EXHIBIT 4.1
HCC INDUSTRIES INC.,
as Issuer
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
as Subsidiary Guarantors
and
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
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INDENTURE
Dated as of May 6, 1997
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$90,000,000
10 3/4% Senior Subordinated Notes due 2007
TABLE OF CONTENTS
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Page
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions......................................... 1
SECTION 1.02. Incorporation by Reference of TIA................... 23
SECTION 1.03. Rules of Construction............................... 23
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating..................................... 24
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount.................................... 26
SECTION 2.03. Registrar and Paying Agent.......................... 26
SECTION 2.04. Paying Agent To Hold Assets in Trust................ 27
SECTION 2.05. Noteholder Lists.................................... 27
SECTION 2.06. Transfer and Exchange............................... 28
SECTION 2.07. Replacement Notes................................... 28
SECTION 2.08. Outstanding Notes................................... 29
SECTION 2.09. Treasury Notes...................................... 29
SECTION 2.10. Temporary Notes..................................... 29
SECTION 2.11. Cancellation........................................ 30
SECTION 2.12. Defaulted Interest.................................. 30
SECTION 2.13. CUSIP Number........................................ 30
SECTION 2.14. Deposit of Moneys................................... 30
SECTION 2.15. Restrictive Legends................................. 31
SECTION 2.16. Book-Entry Provisions for Global Notes.............. 32
SECTION 2.17. Special Transfer Provisions......................... 33
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.................................. 35
SECTION 3.02. Selection of Notes To Be Redeemed................... 36
SECTION 3.03. Notice of Redemption................................ 36
SECTION 3.04. Effect of Notice of Redemption...................... 37
SECTION 3.05. Deposit of Redemption Price......................... 37
SECTION 3.06. Notes Redeemed in Part.............................. 38
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.................................... 38
SECTION 4.02. Maintenance of Office or Agency..................... 38
SECTION 4.03. Corporate Existence................................. 38
SECTION 4.04. Payment of Taxes and Other Claims................... 39
SECTION 4.05. Maintenance of Properties and Insurance............. 39
SECTION 4.06. Compliance Certificate; Notice of Default........... 39
SECTION 4.07. Compliance with Laws................................ 40
SECTION 4.08. SEC Reports......................................... 40
SECTION 4.09. Waiver of Stay, Extension or Usury Laws............. 41
SECTION 4.10. Limitation on Restricted Payments................... 41
SECTION 4.11. Limitation on Restrictions on Distributions
from Restricted Subsidiaries........................ 44
SECTION 4.12. Limitation on Affiliate Transactions................ 45
SECTION 4.13. Limitation on Indebtedness.......................... 46
SECTION 4.14. Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries.................... 47
SECTION 4.15. Limitation on Other Senior Subordinated Debt........ 47
SECTION 4.16. Change of Control................................... 47
SECTION 4.17. Limitation on Sales of Assets and Subsidiary
Stock............................................... 49
SECTION 4.18. Limitation on Indebtedness and Preferred Stock
of Restricted Subsidiaries.......................... 52
SECTION 4.19. Limitation on Liens Securing Subordinated
Indebtedness........................................ 53
SECTION 4.20. Future Subsidiary Guarantors........................ 54
SECTION 4.21. Limitation on Designations of Unrestricted
Subsidiaries........................................ 54
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of
the Company......................................... 55
SECTION 5.02. Successor Corporation Substituted for the
Company............................................. 56
SECTION 5.03. Merger, Consolidation and Sale of Assets of
Any Subsidiary Guarantor............................ 56
SECTION 5.04. Successor Corporation Substituted for
Subsidiary Guarantor................................ 57
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default................................... 57
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SECTION 6.02. Acceleration........................................ 59
SECTION 6.03. Other Remedies...................................... 59
SECTION 6.04. Waiver of Past Defaults............................. 59
SECTION 6.05. Control by Majority................................. 60
SECTION 6.06. Limitation on Suits................................. 60
SECTION 6.07. Rights of Holders To Receive Payment................ 60
SECTION 6.08. Collection Suit by Trustee.......................... 60
SECTION 6.09. Trustee May File Proofs of Claim.................... 61
SECTION 6.10. Priorities.......................................... 61
SECTION 6.11. Undertaking for Costs............................... 62
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee................................... 62
SECTION 7.02. Rights of Trustee................................... 63
SECTION 7.03. Individual Rights of Trustee........................ 64
SECTION 7.04. Trustee's Disclaimer................................ 65
SECTION 7.05. Notice of Default................................... 65
SECTION 7.06. Reports by Trustee to Holders....................... 65
SECTION 7.07. Compensation and Indemnity.......................... 65
SECTION 7.08. Replacement of Trustee.............................. 66
SECTION 7.09. Successor Trustee by Merger, Etc.................... 67
SECTION 7.10. Eligibility; Disqualification....................... 68
SECTION 7.11. Preferential Collection of Claims Against
Company............................................. 68
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance......... 69
SECTION 8.02. Conditions to Defeasance............................ 70
SECTION 8.03. Application of Trust Money.......................... 71
SECTION 8.04. Repayment to Company................................ 71
SECTION 8.05. Indemnity for Government Obligations................ 71
SECTION 8.06. Reinstatement....................................... 72
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.......................... 72
SECTION 9.02. With Consent of Holders............................. 73
SECTION 9.03. Effect on Senior Indebtedness....................... 74
SECTION 9.04. Compliance with TIA................................. 74
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SECTION 9.05. Revocation and Effect of Consents................... 74
SECTION 9.06. Notation on or Exchange of Notes.................... 75
SECTION 9.07. Trustee To Sign Amendments, Etc..................... 75
SECTION 9.08. Payment for Consent................................. 75
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Indebtedness........... 76
SECTION 10.02. No Payment on Notes in Certain Circumstances........ 76
SECTION 10.03. Payment Over of Proceeds upon Dissolution,
Etc. ............................................... 78
SECTION 10.04. Payments May Be Paid Prior to Dissolution........... 79
SECTION 10.05. Subrogation......................................... 80
SECTION 10.06. Obligations of the Company Unconditional............ 80
SECTION 10.07. Notice to Trustee................................... 80
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent................................... 81
SECTION 10.09. Trustee's Relation to Senior Indebtedness........... 81
SECTION 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Indebtedness........................................ 82
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes.............................. 82
SECTION 10.12. This Article Ten Not To Prevent Events of
Default............................................. 83
SECTION 10.13. Trustee's Compensation Not Prejudiced............... 83
SECTION 10.14. Acceleration of Payment of Notes.................... 83
ARTICLE ELEVEN
GUARANTEES
SECTION 11.01. Unconditional Guarantee............................ 83
SECTION 11.02. Subordination of Subsidiary Guarantee.............. 85
SECTION 11.03. Severability....................................... 85
SECTION 11.04. Release of Subsidiary Guarantor from the
Subsidiary Guarantee............................... 85
SECTION 11.06. Waiver of Subrogation.............................. 87
SECTION 11.07. Execution of Subsidiary Guarantee.................. 87
SECTION 11.08. Waiver of Stay, Extension or Usury Laws............ 88
SECTION 11.09. Effectiveness of Subsidiary Guarantee.............. 88
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01. Subsidiary Guarantee Obligations Subordinated
to Senior Indebtedness of Subsidiary
Guarantors.......................................... 88
SECTION 12.02. No Payment on Notes in Certain Circumstances........ 89
SECTION 12.03. Payment Over of Proceeds upon Dissolution,
Etc. ............................................... 91
SECTION 12.04. Payments May Be Paid Prior to Dissolution........... 92
SECTION 12.05. Subrogation......................................... 92
SECTION 12.06. Obligations of Subsidiary Guarantor
Unconditional....................................... 93
SECTION 12.07. Notice to Trustee................................... 93
SECTION 12.08. Reliance on Judicial Order or Certificate of
Liquidating Agent................................... 94
SECTION 12.09. Trustee's Relation to Subsidiary Guarantor's
Senior Indebtedness................................. 94
SECTION 12.10. Subordination Rights Not Impaired by Acts or
Omissions of Subsidiary Guarantors or Holders
of Subsidiary Guarantors' Senior Indebtedness....... 95
SECTION 12.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes.............................. 95
SECTION 12.12. This Article Twelve Not To Prevent Events of
Default............................................. 96
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls........................................ 96
SECTION 13.02. Notices............................................. 96
SECTION 13.03. Communications by Holders with Other Holders........ 98
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.. 98
SECTION 13.05. Statements Required in Certificate or Opinion....... 98
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar........... 99
SECTION 13.07. Legal Holidays...................................... 99
SECTION 13.08. Governing Law....................................... 99
SECTION 13.09. No Adverse Interpretation of Other Agreements....... 99
SECTION 13.10. No Recourse Against Others.......................... 99
SECTION 13.11. Successors.......................................... 100
SECTION 13.12. Duplicate Originals................................. 100
SECTION 13.13. Severability........................................ 100
Signatures .................................................... 104
Exhibit A - Form of Initial Note and Guarantor........................... A-1
Exhibit B - Form of Exchange Note and Guarantor.......................... B-1
Exhibit C - Form of Certificate To Be Delivered in
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Connection with Transfers to Non-QIB
Accredited Investors....................................... C-1
Exhibit D - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S......................... D-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this Indenture.
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INDENTURE, dated as of May 6, 1997, among HCC INDUSTRIES INC., a Delaware
corporation (the "Company"), HERMETIC SEAL CORPORATION, a Delaware corporation,
GLASSEAL PRODUCTS, INC., a New Jersey corporation, SEALTRON INC., a Delaware
corporation, SEALTRON ACQUISITION CORP., a Delaware corporation, and HCC
INDUSTRIES INTERNATIONAL, a California corporation (the "Subsidiary
Guarantors"), and IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY, a New York banking
corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 10 3/4% Senior
Subordinated Notes due 2007 (the "Initial Notes") and, if and when issued
pursuant to a registered exchange for the Initial Notes, 10 3/4% Senior
Subordinated Exchange Notes due 2007 (the "Exchange Notes," and together with
the Initial Notes, the "Notes") and, to provide therefor, the Company and each
of the Subsidiary Guarantors has duly authorized the execution and delivery of
this Indenture. The Subsidiary Guarantors have agreed to guarantee the Notes on
a senior subordinated basis.
All things necessary to make the Notes, when duly issued and executed by
the Company, and authenticated and delivered hereunder, the valid obligations of
the Company, and to make this Indenture a valid and binding agreement of the
Company, have been done. All things necessary to make the Subsidiary Guarantee
(as defined herein) when duly issued and executed by each Subsidiary Guarantor
and endorsed on the Notes, and authenticated and delivered hereunder, the valid
obligations of the Subsidiary Guarantors have been done.
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 Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
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"Acquired Indebtedness" means Indebtedness of a Person or any of its
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Subsidiaries (i) existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Restricted Subsidiaries or (ii) 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 Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"Adjusted Maximum Amount" has the meaning provided in Section 11.05.
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"Affiliate" of any specified Person means (i) any other Person which,
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directly or indirectly, is in control of, is controlled by or is under common
control with such specified Person or (ii) any other Person who is a director or
officer (A) of such specified Person, (B) of any subsidiary of such specified
Person or (C) of any Person described in clause (i) above. For purposes of this
definition, control of a Person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of the provisions described in
Sections 4.10 and 4.12 only, "Affiliate" shall also mean any beneficial owner of
Capital Stock representing 5% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Agent" means any Registrar, Paying Agent or co-Registrar.
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"Agent Members" has the meaning provided in Section 2.16.
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"Aggregate Payments" has the meaning provided in Section 11.05.
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"Asset Disposition" means any sale, lease, transfer or other
-----------------
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger or consolidation in excess of $250,000 (each referred to for the
purposes of this definition as a "disposition"), of (i) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying shares or
shares required by applicable law to be held by a Person other than the Company
or a Restricted Subsidiary), (ii) all or substantially all the assets of any
division or line of business of the Company or any Restricted Subsidiary or
(iii) any other assets of the Company or any Restricted Subsidiary outside of
the ordinary course of business of the Company or such Restricted Subsidiary
(other than, in the case of (i), (ii) and (iii) above, (w) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (x) for purposes of the covenant
described under Section 4.17 only, a disposition that constitutes a Restricted
Payment permitted by the covenant described under Section 4.10 or a disposition
specifically excepted from the definition of Restricted Payment, (y) settlement,
surrender, waiver or release of contract rights or contract, tort or other
claims and (z) grant of licenses of intellectual property including patent,
trademark and know-how.)
"Authenticating Agent" has the meaning provided in Section 2.02.
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"Average Life" means, as of the date of determination, with respect to
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any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
2
"Bank Indebtedness" means all Obligations pursuant to the Revolving
-----------------
Credit Facility and reimbursement of letters of credit issued pursuant to the
Revolving Credit Facility.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
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state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
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any committee thereof duly authorized to act on behalf of such Board.
"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 each day which is not a Legal Holiday.
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"Capital Lease Obligations" of a Person means any obligation which is
-------------------------
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
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rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated), including any Preferred Stock, but excluding
any debt securities convertible into or exchangeable for such equity.
"Cash Equivalents" means (i) marketable direct obligations issued by,
----------------
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Service ("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; (vi) investments in money market
funds which
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invest substantially all their assets in securities of the types described in
clauses (i) through (v) above; and (vii) for the purposes of Section 4.17, the
following are deemed to be cash or Cash Equivalents: (x) the express assumption
of Indebtedness of the Company or any Restricted Subsidiary and (y) securities
received by the Company or any Restricted Subsidiary from the transferee that
are converted by the Company or such Restricted Subsidiary into cash within 120
days of closing the transaction.
"Change of Control" means the occurrence of any of the following
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events:
(i) prior to the first public offering of common stock of the
Company, the Permitted Holders cease to be the "beneficial owners" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total voting power of the
Voting Stock of the Company, whether as a result of issuance of securities
of the Company, any merger, consolidation, liquidation or dissolution of
the Company, any direct or indirect transfer of securities or otherwise
(for purposes of this clause (i) and clause (ii) below, the Permitted
Holders shall be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other corporation
(the "parent corporation") so long as the Permitted Holders beneficially
own (as so defined), directly or indirectly, in the aggregate a majority of
the voting power of the Voting Stock of the parent corporation);
(ii) (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in clause (i) above except that a
person shall be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
more than 35% of the total voting power of the Voting Stock of the Company;
and (B) the Permitted Holders "beneficially own" (as defined in clause (i)
above), directly or indirectly, in the aggregate a lesser percentage of the
total voting power of the Voting Stock of the Company than such other
person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of the Company (for the purposes of this clause (ii), such other
person shall be deemed to beneficially own any Voting Stock of a specified
corporation held by a parent corporation, if such other person
"beneficially owns" (as defined in this clause (ii)), directly or
indirectly, more than 30% of the voting power of the Voting Stock of such
parent corporation and the Permitted Holders "beneficially own" (as defined
in clause (i) above), directly or indirectly, in the aggregate a lesser
percentage of the voting power of the Voting Stock of such parent
corporation and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the Board of
Directors of such parent corporation);
(iii) (A) another corporation merges into the Company or the Company
consolidates with or merges into any other corporation, or (B) the Company
conveys, transfers or leases all or substantially all its assets (computed
on a consolidated basis) to any person or group, in one transaction or a
series of transaction other than any
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conveyance, transfer or lease between the Company and a Wholly Owned
Subsidiary of the Company, in each case in one transaction or a series of
related transactions with the effect that either (x) immediately after such
transaction any person or entity or group (as so defined) of persons or
entities (other than a Permitted Holder) shall have become the beneficial
owner of securities of the surviving corporation of such merger or
consolidation representing a majority of the combined voting power of the
outstanding securities of the surviving corporation ordinarily having the
right to vote in the election of directors or (y) the securities of the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the combined voting power of the securities of the
Company ordinarily having the right to vote in the election of directors
are changed into or exchanged for cash, securities or property, unless
pursuant to such transaction such securities are changed into or exchanged
for, in addition to any other consideration, securities of the surviving
corporation that represent immediately after such transaction, at least a
majority of the combined voting power of the securities of the surviving
corporation ordinarily having the right vote in the election of directors;
or
(iv) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of 60% of the directors of the Company then
still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of
the Company then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Company" means the party named as such in this Indenture until a
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successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated EBITDA Coverage Ratio" as of any date of determination
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means the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which financial statements are
available to (ii) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that (1) if the Company or any Restricted Subsidiary has
issued any Indebtedness since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate the
Consolidated EBITDA Coverage Ratio is an issuance of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been issued on the first day of such period and the discharge
of any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred on
the first day of such period, (2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition, the
EBITDA for such period shall be (including Capital Stock of a Subsidiary)
reduced by an amount equal to the EBITDA (if positive) directly attributable to
the assets which are the subject of such Asset Disposition for
5
such period, or increased by an amount equal to the EBITDA (if negative),
directly attributable thereto for such period, and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in connection
with such Asset Dispositions for such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to the
extent the Company and its continuing Restricted Subsidiaries are no longer
liable for such Indebtedness after such sale), (3) if since the beginning of
such period the Company or any Restricted Subsidiary (by merger or otherwise)
shall have made an Investment in any Restricted Subsidiary (or any Person which
becomes a Restricted Subsidiary) or an acquisition of assets (including Capital
Stock of a Subsidiary), including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the issuance of any Indebtedness) as
if such Investment or acquisition occurred on the first day of such period, and
(4) if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Asset
Disposition or any Investment that would have required an adjustment pursuant to
clause (2) or (3) above if made by the Company or a Restricted Subsidiary during
such period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition or
Investment occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto, and the amount of
Consolidated Interest Expense associated with any Indebtedness issued in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Protection Agreement applicable to
such Indebtedness if such Interest Rate Protection Agreement has a remaining
term in excess of 12 months). For purposes of this definition, whenever pro
forma effect is to be given to any Indebtedness Incurred pursuant to a revolving
credit facility the amount outstanding under such Indebtedness shall be equal to
the average of the lesser of (computed on a daily basis) (1) the amount
outstanding during the period commencing on the first day of the first of the
four most recent fiscal quarters for which financial statements are available
and ending on the date of determination and (2) the total available commitment
under such revolving credit facility as of the date of determination (if such
commitment has been permanently reduced).
"Consolidated Interest Expense" means, for any period, the total
-----------------------------
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such interest expense but Incurred by the
Company or its Restricted Subsidiaries, (i) interest expense attributable to
capital leases, (ii) amortization of debt discount and debt issuance cost, (iii)
capitalized interest, (iv) non-cash interest payments, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing,
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(vi) net costs under Hedging Obligations (including amortization of fees), (vii)
Preferred Stock dividends in respect of all Preferred Stock held by Persons
other than the Company or a Wholly Owned Subsidiary, (viii) interest Incurred in
connection with investments in discontinued operations, (ix) interest actually
paid by the Company or any of its consolidated subsidiaries under any Guarantee
of Indebtedness or other obligation of any other Person and (x) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Company) in connection with Indebtedness Incurred
by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of the
-----------------------
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income
(i) any net income of any Person if such Person is not a Restricted
Subsidiary, except that (A) the Company's equity in the net income of any
such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in a net loss of any such
Person for such period shall be included in determining such Consolidated
Net Income, but only to the extent of the Company's net Investment in such
Person ;
(ii) any net income of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Subsidiary,
directly or indirectly, to the Company, except that (A) the Company's
equity in the net income of any such Restricted Subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution to another Restricted Subsidiary, to the limitation contained
in this clause) and (B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its
consolidated subsidiaries (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary
course of business and any gain (but not loss) realized upon the sale or
other disposition of any Capital Stock of any Person;
7
(v) non-cash charges relating to the any compensation plan,
including, but not limited to stock option and stock appreciation rights
plan; provided, that actual cash amounts paid in connection with any such
plan which have been previously excluded under this clause (v) shall be
included in determination of Consolidated Net Income when such amount are
paid;
(vi) non-cash charges related to the Recapitalization and all charges
related to the issuance of the Notes or the use of proceeds thereof; and
(vii) the cumulative effect of a change in accounting principles.
"Consolidated Net Worth" of any Person means the total of the amounts
----------------------
shown on the balance sheet of such Person and its consolidated subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of such Person for which financial statements of such
Person are available, as (i) the par or stated value of all outstanding Capital
Stock of such Person plus (ii) paid-in capital or capital surplus relating to
such Capital Stock plus (iii) any retained earnings or earned surplus less (A)
any accumulated deficit and (B) any amounts attributable to Disqualified Stock.
"Covenant Defeasance" has the meaning provided in Section 8.02.
-------------------
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Default Notice" has the meaning provided in Section 10.02.
--------------
"Deferred Amount" means the $6 million deposited pursuant to that
---------------
certain Deferred Purchase Price and Security Agreement dated as of February 14,
1997 among the Company and the Buyers, Sellers and the Escrow Agent (each as
defined therein).
"Depository" means The Depository Trust Company, its nominees and
----------
their respective successors.
"Designated Senior Indebtedness" of a Person means (i) the Bank
------------------------------
Indebtedness and (ii) any other Senior Indebtedness of such Person which, at the
date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $25 million and is specifically designated by such Person
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
------------------
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is
8
exchangeable) or upon the happening of any event (i) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (ii) is
convertible or exchangeable for Indebtedness or Disqualified Stock or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the first anniversary of the Stated Maturity of the Notes;
provided, however, that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to require
such Person to repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" or "change of control" occurring prior to the first anniversary of
the Stated Maturity of the Notes shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are not more favorable to the holders of such Capital Stock than the provisions
described under Sections 4.17 and 4.16.
"EBITDA" for any period means the Consolidated Net Income for such
------
period, plus the following (but without duplication) to the extent deducted in
calculating such Consolidated Net Income for such period: (i) income tax
expense, (ii) Consolidated Interest Expense, (iii) depreciation expense, (iv)
amortization expense and (v) all other non-cash charges (other than any
recurring non-cash charges to the extent such charges represent an accrual of or
reserve for cash expenditures in any future period). Notwithstanding clause (v)
above, there shall be deducted from EBITDA in any period any cash expended in
such period that funds a non-recurring, non-cash charge accrued or reserved in a
prior period which was added back to EBITDA pursuant to clause (v) in such prior
period. For the purpose of the calculation of EBITDA, net cash payments by the
Company that are reimbursed from the Deferred Amount shall be excluded from the
calculation.
"Event of Default" has the meaning provided in Section 6.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the preamble to this
--------------
Indenture.
"Exchange Offer" means the registration by the Company under the
--------------
Securities Act pursuant to a registration statement of the offer by the Company
to each Holder of the Initial Notes to exchange all the Initial Notes held by
such Holder for the Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Initial Notes held by such Holder, all in
accordance with the terms and conditions of the Registration Rights Agreement.
"fair market value" means, with respect to any asset or property, the
-----------------
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
9
"Fair Share" has the meaning provided in Section 11.05.
----------
"Fair Share Shortfall" has the meaning provided in Section 11.05.
--------------------
"Foreign Subsidiary" means a Restricted Subsidiary whose assets are
------------------
located, or whose operations are conducted primarily outside of the United
States or the majority of whose sales are to Persons outside the United States.
"Fraudulent Transfer Laws" has the meaning provided in Section 11.05.
------------------------
"Funding Subsidiary Guarantor" has the meaning provided in Section
----------------------------
11.05.
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the date of this Indenture, including those
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 approved by a significant segment of the
accounting profession.
"Global Notes" has the meaning provided in Section 2.01.
------------
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any Person and any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreement to keep-
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantee Obligations" has the meaning provided in Section 12.01.
---------------------
"Hedging Obligations" of any Person means the obligations of such
-------------------
Person pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person against changes
in interest rates or foreign exchange rates.
"Holder" or "Noteholder" means the Person in whose name a Note is
------ ----------
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
-----
liable for Indebtedness; provided, however, that any Indebtedness of a Person
existing at the time such
10
Person becomes a subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
becomes a Subsidiary. The term "Incurrence" when used as a noun shall have a
correlative meaning. The accretion of principal of a non-interest bearing or
other discount security shall be deemed the Incurrence of Indebtedness.
"Indebtedness" of any Person means, without duplication,
------------
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business);
(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in (i) through (iii)
above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the third
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit);
(v) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Stock
(but excluding any accrued dividends);
(vi) all Hedging Obligations;
(vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee (other than in each case by reason of activities described in the
proviso to the definition of "Guarantee"); and
(viii) all obligations of the type referred to in clauses (i) through
(vii) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured.
11
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the amount of liability
required by GAAP to be accrued or reflected on the most recently published
balance sheet of such Person.
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 this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value to be determined in good faith by the
Board of Directors. For purposes hereof, the amount of any Indebtedness issued
with original issue discount shall be the original purchase price plus accrued
interest, provided, however, that such accretion shall not be deemed an
incurrence of Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof.
"Initial Notes" has the meaning provided in the preamble to this
-------------
Indenture.
"Initial Purchasers" means Credit Suisse First Boston Corporation and
------------------
▇▇▇▇▇▇ ▇▇▇▇ LLC.
"Institutional Accredited Investor" means an institution that is an
---------------------------------
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
---------------------
interest on the Notes.
"Interest Rate Protection Agreement" means any interest rate swap
----------------------------------
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance, loan
----------
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the Person making the
advance or loan) or other extensions of credit (including by way of Guarantee or
similar arrangement) 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 of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes
of the definition of "Unrestricted Subsidiary," the definition of "Restricted
Payment" and the covenant described under Section 4.10, (i) "Investment" shall
include the portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of any Subsidiary of the
Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that if such designation is made in connection
with the acquisition of such Subsidiary
12
or the assets owned by such Subsidiary, the "Investment" in such Subsidiary
shall be deemed to be the consideration paid in connection with such
acquisition; provided further, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent investment in an Unrestricted Subsidiary in an amount (if
positive) equal to (x) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (y) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of such Subsidiary at the time of such redesignation, and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors.
"issue" means issue, assume, Guarantee, Incur or otherwise become
-----
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be issued by such
Subsidiary at the time it becomes a Subsidiary; and the term "issuance" has a
corresponding meaning.
"Issue Date" means the date of original issuance of the Notes.
----------
"Legal Defeasance" has the meaning provided in Section 8.02.
----------------
"Legal Holiday" has the meaning provided in Section 13.07.
-------------
"Lien" means any mortgage, pledge, security interest, conditional sale
----
or other title retention agreement or other similar lien.
"Maturity Date" means May 15, 2007.
-------------
"Net Available Cash" from an Asset Disposition means cash payments
------------------
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to such properties or assets or received in any other non-cash form) therefrom,
in each case net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses Incurred, and all Federal, state, provincial,
foreign and local taxes required to be paid or accrued as a liability under
GAAP, as a consequence of such Asset Disposition, (ii) all payments made on any
Indebtedness which is secured by any assets subject to such Asset Disposition,
in accordance with the terms of any lien upon or other security agreement of any
kind with respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law be
repaid out of the proceeds from such Asset Disposition, (iii) all distributions
and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (iv)
appropriate amounts provided by the seller as a reserve, in accordance with
GAAP, against any liabilities associated with the property or other assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset
13
Disposition, 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
Disposition. Further, with respect to an Asset Disposition by a Subsidiary
which is not a Wholly Owned Subsidiary, Net Available Cash shall be reduced pro
rata for the portion of the equity of such Subsidiary which is not owned by the
Company.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
-----------------
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees and expenses actually
Incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
---------------
in Regulation S.
"Notes" means the Initial Notes and the Exchange Notes treated as a
-----
single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
"Obligations" means with respect to any Indebtedness all obligations
-----------
for principal, premium, interest (including, without limitation, interest after
the commencement of any bankruptcy, reorganization, insolvency or similar
proceeding against the Company or any of its Subsidiaries, whether or not
allowed in any such proceeding), penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offer" has the meaning provided in Section 4.17.
-----
"Offer Amount" has the meaning provided in Section 4.17.
------------
"Offer Period" has the meaning provided in Section 4.17.
------------
"Offering Memorandum" means the Offering Memorandum dated May 1, 1997,
-------------------
pursuant to which the Initial Notes were offered, and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the
-------
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 13.04 and 13.05, as they relate to the making of an
Officers' Certificate.
14
"Opinion of Counsel" means a written opinion from legal counsel, who
------------------
may be counsel for the Company, and who is reasonably acceptable to the Trustee
and not rendered by any employee of the Company or any of its Affiliates or
Subsidiaries complying with the requirements of Sections 13.04 and 13.05, as
they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
------------
"Payment Blockage Period" has the meanings provided in Sections 10.02
-----------------------
and 12.02.
"Permitted Holders" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Windward Capital
-----------------
Associates, L.P., Windward/Park HCC, L.L.C., Windward/Merchant, L.P.,
Windward/Merban, L.P. or any of their respective members or partners or any
Affiliate of any of the foregoing.
"Permitted Investment" means an Investment by the Company or any
--------------------
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (v) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(vi) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary;
(vii) stock, obligations or securities received in settlement of debts created
in the ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; and (viii) any Person to the extent
such Investment represents the non-cash portion of the consideration received
for an Asset Disposition as permitted pursuant to the covenant described under
Section 4.17.
"Permitted Liens" means, with respect to any Person, (a) pledges or
---------------
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business; (b) Liens imposed by law,
including carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate proceedings; or
other Liens arising out of judgments or awards against such Person
15
with respect to which such Person shall then be proceeding with an appeal or
other proceedings for review; (c) Liens for taxes, assessments or other
governmental charges not yet subject to penalties for non-payment or which are
being contested in good faith by appropriate proceedings provided appropriate
reserves have been taken on the books of the Company; (d) Liens in favor of
issuers of surety bonds or letters of credit issued pursuant to the request of
and for the account of such Person in the ordinary course of its business;
provided, however, that such letters of credit do not constitute Indebtedness;
(e) encumbrances, easements or reservations of, or rights of others for,
licenses, rights of way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the use of
real properties or liens incidental to the conduct of the business of such
Person or to the ownership of its properties which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person; (f) Liens securing an
Interest Rate Protection Agreement so long as the related Indebtedness is, and
is permitted to be under this Indenture, secured by a Lien on the same property
securing the Interest Rate Protection Agreement; and (g) leases and subleases of
real property which do not materially interfere with the ordinary conduct of the
business of the Company or any of its Subsidiaries; (h) judgement 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; (i) Liens
for the purpose of securing the payment (or the refinancing of the payment) of
all or a part of any Purchase Money Indebtedness relation to assets or property
acquired or constructed in the ordinary course of business provided that (x) the
aggregate principal amount of Indebtedness secured by such Liens shall not
exceed the cost of the assets or property so acquired or constructed and (y)
such Liens shall not encumber any other assets or property of the Company or any
Restricted Subsidiary other than such Assets or property and assets affixed or
appurtenant thereto; (j) Liens arising solely by virtue of any statutory or
common law provision relating to banker's Liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor expository institution; provided that (x) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (y) such deposit account is not intended by the
Company or any Subsidiary to provide collateral to the depository institution;
and (k) Liens arising from precautionary Uniform Commercial Code financing
statement filings regarding operating leases entered into by the Company and its
Subsidiaries in the ordinary course of business.
"Person" means any individual, corporation, limited liability company,
------
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
---------------
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
16
"principal" of any Indebtedness (including the Notes) means the
---------
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Placement Legend" means the legend initially set forth on the
------------------------
Notes in the form set forth in Section 2.15.
"pro forma" means, with respect to any calculation made or required to
---------
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company.
"Public Equity Offering" means an underwritten primary or combined
----------------------
primary and secondary public offering of common stock of the Company pursuant to
an effective registration abatement under the Securities Act.
"Public Market" means any time after (x) a Public Equity Offering has
-------------
been consummated and (y) at least 20% of the total issued and outstanding common
stock of the Company has been distributed by means of an effective registration
statement under the Securities Act or sales pursuant to Rule 144 under the
Securities Act.
"Purchase Date" has the meaning provided in Section 4.17.
-------------
"Purchase Money Indebtedness" means any Indebtedness of a Person to
---------------------------
any seller or other Person incurred to finance the acquisition (including in the
case of a Capitalized Lease Obligation, the lease) of any real or personal
tangible property which, in the reasonable good faith judgment of the Board of
Directors, is directly related to the business of the Company or any Subsidiary
and which is incurred substantially concurrently with such acquisition and is
secured only by the assets so financed.
"QIB" means qualified institutional buyer within the meaning of Rule
---
144A of the Securities Act.
"Record Date" means each Record Date specified in the Notes, whether
-----------
or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
---------------
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
----------------
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Reference Date" has the meaning provided in Section 4.10.
--------------
"Refinance" means, in respect of any Indebtedness, to refinance,
---------
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or
17
replacement for, such indebtedness. "Refinanced" and "Refinancing" shall have
correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
------------------------
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the earlier of
(x) the Stated Maturity of the Indebtedness being Refinanced and (y) the Stated
Maturity of the Notes, (ii) such Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred that is equal to or greater
than the Average Life of the Indebtedness being Refinanced and (iii) such
Refinancing Indebtedness has an aggregate principal amount (or if Incurred with
original issue discount, an aggregate issue price) that is equal to or less that
the aggregate principal amount (or if Incurred with original issue discount, the
aggregate accreted value) then outstanding or committed (plus unpaid accrued
interest and any premium and defeasance costs) under the Indebtedness being
Refinanced plus actual fees and expenses Incurred in connection with the
Refinancing; provided, further, however, that (x) Refinancing Indebtedness shall
not include (1) Indebtedness of a Subsidiary that is not a Wholly Owned
Subsidiary that Refinances Indebtedness of the Company or (2) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary and (y) if the Indebtedness being Refinanced is
subordinate or junior to the Notes, then such Refinancing Indebtedness shall be
subordinate to the Notes at least to the same extent and in the same manner as
the Indebtedness being Refinanced.
Registrar" has the meaning provided in Section 2.03.
---------
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement dated May 6, 1997 among the Company, the Subsidiary Guarantors and the
Initial Purchasers for the benefit of themselves and the Holders, as the same
may be amended or modified from time to time in accordance with the terms
thereof.
"Regulation S" means Regulation S under the Securities Act.
------------
"Regulation S Global Note" has the meaning provided in Section 2.01.
------------------------
"Regulation S Global Note Certificate" has the meaning provided in
------------------------------------
Section 2.01.
"Related Business" means any business related, ancillary or
----------------
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Replacement Assets" has the meaning provided in Section 4.17.
------------------
"Representative" means the indenture trustee or other trustee, agent
--------------
or representative in respect of any Designated Senior Indebtedness; provided
that if, and for so long as, any Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times be the holders of a majority in outstanding
18
principal amount of such Designated Senior Indebtedness in respect of any
Designated Senior Indebtedness.
"Restricted Payment" has the meaning provided in Section 4.10.
------------------
"Restricted Security" has the meaning assigned to such term in Rule
-------------------
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that is
---------------------
not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the credit agreement dated as of
-------------------------
February 14, 1997 by and among the Company, certain financial institutions and
Fleet Capital Corporation, as agent, as amended as at the Issue Date, providing
for an aggregate $20 million revolving credit facility, including any related
notes, guarantees (including, without limitation, by all Subsidiary Guarantors),
collateral documents, instruments and agreements executed in connection
therewith, as such credit agreement and/or related documents may be amended,
restated, supplemented, renewed, replaced or otherwise modified from time to
time whether or not with the same agent, trustee, representative lenders or
holders, and irrespective of any changes in the terms and conditions thereof.
Without limiting the generality of the foregoing, the term "Revolving Credit
Facility" shall include agreements in respect of reimbursement of letters of
credit issued pursuant to the Revolving Credit Facility, agreements in respect
of Hedging Obligations with lenders party to the Revolving Credit Facility and
shall also include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to any Revolving Credit Facility and
all refundings, refinancings (in whole or in part) and replacements of any
Revolving Credit Facility, including any agreement (i) extending the maturity of
any Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers or guarantors thereunder, so long as borrowers and issuers
include one or more of the Company and its Restricted Subsidiaries and their
respective successors and assigns.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"SEC" means the Securities and Exchange Commission.
---
"Secured Indebtedness" means any Indebtedness of a Person secured by a
--------------------
Lien.
"Securities Act" means, the Securities Act of 1933, as amended, or any
--------------
successor statute or statutes thereto.
"Senior Indebtedness" means with respect to any Person (x) Bank
-------------------
Indebtedness and (y) all Obligations under any other Indebtedness other than (1)
any obligation of such Person to any subsidiary of such Person, (2) any
liability of such Person for federal, state, local or other taxes owed or owing
by such Person, (3) any accounts payable or other liability of such Person
19
to trade creditors arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such liabilities), (4) any
Indebtedness, Guarantee or obligation of such Person which is, expressly by its
terms, subordinate or junior in any respect to any other Indebtedness, Guarantee
or obligation of such Person, (5) that portion of any Indebtedness of such
Person which at the time of issuance is issued in violation of this Indenture or
(6) Indebtedness of such Person represented by Disqualified Capital Stock.
"Senior Subordinated Indebtedness" means the Notes and any other
--------------------------------
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank pari passu with the Notes in right of payment and is not subordinated by
its terms in right of payment to any Indebtedness or other obligation of the
Company which is not Senior Indebtedness of the Company.
"Significant Subsidiary" means any Restricted Subsidiary that would be
----------------------
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the final date
---------------
specified in such security as the fixed date on which all outstanding principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company or any
-----------------------
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Notes or the
relevant Restricted Subsidiary, as applicable, pursuant to a written agreement
to that effect.
"Subsidiary" means any corporation, association, partnership, limited
----------
liability company or other business entity of which more than 50% of the total
voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) the Company,
(ii) the Company and one or more Subsidiaries or (iii) one or more Subsidiaries.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of
--------------------
the Company's obligations with respect to the Notes.
"Subsidiary Guarantor" means each of the Restricted Subsidiaries that
--------------------
execute a Guarantee pursuant to Section 4.20, each until a successor replaces it
pursuant to this Indenture and thereafter means such successor. A Restricted
Subsidiary whose Guarantee has terminated pursuant to Section 4.20 ceases to be
a Guarantor effective as of such termination.
"Tangible Property" means all land, buildings, machinery and equipment
-----------------
and leasehold interests and improvements which would be reflected on a balance
sheet of the
20
Company prepared in accordance with generally accepted accounting principles,
excluding (i) all such tangible property located outside the United States of
America, (ii) all rights, contracts and other intangible assets of any nature
whatsoever and (iii) all inventories and other current assets.
"Temporary Cash Investments" means any of the following:
--------------------------
(i) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof.
(ii) investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 180 days of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country
recognized by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $50,000,000
(or the foreign currency equivalent thereof) and has outstanding debt which
is rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor.
(iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above.
(iv) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
Group, and
(v) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard and Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service,
Inc .
"Temporary Regulation S Global Note" has the meaning provided in
----------------------------------
Section 2.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
---
77bbbb) as in effect on the date of this Indenture.
"Tranche A Term Loan" means the $30 million, five year Tranche A Term
-------------------
Loan dated as of February 14, 1997 among the Company and the banks set forth
therein.
21
"Tranche B Term Loan" means the $30 million, six and one-half year
-------------------
Tranche B Term Loan dated February 14, 1997 among the Company and the banks set
forth therein.
"Trust Officer" means any officer of the Trustee assigned by the
-------------
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
-----------------------
at the time of determination shall be or shall have been designated an
Unrestricted Subsidiary by the Board of Directors in the manner provided below
and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors
may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds
any Lien on any property of, the Company or any other Restricted Subsidiary of
the Company that is not a Subsidiary of the Subsidiary to be so designated and
subject to the Section 4.21; provided, however, that the Subsidiary so
designated and each of its Subsidiaries has not at the time of such designation
or thereafter Incurred any Indebtedness pursuant to which the Lender has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (x) if such Unrestricted Subsidiary at such time has
Indebtedness, the Company could Incur $1.00 of additional Indebtedness under
paragraph (a) of the covenant described under Section 4.13 and (y) no Default
shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced by the Company to the Trustee by promptly filing
with the Trustee a copy of the Board Resolution giving effect to such
designation and an officer's certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Global Note" has the meaning provided in Section 2.01.
----------------
"U.S. Global Note Certificate" has the meaning provided in Section
----------------------------
2.01.
"U.S. Government Obligations" means direct obligations (or
---------------------------
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"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.
22
"Voting Stock" of a corporation means all classes of Capital Stock of
------------
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
-----------------------
Capital Stock of which (other than directors' qualifying shares and shares held
by other Persons to the extent such Shares are required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary) is owned by
the Company or one or more Wholly Owned Subsidiaries.
"Windward" means Windward Capital Associates, L.P.
--------
SECTION 1.02. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular; and
23
(5) "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.
(6) reference to Sections or Articles means reference to such Section
or Article in this Indenture, unless stated otherwise.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
---------------
(a) The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Exchange Notes and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit B hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or depository rule or usage. The Company and the Trustee shall
approve the form of the Notes and any notation, legend or endorsement on them.
Each Note shall be dated the date of its issuance and shall show the date of its
authentication.
The Initial Notes are being offered and sold by the Company pursuant
to a Purchase Agreement, dated May 1, 1997 between the Company and the Initial
Purchasers named therein.
(b) The terms and provisions contained in the Notes, annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
(c) The Notes sold within the United States to QIBs in reliance on
Rule 144A under the Securities Act will be issued in the form of a single global
note in fully registered form without interest coupons (the "U.S. Global Note").
The U.S. Global Note will be deposited on behalf of the subscribers therefor
with the Trustee as custodian for the Depository and will be registered in the
name of the Depository or its nominee.
The Notes sold outside the United States in reliance on Regulation S
under the Securities Act will be represented initially by a single temporary
global note (the "Temporary Regulation S Global Note") in fully registered form
without interest coupons registered in the name of the Depository or its nominee
and deposited on behalf of the subscribers therefor with the Trustee, as
custodian. Beneficial interests in the Temporary Regulation S Global Note may
be held only through the Euroclear System ("Euroclear") or Cedel Bank, Societe
Anonyme ("Cedel") unless delivery is made through the U.S. Global Note in
accordance with the certification requirements set forth in this Article Two.
24
After the expiration of the "40-day restricted period" (within the
meaning of Rule 903(c)(3) of Regulation S under the Securities Act) (the "40-day
restricted period"), the Temporary Regulation S Global Note will be exchanged
for a single permanent global note in registered form (the "Regulation S Global
Note") upon delivery to the Depository of certification of compliance with the
transfer restrictions applicable to the Notes and with Regulation S under the
Securities Act. The U.S. Global Note, the Temporary Regulation S Global Note
and the Regulation S Global Note are collectively referred to as the "Global
Notes."
The Regulation S Global Note will be deposited with the Trustee, as
custodian and will be registered in the name of a nominee of the Depository.
Beneficial interests in the Regulation S Global Note may be held through
organizations other than Cedel and Euroclear that are participants in the
Depository. Cedel and Euroclear will hold beneficial interests in the
Regulation S Global Note on behalf of their participants through their
respective depositaries, which in turn will hold such beneficial interests in
the Regulation S Global Note in participants' securities accounts in the
depositaries' names on the books of the Depository.
During the 40-day restricted period, a beneficial interest in the
Temporary Regulation S Global Note may be transferred to a person who takes
delivery in the form of a beneficial interest in the U.S. Global Note only upon
receipt by the Registrar of a written certification from the transferor to the
effect that such transfer is being made to a Person whom the transferor
reasonably believes to be a QIB in a transaction meeting the requirements of
Rule 144A and in accordance with applicable securities laws of any state of the
United States or any other jurisdiction (a "U.S. Global Note Certificate").
After the 40-day restricted period, unless the Temporary Regulation S Global
Note has not been exchanged for the Regulation S Global Note, such certification
requirement will no longer apply to such transfers. Beneficial interests in the
U.S. Global Note may be transferred to a Person who takes delivery in the form
of an interest in the Temporary Regulation S Global Note or Regulation S Global
Note, as the case may be, whether before, during or after the 40-day restricted
period, only upon receipt by the Registrar of written certification from the
transferor to the effect that such transfer is being made in accordance with
Rule 903 or Rule 904 of Regulation S or Rule 144A (a "Regulation S Global Note
Certificate"). Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions and other procedures applicable to beneficial
interests in such other Global Note for so long as it remains an interest.
The Registrar may rely on the information set forth in a U.S. Global
Note Certificate, a Regulation S Global Note Certificate and other certificates
and opinions received pursuant to this Article Two and, in the absence of
receipt of such a certificate or opinion, shall not be deemed to have knowledge
of a transfer of an interest in a Global Note absent actual knowledge of such
transfer.
Except in the limited circumstances described herein, owners of
beneficial interests in the Global Notes will not be entitled or required to
receive physical delivery of individual definitive Notes. The Notes are not
issuable in bearer form.
25
SECTION 2.02. Execution and Authentication; Aggregate Principal
-------------------------------------------------
Amount.
------
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature. The Company's seal shall also be reproduced on the Notes.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in
the aggregate principal amount not to exceed $90,000,000, and (ii) Exchange
Notes from time to time for issue only in exchange for a like principal amount
of Initial Notes, in each case upon written orders of the Company in the form of
an Officers' Certificate. The Officers' Certificate shall specify the amount of
Notes to be authenticated, the date on which the Notes are to be authenticated
and the aggregate principal amount of Notes outstanding on the date of
authentication, whether the Notes are to be Initial Notes or Exchange Notes, and
shall further specify the amount of such Notes to be issued as a Global Note.
The aggregate principal amount of Notes outstanding at any time may not exceed
$90,000,000, except as provided in Section 2.07. The aggregate principal amount
of each of the Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee as Custodian for the Depository,
as hereinafter provided.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York) where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes
26
may be presented or surrendered for payment ("Paying Agent") and (c) notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may have one or more co-Registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
Paying Agent. Neither the Company nor any Affiliate of the Company may act as
Paying Agent. The Company may change any Paying Agent or Registrar without
notice to any Holder.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
or fails to give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Paying Agent or Registrar may resign upon 30 days notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may, and
upon direction of a majority of the Holders shall, at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent, the
Paying Agent shall have no further liability for such assets.
SECTION 2.05. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish or cause the Registrar to furnish
to the Trustee before each Record Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of the Holders, which list may
be conclusively relied upon by the Trustee and the Company shall otherwise
comply with TIA (S) 312(a).
27
SECTION 2.06. Transfer and Exchange.
---------------------
Subject to the provisions of Sections 2.16 and 2.17, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchanges or
transfers pursuant to Sections 2.10, 3.06, 4.16, 4.17 or 9.06, in which event
the Company shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange any Note (i) during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Notes 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 Three, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of a Global Note, shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in such
Global Note shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's reasonable requirements are met. If required by the Trustee or the
Company, such Holder must provide an affidavit of lost certificate and 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 Note is replaced. The Company and
the Trustee may charge such Holder for their out-of-pocket expenses in replacing
a Note, including reasonable fees and expenses of counsel, and for any tax that
may be imposed in replacing such Notes. Every replacement Note shall constitute
an additional obligation of the Company.
28
SECTION 2.08. Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.09, a Note does not cease to be
outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or any of its Affiliates shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so considered.
SECTION 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
upon receipt of a written order of the Company pursuant to Section 2.02
definitive Notes in exchange for, and upon surrender of, temporary Notes. Until
so exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes authenticated and delivered
hereunder.
29
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and, at the written direction of the Company, shall
dispose of all Notes surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new Notes to
replace Notes that it has paid or delivered to the Trustee for cancellation. If
the Company shall acquire any of the Notes, such acquisition shall not operate
as a redemption or satisfaction of the Indebtedness represented by such Notes
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Notes (without
regard to any grace period therefor), it shall pay the defaulted interest, plus
(to the extent lawful) any interest payable on the defaulted interest to the
Persons who are Holders on a subsequent special record date, which date shall be
the fifteenth day 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, as of a recent date selected by the Company,
with a copy to the Trustee, a notice that states the subsequent special record
date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
------------
The Company in issuing the Notes may use "CUSIP" numbers, and if so,
the Trustee shall use such CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of such CUSIP numbers
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in a CUSIP number.
SECTION 2.14. Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each Interest Payment Date
and on the Maturity Date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be.
30
SECTION 2.15. Restrictive Legends.
-------------------
Each Global Note and Note in definitive form that constitutes a
Restricted Security shall bear the following legend (the "Private Placement
Legend") on the face thereof until May 6, 1999, unless otherwise agreed by the
Company and the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-
DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE
SECURITY, IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
31
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT, DATED MAY 6, 1997, EXECUTED AND DELIVERED BY THE COMPANY AND THE
GUARANTORS FOR THE BENEFIT OF HOLDERS FROM TIME TO TIME OF SECURITIES. COPIES
OF SUCH REGISTRATION RIGHTS AGREEMENT ARE AVAILABLE FOR INSPECTION AT THE
CORPORATE TRUST OFFICE OF THE TRUSTEE.
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THIS INDENTURE.
SECTION 2.16. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) The Global Notes initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.15.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Notes held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Notes, and the Depository may
32
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of a
beneficial interest in any Global Note.
(b) Transfers of the Global Notes shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Notes may be transferred
or exchanged for Notes in definitive form in accordance with the rules and
procedures of the Depository and the provisions of Section 2.17. In addition,
Notes in definitive form shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Note if (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for any Global Note, and a successor depositary is not appointed by the Company
within 90 days of such notice or (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depository
to issue Notes in definitive form.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to paragraph
(b), the Registrar shall (if one or more Notes in definitive form are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall, upon written direction from the Company,
authenticate and deliver, one or more Notes in definitive form of like tenor and
amount.
(d) In connection with the transfer of an entire Global Note to
beneficial owners pursuant to paragraph (b), such Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in such
Global Note, an equal aggregate principal amount of Notes in definitive form of
authorized denominations.
(e) Any Note in definitive form constituting a Restricted Security
delivered in exchange for an interest in the Global Note pursuant to paragraph
(b) or (c) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c)
of Section 2.17, bear the legend regarding transfer restrictions applicable to
the Notes in definitive form set forth in Section 2.15.
(f) The Holder of the Global Notes may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.17. Special Transfer Provisions.
---------------------------
33
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-
---------------------------------------------------------------
U.S. Persons. The following provisions shall apply with respect to the
------------
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after May 6,
1999 or (y) (1) in the case of a transfer to an Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons), the proposed
transferee has delivered to the Registrar a certificate substantially in
the form of Exhibit C hereto or (2) in the case of a transfer to a Non-U.S.
Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto and such other
information that the Trustee may reasonably request in order to confirm
that such transaction is being made pursuant to an exemption from or in a
transaction not subject to the registration requirements of the Securities
Act; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Note, upon receipt by the Registrar of (x)
the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Notes in definitive
form) a decrease in the principal amount of such Global Note in an amount equal
to the principal amount of the beneficial interest in such Global Note to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Notes in definitive form of like tenor and
amount.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
34
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Notes in definitive form which after transfer are
to be evidenced by an interest in the Global Note, upon receipt by the
Registrar of instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of the Notes in definitive form
to be transferred, and the Trustee shall cancel the Notes in definitive
form so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the circumstance contemplated by paragraph (a)(i)(x) of this Section
2.17 exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01
at least 60 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers'
35
Certificate stating that such redemption shall comply with the conditions
contained herein and in the Notes.
SECTION 3.02. Selection of Notes To Be Redeemed.
---------------------------------
If fewer than all of the Notes are to be redeemed, selection of the
Notes to be redeemed will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not then listed on a national securities
exchange, on a pro rata basis, by lot or in such other fair and reasonable
manner chosen at the discretion of the Trustee; provided, however, that if a
partial redemption is made with the proceeds of a Public Equity Offering,
selection of the Notes or portion thereof for redemption shall be made by the
Trustee only on a pro rata basis, unless such method is otherwise prohibited.
The Company shall promptly notify the Trustee and the Paying Agent in writing of
the date of listing and the name of the securities exchange if and when the
Notes are listed on a principal national securities exchange. The Trustee shall
make the selection from the Notes outstanding and not previously called for
redemption and shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes in denominations
of $1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Notes that have denominations larger than $1,000. Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes called
for redemption.
SECTION 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail, postage prepaid, to each Holder whose Notes are to be redeemed, with
a copy to the Trustee and any Paying Agent. At the Company's written request,
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 Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption
is being made;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;
36
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption Price plus accrued
interest, if any, upon surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
and
(8) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption;
and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price and the amount of accrued interest payable thereon, provided
that if a Note is redeemed on or after a Record Date for an interest payment but
on or prior to the related Interest Payment Date, then any accrued and unpaid
interest shall be paid to the Holder of record at the close of business on such
Record Date. Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder.
SECTION 3.05. 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 plus accrued interest, if any, of all Notes to be redeemed
on that date (other than Notes or portions of Notes called for redemption 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, except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
37
SECTION 3.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
----------------
The Company shall pay or cause to be paid the principal of and
interest on the Notes on the dates and in the manner provided in the Notes and
in this Indenture. An installment of principal of or interest on the Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Company or an Affiliate of the Company) holds on that date U.S.
Legal Tender designated for and sufficient to pay the installment in full and is
not prohibited from paying such money to the Holders pursuant to the terms of
this Indenture.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee 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 13.02.
SECTION 4.03. Corporate Existence.
-------------------
Except as otherwise permitted by Article Five and Section 4.16, the
Company shall do or cause to be done, at its own cost and expense, all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of each of them and the material
rights (charter and statutory) and franchises of the Company and each such
Restricted Subsidiary; provided, however, that neither the Company nor any
Restricted Subsidiary shall be required to preserve any right or franchise if
the Board of Directors of the Company or the Restricted Subsidiary, as the case
may be, shall determine that the preservation thereof is no longer desirable in
the conduct of the business of such entity.
38
SECTION 4.04. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its 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 its 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 whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
SECTION 4.05. Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its material properties in good working order and
condition (subject to ordinary wear and tear) and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto and
actively conduct and carry on its business; provided, however, that nothing in
this Section 4.05 shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the operation and maintenance of any of its
properties, if such discontinuance is, in the good faith judgment of the Board
of Directors of the Company or the Restricted Subsidiary, as the case may be,
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and is not disadvantageous in any material
respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself and
each of its Restricted Subsidiaries, insurance (including appropriate self-
insurance) against loss or damage of the kinds that, in the good faith judgment
of the Board of Directors of the Company, are adequate and appropriate for the
conduct of the business of the Company and such Restricted 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 customary, in the good faith
judgment of the Board of Directors of the Company, for companies similarly
situated in the industry.
SECTION 4.06. 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 its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
such Officer's knowledge, based on such review, the Company during such
preceding fiscal year has kept, observed, performed and fulfilled each and every
such covenant and no Default or Event of Default occurred during
39
such year and at the date of such certificate there is no Default or Event of
Default that has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe the 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 not contrary to the then-current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of such
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four or Five of
this Indenture or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 13.02 hereof,
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
becoming aware of such occurrence.
SECTION 4.07. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Restricted
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 for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Restricted Subsidiaries, taken
as a whole.
SECTION 4.08. SEC Reports.
-----------
(a) So long as the Notes are outstanding, the Company (at its own
expense) shall file with the SEC and shall provide to the Trustee and the
Holders within 15 days after it files them with the SEC copies of the quarterly
and annual reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) to be filed pursuant to Section 13 or 15(d) of the
Exchange Act (without regard to whether the Company is subject to the
requirements of such Section 13 or 15(d) of the Exchange Act); provided that
prior to the consummation of the Exchange Offer and the issuance of the Exchange
Notes, the Company (at its own expense) will mail to the
40
Trustee and Holders substantially the same information that would have been
required by such Sections within 15 days of when any such document would
otherwise have been required to be filed with the SEC. Upon qualification of
this Indenture under the TIA, the Company shall also comply with the provisions
of the TIA (S) 314(a).
(b) The Company shall provide to any Holder any information reasonably
requested by such Holder concerning the Company (including financial statements)
necessary in order to permit such Holder to sell or transfer Notes in compliance
with Rule 144A under the Securities Act.
SECTION 4.09. 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 Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.10. Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on or in respect of its Capital Stock (including any payment in
connection with any merger or consolidation involving the Company) or to the
direct or indirect holders of its Capital Stock in their capacities as such
(except dividends or distributions payable solely in Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase its
Capital Stock (other than Disqualified Stock and except dividends or
distributions payable to the Company or a Restricted Subsidiary and, if a
Restricted Subsidiary is not wholly owned, to all stockholders on a pro rata
basis); (ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or of any direct or indirect parent of the Company;
(iii) purchase, repurchase, redeem, defease or otherwise acquire or retire for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment, any Subordinated Obligations (other than the purchase, repurchase
or other acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition and other than any
required or mandatory payments, purchases or acquisitions triggered by events
which would trigger the prepayments of the Notes described under Sections 4.16
and 4.17 provided that such required or mandatory payments, purchases or
acquisitions (x) are otherwise in accordance with the terms of this Indenture,
(y) are made in accordance with the subordination provisions governing such
Subordinated Obligations and (z) an offer is made to prepay the Notes in
accordance with the terms of this
41
Indenture, and if such offer is accepted, payments shall be made with respect to
the Notes being repurchased prior to any payment with respect to such
Subordinated Obligations); or (iv) make any Investment in any Affiliate of the
Company other than a Restricted Subsidiary or a Person which will become a
Restricted Subsidiary as a result of any such Investment (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment being herein referred to as a "Restricted Payment") if
at the time the Company or such Restricted Subsidiary makes such Restricted
Payment: (1) a Default shall have occurred and be continuing (or would result
therefrom); or (2) the Company would not be permitted to issue an additional
$1.00 of Indebtedness pursuant to clause (a) under Section 4.13 after giving pro
forma effect to such Restricted Payment; or (3) the aggregate amount of such
Restricted Payment and all other Restricted Payments since the date on which the
Notes were originally issued would exceed the sum of: (A) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the beginning of the fiscal quarter during which the Notes were
originally issued to the end of the most recent fiscal quarter for which
financial statements are available (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit); (B) the aggregate Net Cash
Proceeds received by the Company from the issue or sale of its Capital Stock
(other than Disqualified Stock) subsequent to the date on which the Notes were
originally issued (other than an issuance or sale to a Subsidiary or an employee
stock ownership plan or similar trust in the benefit of employees); (C) the
aggregate Net Cash Proceeds received by the Company from the issue or sale of
its Capital Stock (other than Disqualified Stock) to an employee stock ownership
plan subsequent to the date on which the Notes were originally issued; provided,
however, that if such employee stock ownership plan issues any Indebtedness,
such aggregate amount shall be limited to an amount equal to any increase in the
Consolidated Net Worth of the Company resulting from principal repayments made
by such employee stock ownership plan with respect to Indebtedness issued by it
to finance the purchase of such Capital Stock; (D) the amount by which
Indebtedness of the Company is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Subsidiary) subsequent to the date on
which the Notes were originally issued of any Indebtedness of the Company
convertible or exchangeable for Capital Stock (other than Disqualified Stock) of
the Company (less the amount of any cash, or other property, distributed by the
Company upon such conversion or exchange); and (E) an amount equal to the sum of
(i) the net reduction in Investments in Unrestricted Subsidiaries resulting from
dividends, interest, repayments of loans or advances or Indebtedness or other
transfers of assets, in each case to the Company or any Restricted Subsidiary
from Unrestricted Subsidiaries, and (ii) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary (provided such Unrestricted
Subsidiary is otherwise eligible to become a Restricted Subsidiary); provided,
however, that the foregoing sum in clause (E) shall not exceed, in the case of
any Unrestricted Subsidiary, the amount of Investments previously made (and
treated as a Restricted Payment) by the Company or any Restricted Subsidiary in
such Unrestricted Subsidiary.
(b) The provisions of Section (a) shall not prohibit: (1) any
payments made to repay the Company's $30 million, five year Tranche A Term Loan,
the Company's $30 million, six and one-half year Tranche B Term Loan, to redeem
the Company's 12%
42
subordinated notes due 2004 and the contingent anti-dilution warrants to
purchase 1,461 shares of the Company's Common Stock, each dated as of February
14, 1997 and 8,614 shares of the Company's Common Stock issued to certain
shareholders of the Company on February 14, 1997; (2) any purchase or redemption
of Capital Stock or Subordinated Obligations of the Company made by exchange
for, or out of the proceeds of the substantially concurrent sale of, Capital
Stock of the Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary or an employee stock ownership plan); provided,
however, that (A) such purchase or redemption shall be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds
from such sale shall be excluded from clauses (3)(B) or (3)(C) of Section (a);
(3) any purchase or redemption of Subordinated Obligations of the Company made
by exchange for, or out of the proceeds of the substantially concurrent sale of,
Indebtedness of the Company which is permitted to be issued pursuant to the
provisions of Section 4.13 below; provided, however, that such purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments; (4) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted under Section 4.17 below; provided,
however, that such purchase or redemption shall be excluded in the calculation
of the amount of Restricted Payments; (5) dividends paid within 60 days after
the date of declaration if at such date of declaration such dividend would have
complied with this provision; provided, however, that at the time of payment of
such dividend, no other Default shall have occurred and be continuing (or would
result therefrom); provided further, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments; (6) the
repurchase of shares of, or options to purchase shares of, Capital Stock of the
Company or any of its Subsidiaries from employees, former employees, directors
or former directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former directors),
pursuant to the terms of the agreements (including employment agreements) or
plans (or amendments thereto) approved by the Board of Directors under which
such individuals purchase or sell or are granted the option to purchase or sell,
shares of such common stock; provided, however, that the aggregate amount of
such repurchases shall not exceed the sum of $1.0 million (unless, with respect
to a deceased Person, to the extent such repurchases are funded out of the
proceeds of such Person's life insurance policy of which the Company or a
Restricted Subsidiary is a beneficiary) and the Net Cash Proceeds from the sale
of Capital Stock to members of management or directors of the Company and its
Subsidiaries that occurs after the Issue Date (to the extent the Net Cash
Proceeds from the sale of such Capital Stock have not otherwise been applied to
the payment of Restricted Payments by virtue of clause (3)(C) of paragraph (a)
above); provided further, however, that (A) such repurchases shall be excluded
in the calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale shall be excluded from the calculation of amounts under
clause (3)(C) of paragraph (a) above; and (7) dividend, distribution or other
payment on or with respect to Capital Stock to the extent payable in shares of
Capital Stock of such Person (other than Disqualified Stock).
43
SECTION 4.11. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, create or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (i) pay dividends or
make any other distributions on its Capital Stock to the Company or a Restricted
Subsidiary or pay any Indebtedness or other obligation owed to the Company or a
Restricted Subsidiary, (ii) make any loans or advances to the Company or (iii)
transfer any of its property or assets to the Company, except: (1) any
encumbrance or restriction pursuant to an agreement in effect at or entered into
on the Issue Date, including under the Revolving Credit Facility; (2) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Indebtedness or Preferred Stock issued by such
Restricted Subsidiary or predecessor thereto on or prior to the date on which
such Restricted Subsidiary or predecessor thereto (or assets thereof) was
acquired by the Company (other than Indebtedness or Preferred Stock issued as
consideration in, or to provide all or any portion of the funds utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary (or predecessor (or assets thereof)) became a
Restricted Subsidiary or was acquired by the Company) and outstanding on such
date; (3) any encumbrance or restriction pursuant to an agreement effecting a
refinancing of Indebtedness issued pursuant to an agreement referred to in
clause (1) or (2) or contained in any amendment to an agreement referred to in
clause (1) or (2); provided, however, that the encumbrances and restrictions
with respect to such Restricted Subsidiary contained in any of such refinancing
agreement or amendment, taken as a whole, are no less favorable to the
Noteholders than encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such agreements as determined in good faith by the Board
of Directors of the Company; (4) any such encumbrance or restriction consisting
of customary nonassignment provisions in leases governing leasehold interests or
capital leases to the extent such provisions restrict the transfer of the lease;
and (5) in the case of clause (iii) above, restrictions contained in security
agreements securing Indebtedness of a Restricted Subsidiary to the extent such
restrictions restrict the transfer of the property subject to such security
agreements; (6) encumbrances or restrictions imposed by operation of applicable
law; (7) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; (8) encumbrances or
restrictions imposed upon the transfer, assignment or licensing or sublicensing
of intellectual property including, copyrighted and patent material; and (9)
encumbrances or restrictions imposed pursuant to Purchase Money Indebtedness and
Capital Lease Obligations Incurred pursuant to the terms of this Indenture for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (iii) above on the property so acquired.
Notwithstanding the foregoing, neither (a) customary provisions restricting
subletting or assignment of any lease entered into in the ordinary course of
business, consistent with past practice, nor (b) Liens permitted under this
Indenture, shall in and of themselves be considered a restriction on the ability
of the applicable Restricted Subsidiary to transfer such agreements or assets,
as the case may be.
44
SECTION 4.12. Limitation on Affiliate Transactions.
------------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, conduct any business or enter into any transaction or series of
similar transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of the Company or
any legal or beneficial owner of 5% or more of any class of Capital Stock of the
Company or with an Affiliate of any such owner (other than a Restricted
Subsidiary of the Company or any employee stock ownership plan for the benefit
of the Company's or a Restricted Subsidiary's employees) unless the terms of
such business, transaction or series of transactions are (i) set forth in
writing, (ii) as favorable to the Company or such Restricted Subsidiary as terms
that would be obtainable at the time for a comparable transaction or series of
similar transactions in arms-length dealings with an unrelated third Person and
(iii) the disinterested members, if any, of the Board of Directors have, by
resolution, determined in good faith that such business or transaction or series
of transactions meets the criteria set forth in (ii) above; provided, however,
that if such transaction involves an amount in excess of $2.5 million, the
Company shall also obtain from a nationally recognized expert with experience in
appraising the terms and conditions of the type of business or transactions an
opinion that such transaction is fair from a financial point of view to the
Company or its Restricted Subsidiary, as the case may be.
(b) The provisions of the foregoing paragraph (a) shall not prohibit
(i) any Restricted Payment permitted to be made pursuant to Section 4.10, or any
payment or transaction specifically excepted from the definition of Restricted
Payment, (ii) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors or the board of directors of the relevant Restricted Subsidiary, (iii)
the grant of stock options or similar rights to employees and directors pursuant
to plans approved by the Board of Directors or the board of directors of the
relevant Restricted Subsidiary, (iv) loans or advances to officers, directors or
employees in the ordinary course of business, (v) the payment of reasonable fees
to directors of the Company and its Restricted Subsidiaries who are not
employees of the Company or its Restricted Subsidiaries, (vi) any Affiliate
transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, (vii) indemnification or insurance provided to officers
or directors of the Company or any Subsidiary approved in good faith by the
Board of Directors; (viii) payment of compensation and benefits to directors,
officers and employees of the Company and its Subsidiaries approved in good
faith by the Board of Directors; (ix) sales of Capital Stock of the Company to
Affiliates; (x) fees or expense reimbursements paid to Windward and its
Affiliates in accordance with the provisions of that certain Financial Services
Advisory Agreement between the Company and Windward or that certain Fee Letter
between the Company and Windward both dated as of February 14, 1997, in each
case, as in effect on such date, without amendment; (xi) the purchase of or the
payment of Indebtedness of or monies owed by the Company or any of its
Restricted Subsidiaries for goods or materials purchased, or services received,
in the ordinary course of business or (xii) customary investment banking fees to
Credit Suisse First Boston.
45
SECTION 4.13. Limitation on Indebtedness.
--------------------------
(a) The Company shall not Incur, directly or indirectly, any
Indebtedness unless, on the date of such Incurrence, after giving pro forma
effect thereto, the Consolidated EBITDA Coverage Ratio at the date of such
issuance exceeds 2.0 to 1.0 if such Indebtedness is Incurred prior to May 15,
1999 and 2.25 to 1 if such Indebtedness is Incurred thereafter.
(b) Notwithstanding clause (a), the Company may Incur the following
Indebtedness: (i) Indebtedness Incurred pursuant to the Revolving Credit
Facility; provided, however, that after giving pro forma effect to such
Incurrence and the application of the net proceeds therefrom the aggregate
amount of such Indebtedness outstanding at such time, together with the
aggregate amount of all Indebtedness then outstanding and Incurred pursuant to
clause (i) of Section 4.18 below shall not exceed the greater of (x) $25 million
and (y) the sum of (A) 50% of the gross book value of the inventory of the
Company and its Restricted Subsidiaries and (B) 85% of the gross book value of
the accounts receivable of the Company and its Restricted Subsidiaries; (ii)
Indebtedness owed to and held by a Wholly Owned or Foreign Subsidiary; provided,
however, that any subsequent issuance or transfer of any Capital Stock that
results in such Subsidiary ceasing to be a Wholly Owned or Foreign Subsidiary or
any transfer of such Indebtedness (other than to a Wholly Owned or Foreign
Subsidiary) shall be deemed, in each case, to constitute the issuance of such
Indebtedness by the Company; (iii) the Notes and the Exchange Notes; (iv)
Indebtedness (other than Indebtedness described in clause (i), (ii), or (iii)
above) outstanding on Issue Date; (v) any Refinancing Indebtedness in respect of
Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (iii),
(iv) or (viii) or this clause (v) or pursuant to clause (v) of Section 4.18
below; (vi) obligations of the Company pursuant to (A) interest rate swap or
similar agreements designed to protect the Company against fluctuations in
interest rates in respect of Indebtedness of the Company to the extent the
notional principal amount of such obligation does not exceed the aggregate
principal amount of the Indebtedness to which such interest rate contracts
relate and (B) foreign exchange or commodity hedge, exchange or similar
agreements designed to protect the Company against fluctuations in foreign
currency exchange rates or commodity prices in respect of foreign exchange or
commodity exposures Incurred by the Company in the ordinary course of its
business; (vii) Indebtedness of the Company consisting of obligations in respect
of purchase price adjustments in connection with the acquisition or disposition
of assets by the Company or any Restricted Subsidiary permitted under this
Indenture; (viii) Capital Lease Obligations, Purchase Money Indebtedness and
Acquired Indebtedness in an aggregate principal amount, together with the
principal amount of Indebtedness Incurred pursuant to clause (x) of Section
4.18, not exceeding $15 million at any one given time outstanding; and (ix)
Indebtedness in an aggregate principal amount which, together with all other
Indebtedness of the Company then outstanding (other than Indebtedness permitted
by clauses (i) through (viii) of this Section or clause (a)) does not exceed $10
million (less the amount of any Subsidiary Indebtedness and Preferred Stock then
outstanding and Incurred pursuant to clause (vii) of Section 4.18).
(c) Notwithstanding Sections (a) and (b) above, and the provisions of
Section 4.18, the Company shall not, and shall not permit any Restricted
Subsidiary to issue any Indebtedness if the proceeds thereof are used, directly
or indirectly, to repay, prepay, redeem,
46
defease, retire, refund or refinance any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Notes or the relevant Subsidiary
Guarantee, as applicable, to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section 4.13, (i)
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Company, in its sole discretion,
will classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of the above clauses and (ii) an
item of Indebtedness may be divided and classified in more than one of the types
of Indebtedness described above.
(e) For purposes of determining amounts of Indebtedness under this
covenant, Indebtedness resulting from security interests granted with respect to
Indebtedness otherwise included in the determination of Indebtedness, and
Guarantees (and security interests with respect thereof) of, or obligations with
respect to letters of credit supporting, Indebtedness otherwise included in the
determination of Indebtedness shall not be included in the determination of
Indebtedness.
SECTION 4.14. Limitation on the Sale or Issuance of Capital Stock of
------------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company shall not sell or otherwise dispose of any Capital Stock
of a Restricted Subsidiary, and shall not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell or otherwise dispose of any of its
Capital Stock except (i) to the Company or a Wholly Owned Subsidiary, (ii) if,
immediately after giving effect to such issuance, sale or other disposition,
neither the Company nor any of its Subsidiaries own any Capital Stock of such
Restricted Subsidiary, (iii) if, immediately after giving effect to such
issuance, sale or other disposition, such Restricted Subsidiary (x) would no
longer constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect thereto would have been permitted to be made under
Section 4.10 if made on the date of such issuance, sale or other disposition or
(y) would remain a Restricted Subsidiary or (iv) directors' qualifying shares.
SECTION 4.15. Limitation on Other Senior Subordinated Debt.
--------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary
to, create, Incur, assume, guarantee or in any other manner become liable with
respect to any Indebtedness, other than the Notes, that is subordinate in right
of payment to any Senior Indebtedness of the Company or any such Restricted
Subsidiary, unless such Indebtedness is also pari passu with, or subordinate in
right of payment to, the Notes, or the relevant Subsidiary Guarantee, as the
case may be.
SECTION 4.16. Change of Control.
-----------------
(a) Upon a Change of Control, each Holder shall have the right to
require that the Company repurchase such Holder's Notes at a purchase price in
cash equal to 101% of the
47
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of Holders of record on a record date to
receive interest on the relevant interest payment date), in accordance with the
terms contemplated in Section 4.16(b). If at the time of such Change of
Control the terms of the Senior Indebtedness of the Company restrict or prohibit
the repurchase of Notes pursuant to this Section, then prior to the mailing of
the notice to Holders provided for in Section 4.16(b) below but in any event
within 90 days following any Change of Control, the Company shall obtain the
requisite consent under the agreements governing such Senior Indebtedness of the
Company to permit the repurchase of the Notes as provided for in Section
4.16(b).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to the Trustee and each Holder stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Notes at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued
and unpaid interest, if any, to the date of purchase (subject to the right
of Holders of record on the relevant record date to receive interest on the
relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization, each after giving effect to such Change of
Control);
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Notes purchased.
(c) Holders electing to have a Note purchased will be required to
surrender the Note, with an appropriate form (as provided for in Exhibit A or B,
as appropriate) duly completed, to the Company at the address specified in the
notice at least two Business Days prior to the purchase date. Holders will be
entitled to withdraw their election if the Trustee or the Company receives not
later than 3 p.m. New York City time two Business Day prior to the purchase
date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note which was delivered for purchase
by the Holder and a statement that such Holder is withdrawing his election to
have such Note purchased.
(d) On the purchase date, all Notes purchased by the Company under
this Section shall be delivered to the Trustee for cancellation, and the Company
shall pay the purchase price plus accrued and unpaid interest, if any, to the
Holders entitled thereto.
(e) At the time the Company delivers Notes to the Trustee which are to
be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company pursuant
to and in accordance with the terms of this
48
Section. A Note shall be deemed to have been accepted for purchase at the time
the Trustee, directly or through an agent, mails or delivers payment therefor to
the surrendering Holder.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.17. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Disposition unless:
(i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the
fair market value, as determined in good faith by the Board of Directors
(including as to the value of all non-cash consideration), of the shares
and assets subject to such Asset Disposition and at least 85% of the
consideration thereof received by the Company or such Restricted
Subsidiary, as the case may be, is in the form of cash or Cash Equivalents;
and
(ii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted Subsidiary,
as the case may be): (A) first, to the extent the Company elects (or is
required by the terms of any Senior Indebtedness of the Company), to
prepay, repay or purchase Senior Indebtedness or Indebtedness (other than
any Disqualified Stock) of a Wholly Owned Subsidiary or such Restricted
Subsidiary (in each case other than Indebtedness owed to the Company or a
Subsidiary) within 60 days from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash; (B) second, to the
extent of the balance of such Net Available Cash after application in
accordance with clause (A), at the Company's election to the investment by
the Company or any Wholly Owned Subsidiary or such Restricted Subsidiary in
assets to replace the assets that were the subject of such Asset
Disposition or an asset that (as determined in good faith by the Board of
Directors) will be used in the business of the Company and the Wholly Owned
Subsidiaries existing on the Issue Date or in businesses reasonably related
thereto ("Replacement Assets"), in each case within the later of 270 days
from the date of such Asset Disposition or the receipt of such Net
Available Cash; (C) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A) and (B), to
make an offer to purchase Notes at par (and any other Senior Subordinated
Indebtedness designated by the Company, at a price no greater than par)
plus accrued and unpaid interest; and (D) fourth, to the extent of the
balance of such Net Available Cash after application in accordance with
clauses (A), (B) and (C), to (x) the acquisition by the Company or any
Wholly Owned Subsidiary or such Restricted Subsidiary of Tangible Property
to be used in the business of the Company and the Wholly Owned Subsidiaries
existing on the Issue
49
Date or such Restricted Subsidiary or in businesses reasonably related
thereto or (y) the prepayment, repayment or purchase of Indebtedness (other
than any Disqualified Stock) of the Company (other than Indebtedness owed
to a Subsidiary of the Company) or Indebtedness of any Subsidiary (other
than Indebtedness owed to the Company or a Subsidiary of the Company), in
each case within 270 days from the later of the receipt of such Net
Available Cash and the date the offer is consummated; provided, however,
that in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (A), (C) or (D) above, the Company or such
Subsidiary shall retire such Indebtedness and cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the
foregoing provisions of this Section, the Company and its Restricted
Subsidiaries shall not be required to apply any Net Available Cash in
accordance with this Section except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in
accordance with this Section exceeds $2.5 million. Pending application of
Net Available Cash pursuant to this Section, such Net Available Cash shall
be invested in Permitted Investments.
For the purposes of this Section 4.17, the following are deemed to be cash
or cash equivalents: (x) the express assumption of Indebtedness of the
Company or any Restricted Subsidiary and (y) securities received by the
Company or any Restricted Subsidiary from the transferee that are converted
by the Company or such Restricted Subsidiary into cash within 120 days of
closing the transaction.
(b) In the event of an Asset Disposition that requires the purchase of
Notes (and other Senior Subordinated Indebtedness of the Company) pursuant to
Section 4.17(a)(ii)(C), the Company shall be required to purchase Notes tendered
pursuant to an offer by the Company for the Notes (and other Senior Subordinated
Indebtedness of the Company) (the "Offer") at a purchase price of 100% of their
principal amount (without premium) plus accrued but unpaid interest (or, in
respect of such other Senior Subordinated Indebtedness of the Company, such
lesser price, if any, as may be provided for by the terms of such Senior
Subordinated Indebtedness of the Company) in accordance with the procedures
(including prorating in the event of oversubscription) set forth in Section
4.17(c). If the aggregate purchase price of Notes (and any other Senior
Subordinated Indebtedness of the Company) tendered pursuant to the Offer is less
than the Net Available Cash allotted to the purchase thereof, the Company shall
be required to apply the remaining Net Available Cash in accordance with Section
4.17(a)(ii)(D). The Offer shall remain open for a period of 20 Business Days.
The Company shall not be required to make an Offer to purchase Notes (and other
Senior Subordinated Indebtedness of the Company) pursuant to this Section 4.17
if the Net Available Cash available therefor is less than $2,500,000 (which
lesser amount shall be carried forward for purposes of determining whether such
an Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition).
(c) (1) Promptly, and in any event within 30 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to
deliver to the Trustee and send, by first-class mail to each Holder, a
written notice stating that the Holder may elect
50
to have his Notes purchased by the Company either in whole or in part
(subject to prorating as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not
less than 30 days nor more than 60 days after the date of such notice (the
"Purchase Date") and shall contain such information concerning the business
of the Company which the Company in good faith believes will enable such
Holders to make an informed decision.
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to
the Trustee an Officers' Certificate as to (i) the amount of the Offer (the
"Offer Amount"), (ii) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 4.17(a). Upon
the expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Notes or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee shall, on the Purchase Date, mail
or deliver payment to each tendering Holder in the amount of the purchase
price. In the event that the aggregate purchase price of the Notes
delivered by the Company to the Trustee is less than the Offer Amount, the
Trustee shall deliver the excess to the Company immediately after the
expiration of the Offer Period for application in accordance with this
Section.
(3) Holders electing to have a Note purchased shall be required to
surrender the Note, with an appropriate form duly completed, to the Company
at the address specified in the notice at least two Business Days prior to
the Purchase Date. Holders shall be entitled to withdraw their election if
the Trustee or the Company receives not later than 3:00 p.m., New York City
time, one Business Day prior to the Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note which was delivered for purchase by the Holder
and a statement that such Holder is withdrawing his election to have such
Note purchased. If at the expiration of the Offer Period the aggregate
principal amount of Notes surrendered by Holders exceeds the Offer Amount,
the Company shall select the Notes to be purchased on a pro rata basis
taking into account any other tendered Senior Subordinated Indebtedness
which is the subject of such offer (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders whose Notes are
purchased only in part shall be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered.
(4) At the time the Company delivers Notes to the Trustee which are to
be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Note shall
be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
51
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.18. Limitation on Indebtedness and Preferred Stock of
-------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company shall not permit any Restricted Subsidiary to Incur,
directly or indirectly, any Indebtedness or Preferred Stock except: (i)
Indebtedness Incurred pursuant to the Revolving Credit Facility or any other
revolving credit arrangement; provided, however, that, after giving pro forma
effect to such Incurrence and the application of the proceeds therefrom, the
aggregate amount of such Indebtedness outstanding at such time, together with
the aggregate amount of all Indebtedness then outstanding and issued pursuant to
clause (b)(i) of Section 4.13 above, shall not exceed the greater of (x) $25
million and (y) the sum of (A) 50% of the gross book value of the inventory of
the Company and its Restricted Subsidiaries and (B) 85% of the gross book value
of the accounts receivable of the Company and its Restricted Subsidiaries; (ii)
Indebtedness or Preferred Stock issued to and held by the Company or a Wholly
Owned or Foreign Subsidiary; provided, however, that (A) any subsequent issuance
or transfer of any Capital Stock that results in any such Subsidiary ceasing to
be a Wholly Owned or Foreign Subsidiary or (B) any subsequent transfer of such
Indebtedness or Preferred Stock (other than to the Company or a Wholly Owned or
Foreign Subsidiary) shall be deemed, in each case, to constitute the issuance of
such Indebtedness or Preferred Stock by the issuer thereof; (iii) Acquired
Indebtedness of such Restricted Subsidiary; provided that after giving effect to
the Incurrence of such Acquired Indebtedness, the Company could incur $1.00 of
Indebtedness pursuant to clause (a) under Section 4.13; (iv) Indebtedness or
Preferred Stock (other than any described in clause (i), (ii) or (iii))
outstanding on the Issue Date; (v) Refinancing Indebtedness Incurred in respect
of Indebtedness or Preferred Stock referred to in clause (iii), (iv) or (x) or
this clause (v); provided, however, that to the extent such Refinancing
Indebtedness Refinances Acquired Indebtedness or Preferred Stock of a Restricted
Subsidiary that is not a Wholly Owned Subsidiary, such Refinancing Indebtedness
shall be Incurred only by such Restricted Subsidiary; (vi) Obligations of a
Restricted Subsidiary pursuant to (A) interest rate swap or similar agreements
designed to protect such Restricted Subsidiary against fluctuations in interest
rates in respect of the Indebtedness of such Restricted Subsidiary to the extent
the notional principal amount of such obligation does not exceed the aggregate
principal amount of the Indebtedness to which such interest rate contracts
relate and (B) foreign exchange or commodity hedge, exchange or similar
agreements designed to protect such Restricted Subsidiary against fluctuations
in foreign currency exchange rates or commodity prices in respect of foreign
exchange or commodity exposures Incurred by such Restricted Subsidiary in the
ordinary course of its business; (vii) Indebtedness consisting of the Subsidiary
Guarantees; (viii) Indebtedness of any Restricted Subsidiary consisting of
Obligations in respect of purchase price adjustments in connection with the
acquisition or disposition of assets by any Restricted
52
Subsidiary permitted under this Indenture; (ix) Capital Lease Obligations,
Purchase Money Indebtedness and Acquired Indebtedness in an aggregate principal
amount not exceeding, together with the principal amount of Indebtedness
Incurred pursuant to clause (viii) of Section 4.13, $15 million at any one given
time outstanding; and (x) Indebtedness and Preferred Stock in an aggregate
principal amount which, together with any other Indebtedness or Preferred Stock
of Restricted Subsidiaries then outstanding (other than Indebtedness or
Preferred Stock permitted by clauses (i) through (ix) of this Section) does not
exceed $10 million (less the amount of any Indebtedness then outstanding and
Incurred pursuant to clause (b)(ix) of Section 4.13).
SECTION 4.19. Limitation on Liens Securing Subordinated Indebtedness.
------------------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary
to, create, Incur, assume or suffer to exist any Liens of any kind (other than
Permitted Liens) upon any of their respective assets or properties now owned or
acquired after the date of this Indenture or any income or profits therefrom
securing: (i) any Indebtedness of the Company or a Restricted Subsidiary which
is expressly by its terms subordinate or junior in right of payment to any other
Indebtedness of the Company or such Restricted Subsidiary, as the case may be,
unless the Notes or the relevant Subsidiary Guarantee, as the case may be, are
equally and ratably secured for so long as such Indebtedness is so secured;
provided that, if such Indebtedness which is expressly by its terms subordinate
or junior in right of payment to any other Indebtedness of the Company or a
Restricted Subsidiary is expressly subordinate or junior to the Notes or the
relevant Subsidiary Guarantee, as the case may be, then the Lien securing such
subordinated or junior Indebtedness shall be subordinate and junior to the Lien
securing the Notes or the relevant Subsidiary Guarantee, as the case may be,
with the same relative priority as such subordinated or junior Indebtedness
shall have with respect to the Notes or the relevant Subsidiary Guarantee, as
the case may be; provided further, that this clause (i) shall not be applicable
to any Liens securing any such Indebtedness which became Indebtedness of the
Company or a Restricted Subsidiary pursuant to a transaction permitted under
Section 5.01 or Liens securing Acquired Indebtedness and, in each case, which
Liens were in existence at the time of such transaction or Incurrence of such
Acquired Indebtedness (unless such Indebtedness was Incurred in connection with,
or in contemplation of, such transaction or Incurrence) so long as such Liens do
not extend to or cover any property or assets of the Company or any Restricted
Subsidiary other than the property or assets such Liens covered before the
consummation of such transaction or Incurrence of such Acquired Indebtedness;
(ii) any assumption, guarantee or other liability of the Company or any
Restricted Subsidiary in respect of any Indebtedness of the Company or a
Restricted Subsidiary which is expressly by its terms subordinate or junior in
right of payment to any other Indebtedness of the Company or such Restricted
Subsidiary, unless the Notes or the relevant Subsidiary Guarantee, as the case
may be, is equally and ratably secured for so long as such assumption, guaranty
or other liability is so secured; provided that, if such subordinated
Indebtedness which is expressly by its terms subordinate or junior in right of
payment to any other Indebtedness of the Company or a Restricted Subsidiary is
expressly by its terms subordinate or junior to the Notes or the relevant
Subsidiary Guarantee, as the case may be, then the Lien securing the assumption,
guarantee or other liability of such Subsidiary shall be subordinate and junior
to the Lien securing the Notes or the relevant Subsidiary Guarantee, as
53
the case may be, with the same relative priority as such subordinated or junior
Indebtedness shall have with respect to the Notes or the relevant Subsidiary
Guarantee, as the case may be; provided, further, that this clause (ii) shall
not be applicable to Liens securing any such assumption, guarantee or other
liability which existed at the time such Subsidiary became a Subsidiary or
acquired the assets subject to such Lien and which Liens were in existence at
the time of such transaction (unless such assumption, guarantee or other
liability was Incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary or in contemplation of the acquisition of such Assets), so
long as such Liens do not extend to or cover any property or assets of the
Company or any Subsidiary other than the property or assets of such Person or
other than the property or assets so acquired, as the case may be.
SECTION 4.20. Future Subsidiary Guarantors.
----------------------------
If, after the Issue Date, any Restricted Subsidiary Incurs any
Indebtedness pursuant to clause (i) of Section 4.18 above, the Company shall
cause such Restricted Subsidiary to Guarantee the Notes pursuant to a Subsidiary
Guarantee and to execute and deliver a supplemental indenture to this Indenture
and shall cause all Indebtedness of such Restricted Subsidiary owing to the
Company or any other Subsidiary of the Company and not previously discharged
(and not pledged under the Revolving Credit Facility) to be converted into
Capital Stock of such Restricted Subsidiary (other than Disqualified Stock).
SECTION 4.21. Limitation on Designations of Unrestricted
------------------------------------------
Subsidiaries.
------------
(a) The Company may designate any Subsidiary of the Company (other
than a Subsidiary Guarantor) as an "Unrestricted Subsidiary" (a "Designation")
only if:
(i) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation;
(ii) either (x) the assets of such Subsidiary do not exceed
$1,000 or (y) the Company would be permitted under this Indenture to make
an Investment at the time of Designation (assuming the effectiveness of
such Designation) in an amount (the "Designation Amount") equal to fair
market value of the Capital Stock of such Subsidiary as determined in good
faith by the Board of Directors on such date; and
(iii) the Company would be permitted under this Indenture to
Incur $1.00 of additional Indebtedness pursuant to clause (a) of Section
4.10 above at the time of Designation (assuming the effectiveness of such
Designation).
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
4.10 for all purposes of this Indenture in the Designation Amount. The Company
shall not and shall not permit any Restricted Subsidiary to, at any time (A)
provide credit support for, or a guarantee of, any Indebtedness of any
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness), (B) be directly or indirectly liable for any
Indebtedness which
54
provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity upon the occurrence of a default
with respect to any Indebtedness of any Unrestricted Subsidiary (including any
right to take enforcement action against such Unrestricted Subsidiary), except
in the case of clause (A) or (B) to the extent permitted under Section 4.10.
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the time
of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Indenture and for all purposes of this Indenture shall be deemed to have
been Incurred at such time.
(c) All Designations and Revocations must be evidenced by resolutions
of the Board of Directors delivered to the Trustee certifying compliance with
the foregoing provisions.
(d) Notwithstanding the foregoing, no Subsidiary that is a Subsidiary
Guarantor as of the Issue Date shall be permitted to become an Unrestricted
Subsidiary.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the
-----------------------------------------------
Company.
-------
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets (computed on a consolidated basis) to,
any Person, unless: (i) the resulting, surviving or transferee Person (if not
the Company) shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and such
Person shall expressly assume, by an indenture supplemental to this Indenture,
executed and delivered to the Trustee, all the obligations of the Company under
the Notes and this Indenture; (ii) immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Indebtedness
which becomes an obligation of the resulting, surviving or transferee Person or
any Subsidiary as a result of such transaction as having been Incurred by such
Person or such Subsidiary at the time of such transaction), no Default shall
have occurred and be continuing; (iii) immediately after giving effect to such
transaction, the resulting, surviving or transferee Person would be able to
Incur at least $1.00 of Indebtedness pursuant to Section (a) of Section 4.13;
(iv) immediately after giving effect to such transaction, the resulting,
surviving
55
or transferee Person shall have Consolidated Net Worth in an amount which is not
less than the Consolidated Net Worth of the Company prior to such transaction;
and (v) the Company shall have delivered to the Trustee an Officers' Certificate
and if a supplemental indenture is required, an Opinion of Counsel (in no event,
however, shall such Opinion of Counsel cover financial ratios, the solvency of
any Person or any other financial or statistical data or information), each
stating that such consolidation, merger or transfer and such supplemental
indenture (if any) comply with this Indenture.
SECTION 5.02. Successor Corporation Substituted for the Company.
-------------------------------------------------
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, 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
this Indenture and the Notes with the same effect as if such surviving entity
had been named as such, and the predecessor company, in the case of a
conveyance, transfer or lease, shall be released from the obligation to pay the
principal of and interest on the Notes.
SECTION 5.03. Merger, Consolidation and Sale of Assets of Any
-----------------------------------------------
Subsidiary Guarantor.
--------------------
The Company will not permit any Subsidiary Guarantor to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
a series of transactions, all or substantially all of its assets to any Person
unless: (i) the resulting, surviving or transferee Person (if not such
Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was organized or under the laws of the
United States of America, or any State thereof or the District of Columbia, and
such Person shall expressly assume, by executing a Subsidiary Guarantee, all the
obligations of such Subsidiary, if any, under its Subsidiary Guarantee; (ii)
immediately after giving effect to such transaction or transactions on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
resulting, surviving or transferee Person as a result of such transaction as
having been Incurred by such Person at the time of such transaction), no Default
shall have occurred and be continuing; (iii) immediately after giving effect to
such transaction, the Company would be able to Incur at least $1.00 of
Indebtedness pursuant to Section 4.13(a); and (iv) the Company delivers to the
Trustee an Officers' Certificate and, if a supplemental indenture is required,
an Opinion of Counsel (in no event, however, shall such Opinion of Counsel cover
financial ratios, the solvency of any Person or any other financial or
statistical data or information), each stating that such consolidation, merger
or transfer and, such Subsidiary Guarantee, if any, complies with this
Indenture. The provisions of clauses (i), (ii) and (iii) above shall not apply
to any one or more transactions which constitute an Asset Disposition if the
Company has complied with the applicable provisions of Section 4.17 above.
56
SECTION 5.04. Successor Corporation Substituted for Subsidiary
------------------------------------------------
Guarantor.
---------
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of any Subsidiary Guarantor in accordance
with the foregoing, in which such Subsidiary Guarantor is not the continuing
corporation, the successor Person formed by such consolidation or into which
such Subsidiary Guarantor 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, such Subsidiary Guarantor under this Indenture with
the same effect as if such surviving entity had been named as such.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Notes when
the same becomes due and payable (whether or not such payment shall be
prohibited by Article Ten of this Indenture) and the Default continues for
a period of 30 days; or
(2) the Company defaults in the payment of the principal on any Notes
when such principal becomes due and payable (whether or not such payment
shall be prohibited by Article Ten), at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control under Section 4.16 or an Offer
under Section 4.17); or
(3) the failure by the Company to comply with its obligations under
Section 5.01 above; or
(4) the failure by the Company to comply for 30 days after notice with
any of its obligations under Sections 4.08, 4.10, 4.11, 4.12, 4.13, 4.14,
4.15, 4.16 (other than a failure to purchase the Notes), 4.17 (other than a
failure to purchase the Notes), 4.18, 4.19, 4.20 and 4.21; or
(5) the Company defaults in the observance or performance of any other
covenant or agreement contained in this Indenture and which default
continues for a period of 60 days after notice; or
(6) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders
57
thereof because of a default and the total amount of Indebtedness unpaid or
accelerated together with the principal amount of any other such
Indebtedness which is unpaid or which has been accelerated, exceeds $5.0
million at any time; or
(7) the Company or any Significant Subsidiary of the Company (A)
commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or order
for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (C) consents to the appointment of a Custodian of it or for
substantially all of its property, (D) consents to or acquiesces in the
institution of a bankruptcy or an insolvency proceeding against it, (E)
makes a general assignment for the benefit of its creditors, or (F) takes
any corporate action to authorize or effect any of the foregoing; or
(8) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary of
the Company in an involuntary case or proceeding under any Bankruptcy Law,
which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any such Significant Subsidiary, (B) appoint a Custodian of the
Company or any such Significant Subsidiary or for substantially all of its
property or (C) order the winding-up or liquidation of its affairs; and
such judgment, decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(9) any judgment or decree for the payment of money in an aggregate
amount in excess of $5.0 million shall have been rendered against the
Company or any of its Significant Subsidiaries and is not discharged and
either (A) an enforcement proceeding has been commenced by any Creditor
upon such judgment or decree or (B) there is a period of 60 days following
such judgment during which such judgment or decree is not discharged,
waived or the execution thereof stayed; or
(10) any Subsidiary Guarantee by a Significant Subsidiary ceases to be
in full force and effect (other than in accordance with the terms of the
Subsidiary Guarantee) or any Subsidiary Guarantor that is a Significant
Subsidiary denies or disaffirms its obligations under its Subsidiary
Guarantee.
However, a default under clause (4), (5) or (9) will not constitute an
Event of Default until the Trustee or the Holders of 25% in principal amount of
the outstanding Notes notify the Company of the default and the Company does not
cure such default within the time specified after receipt of such notice.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
58
SECTION 6.02. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified
in Section 6.01(7) or (8) with respect to the Company) occurs and is continuing,
and has not been waived pursuant to Section 6.04, then the Trustee, by written
notice to the Company, or the Holders of at least 25% in principal amount of
outstanding Notes may declare the principal of and accrued but unpaid interest
on all the Notes 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". Upon any such declaration, such amount shall be immediately
due and payable.
(b) If an Event of Default with respect to Section 6.01(7) or (8)
relating to the Company occurs and is continuing with respect to the Company,
the principal of and interest on all the Notes will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.
(c) The Holders of a majority in principal amount of the Notes may, on
behalf of the Holders of all of the Notes, rescind and cancel an acceleration
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) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances and (iv) in the event of the cure or waiver of an Event of Default of
the type described in Section 6.01(7) or 6.01(8), the Trustee shall have
received an Officers' Certificate and an Opinion of Counsel that such Event of
Default has been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative to the extent permitted
by law.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Notes by notice to the Trustee may waive an
existing Default or Event
59
of Default and its consequences, except a Default in the payment of principal of
or interest on any Note as specified in clauses (1) and (2) of Section 6.01.
When a Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
-------------------
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Holder, or that may involve the Trustee in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and provided further, that this
provision shall not affect the rights of the Trustee set forth in Section
7.01(d).
SECTION 6.06. Limitation on Suits.
-------------------
Subject to Article Seven, if an Event of Default occurs and is
continuing, the Trustee will be under no obligation to exercise any of the
rights or powers under this Indenture at the request or direction of any of the
Holders unless such Holders have offered to the Trustee indemnity or security
against any loss, liability or expense reasonably satisfactory to the Trustee.
Except to enforce the right to receive payment of principal, premium (if any) or
interest when due, no Holder of a Note may pursue any remedy with respect to
this Indenture or the Notes unless (i) such Holder has previously given the
Trustee notice that an Event of Default is continuing, (ii) Holders of at least
25% in principal amount of the outstanding Notes have requested the Trustee to
pursue the remedy, (iii) such Holders have offered the Trustee security or
indemnity against any loss, liability or expense reasonably satisfactory to the
Trustee, (iv) the Trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity and (v) the
Holders of a majority in principal amount of the outstanding Notes have not
given the Trustee a direction inconsistent with such request within such 60-day
period.
SECTION 6.07. 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 Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own
60
name and as trustee of an express trust against the Company or any other obligor
on the Notes 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
at the rate set forth in Section 4.01 and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents, consultants and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, if
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agents, consultants and counsel, and any other amounts due the Trustee under
Section 7.07. The Company's payment obligations under this Section 6.09 shall
be secured in accordance with the provisions of Section 7.07 hereunder. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
61
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise thereof as a prudent
person would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or obligations shall be implied in
this Indenture 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.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
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(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 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it.
(e) Whether or not herein expressly provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, note or other paper or document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate, an Opinion of
Counsel or both, which shall conform to Sections 13.04 and 13.05. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys and the Trustee shall not be responsible for the
misconduct or negligence of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers;
63
provided, however that the Trustee's conduct does not constitute wilful
misconduct, negligence or bad faith.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall 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 satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request,
order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) The Trustee may determine (i) the execution by any Holder of any
instrument in writing, (ii) the date of such execution or (iii) the
authority of any Person executing the same, in any manner the Trustee deems
sufficient and in accordance with such reasonable rules as the Trustee may
determine.
(i) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it were not Trustee. However, if the Trustee acquires any
conflicting interest within the meaning of Section 3.10(b) of the TIA, it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
64
SECTION 7.04. Trustee's Disclaimer.
--------------------
The Offering Memorandum and the recitals contained herein and in the
Notes shall be taken as statements of the Company and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or adequacy of this Indenture or the Notes, and it shall not be
accountable for the Company's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Company in this Indenture or the
Notes other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
-----------------
If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder notice of the Default within 90
days after such Default occurs. Except in the case of a Default in payment of
principal of, or interest on, any Note, including an accelerated payment and the
failure to make payment on the purchase date pursuant to a Change in Control
under Section 4.16 or on the Purchase Date pursuant to an Offer under Section
4.17 and, except in the case of a failure to comply with Article Five hereof,
the Trustee may withhold the notice if and so long as its board of directors,
the executive committee of its board of directors or a committee of its Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders. In addition, the Company shall deliver to the Trustee, within
120 days after the end of each fiscal year, a certificate indicating whether the
signers thereof know of any Default that occurred during the previous year. The
Company also shall deliver to the Trustee pursuant to Section 6.01, within 30
days after the occurrence thereof, written notice of any event which would
constitute certain Defaults, their status and what action the Company is taking
or proposes to take in respect thereof.
SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15, beginning with the May 15 following
the date of this Indenture, the Trustee shall, to the extent that any of the
events described in TIA (S) 313(a) occurred within the previous twelve months,
but not otherwise, mail to each Holder a brief report dated as of such date that
complies with TIA (S) 313(a). The Trustee also shall comply with TIA (S)(S)
313(b) and (c).
The Company shall promptly notify the Trustee if the Notes become
listed on, or delisted from, any stock exchange and the Trustee shall comply
with TIA (S) 313(d).
SECTION 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. 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 fees and expenses,
including out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under this Indenture. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents, consultants, experts and
counsel.
65
The Company shall indemnify the Trustee and its agents, employees,
stockholders and directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them, arising out of or in connection
with the administration of this trust including the reasonable costs and
expenses of defending themselves against any claim or liability in connection
with the exercise or performance of any of their rights, powers or duties
hereunder. The Company need not reimburse any expense or indemnify against any
loss, liability or expense Incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity. At the Trustee's sole discretion, the Company shall defend the claim
and the Trustee shall cooperate and may participate in the defense; provided
that any settlement of a claim shall be approved in writing by the Trustee.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel; provided 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. 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 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes. The
Trustee's right to receive payment of any amounts due under this Section 7.07
shall not be subordinate to any other liability or indebtedness of the Company
(even though the Notes may be subordinate to such other liability or
indebtedness).
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law; provided, however, that this shall not
affect the Trustee's rights as set forth in the preceding paragraph or Section
6.10.
SECTION 7.08. Replacement of Trustee.
----------------------
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Company and the Trustee and may appoint a
successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
66
(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 as Trustee or if a vacancy exists
in the office of Trustee for any reason, the Company shall notify each Holder of
such event and shall promptly appoint a successor Trustee. Within one year
after the successor Trustee takes office, the Holders of a majority in principal
amount of the Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided that such
corporation shall be otherwise qualified and eligible under this Article Seven.
If at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trust created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
successor to the Trustee may adopt a certificate of authentication of any
predecessor Trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which
67
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirement of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
In addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA (S) 310(a)(2). The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 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 (S)
310(b)(1) are met. The provisions of TIA (S) 310 shall apply to the Company, as
obligor of the Notes.
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
68
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance.
-------------------------------------------
(a) When (i) the Company delivers to the Trustee all outstanding Notes
(other than Notes replaced pursuant to Section 2.07) for cancellation or (ii)
all outstanding Notes have become due and payable at maturity or will be due and
payable within 60 days as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof, in each case, and the Company irrevocably deposits
with the Trustee funds sufficient to pay at maturity or upon redemption all
outstanding Notes, including interest thereon to maturity or such redemption
date (other than Notes replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
as to the satisfaction of all conditions to such satisfaction and discharge of
this Indenture and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Notes and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections 4.04, 4.05 and 4.08
and Sections 4.10 through 4.21 and the operation of Sections 6.01(4), 6.01(6),
6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(7) and (8), with
respect only to Significant Subsidiaries) and the limitations contained in
Sections 5.01(a)(iii) and (iv) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Sections 6.01(4),
6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(7) and
(8), with respect only to Significant Subsidiaries) or because of the failure of
the Company to comply with Section 5.01(a)(iii) or (iv) or Section 5.01(b)(iii).
If the Company exercises its legal defeasance option or its covenant defeasance
option, each Subsidiary Guarantor, if any, shall be released from all its
obligations under its Subsidiary Guarantee.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08, 8.05 and
8.06 shall survive until the Notes have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive.
69
SECTION 8.02. Conditions to Defeasance.
------------------------
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and interest
on the Notes to maturity or redemption, as the case may be;
(2) in the case of a deposit of U.S. Government Obligations, the
Company delivers to the Trustee a certificate from a nationally recognized
firm of independent accountants expressing their opinion that the payments
of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the Notes to
maturity or redemption, as the case may be;
(3) (x) no Default or Event of Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit and (y) no
Event of Default under Section 6.01(7) or (8) shall occur at any time in
the period ending on the 123rd day after the date of such deposit (it being
understood that the condition set forth in the preceding clause (y) is a
condition subsequent which shall not be deemed satisfied until the
expiration of such 123-day period, but in the case of the covenant
defeasance, the covenants which are defeased under Section 8.01(b)(2) will
cease to be in effect unless an Event of Default under Section 6.01(7) or
(8) occurs during such period);
(4) the Company delivers 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 and the deposit is not prohibited under any Designated
Senior Indebtedness;
(5) neither the deposit nor the defeasance shall result in a default
or event of default under any other material agreement to which the Company
is a party or by which the Company is bound and neither shall be prohibited
by Article 10;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(7) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) 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
70
that, the Noteholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such 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 defeasance had not occurred;
(8) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Noteholders 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; and
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes as contemplated by this Article 8
have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article Three.
SECTION 8.03. Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article Eight. It shall apply the deposited
money and the money from U.S. Government Obligations through the Paying Agent
and in accordance with this Indenture to the payment of principal of and
interest on the Notes. Money and securities so held in trust are not subject to
Article 10.
SECTION 8.04. Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly turn over to the
Company, upon delivery of an Officers' Certificate stating that such payment
does not violate the terms of this Indenture, any excess money or securities
held by them at any time, subject to Section 7.07.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon its written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Noteholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations.
------------------------------------
The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
71
SECTION 8.06. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with this Article Eight by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Eight until such time as the Trustee or Paying Agent is permitted
to apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of interest on or principal of any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
--------------------------
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided that such
amendment or supplement does not, in the opinion of the Trustee, adversely
affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code);
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder; or to surrender any right or power conferred upon the Company;
(6) to add Guarantees with respect to the Notes;
72
(7) to secure the Notes; or
(8) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any Holders
hereunder;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
After an amendment, supplement or waiver under this Section 9.01
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 amendment, supplement or
waiver.
SECTION 9.02. With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Notes, may amend or supplement this Indenture or the Notes, without notice to
any other Holders. Subject to Section 6.07, the Holder or Holders of a majority
in aggregate principal amount of the outstanding Notes may waive compliance by
the Company with any provision of this Indenture or the Notes without notice to
any other Holder. No amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, shall, without the consent of each Holder of each Note
affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Notes;
(3) reduce the principal of or change or have the effect of changing
the Stated Maturity of any Note, or change the date on which any Notes may
be subject to redemption or repurchase, or reduce the premium payable upon
the redemption of any Note or change the time at which any Note may be
redeemed in accordance with Article 3;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in Section 6.04 or Section 6.07 or the second
sentence of this Section;
(6) amend, modify, change or waive any provision of this Section 9.02;
(7) modify Articles Ten or Twelve or the definitions used in Articles
Ten or Twelve to adversely affect the Holders of the Notes; or
73
(8) make any change in any Subsidiary Guarantee that would adversely
affect the Holders.
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 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 9.03. Effect on Senior Indebtedness.
-----------------------------
No amendment of this Indenture shall adversely affect the rights of
any holder of Senior Indebtedness of the Company or any Restricted Subsidiary
under Article Ten or Twelve of this Indenture, without the consent of such
holder (or its Representative).
SECTION 9.04. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 9.05. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date the amendment,
supplement or waiver becomes effective.
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 any of clauses (1)
through (9) of Section 9.02,
74
in which case, the amendment, supplement or waiver shall bind only each Holder
of a Note who has consented to it and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note;
provided that any such waiver shall not impair or affect the right of any Holder
to receive payment of principal of and interest on a Note, on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
SECTION 9.06. Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such
notation or exchange shall be made at the sole cost and expense of the Company.
Failure to make the appropriate notation or to issue a new Note shall not affect
the validity of such amendment, supplement or waiver.
SECTION 9.07. Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
SECTION 9.08. Payment for Consent.
-------------------
Neither the Company nor any Affiliate of the Company shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes, unless such consideration is offered to be paid to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
75
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Indebtedness.
-----------------------------------------
The Company covenants and agrees, and each Holder of the Notes, by its
acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article Ten; and each Person holding
any Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all Obligations on the Notes by
the Company shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
of all Senior Indebtedness of the Company; that the subordination is for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness of the Company, and that each holder of Senior Indebtedness of the
Company whether now outstanding or hereafter created, incurred, assumed or
guaranteed shall be deemed to have acquired Senior Indebtedness of the Company
in reliance upon the covenants and provisions contained in this Indenture and
the Notes. Only Indebtedness of the Company that is Senior Indebtedness of the
Company will rank senior to the Notes in accordance with the provisions of the
Indenture. The Notes will in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company. Unsecured Indebtedness is not deemed
to be subordinated or junior to secured Indebtedness merely because it is
unsecured. The terms of the subordination provisions described in this Article
Ten shall not apply to payments from money or the proceeds of U.S. Government
Obligations in trust by the Trustee for the payment of principal and interest on
the Notes pursuant to the provisions described in Article Eight unless such
payments were in violation of Designated Senior Indebtedness.
SECTION 10.02. No Payment on Notes in Certain Circumstances.
--------------------------------------------
(a) The Company may not, and no other Person on behalf of the Company
may pay principal of, premium (if any) or interest on the Notes or make any
other payments with respect to the Notes or make any deposit pursuant to the
provisions described under Article Eight above and may not repurchase, redeem or
otherwise retire any Notes (collectively, "pay the Notes") if (i) any Designated
Senior Indebtedness of the Company is not paid when due beyond any applicable
grace period whether at maturity, upon redemption, by declaration or otherwise
or (ii) any other default on Designated Senior Indebtedness of the Company
occurs and the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, the default has been cured or
waived in writing and any such acceleration has been rescinded or such
Designated Senior Indebtedness has been paid in full, after which the Company
shall resume making any and all required payments in respect of the Notes,
including any missed payments. However, the Company may pay the Notes without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of the Designated Senior
Indebtedness of the Company with respect to which either of the events set forth
in clause (i) or (ii) of the immediately preceding
76
sentence has occurred and is continuing, after which the Company shall resume
making any and all required payments in respect of the Notes, including any
missed payments. During the continuance of any default (other than a default
described in clause (i) or (ii) of the second preceding sentence) with respect
to any Designated Senior Indebtedness of the Company pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, the Company may not pay the Notes for a period (a
"Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to the Company) of written notice (a "Blockage Notice") of such default
from the Representative of the holders of such Designated Senior Indebtedness of
the Company specifying an election to effect a Payment Blockage Period and
ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (A) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice, (B) because the default giving rise to
such Blockage Notice is no longer continuing or (C) because such Designated
Senior Indebtedness of the Company has been repaid in full). Notwithstanding
the provisions described in the immediately preceding sentence (but subject to
the provisions contained in the first sentence of this paragraph), unless the
holders of such Designated Senior Indebtedness of the Company or the
Representative of such holders has accelerated the maturity of such Designated
Senior Indebtedness of the Company, the Company may resume payments on the Notes
after the end of such Payment Blockage Period, including any missed payments.
The Notes shall not be subject to more than one Payment Blockage Period in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness of the Company during such period. No default
which exists or was continuing on the date of commencement of any Blockage
Period with respect to the Designated Senior Indebtedness of the Company shall
be, or be made, the basis for the commencement of a second Blockage Period by
the Representative of such Designated Senior Indebtedness of the Company whether
or not within a period of 360 consecutive days unless such default shall have
been cured or waived in writing 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 Blockage Period that, in either case, would give rise to a default pursuant
to any provisions under which a default previously existed or was continuing
shall constitute a new default for this purpose).
(b) If, notwithstanding the foregoing, any payment shall be received
by the Trustee or any Holder when such payment is prohibited by Section
10.02(a), such payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of such Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amount of such
Senior Indebtedness of the Company held by such holders) or their respective
Representatives, as their respective interests may appear. The Trustee shall be
entitled to rely on information regarding amounts then due and owing on the
Senior Indebtedness of the Company, if any, received from the holders of Senior
Indebtedness of the Company (or their Representatives) or, if such information
is not received from such holders or their Representatives, from the Company and
only amounts included in the information provided to the Trustee shall be paid
to the holders of Senior Indebtedness of the Company.
77
The provisions of this Section shall not apply to any payment with
respect to which Section 10.03 would be applicable.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Senior Indebtedness of the Company thereafter due
or declared to be due shall first be paid in full in cash before the Holders are
entitled to receive any payment of any kind or character with respect to
Obligations on the Notes.
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc.
----------------------------------------------
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Indebtedness
of the Company shall first be paid in full in cash, or such payment duly
provided for to the satisfaction of the holders of Senior Indebtedness of the
Company, before any payment or distribution of any kind or character is made on
account of any Obligations on the Notes, or for the acquisition of any of the
Notes for cash or property or otherwise. Upon any total or partial liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Company or in a bankruptcy, reorganization,
insolvency, receivership or other similar proceeding, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Notes or the Trustee under
this Indenture would be entitled, except for the provisions hereof, shall be
paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Holders or by the Trustee under this Indenture if received by them, directly to
the holders of Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness of the Company held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
of the Company may have been issued, as their respective interests may appear,
for application to the payment of Senior Indebtedness of the Company remaining
unpaid until all such Senior Indebtedness of the Company has been paid in full
in cash after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of Senior Indebtedness of the Company.
(b) To the extent any payment of Senior Indebtedness of the Company
(whether by or on behalf of the Company, as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness of the Company or part thereof
78
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
(c) If, notwithstanding the foregoing, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, shall be received by any Holder or the Trustee when such payment or
distribution is prohibited by this Section 10.03, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness of the Company (pro rata to such holders
on the basis of the respective amount of Senior Indebtedness of the Company held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
of the Company may have been issued, as their respective interests may appear,
for application to the payment of Senior Indebtedness of the Company remaining
unpaid until all such Senior Indebtedness of the Company has been paid in full
in cash, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness of the
Company.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Senior
Indebtedness of the Company shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, assume the Company's obligations hereunder in accordance with Article
Five hereof.
SECTION 10.04. Payments May Be Paid Prior to Dissolution.
-----------------------------------------
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
10.02 and 10.03, from making payments at any time for the purpose of making
payments of principal of and interest on the Notes, or from depositing with the
Trustee any moneys for such payments, or (ii) in the absence of actual knowledge
by the Trustee that a given payment would be prohibited by Section 10.02 or
10.03, the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of, and interest on, the Notes to
the Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment would otherwise become due and payable a Trust Officer
shall have actually received the written notice provided for in the third
sentence of Section 10.02(a) or in Section 10.07 (provided that, notwithstanding
the foregoing, such application shall otherwise be subject to the provisions of
the first sentence of Section 10.02(a), 10.02(b) and Section 10.03). The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
79
SECTION 10.05. Subrogation.
-----------
Subject to the payment in full in cash of all Senior Indebtedness of
the Company, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Indebtedness of the Company to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness of the Company until the Notes shall be paid in full; and,
for the purposes of such subrogation, no such payments or distributions to the
holders of the Senior Indebtedness of the Company by or on behalf of the Company
or by or on behalf of the Holders by virtue of this Article Ten which otherwise
would have been made to the Holders shall, as between the Company and the
Holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness of the Company, it being understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Senior Indebtedness of the Company, on the other hand. If
any payment or distribution to which the Holders would otherwise have been
entitled but for the application of the provisions of this Article Ten, shall
have been applied, pursuant to the provisions of this Article Ten, to the
payment of amounts payable under Senior Indebtedness of the Company, then the
Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay all amounts payable under
or in respect of such Senior Indebtedness in full in cash.
SECTION 10.06. Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of and any interest on the Notes 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 other than the holders of the Senior Indebtedness of the Company,
nor shall anything herein or therein prevent the Holder of any Note or the
Trustee on its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article Ten. Regardless of anything to the contrary contained in this Article
Ten or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Indebtedness of the Company or of any other facts which would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing from the Company, or from a holder
of Senior Indebtedness of the Company or a
80
Representative therefor and, prior to the receipt of any such written notice,
the Trustee shall be entitled to assume (in the absence of actual knowledge to
the contrary) that no such facts exist.
If the Trustee determines in good faith that any evidence is required
with respect to the right of any Person as a holder of Senior Indebtedness of
the Company to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Indebtedness
of the Company held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article Ten, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 10.08. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent.
-----------------
Upon any payment or distribution of assets of the Company referred to
in this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
or similar case or proceeding is pending so long as such order gives effect to
the provisions of this Article 10, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, receiver, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Ten.
SECTION 10.09. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article Ten with respect to any
Senior Indebtedness of the Company which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Senior Indebtedness of the Company and nothing in this Indenture shall deprive
the Trustee or any such agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness of
the Company shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Company.
81
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Indebtedness of the Company, the distribution may be made and
the notice may be given to their Representative, if any.
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions
------------------------------------------------------
of the Company or Holders of Senior Indebtedness.
------------------------------------------------
No right of any present or future holders of any Senior Indebtedness
of the Company to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Ten or the obligations
hereunder of the Holders of the Notes to the holders of the Senior Indebtedness
of the Company, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness of the Company, or otherwise amend or supplement in any
manner Senior Indebtedness of the Company, or any instrument evidencing the same
or any agreement under which Senior Indebtedness of the Company is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness of the Company; (iii)
release any Person liable in any manner for the payment or collection of Senior
Indebtedness of the Company; and (iv) exercise or refrain from exercising any
rights against the Company and any other Person.
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
-------------------------------------------
Subordination of Notes.
----------------------
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior
Indebtedness of the Company and the Holders of Notes, the subordination provided
in this Article Ten, and appoints the Trustee its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its Notes and
accrued interest in the form required in those proceedings.
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 Indebtedness
of the Company or their Representative are
82
or is hereby authorized to have the right to file and are or is hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Notes. Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Indebtedness of the Company 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 Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Indebtedness of the Company or their Representative to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 10.12. This Article Ten Not To Prevent Events of Default.
-------------------------------------------------
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders to take any action or accelerate the maturity of the
Notes pursuant to Article Six or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article Ten of
the holders from time to time, of Senior Indebtedness of the Company.
SECTION 10.13. Trustee's Compensation Not Prejudiced.
-------------------------------------
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
SECTION 10.14. Acceleration of Payment of Notes.
--------------------------------
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of Designated
Senior Indebtedness of the Company or the Representative of such holders of the
acceleration (in the case of the Trustee, only to the extent of its actual
knowledge of such holders or the Representative of such holders).
ARTICLE ELEVEN
GUARANTEES
SECTION 11.01. Unconditional Guarantee.
-----------------------
Each of the Subsidiary Guarantors hereby unconditionally jointly and
severally guarantees (such guarantee to be referred to herein as the "Subsidiary
Guarantee") to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, the Notes or the obligations
of the Company hereunder or thereunder, that: (i) the
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principal of and interest on the Notes will be promptly paid in full when due,
subject to any applicable grace period, whether at maturity, by acceleration or
otherwise and interest on the overdue principal, if any, and interest on any
interest, to the extent lawful, of the Notes and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of any Notes or
of any such other obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, subject
to any applicable grace period, whether at stated maturity, by acceleration or
otherwise.
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor on one hand, and the Holders and the Trustee on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Six for the purposes of the Subsidiary Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purposes of the Subsidiary
Guaranty.
Each of the Subsidiary Guarantors hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each of the Subsidiary Guarantors hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that the
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Securities, this Indenture and in the
Subsidiary Guarantee. If any Noteholder or the Trustee is required by any court
or otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or any Subsidiary Guarantor, any amount paid by the Company or such
Subsidiary Guarantor to the Trustee or such Noteholder, the Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each of the Subsidiary Guarantors hereby agrees that, in the
event of default in the payment of principal (or premium, if any) or interest on
such Notes, whether at their Stated Maturity, by acceleration, called for
redemption, purchase or otherwise, legal proceedings may be instituted by the
Trustee on behalf of, or by, the Holder of such Notes, subject to the terms and
conditions set forth in this Indenture, directly against each of the Subsidiary
Guarantors to enforce the Subsidiary Guarantee without first proceeding against
the Company. Each Subsidiary Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any Holders are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce any other right or remedy with respect to the Notes, the Subsidiary
Guarantors agree to pay to the Trustee for the account of
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the Holders, upon demand therefor, the amount that would otherwise have been due
and payable had such rights and remedies been permitted to be exercised by the
Trustee or any of the Holders.
SECTION 11.02. Subordination of Subsidiary Guarantee.
-------------------------------------
The obligations of each Subsidiary Guarantor to the Holders of the
Notes and to the Trustee pursuant to the Subsidiary Guarantee and this Indenture
are expressly subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness of such Subsidiary Guarantor, to the extent
and in the manner provided in Article Twelve.
SECTION 11.03. Severability.
------------
In case any provision of the Subsidiary Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.04. Release of Subsidiary Guarantor from the Subsidiary
---------------------------------------------------
Guarantee.
---------
Upon the sale or disposition (whether by merger, stock purchase, asset
sale or otherwise) of a Subsidiary Guarantor (or all or substantially all of its
assets) to an entity which is not the Company or a Subsidiary or Affiliate of
the Company and which sale or disposition is otherwise in compliance with the
terms of this Indenture or pursuant to a foreclosure on the capital stock of
such Subsidiary Guarantor in accordance with the Revolving Credit Facility, such
Subsidiary Guarantor shall be deemed released from all obligations under this
Article Eleven without any further action required on the part of the Trustee or
any Holder.
The Trustee shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate certifying as to the compliance with this Section 11.04.
SECTION 11.05. Limitation on Amount Guaranteed; Contribution by
------------------------------------------------
Subsidiary Guarantors.
---------------------
(a) Anything contained in this Indenture or the Subsidiary Guaranty to
the contrary notwithstanding, if any Fraudulent Transfer Law (as hereinafter
defined) is determined by a court of competent jurisdiction to be applicable to
the obligations of any Subsidiary Guarantor under the Subsidiary Guarantee, such
obligations of such Subsidiary Guarantor under the Subsidiary Guarantee shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations under the Subsidiary Guarantee subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law (collectively,
the "Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such Subsidiary Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically
85
excluding, however, any liabilities of such Subsidiary Guarantor (x) in respect
of intercompany Indebtedness to Company or other Affiliates of Company to the
extent that such Indebtedness would be discharged in an amount equal to the
amount paid by such Subsidiary Guarantor under the Subsidiary Guaranty and (y)
under any Guarantee of Subordinated Indebtedness which Guarantee contains a
limitation as to maximum amount similar to that set forth in this subsection
11.05(a), pursuant to which the liability of such Subsidiary Guarantor under the
Subsidiary Guarantee is included in the liabilities taken into account in
determining such maximum amount) and after giving effect as assets to the value
(as determined under the applicable provisions of the Fraudulent Transfer Laws)
of any rights to subrogation, reimbursement, indemnification or contribution of
such Subsidiary Guarantor pursuant to applicable law or pursuant to the terms of
any agreement (including without limitation any such right of contribution under
subsection 11.05(b).
(b) The Subsidiary Guarantors together desire to allocate among
themselves in a fair and equitable manner, their obligations arising under the
Subsidiary Guarantee. Accordingly, if any payment or distribution is made on
any date by any Subsidiary Guarantor under the Subsidiary Guarantee (a "Funding
Subsidiary Guarantor") that exceeds its Fair Share (as defined below) as of such
date, that Funding Subsidiary Guarantor shall be entitled to a contribution from
each of the other Subsidiary Guarantors in the amount of such other Subsidiary
Guarantor's Fair Share Shortfall (as defined below) as of such date, with the
result that all such contributions will cause each Subsidiary Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"Fair Share" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Subsidiary Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all Subsidiary
Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or
---------- --
before such date by all Funding Subsidiary Guarantors under the Subsidiary
Guarantee in respect of the obligations guarantied. "Fair Share Shortfall"
means, with respect to a Subsidiary Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Subsidiary Guarantor over the
Aggregate Payments of such Subsidiary Guarantor. "Adjusted Maximum Amount"
means, with respect to a Subsidiary Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Subsidiary Guarantor
under the Subsidiary Guarantee, determined as of such date in accordance with
subsection 11.05(a); provided that, solely for purposes of calculating the
--------
Adjusted Maximum Amount with respect to any Subsidiary Guarantor for purposes of
this subsection 11.05(b), any assets or liabilities of such Subsidiary Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Subsidiary Guarantor. "Aggregate
Payments" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the aggregate amount of all payments and
distributions made on or before such date by such Subsidiary Guarantor in
respect of the Subsidiary Guarantee (including, without limitation, in respect
of this subsection 11.05(b) minus (ii) the aggregate amount of all payments
-----
received on or before such date by such Subsidiary Guarantor from the other
Subsidiary Guarantors as contributions under this subsection 11.05(b)). The
amounts payable as contributions hereunder shall be determined as of the date on
which the related payment or distribution is made by the applicable Funding
Subsidiary Guarantor. The
86
allocation among Subsidiary Guarantors of their obligations as set forth in this
subsection 11.05(b) shall not be construed in any way to limit the liability of
any Subsidiary Guarantor under this Indenture or under the Subsidiary Guaranty.
SECTION 11.06. Waiver of Subrogation.
---------------------
Until payment in full is made of the Notes and all other obligations
of the Company to the Holders or the Trustee hereunder and under the Notes, each
Subsidiary Guarantor hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Subsidiary Guarantor's
obligations under the Subsidiary Guarantee and this Indenture, including without
limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or any other manner, payment
or security on account of such claim or other rights. If any amount shall be
paid to any Subsidiary Guarantor in violation of the preceding sentence and the
Notes shall not have been paid in full, such amount shall have been deemed to
have been paid to such Subsidiary Guarantor for the benefit of, and held in
trust for the benefit of, the Holders of the Notes, and shall forthwith be paid
to the Trustee for the benefit of such Holders to be credited and applied upon
the Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by this
Indenture and that the waiver set forth in this Section 11.06 is knowingly made
in contemplation of such benefits.
SECTION 11.07. Execution of Subsidiary Guarantee.
---------------------------------
To evidence its guarantee to the Noteholders set forth in this Article
Eleven, each Subsidiary Guarantor hereby agrees to execute the Subsidiary
Guarantee in substantially the form included in Exhibits A and Exhibit B, which
shall be endorsed on such Note ordered to be authenticated and delivered by the
Trustee. Each Subsidiary Guarantor hereby agrees that the Subsidiary Guarantee
set forth in this Article Eleven shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of the Subsidiary
Guarantee. The Subsidiary Guarantee shall be signed on behalf of each
Subsidiary Guarantor by two Officers, or an Officer and an Assistant Secretary
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 such Subsidiary Guarantee prior to the authentication
of the Note on which it is endorsed, and the delivery of such Note by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Subsidiary Guarantee on behalf of such Subsidiary Guarantor.
Such signatures upon the Subsidiary Guarantee may be by manual or facsimile
signature of such officers and may be imprinted or otherwise reproduced on the
Subsidiary Guarantee, and in case any such officer who shall have signed the
Subsidiary Guarantee shall cease to be such officer before the Note on which the
Subsidiary Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Note
87
nevertheless may be authenticated and delivered or disposed of as though the
person who signed the Subsidiary Guarantee had not ceased to be such Officer of
such Subsidiary Guarantor.
SECTION 11.08. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each Subsidiary Guarantor jointly and severally 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 such Subsidiary Guarantor from performing the Subsidiary Guarantee 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) each Subsidiary Guarantor hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 11.09. Effectiveness of Subsidiary Guarantee.
-------------------------------------
The Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such a payment
or performance had not been made. If any payments, or any part thereof, is
rescinded, reduced, restored or returned, the Notes shall, to the fullest extent
permitted by law, be reinstituted and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01. Subsidiary Guarantee Obligations Subordinated to Senior
-------------------------------------------------------
Indebtedness of Subsidiary Guarantors.
-------------------------------------
Each Subsidiary Guarantor covenants and agrees, and each Holder of the
Notes, by its acceptance thereof, likewise covenants and agrees, that any
payment of obligations by each Subsidiary Guarantor in respect of the Subsidiary
Guarantee (its "Subsidiary Guarantee Obligations") shall be made subject to the
provisions of this Article Twelve, and each Person holding any Note, whether
upon original issue or upon transfer, assignment or exchange thereof,
88
accepts and agrees that the payment of all such Subsidiary Guarantor's
Subsidiary Guarantee Obligations shall, to the extent and in the manner herein
set forth, be subordinated and junior in right of payment to the prior payment
in full in cash of all Obligations in respect of such Subsidiary Guarantor's
Senior Indebtedness, including principal, premium (if any) or interest
(including post-petition interest) thereon, that the subordination is for the
benefit of, and shall be enforceable directly by, the holders of such Subsidiary
Guarantor's Senior Indebtedness, and that each holder of any Subsidiary
Guarantor's Senior Indebtedness whether now outstanding or hereafter created,
incurred, assumed or guaranteed shall be deemed to have acquired such Subsidiary
Guarantor's Senior Indebtedness in reliance upon the covenants and provisions
contained in this Indenture and the Notes. Only Indebtedness of a Subsidiary
Guarantor that is Senior Indebtedness of such Subsidiary Guarantor will rank
senior to the Subsidiary Guarantee of such Subsidiary Guarantor in accordance
with the provisions of the Indenture. A Subsidiary Guarantee will in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Subsidiary Guarantor to which it relates. Unsecured Indebtedness is not deemed
to be subordinated or junior to secured Indebtedness merely because it is
unsecured.
SECTION 12.02. No Payment on Notes in Certain Circumstances.
--------------------------------------------
(a) No Subsidiary Guarantor may, and no other Person on behalf of such
Subsidiary Guarantor may, make any payment with respect to the Subsidiary
Guarantee or make any deposit pursuant to Article Eight above (collectively,
"pay the Subsidiary Guarantee") if (i) any Designated Senior Indebtedness of
such Subsidiary Guarantor or the Company is not paid when due beyond any
applicable grace period whether at maturity, upon redemption, by declaration or
otherwise or (ii) any other default on Designated Senior Indebtedness of such
Subsidiary Guarantor or the Company occurs and the maturity of such Designated
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, the default has been cured or waived in writing and any such
acceleration has been rescinded or such Designated Senior Indebtedness has been
paid in full, after which such Subsidiary Guarantor shall resume making any and
all required payments in respect of the Subsidiary Guaranty, including any
missed payments. However, a Subsidiary Guarantor may pay the Subsidiary
Guarantee without regard to the foregoing if such Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representative of
the Designated Senior Indebtedness guaranteed by such Subsidiary Guarantor with
respect to which either of the events set forth in clause (i) or (ii) of the
immediately preceding sentence has occurred and is continuing, after which such
Subsidiary Guarantor shall resume making any and all required payments in
respect of the Subsidiary Guaranty, including any missed payments. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the second preceding sentence) with respect to any Designated Senior
Indebtedness of a Subsidiary Guarantor or the Company pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, such Subsidiary Guarantor may not pay the
Subsidiary Guarantee for a period (a "Payment Blockage Period") commencing upon
the receipt by the Trustee (with a copy to such Subsidiary Guarantor) of written
notice (a "Blockage Notice") of such default from the Representative of the
holders of such Designated Senior Indebtedness of such Subsidiary Guarantor or
the Company specifying an election to
89
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (A) by written notice to the Trustee
and such Subsidiary Guarantor from the Person or Persons who gave such Blockage
Notice, (B) because the default giving rise to such Blockage Notice is no longer
continuing or (C) because such Designated Senior Indebtedness of such Subsidiary
Guarantor and the related Designated Senior Indebtedness of the Company has been
repaid in full). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this paragraph), unless the holders of such Designated Senior
Indebtedness of such Subsidiary Guarantor or the Company or the Representative
of such holders has accelerated the maturity of such Designated Senior
Indebtedness of such Subsidiary Guarantor or the Company, such Subsidiary
Guarantor may resume payments on the Subsidiary Guarantee after the end of such
Payment Blockage Period including any missed payments. The Subsidiary Guarantee
shall not be subject to more than one Payment Blockage Period in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness guaranteed by such Subsidiary Guarantor during
such period. No default which exists or was continuing on the date of
commencement of any Blockage Period with respect to the Designated Senior
Indebtedness of a Subsidiary Guarantor or the Company under this Section 12.02
shall be, or shall be made, the basis for the commencement of a second Blockage
Period by the Representative of such Designated Senior Indebtedness of such
Subsidiary Guarantor whether or not within a period of 360 consecutive days
unless such default shall have been cured or waived in writing 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 Blockage Period that, in either case, would
give rise to a default pursuant to any provisions under which a default
previously existed or was continuing shall constitute a new event of default for
this purpose).
(b) If, notwithstanding the foregoing, any payment shall be received
by the Trustee or any Holder when such payment is prohibited by Section
12.02(a), such payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of such Subsidiary Guarantor's Senior
Indebtedness (pro rata to such holders on the basis of the respective amount of
such Subsidiary Guarantor's Senior Indebtedness held by such holders) or their
respective Representatives, as their respective interests may appear. The
Trustee shall be entitled to rely on information regarding amounts then due and
owing on such Subsidiary Guarantor's Senior Indebtedness, if any, received from
the holders of such Subsidiary Guarantor's Senior Indebtedness (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from such Subsidiary Guarantor and only amounts included
in the information provided to the Trustee shall be paid to the holders of such
Subsidiary Guarantor's Senior Indebtedness.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.03 would be applicable.
Nothing contained in this Article Twelve shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Senior Indebtedness
90
of the Company thereafter due or declared to be due shall first be paid in full
in cash or before the Holders are entitled to receive any payment of any kind or
character with respect to Obligations on the Notes.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, Etc.
----------------------------------------------
(a) Upon any payment or distribution of assets of any Subsidiary
Guarantor of any kind or character, whether in cash, property or securities, to
creditors upon any total or partial liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of assets
of such Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to such Subsidiary Guarantor
or its property, whether voluntary or involuntary, all Obligations due or to
become due upon all of such Subsidiary Guarantor's Senior Indebtedness shall
first be paid in full in cash, or such payment duly provided for to the
satisfaction of the holders of such Subsidiary Guarantor's Senior Indebtedness,
before any payment or distribution of any kind or character is made on account
of any Obligations with respect to the Subsidiary Guarantee of such Subsidiary
Guarantor, or for the acquisition of such Subsidiary Guarantee for cash or
property or otherwise. Upon any such total or partial liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors or
marshaling of assets of such Subsidiary Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding, any
payment or distribution of assets of such Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders of the
Notes or the Trustee under this Indenture would be entitled, except for the
provisions hereof, shall be paid by such Subsidiary Guarantor or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them, directly to the holders of such Subsidiary
Guarantor's Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of such Subsidiary Guarantor's Senior Indebtedness held by
such holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Subsidiary Guarantor's Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of such Subsidiary Guarantor's Senior Indebtedness
remaining unpaid until all such Subsidiary Guarantor's Senior Indebtedness has
been paid in full in cash or after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Subsidiary
Guarantor's Senior Indebtedness.
(b) To the extent any payment of any Subsidiary Guarantor's Senior
Indebtedness (whether by or on behalf of such Subsidiary Guarantor, as proceeds
of security or enforcement of any right of setoff or otherwise) is declared to
be fraudulent or preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person under
any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, such
Subsidiary Guarantor's Senior Indebtedness or part thereof originally intended
to be satisfied shall be deemed to be reinstated and outstanding as if such
payment had not occurred.
91
(c) If, notwithstanding the foregoing, any payment or distribution of
assets of any Subsidiary Guarantor of any kind or character, whether in cash,
property or securities, shall be received by any Holder or the Trustee when such
payment or distribution is prohibited by this Section 12.03, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of such Subsidiary Guarantor's Senior Indebtedness
(pro rata to such holders on the basis of the respective amount of such
Subsidiary Guarantor's Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Subsidiary Guarantor's Senior Indebtedness may
have been issued, as their respective interests may appear, for application to
the payment of such Subsidiary Guarantor's Senior Indebtedness remaining unpaid
until all such Subsidiary Guarantor's Senior Indebtedness has been paid in full
in cash, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Subsidiary Guarantor's Senior
Indebtedness.
(d) The consolidation of any Subsidiary Guarantor with, or the merger
of any Subsidiary Guarantor with or into, another corporation or the liquidation
or dissolution of any Subsidiary Guarantor following the conveyance or transfer
of all or substantially all of its assets, to another corporation upon the terms
and conditions provided in Article Five hereof and as long as permitted under
the terms of such Subsidiary Guarantor's Senior Indebtedness shall not be deemed
a dissolution, winding-up, liquidation or reorganization for the purposes of
this Section if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, assume such Subsidiary Guarantor's obligations
hereunder in accordance with Article Five hereof.
SECTION 12.04. Payments May Be Paid Prior to Dissolution.
-----------------------------------------
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) any Subsidiary Guarantor, except under the
conditions described in Sections 12.02 and 12.03, from making payments at any
time for the purpose of making payments in respect of this Subsidiary Guarantee,
or from depositing with the Trustee any moneys for such payments, or (ii) in the
absence of actual knowledge by the Trustee that a given payment would be
prohibited by Section 12.02 or 12.03, the application by the Trustee of any
moneys deposited with it for the purpose of making such payments to the Holders
entitled thereto unless at least two Business Days prior to the date upon which
such payment would otherwise become due and payable a Trust Officer shall have
actually received the written notice provided for in the third sentence of
Section 12.02(a) or in Section 12.07 (provided that, notwithstanding the
foregoing, such application shall otherwise be subject to the provisions of the
first sentence of Section 12.02(a), 12.02(b) and Section 12.03). Each
Subsidiary Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of such Subsidiary
Guarantor.
SECTION 12.05. Subrogation.
-----------
Subject to the payment in full in cash of all Subsidiary Guarantor
Senior Indebtedness, the Holders of the Obligations of any Subsidiary Guarantor
shall be subrogated
92
to the rights of the holders of such Subsidiary Guarantor's Senior Indebtedness
to receive payments or distributions of cash, property or securities of such
Subsidiary Guarantor applicable to such Subsidiary Guarantor's Senior
Indebtedness until the Obligations of such Subsidiary Guarantor under the
Subsidiary Guarantee shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of such Subsidiary
Guarantor's Senior Indebtedness by or on behalf of such Subsidiary Guarantor or
by or on behalf of the Holders by virtue of this Article Twelve which otherwise
would have been made to the Holders shall, as between such Subsidiary Guarantor
and the Holders of such Subsidiary Guarantor's Obligations, be deemed to be a
payment by such Subsidiary Guarantor to or on account of such Subsidiary
Guarantor's Senior Indebtedness, it being understood that the provisions of this
Article Twelve are and are intended solely for the purpose of defining the
relative rights of the Holders of such Subsidiary Guarantor's Obligations, on
the one hand, and the holders of such Subsidiary Guarantor's Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the application of the provisions of this Article
Twelve shall have been applied, pursuant to the provisions of this Article
Twelve, to the payment of amounts payable under Senior Indebtedness of any
Subsidiary Guarantor, then the Holders shall be entitled to receive from the
holders of such Senior Indebtedness any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount sufficient to pay
all amounts payable under or in respect of such Senior Indebtedness in full in
cash.
SECTION 12.06. Obligations of Subsidiary Guarantor Unconditional.
-------------------------------------------------
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as among the
Subsidiary Guarantors, their respective creditors other than the holders of such
Subsidiary Guarantor's Senior Indebtedness, and the Holders, the obligation of
such Subsidiary Guarantor, which is absolute and unconditional, to pay to the
Holders the Subsidiary Guarantee Obligations 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 such Subsidiary
Guarantor other than the holders of such Subsidiary Guarantor's Senior
Indebtedness, nor shall anything herein or therein prevent the Holder of any
Note or the Trustee on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, in respect of cash, property or securities of such Subsidiary
Guarantor received upon the exercise of any such remedy.
SECTION 12.07. Notice to Trustee.
-----------------
Each Subsidiary Guarantor shall give prompt written notice to the
Trustee of any fact known to such Subsidiary Guarantor which would prohibit the
making of any payment to or by the Trustee in respect of the Subsidiary
Guarantee or the Notes pursuant to the provisions of this Article Twelve.
Regardless of anything to the contrary contained in this Article Twelve or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Subsidiary
Guarantor's Senior Indebtedness
93
or of any other facts which would prohibit the making of any payment to or by
the Trustee unless and until the Trustee shall have received notice in writing
from such Subsidiary Guarantor or from a holder of such Subsidiary Guarantor's
Senior Indebtedness or a Representative therefor, and, prior to the receipt of
any such written notice, the Trustee shall be entitled to assume (in the absence
of actual knowledge to the contrary) that no such facts exist.
If the Trustee determines in good faith that any evidence is required
with respect to the right of any Person as a holder of such Subsidiary
Guarantor's Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amounts of such
Subsidiary Guarantor's Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article
Twelve, and if such evidence is not furnished the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 12.08. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent.
-----------------
Upon any payment or distribution of assets of any Subsidiary Guarantor
referred to in this Article Twelve, the Trustee, subject to the provisions of
Article Seven hereof, and the Holders of the Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
any insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending so long as such order
gives effect to the provisions of this Article Twelve, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, receiver, assignee for
the benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or the Holders of the Notes, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of each Subsidiary Guarantor's Senior Indebtedness and
other Indebtedness of 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 Twelve.
SECTION 12.09. Trustee's Relation to Subsidiary Guarantor's Senior
---------------------------------------------------
Indebtedness.
------------
The Trustee, any agent of the Trustee and any agent of any Subsidiary
Guarantor shall be entitled to all the rights set forth in this Article Twelve
with respect to the respective Subsidiary Guarantor's Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of the respective Subsidiary Guarantor's Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee or any such
agent of any of its rights as such holder.
With respect to the holders of the respective Subsidiary Guarantor's
Senior Indebtedness, the Trustee undertakes to perform or to observe only such
of its covenants and
94
obligations as are specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of the respective
Subsidiary Guarantor's Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of any Subsidiary Guarantor's Senior Indebtedness.
Whenever a distribution is to be made or a notice given to holders or
owners of any Subsidiary Guarantor's Senior Indebtedness, the distribution may
be made and the notice may be given to their Representative, if any.
SECTION 12.10. Subordination Rights Not Impaired by Acts or Omissions
------------------------------------------------------
of Subsidiary Guarantors or Holders of Subsidiary
-------------------------------------------------
Guarantors' Senior Indebtedness.
-------------------------------
No right of any present or future holders of any Subsidiary
Guarantor's Senior Indebtedness to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of such Subsidiary Guarantor or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by such Subsidiary
Guarantor with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of any Subsidiary Guarantor's Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to the Trustee, without
incurring responsibility to the Trustee or the Holders of the Notes and without
impairing or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Notes to the holders of such
Subsidiary Guarantor's Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, such Subsidiary Guarantor's Senior Indebtedness, or
otherwise amend or supplement in any manner such Subsidiary Guarantor's Senior
Indebtedness, or any instrument evidencing the same or any agreement under which
such Subsidiary Guarantor's Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Subsidiary Guarantor's Senior Indebtedness; (iii)
release any Person liable in any manner for the payment or collection of such
Subsidiary Guarantor's Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against such Subsidiary Guarantor and any other Person.
SECTION 12.11. Noteholders Authorize Trustee To Effectuate
-------------------------------------------
Subordination of Notes.
----------------------
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of each
Subsidiary Guarantor's Senior Indebtedness and the Holders of Notes, the
subordination provided in this Article Twelve, and appoints the Trustee its
attorney-in-fact for such purposes, including, in the event of any dissolution,
winding-up,
95
liquidation or reorganization of such Subsidiary Guarantor (whether in
bankruptcy, insolvency, receivership, reorganization or similar proceedings or
upon an assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Subsidiary Guarantor, the filing
of a claim for the unpaid balance of its Notes and accrued interest in the form
required in those proceedings.
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 each Subsidiary
Guarantor's Senior Indebtedness or their Representative are or is hereby
authorized to have the right to file and are or is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Notes. Nothing
herein contained shall be deemed to authorize the Trustee or the holders of any
Subsidiary Guarantor's Senior Indebtedness or their respective Representatives
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
any Subsidiary Guarantor's Senior Indebtedness or their Representatives to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 12.12. This Article Twelve Not To Prevent Events of Default.
----------------------------------------------------
The failure to make a payment on account of Obligations of any
Subsidiary Guarantor by reason of any provision of this Article Twelve will not
be construed as preventing the occurrence of an Event of Default. Nothing
contained in this Article Twelve shall limit the right of the Trustee or the
Holders to take any action or accelerate the maturity of the Notes pursuant to
Article Six or to pursue any rights or remedies hereunder or under applicable
law, subject to the rights, if any, under this Article Twelve of the holders
from time to time, of Senior Indebtedness of any Subsidiary Guarantor.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 13.02. Notices.
-------
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by commercial courier service,
96
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company or any Subsidiary Guarantor:
HCC Industries Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
if to the Trustee:
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Corporate Finance Trust Services
Each of the Company, the Subsidiary Guarantors and the Trustee 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 Subsidiary Guarantors or the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered; when receipt
is confirmed if delivered by commercial courier service; when receipt is
acknowledged, if faxed; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Holder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.
97
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 13.03. Communications by Holders with Other Holders.
--------------------------------------------
Holders may communicate pursuant to the TIA (S) 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Subsidiary Guarantors, the Trustee, the Registrar and any other
Person shall have the protection of the TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition and the definitions relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
98
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 13.07. 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 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 13.08. Governing Law.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 13.10. No Recourse Against Others.
--------------------------
No past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company or of the Trustee shall have any liability
for any obligations of the Company under the Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
99
SECTION 13.11. Successors.
----------
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 13.12. 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 13.13. Severability.
------------
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms of provisions hereof.
100
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
Issuer:
HCC INDUSTRIES INC.
By:_______________________________
Name:
Title:
Subsidiary Guarantors:
HERMETIC SEAL CORPORATION
By:_______________________________
Name:
Title:
GLASSEAL PRODUCTS, INC.
By:_______________________________
Name:
Title:
101
SEALTRON INC.
By:_______________________________
Name:
Title:
SEALTRON ACQUISITION CORP.
By:_______________________________
Name:
Title:
HCC INDUSTRIES INTERNATIONAL
By:_______________________________
Name:
Title:
Trustee:
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
By:_______________________________
Name:
Title:
102
EXHIBIT A
---------
[Each Global Note and Note in definitive form that constitutes a Restricted
Security shall bear the following Private Placement Legend on the face thereof
until May 6, 1999, unless otherwise agreed by the Company and the Holder
thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-
DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
A-1
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT, DATED MAY 6, 1997, EXECUTED AND DELIVERED BY THE COMPANY AND THE
GUARANTORS FOR THE BENEFIT OF HOLDERS FROM TIME TO TIME OF SECURITIES. COPIES OF
SUCH REGISTRATION RIGHTS AGREEMENT ARE AVAILABLE FOR INSPECTION AT THE CORPORATE
TRUST OFFICE OF THE TRUSTEE.
Each Global Note shall also bear the following legend on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE (AS DEFINED HEREIN).
CUSIP No.:
HCC INDUSTRIES INC.
10-3/4% SENIOR SUBORDINATED NOTE DUE 2007
No. $
A-2
HCC INDUSTRIES INC., a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
_____________________ or registered assigns, the principal sum of _______
Dollars, on May __, 2007.
Interest Payment Dates: [May] 15 and [November] 15
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
HCC INDUSTRIES INC.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Dated: May 6, 1997 Title:
Certificate of Authentication
This is one of the 10-3/4% Senior Subordinated Notes due 2007 referred
to in the within-mentioned Indenture.
_______________________________,
as Trustee
Dated: May 6, 1997 By:____________________________________
Authorized Signatory
A-3
(REVERSE OF SECURITY)
10-3/4% SENIOR SUBORDINATED NOTE DUE 2007
1. Interest. HCC INDUSTRIES INC., a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above; provided, however, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, additional interest
will accrue on this Security at a rate of 0.50% per annum increasing by 0.50%
per annum at the end of each 90-day period thereafter (up to a maximum of 2% per
annum), from and including the date on which any such Registration Default shall
occur to but excluding the date on which all Registration Defaults have been
cured. Interest on the Notes will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from May 6, 1997. The
Company will pay interest semi-annually in arrears on each Interest Payment
Date, commencing November 15, 1997. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal at the rate borne
by the Notes plus 1% per annum and on overdue installments of interest (without
regard to any applicable grace periods) at such higher rate to the extent
lawful.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
--------------------------
Company, a New York banking corporation (the "Trustee"), will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or co-
Registrar without notice to the Holders.
4. Indenture and Subsidiary Guarantee. The Company issued the Notes
----------------------------------
under an Indenture, dated as of May 6, 1997 (the "Indenture"), among the
Company, Hermetic Seal Corporation, Glasseal Products, Inc., Sealtron Inc.,
Sealtron Acquisition Corp., HCC Industries International, and the Trustee. This
Note is one of a duly authorized issue of Initial Notes of the Company
designated as its 10-3/4% Senior Subordinated Notes due 2007 (the "Initial
Notes"). The Notes are limited in aggregate principal amount to $90,000,000. The
Notes include the Initial Notes and the Exchange Notes, as defined below, issued
in exchange for the Initial Notes pursuant to the Indenture. The Initial Notes
and the
A-4
Exchange Notes are treated as a single class of securities under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA Act for a statement of them. The Notes are general unsecured
obligations of the Company. Payment on each Note is guaranteed on a senior
subordinated basis by the Subsidiary Guarantors pursuant to Article Eleven of
the Indenture.
5. Subordination. The Notes are subordinated in right of payment,
-------------
in the manner and to the extent set forth in the Indenture, to the prior payment
in full in cash of all Senior Indebtedness of the Company, whether outstanding
on the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. Redemption.
----------
(a) Optional Redemption. Except as set forth in the following
-------------------
paragraph, the Notes will not be redeemable at the option of the Company
prior to May 15, 2002. Thereafter, the Notes will be redeemable, at the
Company's option, in whole or in part, at any time or from time to time, upon
not less than 30 nor more than 60 days' prior notice mailed by first-class
mail to each Holder's registered address, at the following redemption prices
(expressed in percentages of principal amount), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date),
if redeemed during the 12-month period commencing on May 15 of the years set
forth below:
Redemption
Period Price
------ ----------
2002............................ 105.375%
2003............................ 103.583%
2004............................ 101.792%
2005 and thereafter............. 100.000%
(b) Optional Redemption Upon Public Equity Offerings. In addition,
------------------------------------------------
at any time and from time to time prior to May 15, 2000, the Company may redeem
in the aggregate up to $20 million of the original principal amount of the Notes
with the proceeds of one or more Public Equity Offerings following which there
is a Public Market, at a redemption price (expressed as a percentage of
principal amount) of 110.75% plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
A-5
that at least $70 million aggregate principal amount of the Notes must remain
outstanding after each such redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations of $1,000 may be redeemed only in whole. Notes in denominations
larger than $1,000 may be redeemed in part but only in multiples of $1000.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued and unpaid interest, if any, the
Notes called for redemption will cease to bear interest from and after such
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued and unpaid interest, if
any.
8. Offers to Purchase. Sections 4.16 and 4.17 of the Indenture
------------------
provide that, in the event of certain Asset Sales (as defined in the Indenture)
and upon the occurrence of a Change of Control (as defined in the Indenture),
and subject to further limitations contained therein, the Company will make an
offer to purchase certain amounts of the Notes in accordance with the procedures
set forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement (as defined in the Indenture), the Company will be obligated to
consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Note for the Company's 10-3/4% Senior
Subordinated Exchange Notes due 2007 (the "Exchange Notes"), which have been
registered under the Securities Act, in like principal amount and having terms
identical in all material respects to the Initial Notes. The Holders of the
Initial Notes shall be entitled to receive certain additional interest payments
if such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
10. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for redemption
(except, in the case of Notes to be redeemed in part, the portion of such Notes
not to be redeemed) or any Note for a period of 15 days before the mailing of a
notice of redemption.
A-6
11. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, or comply with Article Five of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such 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. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the
A-7
Indenture or the Notes unless it has received indemnity reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No stockholder, director, officer,
--------------------------
employee or incorporator, as such, of the Company or any Subsidiary Guarantor
shall have any liability for any obligation of the Company under the Notes or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. The Laws of the State of New York shall govern
-------------
this Note and the Indenture, without regard to principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
25. Holders' Compliance with Registration Rights Agreement. Each
------------------------------------------------------
Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
A-8
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: HCC INDUSTRIES INC., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
A-9
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE]
SUBSIDIARY GUARANTEE
Hermetic Seal Corporation, Glasseal Products, Inc., Sealtron Inc.,
Sealtron Acquisition Corp., and HCC Industries International (the "Subsidiary
Guarantors"), have each jointly and severally unconditionally guaranteed on a
senior subordinated basis (such guarantee by each Subsidiary Guarantor being
referred to herein as the "Subsidiary Guarantee") (i) the due and punctual
payment of the principal of and interest on the Notes, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal and interest, if any, on
the Notes, to the extent lawful, and the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee all in accordance
with the terms set forth in Article Eleven of the Indenture and (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth and are senior subordinated obligations of each Subsidiary
Guarantor, to the extent and in the manner provided, in Articles Eleven and
Twelve of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Subsidiary Guarantee therein made.
No stockholder, officer, director or incorporator, as such, past,
present or future, of each Subsidiary Guarantor shall have any liability under
the Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
The Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Notes upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
HERMETIC SEAL CORPORATION
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
A-10
GLASSEAL PRODUCTS, INC.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
SEALTRON INC.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
SEALTRON ACQUISITION CORP.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
A-11
HCC INDUSTRIES INTERNATIONAL
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
A-12
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Date:___________________ Signed:______________________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:____________________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents 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).
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) May 6, 1999, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
A-13
[Check One]
---------
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) __ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(5) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) __ pursuant to an effective registration statement under the Securities
Act; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
A-14
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Dated: ___________________ Signed:_____________________________________________
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:____________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: _____________________ _____________________________________________
NOTICE: To be executed by
an executive officer
A-15
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ]
Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated:__________________ _____________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:____________________________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents 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-16
EXHIBIT B
---------
CUSIP No.:
HCC INDUSTRIES INC.
10-3/4% SENIOR SUBORDINATED NOTE DUE 2007
No. $
HCC INDUSTRIES INC., a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
_____________________ or registered assigns, the principal sum of _______
Dollars, on May 15, 2007.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
HCC INDUSTRIES INC.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Dated:__________, 1997 Title:
Certificate of Authentication
This is one of the 10-3/4% Senior Subordinated Notes due 2007 referred
to in the within-mentioned Indenture.
_______________________________,
as Trustee
Dated:__________, 1997 By:____________________________________
Authorized Signatory
B-1
(REVERSE OF SECURITY)
10-3/4% SENIOR SUBORDINATED NOTE DUE 2007
1. Interest. HCC INDUSTRIES INC., a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above; provided, however, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, interest will accrue
on this Security at a rate of 0.50% per annum (up to a maximum of 2% per annum)
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all Registration Defaults have been cured.
Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from May 6, 1997. The Company
will pay interest semi-annually in arrears on each Interest Payment Date,
commencing November 15, 1997. Interest will be computed on the basis of a 360-
day year of twelve 30-day months.
The Company shall pay interest on overdue principal at the rate borne
by the Notes plus 1% per annum and on overdue installments of interest (without
regard to any applicable grace periods) at such higher rate to the extent
lawful.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, IBJ ▇▇▇▇▇▇▇▇ Bank &
--------------------------
Trust Company, a New York banking corporation (the "Trustee"), will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders.
4. Indenture and Guarantee. The Company issued the Notes under an
-----------------------
Indenture, dated as of May 6, 1997 (the "Indenture"), among the Company,
Hermetic Seal Corporation, Glasseal Products, Inc., Sealtron Inc., Sealtron
Acquisition Corp., and HCC Industries International and the Trustee. This Note
is one of a duly authorized issue of Exchange Notes of the Company designated as
its 10-3/4% Senior Subordinated Notes due 2007 (the "Exchange Notes"). The Notes
are limited in aggregate principal amount to $90,000,000. The Notes include the
Initial Notes (the 10-3/4% Senior Subordinated Notes due 2007) and the Exchange
Notes issued in exchange for the Initial Notes pursuant to the Indenture. The
Initial Notes and the Exchange Notes are treated as a single class of securities
B-2
under the Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
TIA of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the
date of the Indenture. Notwithstanding anything to the contrary herein, the
Notes are subject to all such terms, and Holders of Notes are referred to the
Indenture and said Act for a statement of them. The Notes are general unsecured
obligations of the Company. Payment on each Note is guaranteed on a senior
subordinated basis by the Subsidiary Guarantors pursuant to Article Eleven of
the Indenture.
5. Subordination. The Notes are subordinated in right of payment,
-------------
in the manner and to the extent set forth in the Indenture, to the prior payment
in full in cash of all Senior Indebtedness of the Company, whether outstanding
on the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. Redemption.
----------
(a) Optional Redemption. Except as set forth in the following
-------------------
paragraph, the Notes will not be redeemable at the option of the Company prior
to May 15, 2002. Thereafter, the Notes will be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on May 15 of the years set forth below:
Redemption
Period Price
------ ----------
2002............................ 105.375%
2003............................ 103.58%
2004............................ 101.79%
2005 and thereafter............. 100.000%
(b) Optional Redemption Upon Public Equity Offerings. In addition,
------------------------------------------------
at any time and from time to time prior to May 15, 2000, the Company may redeem
in the aggregate up to $15 million of the original principal amount of the Notes
with the proceeds of one or more Public Equity Offerings following which there
is a Public Market, at a redemption price (expressed as a percentage of
principal amount) of 110.75% plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
B-3
that at least $70 million aggregate principal amount of the Notes must remain
outstanding after each such redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in multiples
of $1000.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued and unpaid interest, if any, the
Notes called for redemption will cease to bear interest from and after such
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued and unpaid interest, if
any.
8. Offers to Purchase. Sections 4.16 and 4.17 of the Indenture
------------------
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for redemption
(except, in the case of Notes to be redeemed in part, the portion of such Notes
not to be redeemed) or any Note for a period of 15 days before the mailing of a
notice of redemption.
10. Persons Deemed Owners. The registered Holder of a Note 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 Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient
B-4
to pay the principal of and interest on the Notes to redemption or maturity and
complies with the other provisions of the Indenture relating thereto, the
Company will be discharged from certain provisions of the Indenture and the
Notes (including certain covenants, but excluding its obligation to pay the
principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, or comply with Article Five of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may
B-5
otherwise deal with the Company, its Subsidiaries or their respective Affiliates
as if it were not the Trustee.
18. No Recourse Against Others. No stockholder, director, officer,
--------------------------
employee or incorporator, as such, of the Company or any Subsidiary Guarantor
shall have any liability for any obligation of the Company under the Notes or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The Laws of the State of New York shall govern
-------------
this Note and the Indenture, without regard to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: HCC INDUSTRIES INC., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
B-6
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE]
SUBSIDIARY GUARANTEE
Hermetic Seal Corporation, Glasseal Products, Inc., Sealtron Inc.,
Sealtron Acquisition Corp., and HCC Industries International (the "Subsidiary
Guarantors"), have each unconditionally guaranteed on a senior subordinated
basis (such guarantee by the Subsidiary Guarantors being referred to herein as
the "Subsidiary Guarantee") (i) the due and punctual payment of the principal of
and interest on the Notes, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Notes, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article Eleven of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth and are senior subordinated obligations of each Subsidiary
Guarantor, to the extent and in the manner provided, in Articles Eleven and
Twelve of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Subsidiary Guarantee therein made.
No stockholder, officer, director or incorporator, as such, past,
present or future, of each Subsidiary Guarantor shall have any liability under
the Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
The Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Notes upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
HERMETIC SEAL CORPORATION
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
B-7
GLASSEAL PRODUCTS, INC.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
SEALTRON INC.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
SEALTRON ACQUISITION CORP.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
B-8
HCC INDUSTRIES INTERNATIONAL
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
B-9
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Date: ___________________ Signed:______________________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: ____________________________
(Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents 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).
B-10
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ]
Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated:__________________ _____________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:____________________________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents 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).
B-11
Exhibit C
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
___________, ____
_________________________________
__________________________
__________________________
Attention: ______________________
Re: HCC Industries Inc.
__% Senior Subordinated Notes due 2007
--------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of __% Senior Subordinated
Notes due 2007 (the "Notes") of HCC Industries Inc. (the "Company"), we confirm
that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated May 1, 1997 relating to the Notes and such other information
as we deem necessary in order to make our investment decision. We acknowledge
that we have read and agreed to the matters stated on pages 98 and 99 of the
Offering Memorandum and in the section entitled "Transfer Restrictions" of the
Offering Memorandum, including the restrictions on duplication and circulation
of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (as described in the Offering Memorandum) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell or otherwise transfer any Notes prior to the date which
is three years after the original issuance of the Notes, we will do so only (i)
to the Company or any of its subsidiaries, (ii) inside the United States in
accordance with Rule 144A under the Securities Act to a
C-1
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act), (iii) inside the United States to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes (or has furnished on
its behalf by a U.S. broker-dealer) to the Trustee (as defined in the Indenture
relating to the Notes), a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Notes, (iv) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (v) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974), except as permitted in the
section entitled "Transfer Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to the Trustee and the Company such certification, legal
opinions and other information as the Trustee and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
C-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
By:_____________________________
Name:
Title:
C-3
Exhibit D
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
______________, ____
_________________________________
_______________________
_______________________
Attention: ______________________
Re: HCC Industries Inc. (the "Company")
10-3/4% Senior Subordinated Notes due 2007
(the "Notes")
------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
D-1
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_____________________________
Authorized Signature
D-2
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1)............................................. 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 7.08; 7.10
(b)................................................ 7.08; 7.10; 13.02
(c)................................................ N.A.
311(a)................................................ 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)................................................ 2.05
(b)................................................ 13.03
(c)................................................ 13.03
313(a)................................................ 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 7.06; 13.02
(d)................................................ 7.06
314(a)................................................ 4.07; 4.08; 13.02
(b)................................................ N.A.
(c)(1)............................................. 13.04
(c)(2)............................................. 13.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 13.05
(f)................................................ N.A.
315(a)................................................ 7.01(b)
(b)................................................ 7.05; 13.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a)(last sentence)................................. 2.09
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.05
317(a)(1)............................................. 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)................................................ 13.01
1
(c)................................................ 13.01
---------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
2