exhibit C and can be
obtained from the Trustee); or
(4) __ outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) __ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended, if available; or
(6) __ pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/__/ The transferee is an Affiliate of the Company.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided, however, that if box (3), (4), (5) or (7)
is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes, in its sole discretion, such written legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, as amended.
110
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Dated: Signed:
------------------ ----------------------------
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A and is aware that the sale
to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
------------------ ----------------------------
NOTICE: To be executed by
an executive officer
111
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$
-------------------
Dated:
------------------ -------------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee:
-----------------------------------------
(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.)
112
EXHIBIT B
INTERNATIONAL KNIFE & SAW, INC.
SERIES B 11-3/8% SENIOR SUBORDINATED NOTE DUE 2006
CUSIP No.:
No. $
INTERNATIONAL KNIFE & SAW, INC., a Delaware corporation (the
"Company", which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum of Dollars, on
November 6, 2006.
Interest Payment Dates: May 15 and November 15, commencing on May
15, 1997
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
INTERNATIONAL KNIFE & SAW, INC.
By:
Name:
Title:
By:
Name:
Title:
Certificate of Authentication
This is one of the Series B 11-3/8% Senior Subordinated Notes due
2006 referred to in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:
Authorized Signatory
Date of Authentication:
113
(REVERSE OF SECURITY)
Series B 11-3/8% Senior Subordinated Note due 2006
1. Interest. INTERNATIONAL KNIFE & SAW, INC., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from November 6, 1996. The Company will pay interest semi-annually in
arrears on each Interest Payment Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful, from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, United States Trust
Company of New York (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice to
the Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of November 6, 1996 (the "Indenture"), between the Company and the Trustee.
This Note is one of a duly authorized issue of Exchange Notes of the Company
designated as its Series B 11-3/8% Senior Subordinated Notes due 2006 (the
"Exchange Notes"). The Notes are limited in aggregate principal amount to
$90,000,000. The Notes include the Exchange Notes and the Initial Notes in
exchange for which the Exchange Notes were issued pursuant to the Indenture. The
Initial Notes and the Exchange Notes are treated as a single class of securities
under the Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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 (15 U.S. Code {{ 77aaa-77bbbb)
114
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured obligations of the Company. Each Holder, by
accepting a Note, agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time in accordance with its
terms.
5. Subordination. The Notes are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full of all Senior Debt of the Company, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed. Each Holder by
his acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Redemption. (a) Optional Redemption. The Notes are redeemable, at
the Company's option, in whole or in part, at any time on and after November 15,
2001 at the redemption prices (expressed as percentages of the principal amount
of the Notes) if redeemed during the twelve-month period commencing on November
15 of the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the Redemption Date:
Year Percentage
2001............................. 105.688%
2002............................. 103.792
2003............................. 101.896
2004 and thereafter.............. 100.000
(b) Optional Redemption Upon Public Equity Offerings. At any time or
from time to time on or prior to November 15, 1999, the Company may, at its
option, redeem up to $30 million aggregate principal amount of the Notes with
the net proceeds of one or more Public Equity Offerings, at a redemption price
equal to 111-3/8% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of redemption; provided, however, that (x) not
less than $60 million aggregate principal amount of the Notes is outstanding
immediately after giving effect to any such redemption (other than any Notes
owned by the Company or any of its Affiliates) and (y) such redemption is
effected within 90 days after the consummation of any such Public Equity
Offering.
The Notes are not entitled to the benefit of any sinking fund.
115
7. 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 of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such Redemption Date, then, unless the Company defaults
in the payment of such Redemption Price plus accrued interest, if any, the Notes
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, and in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes, subject to the provisions of the
Indenture with respect to record dates for the payment of interest.
11. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
matur- ity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain
116
covenants, but excluding its obligation to pay the principal of and interest on
the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, or comply with Article Five of the Indenture or make any other change
that does not adversely affect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and the Subsidiaries to, among other things, incur
additional Indebtedness, make Restricted Payments or Restricted Investments,
create or incur Liens, enter into transactions with Affiliates, create dividend
or other payment restrictions affecting Subsidiaries and issue Preferred Stock
of Subsidiaries, and on the ability of the Company and the Subsidiaries to merge
or consolidate with any other Person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the assets of the Company and
the Subsidiaries. Such limitations are subject to a number of important
qualifications and exceptions. Pursuant to Section 4.06 of the Indenture, the
Company must annually report to the Trustee on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released
from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default
117
(except a Default in payment of principal or interest when due, for any reason
or a Default in compliance with Article Five of the Indenture) if it determines
that withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, the Subsidiaries or their
respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note 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.
19. Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note in larger type. Requests may be made to: International Knife & Saw, Inc.,
▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Chief Executive Officer.
118
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint , agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
Dated: Signed:
------------------ -------------------------
(Sign exactly as name appears
on the other side of this Note)
Signature Guarantee:
(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.)
119
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$
-------------------
Dated:
----------------- -------------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee:
(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.)
120
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------, ----
United States Trust Company
of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division
Re: International Knife & Saw, Inc. (the "Company") 11-3/8%
Senior Subordinated Notes due 2006 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed purchase of $_______ aggregate
principal amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated October 31, 1996, relating to the Notes and such other
information as we deem necessary in order to make our investment decision.
We acknowledge that we have read and agreed to the matters stated in the
section entitled "Notice to Investors" of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
dated as of November 6, 1996 relating to the Notes (the "Indenture") and
the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Notes except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the Notes have not been registered under the
Securities Act, and that the Notes 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 any Notes within three years after the original issuance
of the Notes, we will do so only (A) to the Company or any subsidiary
thereof, (B) inside the United States in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) inside the United States to an institutional "accredited
investor" (as defined in
121
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to you a signed letter substantially in the form of
this letter, (D) outside the United States in accordance with Regulation S
under the Securities Act, (E) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if available), or (F)
pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Notes
from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
4. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certification, written
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.
5. 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, as the case may be.
6. We are acquiring the Notes 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.
122
You, the Company and counsel for 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.
Very truly yours,
[Name of Transferee]
By:
Authorized Signature
123
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
______Pursuant to Regulation S_____
--------------, ----
United States Trust Company
of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division
Re: International Knife & Saw, Inc. (the "Company") 11-3/8%
Senior Subordinated Notes due 2006 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
124
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
Authorized Signature