Exhibit 4.1
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COLOR SPOT NURSERIES, INC., AS ISSUER,
▇▇▇▇▇▇▇▇ GROWERS, L.P.,
LONE STAR, INC. AND
COLORSPOT CHRISTMAS TREES, INC.,
LSGR HOLDINGS, INC.
ODA NURSERY, INC.
AS SUBSIDIARY GUARANTORS,
AND
THE BANK OF NEW YORK
AS TRUSTEE
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INDENTURE
DATED AS OF NOVEMBER __, 2001
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13% SENIOR SUBORDINATED NOTES
DUE 2005
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE...........................................................1
SECTION 1.1. DEFINITIONS...............................................................................1
SECTION 1.2. [RESERVED]...............................................................................16
SECTION 1.3. RULES OF CONSTRUCTION....................................................................16
ARTICLE II. THE SECURITIES.....................................................................................17
SECTION 2.1. FORM AND DATING..........................................................................17
SECTION 2.2. EXECUTION AND AUTHENTICATION.............................................................17
SECTION 2.3. REGISTRAR AND PAYING AGENT...............................................................18
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.....................................................19
SECTION 2.5. HOLDER LISTS.............................................................................19
SECTION 2.6. TRANSFER AND EXCHANGE....................................................................19
SECTION 2.7. REPLACEMENT SECURITIES...................................................................20
SECTION 2.8. OUTSTANDING SECURITIES...................................................................20
SECTION 2.9. TREASURY SECURITIES......................................................................20
SECTION 2.10. TEMPORARY SECURITIES....................................................................20
SECTION 2.11. CANCELLATION............................................................................21
SECTION 2.12. DEFAULTED INTEREST......................................................................21
SECTION 2.13. CUSIP NUMBER............................................................................21
ARTICLE III. REDEMPTION........................................................................................21
SECTION 3.1. NOTICES TO TRUSTEE.......................................................................21
SECTION 3.2. SELECTION OF SECURITIES TO BE REDEEMED...................................................22
SECTION 3.3. NOTICE OF REDEMPTION.....................................................................22
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION...........................................................23
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE..............................................................23
SECTION 3.6. SECURITIES REDEEMED IN PART..............................................................23
ARTICLE IV. SUBORDINATION......................................................................................24
SECTION 4.1. SECURITIES SUBORDINATED TO SENIOR DEBT...................................................24
SECTION 4.2. SUSPENSION OF PAYMENT WHEN SENIOR DEBT IN DEFAULT........................................24
SECTION 4.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR DEBT ON DISSOLUTION,
LIQUIDATION OR REORGANIZATION OF COMPANY......................................................25
SECTION 4.4. HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR DEBT.............................27
SECTION 4.5. OBLIGATIONS OF THE COMPANY UNCONDITIONAL.................................................27
SECTION 4.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE OF NOTICE..................28
SECTION 4.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.......................................28
SECTION 4.8. NO WAIVER OF SUBORDINATION PROVISIONS....................................................28
SECTION 4.9. HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF SECURITIES......................29
SECTION 4.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT....................................................29
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SECTION 4.11. NO SUSPENSION OF REMEDIES...............................................................30
SECTION 4.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR DEBT..................................30
ARTICLE V. COVENANTS...........................................................................................30
SECTION 5.1. PAYMENT OF SECURITIES....................................................................30
SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY..........................................................31
SECTION 5.3. LIMITATION ON RESTRICTED PAYMENTS........................................................31
SECTION 5.4. CORPORATE EXISTENCE......................................................................32
SECTION 5.5. PAYMENT OF TAXES AND OTHER CLAIMS........................................................32
SECTION 5.6. MAINTENANCE OF PROPERTIES AND INSURANCE..................................................32
SECTION 5.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT................................................33
SECTION 5.8. COMPLIANCE WITH LAWS.....................................................................34
SECTION 5.9. SEC REPORTS..............................................................................34
SECTION 5.10. WAIVER OF STAY, EXTENSION OR USURY LAWS.................................................34
SECTION 5.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES..............................................35
SECTION 5.12. LIMITATION ON INDEBTEDNESS..............................................................35
SECTION 5.13. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES...........36
SECTION 5.14. LIMITATION ON LIENS.....................................................................36
SECTION 5.15. LIMITATION ON CHANGE OF CONTROL.........................................................37
SECTION 5.16. LIMITATION ON ASSET SALES...............................................................38
SECTION 5.17. LIMITATION ON CAPITAL STOCK OF SUBSIDIARIES.............................................40
SECTION 5.18. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT............................................40
SECTION 5.20. LIMITATION OF GUARANTEES BY SUBSIDIARIES................................................40
SECTION 5.21. CONDUCT OF BUSINESS.....................................................................41
SECTION 5.22. MAINTENANCE OF CONSOLIDATED EBITDA......................................................41
SECTION 5.23. MAINTENANCE OF MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO.........................41
SECTION 5.24. MAINTENANCE OF MINIMUM INTEREST COVERAGE................................................42
SECTION 5.25. CAPITAL EXPENDITURES....................................................................42
ARTICLE VI. SUCCESSOR CORPORATION..............................................................................43
SECTION 6.1. LIMITATIONS ON MERGERS AND CERTAIN OTHER TRANSACTIONS....................................43
SECTION 6.2. SUCCESSOR CORPORATION SUBSTITUTED........................................................44
ARTICLE VII SUBORDINATED SUBSIDIARY GUARANTIES.................................................................44
SECTION 7.1. SUBORDINATED SUBSIDIARY GUARANTIES.......................................................44
SECTION 7.2. LIMITATION ON LIABILITY..................................................................46
SECTION 7.3. SUCCESSORS AND ASSIGNS...................................................................46
SECTION 7.4. NO WAIVER................................................................................46
SECTION 7.5. MODIFICATION.............................................................................46
SECTION 7.6. RELEASE OF SUBSIDIARY GUARANTOR..........................................................46
ARTICLE VIII. DEFAULT AND REMEDIES.............................................................................47
SECTION 8.1. EVENTS OF DEFAULT........................................................................47
SECTION 8.2. ACCELERATION.............................................................................48
SECTION 8.3. OTHER REMEDIES...........................................................................49
SECTION 8.4. WAIVER OF PAST DEFAULTS..................................................................49
SECTION 8.5. CONTROL BY MAJORITY......................................................................49
SECTION 8.6. LIMITATION ON SUITS......................................................................50
SECTION 8.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.....................................................50
SECTION 8.8. COLLECTION SUIT BY TRUSTEE...............................................................50
SECTION 8.9. TRUSTEE MAY FILE PROOFS OF CLAIM.........................................................51
SECTION 8.10. PRIORITIES..............................................................................51
SECTION 8.11. RIGHTS AND REMEDIES CUMULATIVE..........................................................51
SECTION 8.12. DELAY OR OMISSION NOT WAIVER............................................................52
SECTION 8.13. UNDERTAKING FOR COSTS...................................................................52
ARTICLE IX. TRUSTEE............................................................................................52
SECTION 9.1. DUTIES OF TRUSTEE........................................................................52
SECTION 9.2. RIGHTS OF TRUSTEE........................................................................53
SECTION 9.3. INDIVIDUAL RIGHTS OF TRUSTEE.............................................................54
SECTION 9.4. TRUSTEE'S DISCLAIMER.....................................................................55
SECTION 9.5. NOTICE OF DEFAULT........................................................................55
SECTION 9.6. REPORTS BY TRUSTEE TO HOLDERS............................................................55
SECTION 9.7. COMPENSATION AND INDEMNITY...............................................................55
SECTION 9.8. REPLACEMENT OF TRUSTEE...................................................................56
SECTION 9.9. SUCCESSOR TRUSTEE BY MERGER, ETC.........................................................57
SECTION 9.10. ELIGIBILITY; DISQUALIFICATION...........................................................57
SECTION 9.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.......................................57
ARTICLE X. SATISFACTION AND DISCHARGE OF INDENTURE.............................................................58
SECTION 10.1. TERMINATION OF THE COMPANY'S OBLIGATIONS................................................58
SECTION 10.2. LEGAL DEFEASANCE AND COVENANT DEFEASANCE................................................58
SECTION 10.3. APPLICATION OF TRUST MONEY..............................................................61
SECTION 10.4. REPAYMENT TO THE COMPANY................................................................61
SECTION 10.5. REINSTATEMENT...........................................................................62
ARTICLE XI. AMENDMENTS, SUPPLEMENTS AND WAIVERS................................................................62
SECTION 11.1. WITHOUT CONSENT OF HOLDERS..............................................................62
SECTION 11.2. WITH CONSENT OF HOLDERS.................................................................62
SECTION 11.3. [RESERVED]..............................................................................63
SECTION 11.4. REVOCATION AND EFFECT OF CONSENTS.......................................................63
SECTION 11.5. NOTATION ON OR EXCHANGE OF SECURITIES...................................................64
SECTION 11.6. TRUSTEE TO SIGN AMENDMENTS, ETC.........................................................64
ARTICLE XII. MISCELLANEOUS.....................................................................................65
SECTION 12.1. [RESERVED]..............................................................................65
SECTION 12.2. NOTICES.................................................................................65
SECTION 12.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS............................................66
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT......................................66
SECTION 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...........................................66
SECTION 12.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR...............................................67
SECTION 12.7. LEGAL HOLIDAYS..........................................................................67
SECTION 12.8. GOVERNING LAW...........................................................................67
SECTION 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...........................................67
SECTION 12.10. NO RECOURSE AGAINST OTHERS.............................................................67
SECTION 12.11. SUCCESSORS.............................................................................68
SECTION 12.12. DUPLICATE ORIGINALS....................................................................68
SECTION 12.13. HEADINGS AND TABLE OF CONTENTS.........................................................68
SECTION 12.14. SEVERABILITY...........................................................................68
INDENTURE dated as of November __, 2001, between COLOR SPOT NURSERIES,
INC., a Delaware corporation, The Bank of
New York, as Trustee, and the
undersigned Subsidiary Guarantors (as defined below).
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 13% Senior
Subordinated Notes due 2005 (the "Securities"):
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. DEFINITIONS.
"Acquired Indebtedness" means Indebtedness (a) of a Person or any of
its Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries; or (b) assumed in connection with the acquisition of assets from
such Person and in each case not incurred by such Person in connection with, or
in anticipation or contemplation of, such Person becoming a Subsidiary of the
Company or such acquisition, merger or consolidation.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person,
PROVIDED, that the Existing Bondholders and any affiliated entities to which
they may transfer Securities or Capital Stock of the Company shall not be deemed
to be Affiliates. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative of the foregoing.
"Affiliate Transaction" shall have the meaning provided in Section
5.11(a).
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary of the Company in any other Person, or the merger or consolidation of
any Person with or into the Company or any Subsidiary of the Company, or (b) the
acquisition by the Company or any Subsidiary of the Company of the assets of any
Person other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Subsidiaries (including any Sale and Leaseback Transaction) to any Person
other than the Company or a Wholly Owned Subsidiary of the Company of (a) any
Capital Stock of any Subsidiary of the Company; or (b) any other property or
assets of the Company or any Subsidiary of the Company other than in the
ordinary course of business; PROVIDED, HOWEVER, that Asset Sales shall not
include (i) a transaction or series of
related transactions for which the Company or its Subsidiaries receive
aggregate consideration of less than $500,000; (ii) the sale, lease,
conveyance, disposition or other transfer of all or substantially all of the
assets of the Company as permitted under "Merger, Consolidation and Sale of
Assets;" and (iii) sales of Permitted Investments described in clause (iii)
or (vi) of the definition thereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Barcelo Consulting Agreement" means that certain Consulting and
Noncompetition Agreement dated as of March 5, 1996 between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
the Company.
"Barcelo Note" means that certain 8% Promissory Note dated March 5,
1996, issued by the Company to stockholders of Barcelo's Plant Growers, Inc.
"Barcelo Obligations" means, collectively, the Barcelo Note and the
Barcelo Consulting Agreement.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Expenditures" means, with respect to any Person, expenditures
made or liabilities incurred by such Person for the acquisition of any fixed
assets or improvements, replacements, substitutions or additions thereto which
have a useful life of more than one year, including the total principal portion
of Capital Lease Obligations.
"Capital Lease Obligation" means, as to any Person, the indebtedness of
such Person represented by obligations under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"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
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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 Corporation ("S&P") or ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's"); (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 S&P or at least P-1 from Moody's; (iv) certificates of
deposit or bankers' acceptances 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
U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000; (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.
"Catalyst Notes" means the Company's $12 million in principal amount of
senior subordinated secured notes issued to Catalyst Equity Fund, L.P..
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in any one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture); (ii) 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 provisions of this
Indenture); (iii) any
Person or Group (other than the Permitted Holder(s) or SunAmerica Asset
Management Corp., AIG Global Investment Corp., Ares Management, L.P.,
TCW/Crescent Mezzanine, LLC or the other Existing Bondholders or any combination
of such entities and their respective Affiliates) shall become the owner,
directly or indirectly, beneficially or of record, of more than 35% of the
issued and outstanding shares of Capital Stock of the Company that is generally
entitled to vote for the election of directors (other than the Series A
Preferred Stock or the Series B Preferred Stock); or (iv) the replacement of a
majority of the Board of Directors of the Company over a two-year period from
the directors who constituted the Board of Directors of the Company at the
beginning of such period, and such replacement shall not have been approved by a
vote of (A) the Credit Agent, (B) the holders of a majority of the issued and
outstanding shares of Series B Preferred Stock or (C) a majority of the Board of
Directors of the Company then still in office who either were members of such
Board of Directors at the beginning of such period or whose election as a member
of such Board of Directors was previously so approved.
"Change of Control Offer" shall have the meaning provided in Section
5.15(a).
"Change of Control Payment Date" shall have the meaning provided in
Section 5.15(b).
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such
3
Person's common stock, whether outstanding on the Issue Date or issued after
the Issue Date, and includes, without limitation, all series and classes of
such common stock.
"Company" means Color Spot Nurseries, Inc., a Delaware corporation,
until a successor replaces it pursuant to this
Indenture and thereafter means
such successor.
"Consolidated" means the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
"Consolidated Adjusted Net Earnings" means, with respect to any Person
for any fiscal period, the Consolidated net earnings (or loss) after the
provision for income taxes, but before the deduction for non-cash preferred
stock dividends, of such Person for such fiscal period of such Person, as
reflected on the financial statements of such Person, but excluding (to the
extent included in the calculation of Consolidated net earnings (or loss)): any
gain or loss from asset dispositions (other than sales of inventory); any gain
arising from any write-up of assets; the income (or loss) of any Person accrued
prior to the date it became a Subsidiary of the Company or is merged into or
consolidated with the Company; the income (or loss) of any Person (other than a
subsidiary of the Company) in which the Company or any of its wholly-owned
subsidiaries has an ownership interest unless received in a cash distribution or
requiring the payment of cash; extraordinary gains as defined under GAAP and
extraordinary non-cash losses, net of the related tax effects; and non-cash
gains or losses due to changes in GAAP..
"Consolidated EBITDA" means with respect to any Person for any fiscal
period, the sum of such Person's and its Subsidiaries' Consolidated Adjusted Net
Earnings plus amounts deducted in determining Consolidated Adjusted Net Earnings
in respect of: (a) any provision for (or less any benefit from) income taxes
whether current or deferred; (b) amortization and depreciation expense; (c)
Consolidated Interest Expense for such period, all as determined in accordance
with GAAP and (d) the lesser of (i) the fees, costs and expenses incurred in
connection with the issuance of the Securities, the entry by the Company into
the Credit Agreement, the issuance of the New Preferred Stock and the
transactions effected in connection therewith in the amounts, and for the fiscal
periods, set forth in Attachment 1 to Exhibit 8.3 to the Credit Agreement (as in
effect on the Issue Date) and (ii) the fees, costs and expenses actually
incurred in connection with the issuance of the Securities, the entry by the
Company into the Credit Agreement, the issuance of the New Preferred Stock and
the transactions effected in connection therewith in the amounts and during the
actual periods incurred.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person for any fiscal period, the ratio of (i) Consolidated EBITDA for such
period minus the income taxes payable in cash during such period minus
non-financed Capital Expenditures for such period to (ii) Consolidated Fixed
Charges.
"Consolidated Fixed Charges" means, with respect to any Person for any
fiscal period, scheduled principal payments and Consolidated Interest Expense
required to be paid in cash by such Person and its Subsidiaries during such
period with respect to any Indebtedness, but excluding required principal
payments under the Credit Agreement at maturity.
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"Consolidated Interest Expense" means, with respect to any Person for
any fiscal period, the interest expenses payable in cash by such Person and its
subsidiaries for such period.
"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 Capital Stock of such Person.
"Corporate Trust Office" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 21 West,
New
York,
New York 10286, Attention: Corporate Trust Department, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as such successor Trustee may designate from time
to time by notice to the Holders and the Company.
"Credit Agent" means, at any time, the then acting Administrative Agent
as defined in and under the Amended and Restated Loan and Security Agreement
dated November ___, 2001 by and among the Company, the lenders party thereto in
their capacities as lenders thereunder and Fleet Capital Corporation, as agent
which initially shall be Fleet Capital Corporation. The Company shall promptly
notify the Trustee of any change in the Credit Agent.
"Credit Agreement" means, collectively, (i) the Amended and Restated
Loan and Security Agreement dated November ___, 2001 by and among the Company,
the lenders party thereto in their capacities as lenders thereunder and Fleet
Capital Corporation, as agent, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents), and (ii) the Catalyst Notes together with the related documents
thereto (including, without limitation, any guarantee agreements and security
documents) in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of
available borrowings thereunder (PROVIDED that such increase in borrowings is
permitted by Section 5.12) or adding Subsidiaries of the Company as additional
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Subsidiary of the Company against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Designated Senior Debt" means (i) Indebtedness under or in respect of
the Credit Agreement, and (ii) any other Indebtedness constituting Senior Debt
which, at the time of determination, has an aggregate principal amount of at
least $3,000,000 and is specifically
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designated in the instrument evidencing such Senior Debt as "Designated Senior
Debt" by the Company.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable (other than in connection with a
change of control, pursuant to a sinking fund obligation or otherwise), or is
redeemable at the sole option of the holder thereof, on or prior to the final
maturity date of the Securities.
"Event of Default" shall have the meaning provided in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Exchange Offer" means the Company's offer to exchange their 10 1/2%
Senior Subordinated Notes for the Securities, Series B Preferred Stock and
certain cash payments.
"Existing Bondholders" means the holders of the Old Notes immediately
before giving effect to the exchange of Old Notes for the Securities and the
Series B Preferred Stock.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"▇▇▇▇▇▇ Note" means that certain Amended and Restated 8% Subordinated
Convertible Note due December 15, 2005.
"Holder" means the Person in whose name a Security is registered on the
Registrar's books.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of Indebtedness or other obligations or the
recording, as required pursuant to GAAP or otherwise, of any such Indebtedness
or other obligation on the balance sheet of such Person (and "Incurrence,"
"Incurred" and "Incurring" shall have meanings correlative to the foregoing).
"Indebtedness" means with respect to any Person, without duplication,
(i) all Obligations of such Person for borrowed money, (ii) all Obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capital Lease Obligations of such Person, (iv) all Obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and excluding long-term, deferred purchase
price obligations for trees, PROVIDED that such obligations for trees are not
6
recorded as liabilities on such Person's balance sheet in accordance with GAAP),
(v) all Obligations for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction, (vi) guarantees and
other contingent obligations in respect of Indebtedness referred to in clauses
(i) through (v) above and clause (viii) below, (vii) all Obligations of any
other Person of the type referred to in clauses (i) through (vi) which are
secured by any lien on any property or asset of such Person, the amount of such
Obligation being deemed to be the lesser of the fair market value of such
property or asset or the amount of the Obligation so secured, (viii) all
Obligations under Currency Agreements and Interest Swap Obligations of such
Person and (ix) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the
Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock..
"
Indenture" means this
Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company (other than an interest in less than
1% of the Company's Common Stock after such time as the Company's Common Stock
is publicly traded) and (ii) which, in the judgment of the Board of Directors of
the Company, is otherwise independent and qualified to perform the task for
which it is to be engaged.
"Interest Coverage Ratio" means, with respect to any Person for any
period of determination, the ratio of (i) Consolidated EBITDA of such Person, to
(ii) the Consolidated Interest Expense of such Person incurred for such period,
MINUS (x) interest paid-in-kind for such period as provided under the
Indenture,
and MINUS (y) amortization of deferred financing fees, all as determined in
accordance with GAAP.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Securities.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
7
"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 Person. "Investment" shall exclude extensions of trade credit by the
Company and its Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Subsidiary, as the case may be.
For the purposes of Section 5.3, the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments by
the Company or any of its 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. If the Company or any Subsidiary of the Company sells or otherwise
disposes of any Common Stock of any direct or indirect Subsidiary of the Company
such that, after giving effect to any such sale or disposition, the Company no
longer owns, directly or indirectly, 100% of the outstanding Common Stock of
such 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 Subsidiary not sold or disposed of.
"Issue Date" means _______ __, 2001, the date of original issuance of
the Securities under this Indenture.
"Legal Holiday" shall have the meaning provided in Section 11.7.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Maturity Date" means December 15, 2005.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Subsidiaries from such Asset
Sale net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing arrangements, (c) repayment of Indebtedness
that is required to be repaid in connection with such Asset Sale and (d)
appropriate amounts to be provided by the Company or any of its Subsidiaries, as
the case may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Subsidiary,
as the case may be, after 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.
8
"Net Proceeds Offer" shall have the meaning provided in Section 5.16.
"Net Proceeds Offer Amount" shall have the meaning provided in Section
5.16.
"Net Proceeds Offer Payment Date" shall have the meaning provided in
Section 5.16.
"New Preferred Stock" means the Series B Preferred Stock and the Series
B-1 Preferred Stock.
"Note Obligations" shall have the meaning set forth in Section 7.1.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Oda Note" means that certain 9% Subordinated Promissory Note with a
principal amount of $1,000,000 issued by the Company to the stockholders of Oda
Nursery, Inc.
"Officer" means, with respect to any Person, the Chief Executive
Officer, the Chief Financial Officer or the Chief Accounting Officer of such
Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two officers of the Company, one of whom must be the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company.
"Old Credit Agreement" means that certain Loan and Security Agreement
dated as of October 15, 1998 by and among Fleet Capital Corporation,
individually as a lender and as agent, the Company as Borrower and other lenders
party thereto, as amended from time to time.
"Old Notes" means the $100,000,000 in principal amount of 10 1/2 %
Senior Subordinated Notes due 2007 issued by the Company.
"operating lease" means any lease the obligations under which do not
constitute Capital Lease Obligations.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
12.4 and 12.5. Unless otherwise required by the Trustee, the legal counsel may
be an employee of or counsel to the Company or the Trustee.
"Paying Agent" shall have the meaning provided in Section 2.3, except
that for the purposes of Articles III and X and Sections 5.15 and 5.16, the
Paying Agent shall not be the Company or an Affiliate of the Company.
"Payment Blockage Period" shall have the meaning set forth in Section
4.2(b).
9
"Permitted Holder(s)" means KCSN Acquisition Company, L.P. and its
Affiliates, Kohlberg & Company, LLC and its Affiliates, Kohlberg Management
IV, LLC and its Affiliates, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and his Affiliates.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Securities, the Subsidiary
Guarantees of the Securities and the Indenture;
(ii) Indebtedness incurred pursuant to the Credit Agreement in
an aggregate principal amount at any time outstanding not to exceed $85
million, less the amount of all mandatory principal payments actually
made by the Company in respect of the Credit Agreement (excluding any
such payments to the extent refinanced at the time of payment under a
replacement of the Credit Agreement) and permanent commitment
reductions required to be made and actually made pursuant to Section
5.16 (PROVIDED, that Indebtedness under the Credit Agreement may only
be used to pay liabilities or make expenditures in the ordinary course
of the Company's business (including to effect Refinancings permitted
pursuant to subsection (x) hereof) or in connection with the
consummation of the Exchange Offer, the refinancing of the Old Credit
Agreement, the Company's entry into the Credit Agreement (including
issuance of the Catalyst Notes) and may not be used for any Asset
Acquisition);
(iii) Any Old Notes outstanding on the Issue Date, the ▇▇▇▇▇▇
Note, the Oda Note and the Barcelo Obligations, in each case reduced by
the amount of any scheduled amortization payments or mandatory
prepayments when actually paid or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company covering
Indebtedness of the Company or any of its Subsidiaries and Interest
Swap Obligations of any Subsidiary of the Company covering Indebtedness
of such Subsidiary; PROVIDED, HOWEVER, that such Interest Swap
Obligations are entered into and maintained to protect the Company and
its Subsidiaries from fluctuations in interest rates on Indebtedness
incurred in accordance with the Credit Agreement to the extent the
notional principal amount of such Interest Swap Obligation does not
exceed the principal amount of the Indebtedness to which such Interest
Swap Obligation relates;
(v) Indebtedness under Currency Agreements; PROVIDED that in
the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the Indebtedness of the Company and
its Subsidiaries outstanding other than as a result of fluctuations in
foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Subsidiary of the Company
to the Company or to a Wholly Owned Subsidiary of the Company for so
long as such Indebtedness is held by the Company or a Wholly Owned
Subsidiary of the Company, in each case subject to no Lien held by a
Person other than the Company or a Wholly Owned Subsidiary of the
Company (other than the Liens granted under the Credit
10
Agreement); PROVIDED that if as of any date any Person other than
the Company or a Wholly Owned Subsidiary of the Company owns or
holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the Incurrence of
Indebtedness not constituting Permitted Indebtedness by the issuer
of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Subsidiary
of the Company for so long as such Indebtedness is held by a Wholly
Owned Subsidiary of the Company, in each case subject to no Lien;
PROVIDED that (a) any Indebtedness of the Company to any Wholly Owned
Subsidiary of the Company is unsecured and subordinated, pursuant to a
written agreement, to the Company's obligations under the Indenture and
the Securities and (b) if as of any date any Person other than a Wholly
Owned Subsidiary of the Company owns or holds any such Indebtedness or
any Person holds a Lien in respect of such Indebtedness, such date
shall be deemed the Incurrence of Indebtedness not constituting
Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; PROVIDED,
HOWEVER, that such Indebtedness is extinguished within two business
days of Incurrence;
(ix) Indebtedness of the Company or any of its Subsidiaries
represented by letters of credit for the account of the Company or such
Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of
business;
(x) Indebtedness incurred to Refinance (x) any Senior Debt
(other than Senior Debt Incurred under the Credit Agreement) or (y) to
the extent then due and payable, the Oda Note, or the Barcelo
Obligations, in each case that does not (1) result in an increase in
the aggregate principal amount of such Indebtedness as of the date of
such Refinancing (plus the amount of any premium required to be paid
under the terms of the instrument governing such Indebtedness and plus
the amount of reasonable expenses incurred by the Company in connection
with such Refinancing) or (2) create Indebtedness (A) with a Weighted
Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or (B) with a final
maturity earlier than the final maturity of the Indebtedness being
Refinanced, or (C) that ranks senior to the Indebtedness that is being
so Refinanced; PROVIDED that if such Indebtedness being Refinanced is
solely Indebtedness of the Company, then such Refinancing Indebtedness
shall be Indebtedness solely of the Company; and
(xi) Indebtedness constituting Capital Lease Obligations (a)
incurred in connection with Capital Expenditures permitted under
"Capital Expenditures" above or (b) incurred to Refinance any
Indebtedness constituting Capital Lease Obligations outstanding on the
Issue Date or incurred pursuant to clause (a), so long as (1) the
Indebtedness incurred pursuant to this clause (b) is not materially
more burdensome to the Company than the Indebtedness so Refinanced and
(2) the aggregate principal amount at any time outstanding of
Indebtedness incurred under this clause (b) (as reflected on a
11
balance sheet prepared in accordance with GAAP) does not exceed the
sum of (x) the aggregate amount of Capital Lease Obligations
outstanding on the Issue Date plus (y) the amount of Indebtedness
constituting Capital Lease Obligations incurred pursuant to clause
(a); and
(xii) additional Indebtedness of the Company and its
Subsidiaries in an aggregate principal amount not to exceed $3,000,000
at any one time outstanding.
"Permitted Investments" means (i) Investments by the Company or any
Subsidiary of the Company in any Person that is or will become immediately after
such Investment a Wholly Owned Subsidiary of the Company or that will merge or
consolidate into the Company or a Wholly Owned Subsidiary of the Company; (ii)
Investments in the Company by any Subsidiary of the Company; PROVIDED that any
Indebtedness evidencing such Investment is unsecured and subordinated, pursuant
to a written agreement, to the Company's obligations under the Securities and
this Indenture; (iii) investments in cash and Cash Equivalents; (iv) loans and
advances to employees and officers of the Company and its Subsidiaries in the
ordinary course of business for bona fide hiring and relocation expenses
extended from and after the Issue Date not in excess of $300,000 at any one time
outstanding; (v) Currency Agreements and Interest Swap Obligations entered into
in the ordinary course of the Company's or its Subsidiaries' businesses and
otherwise in compliance with the Indenture; (vi) Investments in securities of
trade creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (vii) Investments made by the Company or its Subsidiaries as a result
of consideration received in connection with an Asset Sale made in compliance
with Section 5.16; (viii) notes received from management as payment for
purchases of Capital Stock; and (ix) additional Investments by the Company or
any Subsidiary of the Company in an aggregate amount, based on original cost,
not to exceed $1,000,000 at any one time outstanding.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or (b) contested in good faith by
appropriate proceedings and as to which the Company or its Subsidiaries
shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other
Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases,
12
government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment
of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;
(v) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
(vi) Liens existing as of the date of this Indenture;
(vii) any interest (including UCC filings) or title of a
lessor under any Capital Lease Obligation; provided that such Liens do
not extend to any property or assets which is not leased property
subject to such Capital Lease Obligation;
(viii) purchase money Liens to finance property or assets of
the Company or any Subsidiary of the Company acquired in the ordinary
course of business; provided, however, that (A) the related purchase
money Indebtedness shall not exceed the cost of such property or assets
and shall not be secured by any property or assets of the Company or
any Subsidiary of the Company other than the property and assets so
acquired and (B) the Lien securing such Indebtedness shall be created
within 90 days of such acquisition;
(ix) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
banker's acceptance issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(x) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other
property relating to such letters of credit and products and proceeds
thereof;
(xi) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements or the Company or any of its Subsidiaries, including
rights of offset and set-off;
(xii) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted
under the Indenture;
(xiii) Liens securing Indebtedness under Currency
Agreements; and
(xiv) Liens securing Indebtedness in an aggregate amount not
to exceed $1,000,000 at any one time outstanding.
13
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Record Date" means the record dates specified in the Securities;
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 Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and Paragraph 5 of the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and Paragraph 5 of the Securities.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, pre-pay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Registrar" shall have the meaning provided in Section 2.3.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; PROVIDED that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of any property, whether owned by
the Company or any Subsidiary at the Issue Date or later acquired, which has
been or is to be sold or transferred by the Company or such Subsidiary to such
Person or to any other Person from whom funds have been or are to be advanced by
such Person on the security of such Property.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company or any Subsidiary, whether outstanding on the Issue
Date or thereafter created, incurred or assumed, unless, in the case of any
particular
14
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Securities. Without limiting the
generality of the foregoing, "Senior Debt" shall also include the principal
of, premium, if any, interest (including any interest accruing subsequent to
the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in
respect of (w) all monetary obligations of every nature of the Company under
the Credit Agreement (or of any Subsidiaries of the Company under any
guarantee of the Company's obligations under the Credit Agreement),
including, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, (x) all Interest Swap Obligations, (y) all obligations under
Currency Agreements, in each case whether outstanding on the Issue Date or
thereafter incurred. Notwithstanding the foregoing, "Senior Debt" shall not
include (i) any Indebtedness of the Company to a Subsidiary of the Company or
any Affiliate of the Company or any of such Affiliate's Subsidiaries, (ii)
Indebtedness to, or guaranteed on behalf of, any shareholder, director,
officer or employee of the Company or any Subsidiary of the Company
(including, without limitation, amounts owed for compensation), (iii)
Indebtedness to trade creditors and other amounts incurred in connection with
obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Capital Stock, (v) any liability for federal, state, local or other
taxes owed or owing by the Company, (vi) Indebtedness incurred in violation of
this Indenture provisions set forth in Section 5.12, (vii) Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of ▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, is without recourse to the Company and (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of the Company, including the ▇▇▇▇▇▇ Note and the Old
Notes; PROVIDED, for the avoidance of doubt, that Indebtedness incurred pursuant
to the Credit Agreement in accordance with clause (ii) of the definition of
Permitted Indebtedness whether or not owed to an Affiliate of the Company shall
be "Senior Debt" notwithstanding that a portion of such Indebtedness (the
Catalyst Notes) is subordinated by its terms to the balance of such
Indebtedness.
"Series A Preferred Stock" means the existing Series A Preferred Stock
of the Company with a liquidation preference of $1,000 per share.
"Series B Preferred Stock" means the Series B Preferred Stock of the
Company issued pursuant to the Series B Certificate of Designation.
"Series B-1 Preferred Stock" means the Series B-1 Preferred Stock of
the Company issued pursuant to the Series B-1 Certificate of Designation.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantee" means the guarantee of a Subsidiary Guarantor
with respect to the Company's obligations under the Securities and the
Indenture.
15
"Subsidiary Guarantor" means each existing and future Subsidiary of the
Company that executes a Subsidiary Guarantee.
"Surviving Entity" shall have the meaning provided in Section 6.1(i).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb), as amended, as in effect on the date the Company is required to
qualify this Indenture under the TIA.
"Trust Officer" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"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.
"U.S. Government Obligations" means direct non-callable obligations of,
or non-callable obligations guaranteed by, the United States of America for the
payment of which guarantee or obligation the full faith and credit of the United
States 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.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than in the case of
a foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
Section 1.2. [RESERVED].
Section 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) term has the meaning assigned to it;
16
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(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.
ARTICLE II.
THE SECURITIES
Section 2.1. FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company and the Trustee shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the Securities 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.
Section 2.2. EXECUTION AND AUTHENTICATION.
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 Securities for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for original issue in the
aggregate principal amount of up to $55,000,000 on the Issue Date pursuant to a
written order of the Company in the form of an Officers' Certificate and, from
time to time thereafter, in an aggregate principal
17
amount specified in a written order in the form of an Officers' Certificate
and equal to the interest payable on outstanding Securities in the form of
additional Securities and pursuant to the terms of the Securities. The
Officers' Certificate shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated.
Such Securities shall be issued in definitive form in the name of the
registered holder thereof. Except as provided in Section 2.7, the aggregate
principal amount of Securities outstanding at any time may not exceed the sum
of (x) $55,000,000 (or such lesser amount as is requested authenticated by the
Trustee and issued by the Company on the Issue Date) and (y) the additional
amount of Securities issued from time to time after the Issue Date in an
aggregate principal amount specified in a written order in the form of an
Officers' Certificate and equal to the interest payable on outstanding
Securities in the form of additional Securities and pursuant to the terms of
the Securities, .
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $500 and integral multiples thereof.
Section 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of
New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of
New York, for such purposes. The
Company may act as its own Registrar or Paying Agent except that for the
purposes of Articles III and X and Sections 5.15 and 5.16, neither the Company
nor any Affiliate of the Company shall act as Paying Agent. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company, upon 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 initially
appoints the Trustee as Registrar and Paying Agent until such time as the
Trustee has resigned or a successor has been appointed.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall 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, the Trustee shall act as
such.
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Section 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that, subject to Article IV, each Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all assets held by the Paying
Agent for the payment of principal of, or interest on, the Securities (whether
such assets have been distributed to it by the Company or any other obligor on
the Securities), and shall notify the Trustee of any Default by the Company (or
any other obligor on the Securities) in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate such assets and hold
them as a separate trust fund, subject to Article IV. 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 2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which list
may be conclusively relied upon by the Trustee.
Section 2.6. TRANSFER AND EXCHANGE.
When Securities are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities 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 Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his or her attorney duly authorized in
writing. To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities 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 or transfers pursuant to Sections 2.2, 2.7, 2.10, 3.6,
5.15, 5.16 or 11.5). The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Security (i) during a period
beginning at the opening of business 15 days before the mailing of a notice of
redemption of Securities and ending at the close of business on the day of such
mailing and (ii) selected for redemption in whole or in part pursuant to Article
III, except the unredeemed portion of any Security being redeemed in part.
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Section 2.7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security 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,
sufficient in the 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 Security is replaced. The Company may charge such Holder for its reasonable
out-of-pocket expenses in replacing a Security pursuant to this Section 2.7,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Company.
Section 2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities 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. A
Security does not cease to be outstanding because the Company or any of its
respective Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or a Subsidiary) holds U.S. Legal Tender or U.S. Government
Obligations sufficient to pay all of the principal and interest due on the
Securities payable on that date, then on and after that date such Securities
cease to be outstanding and interest on them ceases to accrue unless, pursuant
to the provisions of Article IV, the Paying Agent is unable to make payments on
the Securities to the Holders thereof.
Section 2.9. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Subsidiaries or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer the Trustee actually knows or has reason to know
are so owned shall be disregarded.
Section 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate
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for temporary Securities. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Securities (which may
be in typewritten form) in exchange for temporary Securities. Until such
exchange, temporary Securities shall be entitled to the same rights, benefits
and privileges as definitive Securities.
Section 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or a Subsidiary), and no one else, shall cancel and, at
the written direction of the Company, shall dispose of all Securities
surrendered for transfer, exchange, payment or cancellation. Subject to Section
2.7, the Company may not issue new Securities to replace Securities that it has
paid or delivered to the Trustee for cancellation. If the Company shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities, it
shall, unless the Trustee fixes another record date pursuant to Section 8.10,
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 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. At least 15 days before the
subsequent special record date, the Company shall mail to each Holder, 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.
Section 2.13. CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities.
ARTICLE III.
REDEMPTION
Section 3.1. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee, with a copy to the Representative,
of the Redemption Date and the principal amount of Securities to be redeemed and
whether it wants the Trustee to give notice of
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redemption to the Holders at least 30 days but not more than 60 days before
the Redemption Date. Any such notice may be cancelled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be
void and of no effect.
Section 3.2. SELECTION OF SECURITIES TO BE REDEEMED.
If fewer than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed pro rata, by lot or by any other
method that the Trustee considers fair and appropriate and, if such Securities
are listed on any securities exchange, by a method that complies with the
requirements of such exchange.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 or less may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 or
integral multiples thereof) of the principal amount of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.3. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail to each Holder
whose Securities are to be redeemed at such Holder's registered address, with a
copy to the Trustee. At the Company's written request delivered at least 15 days
prior to the date such notice is to be given (unless a shorter period shall be
acceptable to the Trustee), the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense. Each notice for redemption
shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(5) that, unless (a) the Company defaults in making the
redemption payment on the Redemption Date or (b) such redemption
payment is prohibited pursuant to Article IV or otherwise, interest on
Securities called for redemption ceases to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price upon surrender
to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the Redemption Date, and upon
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surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be
issued;
(7) if fewer than all the Securities are to be redeemed,
the identification of the particular Securities (or portion thereof)
to be redeemed, as well as the aggregate principal amount of Securities
to be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption; and
(8) the CUSIP number of the Securities to be redeemed.
Section 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or Paying Agent, such
Securities called for redemption shall be paid at the Redemption Price unless
prohibited pursuant to Article IV or otherwise pursuant to this Indenture.
Securities that are redeemed by the Company or that are purchased by the Company
pursuant to a Net Proceeds Offer as described in Section 5.16 or pursuant to a
Change of Control Offer as described in Section 5.15 or that are otherwise
acquired by the Company will be surrendered to the Trustee for cancellation.
Section 3.5. DEPOSIT OF REDEMPTION PRICE.
On or before 11:00 a.m.
New York City time on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price of all Securities to be redeemed on that date (other than
Securities or portions thereof called for redemption on that date which have
been delivered by the Company to the Trustee for cancellation). The Paying Agent
shall promptly return to the Company any U.S. Legal Tender so deposited which is
not required for that purpose upon the written request of the Company, except
with respect to monies owed as obligations to the Trustee pursuant to Article
IX.
If the Company complies with the preceding paragraph and payment of the
Securities called for redemption is not prohibited under Article IV or
otherwise, then, unless the Company defaults in the payment of such Redemption
Price, interest on the Securities or portions thereof to be redeemed will cease
to accrue on and after the applicable Redemption Date, whether or not such
Securities are presented for payment.
Section 3.6. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Security or Securities equal in
principal amount to the unredeemed portion of the Security surrendered.
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ARTICLE IV.
SUBORDINATION
Section 4.1. SECURITIES SUBORDINATED TO SENIOR DEBT.
Anything herein to the contrary notwithstanding, the Company, for
itself and its successors, each Subsidiary Guarantor, for itself and its
successors, and each Holder, by his or her acceptance of Securities, agrees that
the payment of any Obligations on the Securities (including, without limitation
on, the guaranty obligations provided under Article VII hereof), is
subordinated, to the extent and in the manner provided in this Article IV, to
the prior payment in full in cash or Cash Equivalents of all Senior Debt,
whether outstanding on the Issue Date or thereafter Incurred, including with
respect to Designated Senior Debt, any interest accruing thereon subsequent to
the occurrence of any Event of Default specified in clauses (vii) or (viii) of
Section 8.1 relating to the Company or any Subsidiary Guarantor, whether or not
such interest is an allowed claim enforceable against the Company or any
Subsidiary Guarantor under any Bankruptcy Law.
This Article IV shall constitute a continuing offer to all persons who
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 any one or more of them may enforce such provisions.
The obligations of the Company or any Subsidiary Guarantor to the
Trustee under Section 8.7 shall not be subject to the provisions of this Article
IV.
Section 4.2. SUSPENSION OF PAYMENT WHEN SENIOR DEBT IN DEFAULT.
(a) Unless Section 4.3 shall be applicable, no direct or indirect
payment (other than payments by a trust previously established pursuant to
Article X) or distribution of any asset of the Company or any Subsidiary
Guarantor of any kind or character by or on behalf of the Company or any
Subsidiary Guarantor of Obligations on the Securities or on account of the
purchase or redemption or other acquisition of the Securities whether pursuant
to the terms of the Securities or upon acceleration or otherwise shall be made
if, at the time of such payment or distribution, there exists a default in the
payment of all or any portion of principal of, premium, if any, or interest on
any Designated Senior Debt and such default shall not have been cured or waived
by or on behalf of the holders of such Designated Senior Debt or shall have
ceased to exist, until such default shall have been cured or waived or shall
have ceased to exist or such Designated Senior Debt shall have been discharged
or paid in full in cash or Cash Equivalents, after which the Company or any
Subsidiary Guarantor shall resume making any and all required payments in
respect of the Securities, including any missed payments.
(b) Unless Section 4.3 shall be applicable, during the continuance
of any other event of default with respect to any Designated Senior Debt
pursuant to which the maturity thereof may be accelerated, upon the earlier to
occur of (a) receipt by the Trustee of written notice from the holders of a
majority of the outstanding principal amount of the Designated Senior Debt or
their Representative stating that such notice is a notice pursuant to Section
4.2 of this Indenture,
24
or (b) if such event of default results from the acceleration of the
Securities, the date of such acceleration, no such payment (other than
payments by a trust previously established pursuant to Article X) or
distribution of any asset of the Company or any Subsidiary Guarantor of any
kind or character shall be made by the Company or any Subsidiary Guarantor
upon or in respect of the Securities (including without limitation on account
of any principal of, premium, if any, or interest on the Securities) or on
account of the purchase or redemption or other acquisition of Securities for
a period ("Payment Blockage Period") commencing on the earlier of the date of
receipt of such notice or the date of such acceleration and ending 180 days
thereafter (provided such Designated Senior Debt shall theretofore not have
been accelerated) (unless (x) such Payment Blockage Period shall be
terminated by written notice to the Trustee from the holders of a majority of
the outstanding principal amount of such Designated Senior Debt or their
Representative who delivered such notice or (y) such default is cured or
waived, or ceases to exist or such Designated Senior Debt is discharged or
paid in full in cash or Cash Equivalents), after which the Company shall
promptly notify the Trustee in writing of such cure or waiver and resume
making any and all required payments in respect of the Securities, including
any missed payments. Notwithstanding anything herein to the contrary, in no
event will Payment Blockage Periods exceed an aggregate of 180 days during
any consecutive 360-day period. Not more than two Payment Blockage Periods
may be commenced with respect to the Securities during any period of 360
consecutive days. No event of default which existed or was continuing on the
date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Debt initiating such Payment Blockage Period shall be, or
be made, the basis for the commencement of a second Payment Blockage Period
by the holders of such Designated Senior Debt or their Representative whether
or not within a period of 360 consecutive days unless such event of default
shall have been cured or waived for a period of not less than 90 consecutive
days (it being acknowledged that any subsequent action, or any breach of any
financial covenants for a period commencing after the date of commencement of
such Payment Blockage Period that, in either case, would give rise to an
event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default
for this purpose).
(c) In the event that, notwithstanding the foregoing, the Trustee
or a Holder shall have received any payment prohibited by the foregoing
provisions of this Section 4.2, then and in such event such payment shall be
paid over and delivered forthwith to the Representative or as a court of
competent jurisdiction shall direct.
Section 4.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR DEBT ON
DISSOLUTION, LIQUIDATION OR REORGANIZATION OF COMPANY.
Upon any payment or distribution of assets of the Company or any
Subsidiary Guarantor of any kind or character, whether in cash, property or
securities, upon any dissolution, winding-up, total or partial liquidation or
reorganization of the Company or any Subsidiary Guarantor (including, without
limitation, in bankruptcy, insolvency or receivership proceedings or upon any
assignment for the benefit of creditors or any other marshalling of the
Company's or any Subsidiary Guarantor's assets and liabilities and whether
voluntary or involuntary):
(a) the holders of Senior Debt shall first be entitled to receive
payments in full in cash or Cash Equivalents, or such payment duly provided for
to the satisfaction of the holders of
25
Senior Debt, of all amounts payable under Senior Debt before the Holders will
be entitled to receive any payment with respect to the Securities, or for the
acquisition of any of the Securities for cash or property or otherwise;
(b) any payment or distribution of assets of the Company or any
Subsidiary Guarantor of any kind or character, whether in cash, property or
securities, to which the Holders or the Trustee on behalf of the Holders would
be entitled except for the provisions of this Article IV, shall be paid by the
liquidating trustee or agent or other person making such a payment or
distribution, directly to the holders of Senior Debt or their Representative,
ratably according to the respective amounts of Senior Debt remaining unpaid held
or represented by each, until all Senior Debt remaining unpaid shall have been
paid in full in cash or Cash Equivalents after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt; and
(c) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company or any Subsidiary Guarantor of any kind
or character, whether in cash, property or securities, shall be received by the
Trustee or the Holders or any Paying Agent on account of principal of, premium,
if any, or interest on the Securities before all Senior Debt is paid in full in
cash or Cash Equivalents, such payment or distribution (subject to the
provisions of Sections 4.6 and 4.7) shall be received, segregated from other
funds, and held in trust by the Trustee or such Holder or Paying Agent for the
benefit of, and shall immediately be paid over to, the holders of Senior Debt or
their Representative, ratably according to the respective amounts of Senior Debt
held or represented by each, until all Senior Debt remaining unpaid shall have
been paid in full in cash or Cash Equivalents, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
Notwithstanding anything to the contrary contained herein, in the absence of its
gross negligence or willful misconduct, the Trustee shall have no duty to
collect or retrieve monies previously paid by it in good faith; provided,
however, that this sentence shall not affect the obligation of any other party
receiving such payment to hold such payment for the benefit of, and to pay over
such payment over to, the holders of Senior Debt or their Representative.
The consolidation of the Company or any Subsidiary Guarantor with, or
the merger of the Company or any Subsidiary Guarantor with or into, another
person or the liquidation or dissolution of the Company or any Subsidiary
Guarantor 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 VI 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 or any Subsidiary
Guarantor for the purposes of this Article IV 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 such Article VI.
The Company or any Subsidiary Guarantor shall give prompt written
notice to the Trustee prior to any dissolution, winding-up, total or partial
liquidation or reorganization (including, without limitation, in bankruptcy,
insolvency, or receivership proceedings or upon any assignment for the benefit
of creditors or any other marshalling of the Company's or any Subsidiary
Guarantor's assets and liabilities).
26
Section 4.4. HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt, Holders shall be subrogated to the rights of the holders of Senior
Debt to receive payments or distributions of assets of the Company or any
Subsidiary Guarantor applicable to the Senior Debt until all amounts owing on
the Securities shall be paid in full in cash, and for the purpose of such
subrogation no payments or distributions to the holders of Senior Debt by or on
behalf of the Company or any Subsidiary Guarantor, or by or on behalf of the
Holders by virtue of this Article IV, which otherwise would have been made to
the Holders, shall, as between the Company or any Subsidiary Guarantor and the
Holders, be deemed to be payment by the Company or any Subsidiary Guarantor to
or on account of the Senior Debt, it being understood that the provisions of
this Article IV are and 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.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article IV shall have been
applied, pursuant to the provisions of this Article IV, to the payment of all
amounts payable under the Senior Debt, then the Holders shall be entitled to
receive from the holders of such Senior Debt any payments or distributions
received by such holders of Senior Debt in excess of the amount sufficient to
pay all amounts payable under or in respect of the Senior Debt in full in cash
or Cash Equivalents.
Section 4.5. OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article IV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company or any
Subsidiary Guarantor and the Holders, the obligation of the Company or any
Subsidiary Guarantor, which is absolute and unconditional, to pay to the Holders
the principal of and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders and creditors of the Company or
any Subsidiary Guarantor other than the holders of the Senior Debt, nor shall
anything herein or therein 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 IV, of the holders
of Senior Debt in respect of cash, property or securities of the Company or any
Subsidiary Guarantor received upon the exercise of any such remedy. Upon any
payment or distribution of assets or securities of the Company or any Subsidiary
Guarantor referred to in this Article IV, the Trustee, subject to the provisions
of Sections 9.1 and 9.2, and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee or
agent or other person making any payment or distribution 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 or any Subsidiary Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article IV. Nothing in this Section 4.5 shall
apply to the claims of, or payments to, the Trustee under or pursuant to Section
9.7.
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Section 4.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE
OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until the Trustee shall have received written notice
thereof from the Company or any Subsidiary Guarantor or from one or more holders
of Senior Debt or from any Representative therefor and, prior to the receipt of
any such notice, the Trustee, subject to the provisions of Sections 9.1 and 9.2,
shall be entitled in all respects conclusively to assume that no such fact
exists.
Section 4.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
U.S. Legal Tender or U.S. Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Section 10.2 shall be for
the sole benefit of Holders and, to the extent allocated for the payment of
Securities, shall not be subject to the subordination provisions of this Article
IV. Otherwise, any deposit of assets or securities by or on behalf of the
Company or any Subsidiary Guarantor with the Trustee or any Paying Agent
(whether or not in trust) for the payment of principal of or interest on any
Securities shall be subject to the provisions of this Article IV; provided,
however, that if prior to the second Business Day preceding the date on which by
the terms of this Indenture any such assets may become distributable for any
purpose (including, without limitation, the payment of principal of or premium
or interest on any Security) the Trustee or such Paying Agent shall not have
received with respect to such assets the notice provided for in Section 4.6,
then the Trustee or such Paying Agent shall have full power and authority to
receive such assets and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary received by it
on or after such date. The foregoing shall not apply to the Paying Agent if the
Company or any Subsidiary or Affiliate of the Company is acting as Paying Agent.
Nothing contained in this Section 4.7 shall limit the right of the holders of
Senior Debt to recover payments as contemplated by this Article IV.
Section 4.8. 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 any Subsidiary Guarantor or by any act or failure to act, in good faith, by
any such holder, or by any non-compliance by the Company or any Subsidiary
Guarantor 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 subsection (a) of this
Section 4.8, 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 IV 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
28
or payment of Senior Debt; and (4) exercise or refrain from exercising any
rights against the Company or any Subsidiary Guarantor and any other person;
provided, however, that in no event shall any such actions limit the right of
the Holders to take any action to accelerate the maturity of the Securities
pursuant to Article VIII 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 Indenture.
(c) Each Holder by accepting a Security agrees that the
Representative of any Senior Debt (including, without limitation, the Credit
Agent), in its discretion, without notice or demand and without affecting any
rights of any holder of Senior Debt under this Article IV, may foreclose any
mortgage or deed of trust covering interests in real property secured thereby,
by judicial or nonjudicial sale; and such Holder hereby waives any defense to
the enforcement by the Representative of any Senior Debt (including, without
limitation, the Credit Agent) or by any holder of any Senior Debt against such
Holder of this Article IV after a judicial or nonjudicial sale or other
disposition of its interests in real property secured by such mortgage or deed
of trust; and such Holder expressly waives any defense or benefits that may be
derived from comparable provisions of the laws of any jurisdiction or any
similar statute in effect in any jurisdiction.
Section 4.9. HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
SECURITIES.
Each Holder by his or her acceptance of a Security authorizes and
expressly directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to effect the subordination provisions contained in
this Article IV, and appoints the Trustee his or her attorney-in-fact for such
purpose, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company or any Subsidiary Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or any other marshalling of assets and liabilities of the
Company or any Subsidiary Guarantor) tending towards liquidation or
reorganization of the business and assets of the Company or any Subsidiary
Guarantor, the immediate filing of a claim for the unpaid balance of such
Holder's Securities in the form required in said proceedings and cause said
claim to be approved. If the Trustee does not file a proper claim or proof of
debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of the
Senior Debt or their Representative is hereby authorized to file an appropriate
claim for and on behalf of the Holders. Nothing herein contained shall be deemed
to authorize the Trustee or the holders of Senior Debt or their Representative
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Senior Debt or their Representative to vote in respect of the
claim of any Holder in any such proceeding.
Section 4.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT.
The Trustee shall be entitled to all of the rights set forth in this
Article IV in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
29
Section 4.11. NO SUSPENSION OF REMEDIES.
The failure to make a payment on account of principal of or interest on
the Securities by reason of any provision of this Article IV shall not be
construed as preventing the occurrence of a Default or an Event of Default under
Section 8.1.
Nothing contained in this Article IV shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article VIII or to pursue any rights or remedies
hereunder or under applicable law, subject to the rights, if any, under this
Article IV of the holders, from time to time, of Senior Debt.
Section 4.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders (other than
for its willful misconduct or gross negligence) if it shall in good faith
mistakenly pay over or deliver to the Holders or the Company or any Subsidiary
Guarantor or any other person, money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article IV or otherwise. Nothing in
this Section 4.12 shall affect the obligation of any person other than the
Trustee to hold such payment for the benefit of, and to pay such payment over
to, the holders of Senior Debt or their Representative.
Section 4.13. SUBORDINATED SUBSIDIARY GUARANTEES.
Each of the provisions of this Article IV shall apply in full to each
obligation of each Subsidiary Guarantor (including, without limitation, the
obligations provided for under Article VII hereof).
ARTICLE V.
COVENANTS
Section 5.1. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. An installment of
principal of or interest on the Securities shall be considered paid on the date
it is due if the Trustee or Paying Agent (other than the Company or a
Subsidiary) holds on that date U.S. Legal Tender designated for and sufficient
to pay the installment; provided, however, that U.S. Legal Tender held by the
Trustee for the benefit of holders of Senior Debt or the payment of which to the
Holders is prohibited pursuant to the provisions of Article IV or otherwise
shall not be considered to be designated for the payment of any installment of
principal or interest on the Securities within the meaning of this Section 5.1.
The Company shall pay interest on overdue principal at the rate borne
by the Securities and it shall pay interest on overdue installments of interest
at the same rate, to the extent lawful.
30
Section 5.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of
New
York, the office or agency required under Section 2.3. The Company shall give
prior 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 12.2.
Section 5.3. LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make
any distribution (other than dividends or distributions payable in Qualified
Capital Stock of the Company) on or in respect of shares of the Company's or its
Subsidiaries' Capital Stock to holders of such Capital Stock, other than
dividends or distributions to the Company or its Wholly Owned Subsidiaries,
which shall be permitted (b) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company or its Subsidiaries or any warrants,
rights or options to purchase or acquire shares of any class of such Capital
Stock, other than from the Company or a Wholly Owned Subsidiary of the Company,
which shall be permitted (c) make any principal payment on, purchase, defease,
redeem, prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund payment,
any Indebtedness of the Company or its Subsidiaries that is subordinate or
junior in right of payment to the Securities; (d) make any payment on,
repurchase, redeem or refinance any securities ranking in parity with the New
Preferred Stock or the Securities prior to any scheduled final maturity,
scheduled repayment, scheduled sinking fund payment, or scheduled interest
payment, unless such payment, repurchase, redemption or refinancing is made PRO
RATA for the New Preferred Stock or the Securities, as applicable (PROVIDED,
that the foregoing clause (d) shall not preclude refinancings permitted under
subparagraphs (x) or (xi) of the definition of "Permitted Indebtedness" or any
payments with respect to, or repurchases or redemptions of, any Indebtedness
permitted under any of subparagraphs (iv), (v), (vi), (vii), (viii), (ix) or
(xii) of the definition of "Permitted Indebtedness" (solely at stated maturity
with respect to redemptions of Indebtedness under subparagraph (xii)); or (e)
make any Investment (other than Permitted Investments) (each of the foregoing
actions set forth in clauses (a), (b), (c), (d) and (e) being referred to as a
"Restricted Payment").
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit (1) if no Default or Event of
Default shall have occurred and be continuing, the acquisition of any
Indebtedness of the Company that is subordinate or junior in right of payment to
the Securities either (A) solely in exchange for shares of Qualified Capital
Stock of the Company or (B) solely, if and to the extent that the Indebtedness
being Refinanced is then due and payable, Refinancing Indebtedness that complies
with clause (x) of the definition of Permitted Indebtedness; (2) so long as no
Default or Event of Default shall have occurred and be continuing, the payment
of cash dividends on the New Preferred Stock commencing with the first payment
due on September 15, 2003; (3) so long as no Default or Event of Default shall
have occurred and be continuing, the repurchase of Series B Preferred Stock,
Series B-1 Preferred Stock and Series A Preferred Stock after a Change of
Control; PROVIDED that the
31
Company has completed the Change of Control Offer on the Securities; (4) if
no Default or Event of Default shall have occurred and be continuing, the
acquisition of any shares of Capital Stock of the Company, solely in exchange
for shares of Qualified Capital Stock of the Company; and (5) so long as no
Default or Event of Default shall have occurred and be continuing,
repurchases by the Company of Capital Stock of the Company from employees of
the Company or any of its Subsidiaries or their authorized representatives
upon the death, disability or termination of employment of such employees or
pursuant to a written contract or plan, in an aggregate amount not to exceed
$300,000 in the aggregate.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture.
Section 5.4. CORPORATE EXISTENCE.
Except as otherwise permitted by Article VI, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the rights (charter and statutory) and
franchises of the Company; provided, however, that the Company shall not be
required to preserve, with respect to itself, any right or franchise, if the
Board of Directors of the Company, as the case may be, shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company.
Section 5.5. 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 taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of the Subsidiaries or
properties of it or any of the Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any of the Subsidiaries; 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 if either (a) the amount,
applicability or validity thereof is being contested in good faith by
appropriate proceedings and an adequate reserve has been established therefor to
the extent required by GAAP or (b) the failure to make such payment or effect
such discharge (together with all other such failures) would not have a material
adverse effect on the financial condition or results or operations of the
Company and the Subsidiaries taken as a whole.
Section 5.6. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall cause all properties used or useful to the
conduct of its business or the business of any of the Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times unless the
failure to so maintain such properties (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of the Company and the Subsidiaries taken as a
32
whole; provided, however, that nothing in this Section 5.6 shall prevent the
Company or any Subsidiary from discontinuing the operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance
or disposal is either (i) in the ordinary course of business, (ii) in the
good faith judgment of the Board of Directors of the Company or the
Subsidiary concerned, or of the senior officers of the Company or such
Subsidiary, as the case may be, desirable in the conduct of the business of
the Company or such Subsidiary, as the case may be, or (iii) is otherwise
permitted by this Indenture.
(b) The Company shall provide or cause to be provided, for itself
and each of the Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company are adequate and appropriate for the conduct of the business of
the Company and the Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be either (i) consistent with past practices of the Company or
the applicable Subsidiary or (ii) customary, in the reasonable, good faith
opinion of the Company, for corporations similarly situated in the industry,
unless the failure to provide such insurance (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company and the Subsidiaries, taken as a whole.
Section 5.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee within 120 days after
the end of the Company's fiscal year an Officers' Certificate stating that a
review of its activities and the activities of the Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no event of default in respect of any
payment obligation under the Credit Agreement and no Default or Event of Default
occurred during such year or, if such signers do know of such an event of
default, Default or Event of Default, the certificate shall describe the event
of default, Default or Event of Default and its status with particularity. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) So long as, and to the extent, not contrary to the then
current recommendations of the American Institute of Certified Public
Accountants, the Company shall deliver to the Trustee within 120 days after the
end of each fiscal year a written statement by the Company's independent
certified public accountants stating (A) that their audit examination has
included a review of the terms of this Indenture and the Securities as they
relate to accounting matters, and (B) whether, in connection with their audit
examination, any Default relating to accounting matters has come to their
attention and if such a Default has come to their attention, specifying the
nature and period of existence thereof.
(c) The Company shall deliver to the Trustee, forthwith upon
becoming aware, and in any event within 5 days after the occurrence, of (i) any
Default or Event of Default; (ii) any
33
event of default in respect of any payment obligation under the Credit
Agreement or any event of default under any bond, debenture, note, or other
evidence of Indebtedness of the Company or any of the Subsidiaries, or under
any mortgage, indenture or other instrument, an Officers' Certificate
specifying with particularity such event.
Section 5.8. COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of the Subsidiaries 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 such as are being contested in good faith and by appropriate
proceedings and except for such noncompliances as would not in the aggregate
have a material adverse effect on the financial condition or results of
operations of the Company and the Subsidiaries taken as a whole.
Section 5.9. SEC REPORTS.
The Company will deliver to the Trustee within 15 days after the filing
of the same with the Commission, copies of the quarterly and annual reports and
of the information, documents and other reports, if any, which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will file with the Commission, to the extent permitted, and provide the Trustee
and Holders with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. To the extent
required by the TIA, the Company will also comply with the other provisions of
TIA Section 314(a).
Delivery of such reports, information, and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 5.10. 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 law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Securities 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.
34
Section 5.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions on terms that are no less favorable
than those that might reasonably have been obtained in a comparable transaction
at such time on an arm's-length basis from a Person that is not an Affiliate of
the Company or such Subsidiary. All Affiliate Transactions (and each series of
related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other property with a fair market value in
excess of $250,000 shall be approved by the Board of Directors of the Company or
such Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Subsidiary of the Company enters into an Affiliate Transaction (or a series of
related Affiliate Transactions related to a common plan) that involves an
aggregate fair market value of more than $1,000,000, the Company or such
Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain
a favorable opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Subsidiary, as the case may be, from
a financial point of view, from an Independent Financial Advisor and file the
same with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to
(i) reasonable fees and compensation paid to and indemnity provided on behalf
of, officers, directors, employees or consultants of the Company or any
Subsidiary of the Company (including customary provisions contained in
employment agreements with executive officers of the Company) as determined in
good faith by the Company's Board of Directors or senior management; (ii)
transactions exclusively between or among the Company and any of its Wholly
Owned Subsidiaries or exclusively between or among such Wholly Owned
Subsidiaries, provided such transactions are not otherwise prohibited by the
Indenture; (iii) any agreement as in effect as of the Issue Date or any
amendment thereto or any transaction contemplated thereby (including pursuant to
any amendment thereto) in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the Holders in
any material respect than the original agreement as in effect on the Issue Date;
(iv) Restricted Payments permitted by Section 5.3, (v) the payments by the
Company under that certain lease of its Richmond, California facility between
the Company and ▇. ▇. ▇▇▇▇▇▇▇▇ Co. dated as of December 1, 1995, as amended on
December 13, 1995; and (vi) the payments by the Company under that certain
residential lease rental agreement and deposit receipt between the Company and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as guardian of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, dated as of December 13,
1995.
Section 5.12. LIMITATION ON INDEBTEDNESS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly Incur any Indebtedness (other than Permitted
Indebtedness).
35
Section 5.13. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary of the Company to (a) pay dividends or make any other distributions
on or in respect of its Capital Stock; (b) make loans or advances or to pay any
Indebtedness or other obligation owed to the Company or any other Subsidiary of
the Company; or (c) transfer any of its property or assets to the Company or any
other Subsidiary of the Company, except for such encumbrances or restrictions
existing under or by reason of: (1) applicable law; (2) the Indenture; (3)
customary non-assignment provisions of any contract or any lease governing a
leasehold interest of any Subsidiary of the Company; (4) agreements existing on
the Issue Date to the extent and in the manner such agreements are in effect on
the Issue Date; (5) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (c) above on the property so acquired; or (6) an agreement governing
Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clause (2) or (4) above; PROVIDED,
HOWEVER, that the provisions relating to such encumbrance or restriction
contained in any such Indebtedness are no less favorable to the Company in any
material respect as determined by the Board of Directors of the Company in its
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2) or (4).
Section 5.14. LIMITATION ON LIENS.
The Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist any Liens of any kind against or upon any property or assets of
the Company or any of its Subsidiaries whether owned on the Issue Date or
acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise
convey any right to receive income or profits therefrom unless (i) in the case
of Liens securing Indebtedness that is expressly subordinate or junior in right
of payment to the Securities, the Securities are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens and (ii)
in all other cases, the Securities are equally and ratably secured, except for
(A) Liens existing as of the Issue Date to the extent and in the manner such
Liens are in effect on the Issue Date; (B) Liens securing any Senior Debt; (C)
Liens securing the Securities; (D) Liens of the Company or a Wholly Owned
Subsidiary of the Company on assets of any Subsidiary of the Company; (E) Liens
securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under the Indenture and
which is outstanding as of the Issue Date or has been incurred in accordance
with the provisions of the Indenture; PROVIDED, HOWEVER, that such Liens (A) are
no less favorable to the Holders and are not more favorable to the lienholders
with respect to such Liens than the Liens in respect of the Indebtedness being
Refinanced and (B) do not extend to or cover any property or assets of the
Company or any of its Subsidiaries not securing the Indebtedness so Refinanced;
and (F) Permitted Liens.
36
Section 5.15. LIMITATION ON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder will
have the right to require that the Company purchase all or a portion of such
Holder's Securities pursuant to the offer described below (the "Change of
Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued interest to the date of purchase.
(b) No later than 30 days following the date upon which the Change
of Control occurred, the Company must send, by first class mail, a notice to
each Holder, with a copy to the Trustee, which notice shall govern the terms of
the Change of Control Offer. Notice of an event giving rise to a Change of
Control shall be given on the same date and in the same manner to all Holders.
Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 5.15 and that all Securities tendered will be accepted for
payment;
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier than 30 days
nor later than 45 days from the date such notice is mailed, other than
as may be required by law) (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue
interest if interest is then accruing;
(4) that, unless (i) the Company defaults in making payment
therefor or (ii) such payment is prohibited pursuant to Article IV, any
Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment
Date;
(5) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security 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 Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than two Business Days prior to
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Securities the Holder delivered for purchase
and a statement that such Holder is withdrawing his or her election to
have such Security purchased;
(7) that Holders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portions of the Securities surrendered; provided that each
Security purchased and each Security issued shall be in an original
principal amount of $1,000 or integral multiples thereof;
37
(8) that each Change of Control Offer is required to remain
open for at least 20 Business Days or such longer period as may be
required by law and until 5:00 p.m.
New York City time on the
applicable Change of Control Payment Date; and
(9) the circumstances and relevant facts regarding such
Change of Control.
(c) On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Securities or portions thereof tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price of all Securities so tendered and
(iii) deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price (and the Trustee shall
promptly authenticate and mail to such Holders new Securities equal in principal
amount to any unpurchased portion of the Securities surrendered provided that
each such new Security shall be in the principal amount of $1,000 or integral
multiples thereof) unless such payment is prohibited pursuant to Article IV or
otherwise. The Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. For purposes of this Section 5.15, the Trustee shall act as the Paying
Agent.
(d) Notwithstanding the foregoing, prior to the mailing of the
notice of a Change of Control Offer referred to above, but in any event within
30 days following a Change of Control, the Company shall either (i) repay in
full and terminate all commitments under Indebtedness under the Credit Agreement
and all other Senior Debt the terms of which require repayment upon a Change of
Control or offer to repay in full and terminate all commitments under all
Indebtedness under the Credit Agreement and all such other Senior Debt and to
repay the Indebtedness owed to each lender which has accepted such offer, or
(ii) obtain the requisite consents under the Credit Agreement and all other
Senior Debt to permit the repurchase of the Securities as provided above. The
Company shall first comply with the covenant in the immediately preceding
sentence before it shall be required to repurchase Securities pursuant to the
provisions described above.
(e) The Company must comply with Rule 14e-1 under the Exchange Act
and other provisions of state and federal securities laws to the extent
applicable in connection with a Change of Control Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 5.15, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
the provisions of this Section 5.15 by virtue thereof.
Section 5.16. LIMITATION ON ASSET SALES.
The Company will not, and will not permit any of its Subsidiaries to,
consummate an Asset Sale unless (i) the Company or the applicable Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed of (as
determined reasonably and in good faith by the Company's Board of Directors) and
(ii) upon the consummation of an Asset Sale, the Company shall apply, or cause
such Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale to
prepay
38
any Senior Debt required pursuant to its terms to be prepaid, and in the case
of any Senior Debt incurred under any revolving credit facility, effect a
permanent reduction in the availability under such revolving credit facility.
Following the application of the Net Cash Proceeds as set forth in the
immediately preceding sentence the aggregate amount of remaining Net Cash
Proceeds which have not been applied as described in the immediately preceding
sentence (each a "Net Proceeds Offer Amount") shall be applied by the Company or
such Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a
date (the "Net Proceeds Offer Payment Date") not less than 40 nor more than 55
days following the date of receipt of such Net Cash Proceeds by the Company or
such Subsidiary, from all Holders on a PRO RATA basis, that amount of Securities
equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal
amount of the Securities to be purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase; PROVIDED, HOWEVER, that if at any time
any non-cash consideration received by the Company or any Subsidiary of the
Company, as the case may be, in connection with any Asset Sale is converted into
or sold or otherwise disposed of for cash (other than interest received with
respect to any such non-cash consideration), then such conversion or disposition
shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds
thereof shall be applied in accordance with this covenant. The Company may defer
the Net Proceeds Offer until there is an aggregate Net Proceeds Offer Amount
equal to or in excess of $1,000,000 resulting from one or more Asset Sales (at
which time, the entire Net Proceeds Offer Amount, and not just the amount in
excess of $1,000,000, shall be applied as required pursuant to this paragraph).
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Subsidiaries as an entirety to a
Person in a transaction permitted under Section 6.1, the successor corporation
shall be deemed to have sold the properties and assets of the Company and its
Subsidiaries not so transferred for purposes of this covenant, and shall comply
with the provisions of this Section 5.16 with respect to such deemed sale as if
it were an Asset Sale. In addition, the fair market value of such properties and
assets of the Company or its Subsidiaries deemed to be sold shall be deemed to
be Net Cash Proceeds for purposes of this Section 5.16.
Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 10 days following the receipt of the Net Cash
Proceeds by the Company or its Subsidiary, as applicable, with a copy to the
Trustee, and shall comply with the procedures set forth in the Indenture. Upon
receiving notice of the Net Proceeds Offer, Holders may elect to tender their
Securities in whole or in part in integral multiples of $1,000 in exchange for
cash. To the extent Holders properly tender Securities in an amount exceeding
the Net Proceeds Offer Amount, Securities of tendering Holders will be purchased
on a PRO RATA basis (based on amounts tendered). A Net Proceeds Offer shall
remain open for a period of 20 business days or such longer period as may be
required by law.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
5.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 5.16 by virtue thereof.
39
Section 5.17. LIMITATION ON CAPITAL STOCK OF SUBSIDIARIES.
The Company will not permit any of its Subsidiaries to issue any
Capital Stock (other than to the Company or to a Wholly Owned Subsidiary of the
Company) or permit any Person (other than the Company or a Wholly Owned
Subsidiary of the Company) to own any Preferred Stock of any Subsidiary of the
Company.
Section 5.18. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT.
Except for Indebtedness incurred under or in respect of the Catalyst
Notes, the Company will not incur or suffer to exist Indebtedness that is senior
in right of payment to the Securities and subordinate in right of payment to any
other Indebtedness of the Company.
Section 5.19. SUBSIDIARY GUARANTEES.
If the Company or any of its Subsidiaries acquires or creates a
Subsidiary that is organized and existing under the laws of any state in the
United States or the District of Columbia after the date of this Indenture, then
the newly acquired or created Subsidiary will execute a supplemental indenture
setting forth its Subsidiary Guarantee as provided in Article VII, and deliver
an Opinion of Counsel relating to the enforceability and authorization of that
Subsidiary Guarantee in accordance with the terms of this Indenture, pursuant to
which that Subsidiary will become a Subsidiary Guarantor, on a senior
subordinated basis, of the Issuer's payment obligations under this Indenture.
Section 5.20. LIMITATION OF GUARANTEES BY SUBSIDIARIES.
The Company will not permit any of its Subsidiaries, directly or
indirectly, by way of the pledge of any intercompany note or otherwise, to
assume, guarantee or in any other manner become liable with respect to any
Indebtedness of the Company or any other Subsidiary of the Company (other than
(A) Indebtedness and other obligations under the Credit Agreement, (B) Permitted
Indebtedness of a Subsidiary of the Company, (C) Indebtedness under Currency
Agreements in reliance on clause (v) of the definition of Permitted
Indebtedness, or (D) Interest Swap Obligations incurred in reliance on clause
(iv) of the definition of Permitted Indebtedness), (x) if any such assumption,
guarantee or other liability of such Subsidiary is provided in respect of Senior
Debt, the guarantee or other instrument provided by such Subsidiary in respect
of such Senior Debt may be superior to the Guarantee pursuant to subordination
provisions that are no less favorable to the Holders of the Securities than
those contained in the Indenture and (y) if such assumption, guarantee or other
liability of such Subsidiary is provided in respect of Indebtedness that is
expressly subordinated to the Securities, the guarantee or other instrument
provided by such Subsidiary in respect of such subordinated Indebtedness shall
be subordinated to the Guarantee pursuant to subordination provisions no less
favorable to the Holders of the Securities than those contained in this
Indenture.
Notwithstanding the foregoing, any such Guarantee by a Subsidiary of
the Securities shall provide by its terms that it shall be automatically and
unconditionally released and discharged, without any further action required on
the part of the Trustee or any Holder, upon: (i) the unconditional release of
such Subsidiary from its liability in respect of the Indebtedness in connection
with which such Guarantee was executed and delivered pursuant to the preceding
40
paragraph; or (ii) any sale or other disposition (by merger or otherwise) to any
Person which is not a Subsidiary of the Company of all of the Company's Capital
Stock in, or all or substantially all of the assets of, such Subsidiary;
PROVIDED that (a) such sale or disposition of such Capital Stock or assets is
otherwise in compliance with the terms of this Indenture and (b) such
assumption, guarantee or other liability of such Subsidiary has been released by
the holders of the other Indebtedness so guaranteed.
Section 5.21. CONDUCT OF BUSINESS.
The Company and its Subsidiaries will not engage in any businesses
which are not the same, similar or related to the businesses in which the
Company and its Subsidiaries are engaged on the Issue Date.
Section 5.22. MAINTENANCE OF CONSOLIDATED EBITDA.
So long as there are Securities outstanding, the Company shall achieve
Consolidated EBITDA for each period set forth below of not less than the amount
set forth opposite such period below:
PERIOD AMOUNT
Twelve (12) month period ending December 31, 2001 $12,750,000
Twelve (12) month period ending March 31, 2002 $13,175,000
Twelve (12) month period ending June 30, 2002 $14,450,000
Twelve (12) month period ending September 30, 2002 $15,300,000
Twelve (12) month period ending December 31, 2002 $15,725,000
Twelve (12) month period ending March 31, 2003 $16,150,000
Twelve (12) month period ending June 30, 2003 $17,000,000
Twelve (12) month period ending September 30, 2003 $17,000,000
Twelve (12) month period ending December 31, 2003 $17,850,000
Twelve (12) month period ending March 31, 2004 $18,275,000
Twelve (12) month period ending June 30, 2004 $18,700,000
Twelve (12) month period ending September 30, 2004 $19,550,000
Twelve (12) month period ending December 31, 2004 and each twelve $20,000,000
(12) month period ending on the last day of any fiscal quarter
thereafter
Section 5.23. MAINTENANCE OF MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
So long as there are Securities outstanding, the Company shall not
permit the Consolidated Fixed Charge Coverage Ratio for any period set forth
below to be less than the ratio set forth opposite such period below:
41
PERIOD RATIO
Twelve (12) month period ending December 31, 2001 0.85 to 1.0
Twelve (12) month period ending March 31, 2002 0.98 to 1.0
Twelve (12) month period ending June 30, 2002 1.02 to 1.0
Twelve (12) month period ending September 30, 2002 1.02 to 1.0
Twelve (12) month period ending December 31, 2002 1.02 to 1.0
Twelve (12) month period ending March 31, 2003 1.02 to 1.0
Twelve (12) month period ending June 30, 2003 1.02 to 1.0
Twelve (12) month period ending September 30, 2003 1.02 to 1.0
Twelve (12) month period ending December 31, 2003 1.02 to 1.0
Twelve (12) month period ending March 31, 2004 1.05 to 1.0
Twelve (12) month period ending June 30, 2004 1.05 to 1.0
Twelve (12) month period ending September 30, 2004 and each twelve 1.10 to 1.0
(12) month period ending on the last day of any fiscal quarter
thereafter
Section 5.24. MAINTENANCE OF MINIMUM INTEREST COVERAGE.
So long as there are Securities outstanding, the Company shall not
permit the Interest Coverage Ratio for any period set forth below to be less
than the ratio set forth opposite such period below:
PERIOD RATIO
Twelve (12) month period ending December 31, 2001 1.28 to 1.0
Twelve (12) month period ending March 31, 2002 1.36 to 1.0
Twelve (12) month period ending June 30, 2002 1.40 to 1.0
Twelve (12) month period ending September 30, 2002 1.40 to 1.0
Twelve (12) month period ending December 31, 2002 1.40 to 1.0
Twelve (12) month period ending March 31, 2003 1.45 to 1.0
Twelve (12) month period ending June 30, 2003 1.53 to 1.0
Twelve (12) month period ending September 30, 2003 1.53 to 1.0
Twelve (12) month period ending December 31, 2003 1.53 to 1.0
Twelve (12) month period ending March 31, 2004 and each twelve (12) 1.60 to 1.0
month period ending on the last day of any fiscal quarter thereafter
Section 5.25. CAPITAL EXPENDITURES.
So long as there are Securities outstanding, the Company and its
Subsidiaries shall not be permitted to make Capital Expenditures (including,
without limitation, by way of capitalized leases, or any casualty insurance
proceeds received by the Company or any of its Subsidiaries which are spent to
replace Collateral which is lost or destroyed) in any fiscal year set forth
below which, in the aggregate, as to the Company and all of its Subsidiaries,
exceed the amount set
42
forth opposite such fiscal year (PROVIDED, that any unused portion of the
Capital Expenditure allowance for any fiscal year may be carried over to the
immediately succeeding fiscal year to be used in such succeeding fiscal year
after all of the Capital Expenditure allowance for that year has been used):
PERIOD AMOUNT
Twelve (12) month period ending December 31, 2001 $6,325,000
Twelve (12) month period ending December 31, 2002 $6,900,000
Twelve (12) month period ending December 31, 2003 $6,900,000
Twelve (12) month period ending December 31, 2004 $8,500,000
Twelve (12) month period ending December 31, 2005 $10,000,000
ARTICLE VI.
SUCCESSOR CORPORATION
Section 6.1. LIMITATIONS ON MERGERS AND CERTAIN OTHER TRANSACTIONS.
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company's assets (determined on a
consolidated basis for the Company and the Company's Subsidiaries) whether as an
entirety or substantially as an entirety to any Person unless: (i) either (1)
the Company shall be the surviving or continuing corporation or (2) the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the Company
and of the Company's Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(y) shall expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest on all
of the Securities and the performance of every covenant of the Securities and
the Indenture on the part of the Company to be performed or observed; (ii)
immediately after giving effect to such transaction and the assumption
contemplated by clause (i)(2)(y) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction), the Company or such
Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal
to or greater than the Consolidated Net Worth of the Company immediately prior
to such transaction; (iii) immediately before and immediately after giving
effect to such transaction and the assumption contemplated by clause (i)(2)(y)
above (including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and (iv) the Company or
the Surviving Entity shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that such consolidation,
merger, sale, assignment, transfer,
43
lease, conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with the applicable provisions of the Indenture and that all
conditions precedent in the Indenture relating to such transaction have been
satisfied.
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 of the
Company 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 6.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 6.1,
in which the Company is not the continuing corporation, the successor Person
formed by such consolidation or into which the Company is merged or to which
such conveyance, lease or transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under the Indenture
and the Securities with the same effect as if such surviving entity had been
named as such.
ARTICLE VII
SUBORDINATED SUBSIDIARY GUARANTIES
Section 7.1. SUBORDINATED SUBSIDIARY GUARANTIES.
For value received, each Subsidiary Guarantor hereby unconditionally
and irrevocably guarantees, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of and interest on the Securities when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under this Indenture and the Securities and (b) the full and
punctual performance within applicable grace periods of all other obligations of
the Company under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Note Obligations"). Each Subsidiary
Guarantor further agrees that the Note Obligations may be extended or renewed,
in whole or in part, without notice or further assent from such Subsidiary
Guarantor and that such Subsidiary Guarantor will remain bound under this
Article VII notwithstanding any extension or renewal of any Note Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Note Obligations and also waives
notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Note Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the
44
Trustee for the Note Obligations or any of them; (e) the failure of any
Holder or the Trustee to exercise any right or remedy against any other
guarantor of the Note Obligations; or (f) any change in the ownership of such
Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Note Obligations.
Except as expressly set forth in Sections 7.2, 7.6 and 10.2, or (ii)
upon payment of the Note Obligations, the obligations of each Subsidiary
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Note Obligations
or otherwise. Without limiting the generality of the foregoing, the obligations
of each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities or
any other agreement, by any waiver of modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
such Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Note
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Note Obligation when and as the same shall
become due, whether at maturity, by acceleration, by redemption or otherwise, or
to perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such Note Obligations, (ii) accrued and
unpaid interest on such Note Obligations (but only to the extent not prohibited
by law) and (iii) all other monetary Obligations of the Company to the Holders
and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the Note
Obligations Guaranteed hereby may be accelerated as provided in Article VIII for
the purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of any Note Obligations Guaranteed hereby, and (y) in
the event of any declaration of acceleration of such obligations as provided in
Article VIII, such Note
45
Obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
Section 7.2. LIMITATION ON LIABILITY.
Any term or provision of this Indenture to the contrary
notwithstanding, the maximum, aggregate amount of the Note Obligations
guaranteed hereunder by any Subsidiary Guarantor shall not exceed the maximum
amount that can be hereby guaranteed without rendering this Indenture or the
Guarantee, as they relate to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance of fraudulent transfer or
similar laws affecting the rights of creditors generally.
Section 7.3. SUCCESSORS AND ASSIGNS.
This Article VII shall be binding upon each Subsidiary Guarantor and
its successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
Section 7.4. NO WAIVER.
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article VII shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Article VII at law, in equity, by
statute or otherwise.
Section 7.5. MODIFICATION.
No modification, amendment or waiver of any provision of this Article
VII, nor the consent to any departure by any Subsidiary Guarantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Trustee, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on
any Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to
any other or further circumstances.
Section 7.6. RELEASE OF SUBSIDIARY GUARANTOR.
In the event of a sale or other disposition of all or substantially all
of the assets of any Subsidiary Guarantor or sale of a Subsidiary Guarantor by
way of merger, consolidation or otherwise, or a sale or other disposition of all
of the Capital Stock of any Subsidiary Guarantor
46
that complies with the provisions of Section 5.16, then that Subsidiary
Guarantor or the corporation acquiring such assets, as applicable, will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Cash Proceeds of the sale or other disposition are
applied in accordance with this Indenture. Notwithstanding the foregoing, any
Subsidiary Guarantee may be released at any time with the consent of the
Holders of eighty-five (85%) percent in principal amount of the then
outstanding Securities.
Section 7.7. SUBORDINATION.
The guarantees provided for in this Article VII shall be subject in
full to the subordination provisions set forth in Article IV.
ARTICLE VIII.
DEFAULT AND REMEDIES
Section 8.1. EVENTS OF DEFAULT.
Each of the following events constitutes an "Event of Default":
(i) the failure to pay interest on any Securities when the same
becomes due and payable and the default continues for a period of 30 days
(whether or not such payment shall be prohibited by Article IV);
(ii) the failure to pay the principal on any Securities, when such
principal becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Securities tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer) (whether or not
such payment shall be prohibited by Article IV);
(iii) a default in the observance or performance of Sections 5.3,
5.12 and 6.1.
(iv) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Securities;
(v) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Subsidiary of the Company, or the
acceleration of the final stated maturity of any such Indebtedness if the
aggregate principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated, aggregates $4,000,000 or more at
any time;
(vi) one or more judgments in an aggregate amount in excess of
$4,000,000 (excluding any amounts covered by insurance as to which the insurer
has acknowledged coverage) shall have been rendered against the Company or any
of its Subsidiaries and such
47
judgments remain undischarged, unpaid or unstayed for a period of 60 days
after such judgment or judgments become final and non-appealable;
(vii) the Company or any of its Subsidiaries pursuant to or within
the meaning of any Bankruptcy Law: (a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against it in an involuntary
case or proceeding; (c) consents to the appointment of a Custodian of it or for
all or substantially all of its property; (d) makes a general assignment for the
benefit of its creditors; or (e) generally is not paying its debts as they
become due;
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (a) is for relief against the Company or any of
its Subsidiaries in an involuntary case or proceeding; (b) appoints a Custodian
of the Company or any of its Subsidiaries, or for all or any substantial part of
their respective properties; or (c) orders the liquidation of the Company or any
of its Subsidiaries, and in each case the order or decree remains unstayed and
in effect for 60 days; or
(ix) the lenders under the Credit Agreement shall commence judicial
proceedings to foreclose upon any material portion of the assets of the Company
and its Subsidiaries.
Section 8.2. ACCELERATION.
(a) If an Event of Default (other than an Event of Default
specified in clauses (vii) or (viii) of Section 8.1 with respect to the Company)
shall occur and be continuing, the Trustee or the Holders of at least 25% in
principal amount of outstanding Securities may declare the principal of and
accrued interest on all the Securities to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice"),
and the same (i) shall become immediately due and payable or (ii) if there are
any amounts outstanding under the Credit Agreement, shall become immediately due
and payable upon the first to occur of an acceleration under the Credit
Agreement or 5 business days after receipt by the Company and the Representative
under the Credit Agreement of such Acceleration Notice. If an Event of Default
specified in clauses (vii) or (viii) of Section 8.1 with respect to the Company
occurs and is continuing, then all unpaid principal of, and premium, if any, and
accrued and unpaid interest on all of the outstanding Securities shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder.
(b) At any time after a declaration of acceleration with respect
to the Securities as described in the preceding paragraph, the Holders of a
majority in principal amount of the Securities may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of the acceleration, (iii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (iv) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances and (v)
in the event of the cure or waiver of an Event of Default of the type described
in clauses (vii) or (viii) of Section 8.1, the Trustee shall have received an
Officers' Certificate that such Event of
48
Default has been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
(c) The Holders of a majority in principal amount of the
Securities may waive any existing Default or Event of Default under this
Indenture, and its consequences, except a default in the payment of the
principal of or interest on any Securities.
(d) Holders of the Securities may not enforce this Indenture or
the Securities except as provided in this Indenture and, to the extent
applicable, under the TIA. Subject to the provisions of Article IX, the Trustee
is under no obligation to exercise any of its rights or powers under this
Indenture at the request, order or direction of any of the Holders, unless such
Holders have offered to the Trustee reasonable indemnity. Subject to all
provisions of Section 8.5 and applicable law, the Holders of a majority in
aggregate principal amount of the then outstanding Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
(e) The Company is required to provide an Officers' Certificate to
the Trustee promptly upon any such officer obtaining knowledge of any Default or
Event of Default (provided that such officers 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 8.3. 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
principal of or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any 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 8.4. WAIVER OF PAST DEFAULTS.
Subject to Sections 8.7 and 10.2, the Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Security as specified
in clauses (i) and (ii) of Section 8.1 (other than any such Default arising
solely by reason of acceleration of the Securities). When a Default or Event of
Default is waived, it is cured and ceases.
Section 8.5. CONTROL BY MAJORITY.
Subject to Section 2.9, the Holders of a majority in principal amount
of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy
49
available to the Trustee or exercising any trust or power conferred on it,
including, without limitation, any remedies provided for in Section 8.3.
Subject to Section 9.1, however, the Trustee may refuse to follow any
direction that conflicts with any law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Holder, or that
may involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 8.6. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(1) the Holder gives to the Trustee written notice of
continuing Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of
the outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holder or Holders of a majority
in principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
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 8.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
Section 8.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified in
clause (i) or (ii) of Section 8.1 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 Securities for the whole amount of 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, in each case at the rate per annum borne by
the Securities 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.
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Section 8.9. 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, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed in
any judicial proceedings relating to the Company or any other obligor upon the
Securities, 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, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 9.7. 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 Securities or the rights of any Holder,
or to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding. The Trustee may enforce claims on behalf of Holders without
possession of such Holders' Securities.
Section 8.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article VIII, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 9.7;
Second: subject to Article IV, to Holders for interest accrued on
the Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for interest; and
Third: subject to Article IV, to Holders for principal amounts due
and unpaid on the Securities, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal.
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 8.10.
Section 8.11. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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Section 8.12. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article VIII or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 8.13. 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 discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 8.13 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 8.7, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Securities.
ARTICLE IX.
TRUSTEE
The Company hereby appoints and employs the Trustee and the Trustee
hereby accepts the express trust imposed upon it by this Indenture and covenants
and agrees to perform the same, subject to the conditions and terms hereof.
Section 9.1. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default of which a Trust Officer
of the Trustee is actually aware 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 or
her own affairs.
(b) Except during the continuance of a Default or an Event of
Default of which the Trust Officer of the Trustee is actually aware:
(1) The Trustee need undertake to perform only those duties as
are expressly and specifically set forth in this Indenture and no
covenants or obligations whatsoever shall be implied in this Indenture
against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture (but need
52
not confirm or investigate the accuracy of mathematical calculations
or other facts stated therein).
(c) The Trustee shall have no liability except 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 9.1.
(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.
(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 8.5.
(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 9.1.
(f) The Trustee shall not be liable for interest on any assets
received by it. Assets held in trust by the Trustee need not be segregated from
other assets except to the extent required by law.
Section 9.2. RIGHTS OF TRUSTEE.
Subject to Section 9.1:
(a) The Trustee may conclusively rely on and shall be 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, including, without
limitation, any Person purporting to be a holder of Senior Debt or a
Representative. The Trustee need not investigate any fact or matter stated in
the document or the status of any such Person delivering such document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require in addition the receipt of written
direction(s) from the Company accompanied by an Officers' Certificate or an
Opinion of Counsel, which opinion or certificate shall conform to Sections 12.4
and 12.5 of this Indenture. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
53
(d) The Trustee shall not be liable for any action that it takes
or omits to take in good faith which it 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; provided, however, that in so doing the Trustee shall not be deemed to
undertake any liability or additional duty hereunder.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, 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 therein or thereby.
(g) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(h) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(i) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
(j) The rights, priviledges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
(k) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person specified as so
authorized in any such certificate previously delivered and not superceded.
Section 9.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries, 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 9.10 and 9.11.
54
Section 9.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation or warranty and shall have no
liability whatsoever as to and for the validity or adequacy of this Indenture or
the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
in the Securities other than the Trustee's certificate of authentication.
Section 9.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is actually known to a Trust Officer of the Trustee, the Trustee shall mail to
each Holder notice of the Default or Event of Default within 90 days after such
Default or Event of Default occurs or if such Default or Event of Default is
known to a Trust Officer of the Trustee during such 90-day period, promptly
after such Default or Event of Default becomes known to a Trust Officer of the
Trustee; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of or interest on any Security,
including the failure to make payment on a Change of Control Payment Date
pursuant to a Change of Control Offer or payment when due pursuant to a Net
Proceeds Offer, the Trustee may withhold such notice if it in good faith
determines that withholding such notice is in the interest of the Holders.
Section 9.6. REPORTS BY TRUSTEE TO HOLDERS.
Whether or not this Indenture is required to be qualified under the
TIA, within 60 days after each May 15 beginning with the first May 15 following
the date of this Indenture, the Trustee shall, to the extent that any of the
events described in TIA Section 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Holder a brief report dated as of such
May 15 that complies with TIA Section 313(a). Whether or not this Indenture is
required to be qualified under the TIA, the Trustee also shall comply with TIA
Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the Commission and each stock exchange, if
any, on which the Securities are listed.
The Company shall notify the Trustee in writing if the Securities
become listed on any stock exchange or of any delisting thereof.
Section 9.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its services as the Company and the Trustee shall from time to
time agree in writing. 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 disbursements, expenses
and advances incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
55
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability incurred by it except for such actions to the
extent caused by any negligence or willful misconduct on its part, arising out
of or in connection with the administration of this trust and its rights or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel; provided, however, that the Company will not be required to pay
such fees and expenses if it assumes the Trustee's defense and there is no
conflict of interest between the Company and the Trustee in connection with such
defense as reasonably determined by the Trustee. The Company need not pay for
any settlement made without its written consent, which shall not be
unnecessarily withheld. The Company need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 9.7, the
Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.1(vii) or (viii) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
Section 9.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee and appoint a successor trustee with the Company's consent, by so
notifying the Company and the Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) 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 Securities 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 9.7,
56
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. At the Company's
expense, the Company or the Holders of at least 10% in principal amount of the
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
9.8, the Company's obligations under Section 9.7 shall continue for the benefit
of the retiring Trustee.
Section 9.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
Section 9.10. ELIGIBILITY; DISQUALIFICATION.
Whether or not this Indenture is required to be qualified under the
TIA, this Indenture shall always have a Trustee who satisfies the requirement of
TIA Sections 310(a)(1) and 310(a)(5). The Trustee shall have (or in the case of
a corporation trust company included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition. Whether or not this Indenture is required to be qualified under the
TIA, the Trustee shall comply with TIA Section 310(b); provided, however, that
there shall be excluded from the operation of TIA Section 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 Section 310(b)(1) are
met.
Section 9.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
Whether or not this Indenture is required to be qualified under the
TIA, the Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). Whether or not this Indenture is
required to be qualified under the TIA, a Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
57
ARTICLE X.
SATISFACTION AND DISCHARGE OF INDENTURE
Section 10.1. TERMINATION OF THE COMPANY'S OBLIGATIONS.
The Company may terminate its obligations under the Securities and this
Indenture, except those obligations referred to in the penultimate paragraph of
this Section 10.1, if
(1) either (a) all Securities theretofore authenticated and
delivered (except lost, stolen or destroyed Securities which have been replaced
or paid and Securities 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, as provided in Section 10.4) have
been delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or (b) all Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Securities
not theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Securities to the date of deposit together
with irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may be;
(2) the Company has paid all other sums payable by it hereunder;
and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligations under the
Securities and this Indenture have been complied with. Such Opinion of Counsel
shall also state that such satisfaction and discharge does not result in a
default under the Credit Agreement (if then in effect) or other specified
material agreements or instruments that bind or affect the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.5, 2.6, 2.7, 2.8, 5.1, 5.2 and 9.7 shall survive until the Securities
are no longer outstanding pursuant to the last paragraph of Section 2.8. After
the Securities are no longer outstanding, the Company's obligations in Sections
9.7, 10.4 and 10.5 in respect thereof shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
Section 10.2. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, with respect to the Securities,
elect to have either paragraph (b) or paragraph (c) below be applied to the
outstanding Securities upon compliance with the conditions set forth in
paragraph (d).
58
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "legal defeasance"). For this purpose, legal defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Securities, which shall thereafter be deemed to
be "outstanding" only for the purposes of paragraph (e) below 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 Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), and Holders of the Securities and any amounts deposited under paragraph
(d) below shall cease to be subject to any obligations to, or the rights of, any
holder of Senior Debt under Article IV or otherwise, except for the following
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders to receive payments in respect of the principal of, premium,
if any, and interest on the Securities when such payments are due, (ii) the
Company's obligations with respect to such Securities under Sections 2.6, 2.7
and 5.2, and, with respect to the Trustee, under Section 9.7, (iii) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (iv) this Section 10.2 and Section 10.5.
Subject to compliance with this Section 10.2, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article IV and Article VI
and in Sections 5.3, 5.5 through 5.9 and 5.11 through 5.25 with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Securities shall
thereafter be deemed to be not "outstanding" for the purpose of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder and Holders of the Securities and
any amounts deposited under paragraph (d) below shall cease to be subject to any
obligations to, or the rights of, any holder of Senior Debt under Article IV or
otherwise. For this purpose, covenant defeasance means that, with respect to the
outstanding Securities, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant listed above, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 8.1(iii), but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company must have irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 9.10
who shall agree to comply with the provisions of this Section 10.2
applicable to it) in trust, for the benefit of the Holders,
59
cash in U.S. dollars, 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, to pay
the principal of, premium, if any, and interest on the Securities on
the Maturity Date or Redemption Date, as the case may be; provided
that the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such U.S. Government Obligations to said
payments with respect to the Securities on the Maturity Date or such
Redemption Date, as the case may be;
(ii) in the case of legal defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such legal defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred;
(iii) in the case of covenant defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders
will not recognize income, gain or loss for federal income tax purposes
as a result of such covenant defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as clauses (vii) or
(viii) of Section 8.1 are concerned, at any time in the period ending
on the 91st day after the date of deposit;
(v) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under this
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the legal defeasance
or the covenant defeasance have been complied with; and
(viii) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally.
60
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (other than the Company or any Affiliate of the Company), to the
Holders of such Securities of all sums due and to become due thereon in respect
of principal, premium and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above or the principal, premium, if any, and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities. The Company's obligations to pay and indemnify the Trustee as set
forth in this paragraph shall survive the termination of this Indenture and the
Securities.
Anything in this Section 10.2 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request,
in writing, by the Company any money or U.S. Government Obligations held by it
as provided in paragraph (d) above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance.
Section 10.3. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Sections 10.1 and 10.2, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the Securities.
Section 10.4. REPAYMENT TO THE COMPANY.
Subject to Sections 9.7, 10.1 and 10.2, the Trustee shall promptly pay
to the Company upon receipt by the Trustee of an Officers' Certificate, any
excess money, determined in accordance with Section 10.2, held by it at any
time. The Trustee and the Paying Agent shall pay to the Company, as the case may
be, upon receipt by the Trustee or the Paying Agent, as the case may be, of an
Officers' Certificate, any money held by it for the payment of principal,
premium, if any, or interest that remains unclaimed for two years after payment
to the Holders is required; provided, however, that the Trustee and the Paying
Agent before being required to make any payment may, but need not, 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, as the case may be, Holders entitled
to money must look solely to the Company for payment as general creditors unless
an applicable abandoned property law designates another
61
person, and all liability of the Trustee or Paying Agent with respect to such
money shall thereupon cease.
Section 10.5. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture 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, then
and only then the Company's, if any, obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had been made
pursuant to this Indenture until such time as the Trustee is permitted to apply
all such money or U.S. Government Obligations in accordance with this Indenture;
provided, however, that if the Company have made any payment of principal of,
premium, if any, or interest on any Securities because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE XI.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.1. WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Securities without
notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency or to comply
with requirements of the Commission in order to qualify this Indenture under the
TIA (to the extent such qualification is required pursuant to the terms of the
TIA), so long as such change does not adversely affect the rights of any of the
Holders in any material respect ;
(2) to add any new Subsidiary Guarantor; add
(3) to comply with Article VI.
Section 11.2. WITH CONSENT OF HOLDERS.
Subject to Section 8.7, the Company, when authorized by a Board
Resolution, the Trustee and the Holders of not less than a majority in aggregate
principal amount of the Securities then outstanding, may amend or supplement (or
waive compliance with any provision of) this Indenture or the Securities without
any notice to any other Holder, except that (a) without the consent of each
Holder of the Securities affected, no such amendment, supplement or waiver may:
(1) reduce the principal amount of the Securities
whose Holders must consent to an amendment, supplement or waiver of
any provision of this Indenture or the Securities;
62
(2) reduce the rate of or change or have the effect of
changing the time for payment of interest, including defaulted
interest, on any Securities;
(3) reduce the principal of, premium applicable to, or
change or have the effect of changing the stated maturity of any
Securities, or change the date on which any Securities may be
subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor (other than a payment required under
Sections 5.15 or 5.16);
(4) make the principal of, or interest on, any
Securities payable in any currency other than U.S. Legal Tender;
(5) make any changes in the provisions of this Indenture
protecting the right of each Holder to receive payment of principal of
and interest on such Securities on or after the due date thereof or to
bring suit to enforce such payment, or permitting Holders of a majority
in principal amount of Securities to waive Defaults or Events of
Default; or
(6) modify or change any provision of this Indenture or
the related definitions affecting the Subordination or ranking of the
Securities in a manner which adversely affects the Holders; and
(b) without the consent of Holders of at least 85% in aggregate
principal amount of outstanding Securities, no such amendment, supplement or
waiver may release or terminate any Guarantee by a Subsidiary Guarantor.
The Company agrees that no amendment, supplement or waiver under this
Article XI may make any change that adversely affects the rights under Article
IV of any holders of any Senior Debt unless the holders of such Senior Debt
consent to the change.
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.
After an amendment, supplement or waiver under this Section 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.
In connection with any amendment, supplement or waiver under this
Article XI, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
Section 11.3. [RESERVED].
Section 11.4. 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 Security or portion of a
63
Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent is not made on any Security. However, any
such Holder or subsequent Holder may revoke the consent as to his or her
Security or portion of his or her Security 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
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
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 last sentence of the immediately preceding paragraph, those
persons who were Holders at such record date (or their duly designated proxies),
and only those persons, shall be entitled to 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 a change described in Section 11.2, in which
case, the amendment, supplement or waiver shall bind only each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security; 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
Security, on or after the respective due dates expressed in such Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
Section 11.5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security 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 Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Section 11.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article XI; 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 stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article XI is
authorized or permitted by this Indenture.
64
ARTICLE XII.
MISCELLANEOUS
Section 12.1. [RESERVED].
Section 12.2. 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 facsimile or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company:
Color Spot Nurseries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇▇▇▇▇▇▇ Hyatt & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
if to the Representative under the Credit Agreement:
Fleet Capital Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Loan Administration Manager
with a copy to:
Goldberg, Kohn, Bell, Black, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
65
Each of the Company, the Trustee and the Representative by written
notice to each other such person may designate additional or different addresses
for notices to such person. Any notice or communication to the Company, the
Trustee, and the Representative shall be deemed to have been given or made as of
the date so delivered if personally delivered; when receipt is acknowledged, if
delivered by facsimile; 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
or her by first class mail or other equivalent means at his or her address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him or her 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 12.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
Section 12.4. 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, upon request, shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 12.5. 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 5.7, shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
66
(3) a statement that, in the opinion of such person, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided, however,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 12.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
Section 12.7. LEGAL HOLIDAYS.
A "Legal Holiday" 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, in the city in which the principal corporate trust office of the Trustee
is located 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 12.8. GOVERNING LAW.
THIS INDENTURE, THE SUBSIDIARY GUARANTEES AND THE SECURITIES 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 CONFLICTS OF LAW. 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 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 12.10. NO RECOURSE AGAINST OTHERS.
No director, officer, employee, stockholder or incorporator, as such,
of the Company or its Subsidiaries shall have any liability for any obligations
of the Company under the Securities or this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
by accepting a Security waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Securities.
67
Section 12.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 12.12. 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 12.13. HEADINGS AND TABLE OF CONTENTS.
The headings and table of contents contained in this Indenture are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Indenture.
Section 12.14. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Securities 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 shall
be enforceable to the full extent permitted by law.
68
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and the Issuer and the Subsidiary Guarantors have caused their
respective corporate seals to be hereunto affixed and attested, all as of the
date first written above.
COLOR SPOT NURSERIES, INC.
By: ______________________________
Name:
Title:
Attest: _____________
Name:
LONE STAR GROWERS, L.P.
by its general partner, Lone Star, Inc.
By: ______________________________
Name:
Title:
Attest: _____________
Name:
LONE STAR, INC.
By: ______________________________
Name:
Title:
Attest: _____________
Name:
COLOR SPOT CHRISTMAS TREES, INC.
By: ______________________________
Name:
Title:
Attest: _____________
Name:
69
LSGR HOLDINGS, INC.
By: _____________________________
Name:
Title:
Attest: _____________
Name:
ODA NURSERY, INC.
By: _____________________________
Name:
Title:
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
as Trustee
By: ______________________________
Name:
Title:
Attest: _____________
Name:
71
EXHIBIT A
FORM OF SECURITY
[FACE OF SECURITY]
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933, AS AMENDED, OF THE UNITED STATES OF AMERICA OR
UNDER THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OF
AMERICA, AND MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE
UNITED STATES OF AMERICA OR TO UNITED STATES PERSONS, UNLESS
THE OFFER, SALE OR DELIVERY WOULD QUALIFY FOR AN EXEMPTION
UNDER SUCH ACT AND STATE SECURITIES LAWS.
COLOR SPOT NURSERIES, INC.
13% Senior Subordinated Note
due 2005
No. $_______________________
Cusip ▇▇. ▇▇▇▇▇▇
COLOR SPOT NURSERIES, INC., a Delaware corporation (the "Company,"
which term includes any successor corporation), for value received promises to
pay to ____________________ or registered assigns, the principal sum
of ________________ Dollars, on December 15, 2005.
Interest Payment Dates: March 15, June 15, September 15, December 15
Record Dates: March 1, June 1, September 1, December 1
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-1
A-2
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated:
COLOR SPOT NURSERIES, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Trustee's Certification of Authentication
This is one of the 13% Senior Subordinated Notes Due 2005 described in the
within-mentioned Indenture.
Dated: November __, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
as Trustee
By:____________________________________
Authorized Signatory
A-3
[REVERSE SIDE OF SECURITY]
COLOR SPOT NURSERIES, INC.
13% SENIOR SUBORDINATED NOTE
DUE 2005
1. INTEREST.
COLOR SPOT NURSERIES, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest quarterly in cash on each
March 15, June 15, September 15 and December 15 commencing on December 15, 2001
(each, an "Interest Payment Date"), to the Holders of record at the close of
business on March 1, June 1, September 1 and December 1 immediately preceding
the applicable Interest Payment Date. Interest on the Securities shall be
payable in cash on each Interest Payment Date, PROVIDED that on each Interest
Payment Date occurring on or prior to June 15, 2003, interest may be paid, at
the Company's option, by (i) the cash payment of accrued interest at the annual
rate equal to 11% and (ii) the issuance of additional Securities with a
principal amount equal to the interest accrued to such date at an annual rate
equal to 2%. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance of the Securities. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Company shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to the
rate of interest otherwise payable on the Securities.
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (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
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities 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 wire transfer of Federal funds, or 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. Notwithstanding the foregoing, the Company shall pay or cause to be
paid all amounts payable with respect to non-DTC eligible Securities by wire
transfer of Federal funds to the account of the Holders of such Securities
notified to the Company or any Paying Agent in writing prior to the relevant
Record Date.
3. PAYING AGENT AND REGISTRAR.
Initially, The Bank 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. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Paying Agent, Registrar
or co-Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
November __, 2001 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are general
unsecured obligations of the Company limited in aggregate principal amount of up
to $55,000,000 on the Issue Date pursuant to a written order of the Company in
the form of an Officers' Certificate and, from time to time thereafter, in an
aggregate principal amount specified in a written order in the form of an
Officers' Certificate in an amount equal to the interest payable on outstanding
Securities in the form of additional Securities and pursuant to the terms of the
Securities.
5. OPTIONAL REDEMPTION.
The Securities will be redeemable, at the Company's option, in whole at
any time or in part from time to time, on and after December 15, 2002 upon not
less than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on December 15 of the year set forth below,
plus in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
2002 105.25%
2003 103.50%
2004 101.75%
Notwithstanding the foregoing, in connection with a refinancing of the
entire outstanding principal amount of the Securities, within six months of the
Issue Date, the Securities shall be redeemable with no premium of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the date of
redemption.
6. 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 Securities to be redeemed
at such Holder's registered address. No Securities in denominations less than
$500 shall be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption Date
and payment of the Securities called for redemption is not prohibited under
Article IV of the Indenture, then, unless the Company
defaults in the payment of such Redemption Price, the Securities called for
redemption will cease to bear interest and the only right of the Holders of
such Securities will be to receive payment of the Redemption Price.
7. CHANGE OF CONTROL OFFER.
Upon the occurrence of a Change of Control, each Holder shall have
the right to require the repurchase of such Holder's Securities pursuant to a
Change of Control Offer at a purchase price equal to 101% of the principal
amount thereof plus accrued interest, if any, to the date of purchase. The
Company shall not be required to repurchase Securities until it has complied
with its covenants to repay in full all Indebtedness of the Company and its
Subsidiaries under the Credit Agreement or offer to repay in full all such
Indebtedness and repay the Indebtedness of each lender who has accepted its
offer to repay such Indebtedness or to obtain the requisite consent under the
Credit Agreement to permit the repurchase of the Securities pursuant to a
Change of Control Offer.
8. LIMITATION ON ASSET SALES.
Under certain circumstances the Company is required to apply the net
proceeds from Asset Sales to the repayment of Senior Debt or to purchase in a
Net Proceeds Offer, (at a price equal to 100% of the aggregate principal
amount thereof, plus accrued interest to the date of purchase) such aggregate
principal amount of Securities which, when added to the accrued interest
thereon, shall be equal to the net proceeds required to be applied thereto.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $500 and integral multiples of $500. A Holder shall register
the transfer of or exchange Securities 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
any Securities or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
11. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agents will pay the money back to
the Company at its request. After that, all liability of the Trustee and such
Paying Agents 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 Securities 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 Securities (including the financial
covenants, but excluding its obligation to pay the principal of and interest
on the Securities).
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture and the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture or the
Securities to cure any ambiguity, defect or inconsistency or to comply with
requirements of the Commission in order to qualify the Indenture under the TIA
(to the extent such qualification is required pursuant to the terms of the TIA);
so long as such change does not, in the opinion of the Trustee, adversely affect
the rights of any of the Holders in any material respect, and to comply with
Article VI of the Indenture.
14. GUARANTEE.
The obligations of the Company pursuant to the Securities, including
the repurchase obligations resulting from a Change of Control, will be
unconditionally guaranteed, on a senior subordinated basis, by each
Subsidiary Guarantor.
15. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and the Subsidiaries to, among other things, incur Indebtedness or
Liens, make payments in respect of its Capital Stock and merge or consolidate
with any other person and sell, lease, transfer or otherwise dispose of
substantially all of its properties or assets. The limitations are subject to
a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
16. SUBORDINATION.
The Securities will be subordinated in right of payment to the prior
payment in full of all Senior Debt (as defined in the Indenture) of the
Company. To the extent and in the manner provided in the Indenture, Senior
Debt must be paid before any payment may be made to any Holder of this
Security. Any Holder by accepting this Security agrees to the subordination
and authorizes the Trustee to give it effect.
17. SUCCESSORS.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
18. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately
in the manner and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may require indemnity satisfactory to it before
it enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Securities notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
19. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries or their respective Affiliates as if
it were not the Trustee.
20. NO RECOURSE AGAINST OTHERS.
No director, officer, employee, incorporator or stockholder of the
Company or its Subsidiaries, as such, shall have any liability for any
obligation of the Company under the Securities, the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of a Security by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
21. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
22. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
23. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
Color Spot Nurseries, Inc.
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▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
A-8
[FORM OF ASSIGNMENT]
To assign this Security, fill in the form below: I or we assign and transfer
this Security to
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(Print or type assignee's name, address and zip code)
Please insert Social Security or other identifying number of assignee
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and irrevocably appoint _______________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to
act for him or her.
Dated:____________________ Signature:_____________________________________
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(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:__________________________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements 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
Securities Exchange Act of 1934, as amended.
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 5.15 or Section 5.16 of the Indenture, as the case may be,
check the appropriate box below: Section 5.15 [ ] Section 5.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 5.15 or Section 5.16 of the Indenture, as the
case may be, state the amount you want to be purchased:
$
Date:____________ Signature: _________________________________________________
(Sign exactly as your name appears on the face of
this Security)
Signature Guarantee:______________________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements 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 Securities Exchange Act of 1934, as amended.