Exhibit 4.4
▇▇▇▇▇ EQUIPMENT COMPANY,
as Issuer
and
UNITED STATES TRUST COMPANY OF TEXAS, N.A.,
as Trustee
______________
DEBENTURE INDENTURE
Dated as of July 28, 1999
______________
15% Senior Discount Debentures due July 15, 2011
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.......................... 25
SECTION 1.03. Rules of Construction...................................... 25
SECTION 1.04. One Class of Securities.................................... 26
ARTICLE TWO
THE DEBENTURES
SECTION 2.01. Form and Dating............................................ 26
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount... 26
SECTION 2.03. Registrar and Paying Agent................................. 27
SECTION 2.04. Paying Agent To Hold Assets in Trust....................... 28
SECTION 2.05. Debentureholder Lists...................................... 28
SECTION 2.06. [Intentionally Omitted].................................... 28
SECTION 2.07. Replacement Debentures..................................... 28
SECTION 2.08. Outstanding Debentures..................................... 29
SECTION 2.09. Treasury Debentures........................................ 29
SECTION 2.10. Temporary Debentures....................................... 29
SECTION 2.11. Cancellation............................................... 30
SECTION 2.12. Defaulted Interest......................................... 30
SECTION 2.13. CUSIP Number............................................... 30
SECTION 2.14. Deposit of Moneys.......................................... 31
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee......................................... 31
SECTION 3.02. Selection of Debentures To Be Redeemed..................... 31
SECTION 3.03. Notice of Redemption....................................... 32
SECTION 3.04. Effect of Notice of Redemption............................. 33
SECTION 3.05. Deposit of Redemption Price................................ 33
SECTION 3.06. Debentures Redeemed in Part................................ 33
SECTION 3.07. Optional Redemption........................................ 33
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Debentures...................................... 34
SECTION 4.02. Maintenance of Office or Agency............................ 34
SECTION 4.03. Corporate Existence........................................ 35
SECTION 4.04. Payment of Taxes and Other Claims.......................... 35
SECTION 4.05. Maintenance of Properties and Insurance.................... 35
SECTION 4.06. Compliance Certificate; Notice of Default.................. 36
SECTION 4.07. Compliance with Laws....................................... 37
SECTION 4.08. SEC Reports................................................ 37
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.................... 37
SECTION 4.10. Limitation on Restricted Payments.......................... 37
SECTION 4.11. Limitation on Restrictions on Distributions from
Restricted Subsidiaries.................................. 40
SECTION 4.12. Limitation on Affiliate Transactions....................... 42
SECTION 4.13. Limitation on Indebtedness............................... 43
SECTION 4.14. Limitation on the Sale or Issuance of Preferred Stock of
Restricted Subsidiaries.................................. 46
SECTION 4.15. Change of Control.......................................... 47
SECTION 4.16. Limitation on Sales of Assets and Subsidiary Stock......... 49
SECTION 4.17. Limitation on Liens........................................ 52
SECTION 4.18. Limitation on Sale/Leaseback Transactions.................. 53
SECTION 4.19. Limitations on Status as Investment Company................ 53
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the Company.... 53
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.......................................... 54
SECTION 6.02. Acceleration............................................... 55
SECTION 6.03. Other Remedies............................................. 56
SECTION 6.04. Waiver of Past Defaults.................................... 56
SECTION 6.05. Control by Majority........................................ 56
SECTION 6.06. Limitation on Suits........................................ 57
SECTION 6.07. Rights of Holders To Receive Payment....................... 57
SECTION 6.08. Collection Suit by Trustee................................. 58
SECTION 6.09. Trustee May File Proofs of Claim........................... 58
SECTION 6.10. Priorities................................................. 58
SECTION 6.11. Undertaking for Costs...................................... 59
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.......................................... 59
SECTION 7.02. Rights of Trustee.......................................... 60
SECTION 7.03. Individual Rights of Trustee............................... 62
SECTION 7.04. Trustee's Disclaimer....................................... 62
SECTION 7.05. Notice of Default.......................................... 62
SECTION 7.06. Reports by Trustee to Holders.............................. 62
SECTION 7.07. Compensation and Indemnity................................. 63
SECTION 7.08. Replacement of Trustee..................................... 64
SECTION 7.09. Successor Trustee by Merger, Etc........................... 65
SECTION 7.10. Eligibility; Disqualification.............................. 65
SECTION 7.11. Preferential Collection of Claims Against Company.......... 65
ARTICLE EIGHT
DISCHARGE OF DEBENTURE INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Debentures; Defeasance........... 66
SECTION 8.02. Conditions to Defeasance................................... 67
SECTION 8.03. Application of Trust Money................................. 68
SECTION 8.04. Repayment to Company....................................... 68
SECTION 8.05. Indemnity for Government Obligations....................... 69
SECTION 8.06. Reinstatement.............................................. 69
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................. 69
SECTION 9.02. With Consent of Holders.................................... 70
SECTION 9.03. Compliance with TIA........................................ 71
SECTION 9.04. Revocation and Effect of Consents.......................... 71
SECTION 9.05. Notation on or Exchange of Debentures...................... 72
SECTION 9.06. Trustee To Sign Amendments, Etc............................ 72
SECTION 9.07. Payment for Consent........................................ 73
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. TIA Controls............................................... 73
SECTION 10.02. Notices.................................................... 73
SECTION 10.03. Communications by Holders with Other Holders............... 74
SECTION 10.04. Certificate and Opinion as to Conditions Precedent......... 75
SECTION 10.05. Statements Required in Certificate or Opinion.............. 75
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar.................. 75
SECTION 10.07. Legal Holidays............................................. 76
SECTION 10.08. Governing Law.............................................. 76
SECTION 10.09. No Adverse Interpretation of Other Agreements.............. 76
SECTION 10.10. No Recourse Against Others................................. 76
SECTION 10.11. Successors................................................. 76
SECTION 10.12. Duplicate Originals........................................ 77
SECTION 10.13. Severability............................................... 77
Appendix ........................................................... I
Exhibit A Form of Initial Debenture and Guarantee...................... A-1
Exhibit B - Form of Exchange Debenture and Private Exchange Debenture
and Guarantee................................................ B-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this Debenture Indenture.
DEBENTURE INDENTURE, dated as of July 28, 1999, among ▇▇▇▇▇
EQUIPMENT COMPANY, a Delaware corporation (the "Company") and United States
Trust Company of Texas, N.A., a Texas banking corporation, as Trustee (the
"Trustee").
The Company has duly authorized the creation of an issue of
$52,204,000 aggregate principal amount at maturity of 15% Senior Discount
Debentures due July 15, 2011 in the form of Initial Debentures (as defined
below) and, if and when issued in connection with a registered exchange for such
Initial Debentures, 15% Senior Discount Debentures due July 15, 2011 in the form
of Exchange Debentures (as defined below) and, if and when issued in connection
with a private exchange for such Initial Debentures, 15% Senior Discount
Debentures due July 15, 2011 in the form of Private Exchange Debentures (as
defined below).
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Debentures.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
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"Accreted Value" means, as of any date prior to July 15, 2004, an
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amount per $1,000 principal amount at maturity of Debentures that is equal to
the sum of (a) the initial offering price ($481.45 per $1,000 principal amount
at maturity of Debentures) of such Debentures and (b) the portion of the excess
of the principal amount of such Debentures over such initial offering price
which shall have been amortized through such date, such amount to be so
amortized on a daily basis and compounded quarterly on each January 15/th/ and
April 15/th/, July 15/th/ and October 15/th/ (commencing October 15,1999) at the
rate of 15% per annum from the date of original issue of the Debentures through
the date of determination computed on the basis of a 360-day year of twelve 30-
day months, and as of any date on or after July 15, 2004, the principal amount
of each Debenture.
"Additional Assets" means
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(i) any property or assets (other than Indebtedness and Capital
Stock) in a Related Business;
(ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary or
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(iii) Capital Stock constituting a minority interest in any Person
that at such time is a Restricted Subsidiary; provided, however, that any
such Restricted Subsidiary described in clauses (ii) or (iii) above is
primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person which,
---------
directly or indirectly, is in control of, is controlled by or is under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of the provisions described under Sections 4.10, 4.12
and 4.16 only, "Affiliate" will also mean any beneficial owner of the Company's
Capital Stock representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) 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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"Appendix" has the meaning provided in Section 2.01.
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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, consolidation or similar transaction (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's or any Restricted Subsidiary or
(iii) any other assets of the Company or any Restricted Subsidiary
outside of the Company's ordinary course of business or such Restricted
Subsidiary.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Dispositions:
(i) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
(ii) a transfer of assets between or among the Company and its Wholly
Owned Subsidiaries,
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(iii) an issuance of Equity Interests by a Wholly Owned Subsidiary to
the Company or to another Wholly Owned Subsidiary;
(iv) the sale, license or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business;
(v) the sale or other disposition of cash or Cash Equivalents or
Marketable Securities;
(vi) a Restricted Payment that is permitted by the covenant described
above under Section 4.10.
"Attributable Debt" when used with respect to any Sale/Leaseback
-----------------
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Debentures, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Authenticating Agent" has the meaning provided in Section 2.02.
--------------------
"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.
"Banks" has the meaning specified in the Senior Credit Facility.
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"Bank Indebtedness" means all Obligations pursuant to the Senior
-----------------
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
------------------
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 for financial
reporting purposes in accordance with
3
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) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Cash Equivalents" means:
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(i) United States dollars;
(ii) securities issued or directly and fully guaranteed or insured by
the Untied States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of no more than six months from the date
of acquisition;
(iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding twelve months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better;
(iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institutions meeting the
qualifications specified in clause (iii) above;
(v) commercial paper having the highest rating obtainable from
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Rating Services and in
each case maturing within twelve months after the date of acquisition; and
(vi) money marked funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (i) through
(v) of this definition.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commodity Agreement" means in respect of a Person, any commodity
-------------------
futures contract, commodity option or other similar agreement or arrangement
designed to protect such Person against fluctuations in the price of energy,
commodities and raw materials.
"Company" means the party named as such in this Debenture Indenture
-------
until a successor replaces it pursuant to this Debenture Indenture and
thereafter means such successor.
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"Consolidated Coverage Ratio" as of any date of determination means
---------------------------
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters prior to the date of such determination
to (ii) Consolidated Interest Expense for such four fiscal quarters; provided,
however, that
(i) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period will be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred 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,
(ii) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period will be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as the Company or such
Restricted Subsidiary has not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used to
repay, repurchase, defease or otherwise discharge such Indebtedness,
(iii) if since the beginning of such period the Company or any
Restricted Subsidiary will have made any Asset Disposition, the EBITDA for
such period will be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for 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 will be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to the
Company's Indebtedness 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
Disposition 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),
(iv) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) will have made an Investment
in any Restricted Subsidiary (or any person which becomes a Restricted
Subsidiary) or an acquisition of assets, including any acquisition of
assets occurring in connection with a transaction requiring a calculation
to be
5
made hereunder, which constitutes all or substantially all of an operating
unit of a business, EBITDA and Consolidated Interest Expense for such
period will be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness or any cost saving permitted to be
adjusted in accordance with Article 11 of Regulation S-X) as if such
Investment or acquisition occurred on the first day of such period and
(v) 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)
will have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (iii) or
(iv) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period will be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition 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
Incurred in connection therewith, the pro forma calculations will be determined
by the Company in good faith by a responsible financial or accounting Officer.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest of such Indebtedness will 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 Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).
"Consolidated Interest Expense" means, for any period, the Company's
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total interest expense and that of the Company's consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries,
without duplication,
(i) interest expense attributable to capital leases and the interest
expense attributable to leases constituting part of a Sale/Leaseback
Transaction,
(ii) amortization of debt discount and debt issuance cost,
(iii) capitalized interest,
(iv) non-cash interest expenses,
(v) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing,
(vi) net costs associated with Hedging Obligations (including
amortization of fees),
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(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 accruing on any Indebtedness of any other Person to
the extent such Indebtedness is Guaranteed by (or secured by the assets of)
the Company or any Restricted Subsidiary 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 Company's net
-----------------------
income and that of the Company's consolidated Subsidiaries; provided, however,
that there will not be included in such Consolidated Net Income:
(i) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that
(A) subject to the exclusion contained in clause (iv) below,
the Company's equity in the net income of any such Person for such
period will 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 paid 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 will be included in determining such Consolidated Net
Income;
(ii) any net income (or loss) 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 Restricted
Subsidiary, directly or indirectly, to the Company, except that
(A) this clause (iii) shall not apply to the restrictions
contained in the Notes Indenture or the Senior Credit Facility,
(B) subject to the exclusion contained in clause (iv) below,
the Company's equity in the net income of any such Restricted
Subsidiary for such period will be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
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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 paid to another
Restricted Subsidiary, to the limitation contained in this clause) and
(C) the Company's equity in a net loss of any such Restricted
Subsidiary for such period will be included in determining such
Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any of the Company's assets, the Company's consolidated
Subsidiaries or any other Person (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;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of the covenant described under
Section 4.10 only, there will be excluded from Consolidated Net Income any
dividends, repayments of loans or advances or other transfers of assets from
Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the
extent such dividends, repayments or transfers increase the amount of Restricted
Payments permitted under such covenant.
"covenant defeasance option" has the meaning provided in Section 8.01.
--------------------------
"Credit Facilities" means, one or more debt facilities or commercial
-----------------
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), working
capital loans, swing lines, advances or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced, restructured or
refinanced in whole or in part from time to time.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
sequestrator or similar official under any Bankruptcy Law.
"Debentures" means the Initial Debentures, the Exchange Debentures and
----------
the Private Exchange Debentures 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 Debenture Indenture.
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"Debenture Indenture" means this Debenture Indenture, as amended or
-------------------
supplemented from time to time in accordance with the terms hereof.
"Default" means any event which is, or after notice or passage of time
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or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
----------
their respective successors.
"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 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 or must be purchased, upon the occurrence of
certain events or otherwise, by such Person 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
Debentures; 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 purchase 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 Debentures will not constitute
Disqualified Stock if (x) 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 terms applicable to the Debentures and described under
Sections 4.15 and 4.16 and (y) any such requirement only becomes operative after
compliance with such terms applicable to the Debentures, including the purchase
of any Debentures tendered pursuant thereto.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
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Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income:
(i) all the Company's income tax expense and that of the Company's
consolidated Restricted Subsidiaries,
(ii) the Company's depreciation expense and that of the Company's
consolidated Restricted Subsidiaries,
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(iii) the Company's amortization expense and that of the Company's
consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period),
(iv) all the Company's other non-cash charges and those of the
Company's consolidated Restricted Subsidiaries (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
expenditures in any future period), in each case for such period, and
(v) all one-time compensation payments made in connection with the
Recapitalization.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and non-cash charges of, a
Restricted Subsidiary will be added to Consolidated Net Income to compute EBITDA
only to the extent (and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Net Income and
only if a corresponding amount would be permitted at the date of determination
to be dividended to the Company by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders. If since the beginning of the relevant period, the Company or any
Restricted Subsidiary will have made an Investment in any Restricted Subsidiary
(or any person which becomes a Restricted Subsidiary) or an acquisition of
assets, including any acquisition of assets occurring in connection with a
transaction requiring a calculation to be made hereunder, which constitutes all
or substantially all of an operating unit of a business, EBITDA for such period
will be calculated after giving pro forma effect thereto (including any cost
saving permitted to be adjusted in accordance with Article 11 of Regulation S-
X).
"Equity Interest" means Capital Stock and all warrants, options or
---------------
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.
"Equity Offering" means an offering of stock of the Company.
---------------
"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 Debentures" has the meaning provided in the Appendix.
-------------------
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the Issue Date, including those set forth
in
10
(i) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants,
(ii) statements and pronouncements of the Financial Accounting
Standards Board,
(iii) such other statements by such other entity as approved by a
significant segment of the accounting profession and
(iv) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in periodic
reports required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness 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 agreements 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 the purpose of assuring in any other manner the
obligee of such Indebtedness 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" will not include endorsements for
collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning. The term
"Guarantor" will mean any Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
-------------------
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Debentureholder" means the Person in whose name a
------ ---------------
Debenture is registered on the Registrar's books.
"Incur" 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 the Company's Subsidiary
(whether by merger, consolidation, acquisition or otherwise) will be deemed to
be Incurred by such Subsidiary at the time it becomes a Subsidiary. The term
"Incurrence" when used as a noun will have a correlative meaning. The accretion
of principal of a non-interest bearing or other discount security will be deemed
the Incurrence of Indebtedness.
11
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication):
(i) the principal 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, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into by
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 clauses (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
tenth Business Day 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 or,
with respect to any Subsidiary of such Person, the liquidation preference
with respect to, any Preferred Stock (but excluding, in each case, any
accrued dividends);
(vi) all obligations of the type referred to in clauses (i) through
(v) 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;
(vii) all obligations of the type referred to in clauses (i) through
(v) 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; and
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date will be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
12
"Initial Debentures" has the meaning provided in the Appendix.
------------------
"Initial Purchaser" has the meaning provided in the Appendix.
-----------------
"Interest Payment Date" means the stated maturity of an installment of
---------------------
cash interest on the Debentures.
"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 lender) 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" will 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 upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company will be deemed to continue to have a permanent "Investment" in
an Unrestricted Subsidiary equal to 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
will 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 Debentures.
----------
"legal defeasance option" has the meaning provided in Section 8.01.
-----------------------
"Legal Holiday" has the meaning provided in Section 10.07.
-------------
13
"Lien" means any mortgage, pledge, security interest, encumbrance,
----
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Marketable Securities" means publicly traded debt or equity
---------------------
securities that are listed for trading on a national securities exchange and
that were issued by a corporation whose debt securities are rated in one of the
three highest categories by either Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, Inc.
"Maturity Date" means July 15, 2011.
-------------
"Net Available Cash" from an Asset Disposition means cash payments,
------------------
cash equivalents and Marketable Securities received therefrom (including any
cash payments received by way of deferred payment of principal pursuant to a
note or installment receivable or otherwise and proceeds from the sale or other
disposition of any securities received as consideration, 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 noncash form), 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 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 Restricted Subsidiaries as a result of such
Asset Disposition and
(iv) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"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 actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
14
"Non-Recourse Debt" means Indebtedness
-----------------
(i) as to which neither the Company nor any Restricted Subsidiary
(A) provides any guarantee or credit support of any kind
(including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or
(B) is directly or indirectly liable (as a guarantor or
otherwise) and
(ii) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of
the Company's other Indebtedness or that of any Restricted Subsidiary to
declare a default under such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity.
"Notes" means the Notes of WEC issued pursuant to the Notes Indenture.
-----
"Notes Indenture" means the indenture dated as of July 28, 1999, among
---------------
WEC, as issuer, the Company, as guarantor, and United States Trust Company of
New York, as trustee.
"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 4.16.
-----
"Offer Amount" has the meaning provided in Section 4.16.
------------
"Offer Period" has the meaning provided in Section 4.16.
------------
"Offering Circular" means with respect to the Initial Debentures
-----------------
issued on July 28, 1999, the Offering Circular dated July 26, 1999, pursuant to
which the $52,204,000 principal amount at maturity of 15% Senior Discount
Debentures due July 15, 2011 in the form of Initial Debentures 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 Controller, the Treasurer, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
15
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Officers or by an Officer and either a Treasurer or
Assistant Treasurer or an Assistant Secretary of such Person and otherwise
complying with the requirements of Sections 10.04 and 10.05, to the extent they
relate to the making of an Officers' Certificate.
"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
complying with the requirements of Sections 10.04 and 10.05, to the extent they
relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
------------
"Permitted Holders" means Madison Dearborn Partners, Inc. and any
-----------------
affiliate thereof.
"Permitted Investment" means an Investment by the Company or any
--------------------
Restricted Subsidiary in
(i) the Company, 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) Investments in Cash Equivalents and Marketable Securities;
(iv) receivables owing to the Company or any Restricted Subsidiary,
including negotiable interests held for deposit or collecting, 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 the Company's past practices or that of such
Restricted Subsidiary;
(vii) 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 4.16;
16
(viii) any acquisition of assets to the extent acquired in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(ix) Hedging Obligations permitted by Section 4.13(vii);
(x) an Investment existing on the date hereof;
(xi) any Investment in securities of trade creditors or customers
received in compromise of obligations of such persons incurred in the
ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of
such trade creditors or customers; and
(xii) any Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (xii) that are at the time
outstanding not to exceed the greater of $5.0 million or 5% of Total
Tangible Assets.
"Permitted Liens" means, with respect to any Person,
---------------
(i) 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;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanic's Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceeding or other Liens arising out of
judgments or awards against such Person with respect to which such Person
will then be proceeding with an appeal or other proceedings for review;
(iii) Liens for property taxes not yet subject to penalties for
non-payment, which are being contested in good faith by appropriate
proceedings or with respect to which adequate reserves have been recorded
in accordance with GAAP;
(iv) 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;
(v) survey exceptions, 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 use of real properties or liens incidental to the
conduct of the business of such Person or to the ownership of its
properties;
17
(vi) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under this Debenture Indenture,
secured by a Lien on the same property securing such Hedging Obligations;
(vii) leases and subleases of real property which do not interfere
with the ordinary conduct of the Company's business or that of any of the
Company's Restricted Subsidiaries, and which are made on customary and
usual terms applicable to similar properties;
(viii) Liens existing as of the Issue Date and Liens created by this
Debenture Indenture or the Notes Indenture;
(ix) Liens created solely for the purpose of securing the payment of
all or a part of the purchase price of assets or property acquired or
constructed in the ordinary course of business after the date on which the
Debentures are originally issued; provided, however, that
(A) the aggregate principal amount of Indebtedness secured by
such Liens will not exceed the lesser of cost or fair market value of
the assets or property so acquired or constructed,
(B) the Indebtedness secured by such Liens will have otherwise
been permitted to be issued under this Debenture Indenture and
(C) such Liens will not encumber any of the Company's other
assets or property or that of any of the Company's Restricted
Subsidiaries and will attach to such assets or property within 180
days of the construction or acquisition of such assets or property;
(x) Liens on the assets or property of any of the Company's
Restricted Subsidiaries existing at the time such Restricted Subsidiary
became a Subsidiary of the Company and not incurred as a result of (or in
connection with or in anticipation of) such Restricted Subsidiary becoming
a Subsidiary of the Company; provided, however, that:
(A) any such Lien does not by its terms cover any property or
assets after the time such Restricted Subsidiary becomes a Subsidiary
which were not covered immediately prior to such transaction,
(B) the incurrence of the Indebtedness secured by such Lien
will have otherwise been permitted to be issued under this Debenture
Indenture, and
(C) such Liens do not extend to or cover any of the Company's
other property or assets or that of any of the Company's Restricted
Subsidiaries;
(xi) Liens to secure Capitalized Lease Obligations permitted to be
Incurred under this Debenture Indenture;
18
(xii) Liens securing Indebtedness outstanding or committed under the
Senior Credit Facility;
(xiii) Liens extending, renewing or replacing in whole or in part a
Lien permitted by this Debenture Indenture; provided, however, that:
(A) such Liens do not extend beyond the property subject to the
existing Lien and improvements and construction on such property and
(B) the Indebtedness secured by the Lien may not exceed the
Indebtedness secured at the time by the existing Lien;
(xiv) Liens on inventory deemed to arise by reason of the
consignment of inventory in the Company's ordinary course of business and
that of the Company's Restricted Subsidiaries;
(xv) Liens on the assets or property of any of the Company's
Restricted Subsidiaries to secure Indebtedness of such Restricted
Subsidiary owing to and held by the Company; and
(xvi) Liens incurred in the ordinary course of business with respect
to obligations that do not exceed $1.0 million at any one time outstanding.
"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 Person,
---------------
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 Person,
over shares of Capital Stock of any other class of such Person.
"principal" of a Debenture means the Accreted Value of the Debenture
---------
plus the premium, if any, payable on the Debenture which is due or overdue or is
to become due at the relevant time.
"principal amount at maturity" of a Debenture means the amount
----------------------------
specified as such on the face of such Debenture.
"Private Exchange Debentures" has the meaning provided in the
---------------------------
Appendix.
"pro forma" means, with respect to any calculation made or required to
---------
be made pursuant to the terms of this Debenture 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.
19
"Productive Assets" means assets (including Capital Stock) that are
-----------------
used or useable by the Company and its Restricted Subsidiaries in a Related
Business.
"Public Equity Offering" means an underwritten primary public offering
----------------------
of the Company's common stock pursuant to an effective registration statement
under the Securities Act.
"Purchase Date" has the meaning provided in Section 4.16.
-------------
"Record Date" means each Record Date specified in the Debentures,
-----------
whether or not a Legal Holiday.
"Redemption Date," when used with respect to any Debenture to be
---------------
redeemed, means the date fixed for such redemption pursuant to this Debenture
Indenture and the Debentures.
"Redemption Price," when used with respect to any Debenture to be
----------------
redeemed, means the price fixed for such redemption pursuant to this Debenture
Indenture and the Debentures.
"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 replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any of
------------------------
the Company's Indebtedness or that of any Restricted Subsidiary referred to in
Section 4.13(b)(vi), including Indebtedness that Refinances Refinancing
Indebtedness; provided, however, that:
(i) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced,
(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 than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided
further, however, that Refinancing Indebtedness will not include (x)
Indebtedness of a Subsidiary that Refinances the Company's Indebtedness or
(y) the Company's Indebtedness or that of a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
"Registrar" has the meaning provided in Section 2.03.
---------
20
"Registration Rights Agreement" has the meaning set forth in the
-----------------------------
Appendix.
"Related Business" means any business related, ancillary or
----------------
complementary to the Company's businesses and that of the Restricted
Subsidiaries on the Issue Date.
"Restricted Investment" means an Investment other than a Permitted
---------------------
Investment.
"Restricted Payment" with respect to any Person means
------------------
(i) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its Capital
Stock (other than dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) and dividends or distributions
payable solely to the Company or a Restricted Subsidiary, and other than
pro rata dividends or other distributions made by a Subsidiary that is not
a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation)),
(ii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company's (other than a Restricted Subsidiary), including the exercise of
any option to exchange any Capital Stock (other than into the Company's
Capital Stock that is not Disqualified Stock),
(iii) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment of 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) or
(iv) the making of any Investment in any Person (other than a
Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
---------------------
not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"Sale/Leaseback Transaction" means an arrangement relating to property
--------------------------
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
---
21
"Securities Act" means, the Securities Act of 1933, as amended, or any
--------------
successor statute or statutes thereto.
"Senior Credit Facility" means that certain Credit Agreement, dated
----------------------
on or about July 28, 1999, among the Company, WEC, the Subsidiaries named
therein and the lenders from time to time party thereto, including any
collateral documents, instruments and agreements executed in connection
therewith, and the term Senior Credit Facility will also include any amendments,
supplements, modifications, extensions, renewals, restatements or refundings
thereof and any credit facilities that replace, refund or refinance any part of
the loans, other credit facilities or commitments thereunder, including any such
replacement, refunding or refinancing facility that increases the amount
borrowable thereunder or alters the maturity thereof.
"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
-----------------------
(whether outstanding on July 15, 1999 or thereafter Incurred) which is
subordinate or junior in right of payment to the Debentures, as applicable,
pursuant to a written agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation,
----------
association, partnership 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:
(1) such Person,
(2) such Person and one or more Subsidiaries of such Person or
(3) one or more Subsidiaries of such Person.
"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,
22
(ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date 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's) 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 & Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service,
Inc.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
---
▇▇.▇▇. 77aaa-77bbbb), as in effect on the date of this Debenture Indenture.
"Total Tangible Assets" means the total consolidated assets of the
---------------------
Company and its Restricted Subsidiaries as set forth on the Company's most
recent balance sheet excluding goodwill, trademarks, patents and minority
interests of others and other intangible assets, all as determined in accordance
with GAAP.
"Trust Officer" means any officer within the Corporate Trust
-------------
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject, or in the case of a successor trustee, an authorized officer assigned
to the department, division or group performing the corporation trust work of
such successor and assigned to administer this Debenture Indenture.
23
"Trustee" means United States Trust Company of Texas, N.A. until a
-------
successor replaces it in accordance with the provisions of this Debenture
Indenture and thereafter means such successor.
"Unrestricted Subsidiary" means
-----------------------
(i) any Subsidiary of the Company that at the time of determination
will be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below and
(ii) any Subsidiary of an Unrestricted Subsidiary.
The Company's Board of Directors may designate any of its Subsidiaries
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any of the
Company's Capital Stock or Indebtedness, or holds any Lien on the Company's
property or that of any Subsidiary of the Company that is not a Subsidiary of
the Subsidiary to be so designated; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under the covenant described under Section 4.10.
The Company's Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (x) the Company could Incur $1.00 of
additional Indebtedness under paragraph (a) of the covenant described under
Section 4.13 and (y) no Default will have occurred and be continuing. Any such
designation by the Company's Board of Directors will be evidenced to the Trustee
by promptly filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"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.
"Voting Stock" of a Person means all classes of Capital Stock or other
------------
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"WEC" means WEC Company, a Delaware corporation.
---
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
-----------------------
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.
24
SECTION 1.02. Incorporation by Reference of TIA.
---------------------------------
Whenever this Debenture Indenture refers to a provision of the TIA,
such provision is incorporated by reference in, and made a part of, this
Debenture Indenture. The following TIA terms used in this Debenture Indenture
have the following meanings:
"Indenture securities" means the Debentures.
"Indenture security holder" means a Holder or a Debentureholder.
"Indenture to be qualified" means this Debenture Indenture.
"Indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on this Debenture Indenture securities means the Company or
any other obligor on the Debentures.
All other TIA terms used in this Debenture 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 _______ __, 1999;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) "herein," "hereof" and other words of similar import refer to
this Debenture Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(6) reference to Sections or Articles means reference to such Section
or Article in this Debenture Indenture, unless stated otherwise.
25
SECTION 1.04. One Class of Securities.
-----------------------
The Initial Debentures, the Private Exchange Debentures and the
Exchange Debentures shall vote and consent together on all matters as one class
and none of the Initial Debentures, the Private Exchange Debentures or the
Exchange Debentures shall have the right to vote or consent as a separate class
on any matter.
ARTICLE TWO
THE DEBENTURES
SECTION 2.01. Form and Dating.
---------------
(a) Provisions relating to the Initial Debentures, the Private
Exchange Debentures and the Exchange Debentures are set forth in the Rule 144A
Appendix attached hereto (the "Appendix"), which is hereby incorporated in and
--------
expressly made a part of this Debenture Indenture. The Initial Debentures and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit A hereto. The Exchange Debentures, the Private Exchange Debentures
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit B hereto. The Debentures 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 shall
approve the forms of the Debentures and any notation, legend or endorsement on
them. Each Debenture shall be dated the date of its issuance and shall show the
date of its authentication.
(b) The terms and provisions contained in the Appendix and in the
forms of the Debentures, annexed hereto as Exhibits A and B, shall constitute,
and are hereby expressly made, a part of this Debenture Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Debenture Indenture, expressly agree to such terms and provisions and to
be bound thereby.
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 Debentures for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Debenture
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
Debenture, the Debenture shall nevertheless be valid.
26
On July 28, 1999, the Trustee shall authenticate and deliver
$52,204,000 principal amount at maturity of 15% Senior Discount Debentures due
July 15, 2011 in the form of Initial Debentures. In addition, the Trustee shall
authenticate Exchange Debentures and Private Exchange Debentures, as applicable,
for original issue in the aggregate principal amount at maturity not to exceed
$52,204,000, in each case upon receipt of a written order of the Company in the
form of an Officers' Certificate; provided that such Exchange Debentures and
Private Exchange Debentures shall be issuable only upon the valid surrender for
cancellation of such Initial Debentures of a like aggregate principal amount.
Further, at any time and from time to time thereafter, the Trustee shall
authenticate and deliver Debentures for original issue in an aggregate principal
amount specified, in each case upon receipt of a written order of the Company in
the form of an Officers' Certificate. Such order shall specify the amount of the
Debentures to be authenticated and the date on which the original issue of
Debentures is to be authenticated.
A Debenture shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Debenture. The
signature shall be conclusive evidence that the Debenture has been authenticated
under this Debenture Indenture.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Debentures. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Debentures whenever the Trustee may do so. Each reference in this Debenture
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 Debentures shall be issuable in fully registered form only,
without coupons, in denominations of $1,000 principal amount at maturity and any
integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain or designate an office or agency (which
shall be located in the Borough of Manhattan in the City of New York, State of
New York and which may be the office of the Trustee) where (a) Debentures may be
presented or surrendered for registration of transfer or for exchange
("Registrar"), (b) Debentures may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Company in respect
of the Debentures and this Debenture Indenture may be served. The Registrar
shall keep a register of the Debentures 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. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar, except
that for purposes of Articles Three and Eight and Sections 4.15 and 4.16,
neither the Company nor any of its Subsidiaries or Affiliates shall 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 Debenture Indenture, which agreement shall incorporate
the provisions of the TIA and
27
implement the provisions of this Debenture 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 Debentures,
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 Debentures (whether such assets have been
distributed to it by the Company or any other obligor on the Debentures), and
the Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Debentures) 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 or any other obligor on the
Debentures to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
SECTION 2.05. Debentureholder 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 ss. 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 least seven Business Days before
each Interest Payment 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 ss. 312(a).
SECTION 2.06. [Intentionally Omitted]
-----------------------
SECTION 2.07. Replacement Debentures.
----------------------
If a mutilated Debenture is surrendered to the Trustee or if the
Holder of a Debenture claims that the Debenture has been lost, destroyed or
wrongfully taken, subject to the terms of the next succeeding sentence, the
Company shall issue and the Trustee, upon the receipt of a written
28
order complying with Section 2.02, shall authenticate a replacement Debenture if
the Trustee's reasonable requirements for replacement Debentures 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, any Agent or any Authenticating Agent from any loss which any of them
may suffer if a Debenture is replaced. The Company and the Trustee may charge
such Holder for their out-of-pocket expenses in replacing a Debenture, including
reasonable fees and expenses of counsel, and for any tax that may be imposed in
replacing such Debentures. Every replacement Debenture shall constitute an
additional obligation of the Company.
SECTION 2.08. Outstanding Debentures.
----------------------
Debentures outstanding at any time are all the Debentures 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 Debenture does not cease to be
outstanding because the Company or any of its Affiliates holds the Debenture.
If a Debenture is replaced pursuant to Section 2.07 (other than a
mutilated Debenture surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Debenture
is held by a bona fide purchaser. A mutilated Debenture ceases to be outstanding
upon surrender of such Debenture and replacement thereof pursuant to Section
2.07.
Except as otherwise provided in Article 8, 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
Debentures payable on that date and is not prohibited from paying such money to
the Holders thereof pursuant to the terms of this Debenture Indenture, then on
and after that date such Debentures cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Treasury Debentures.
-------------------
In determining whether the Holders of the required principal amount at
maturity of Debentures have concurred in any direction, waiver, consent or
notice, Debentures 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, consent or notice, only Debentures which a Trust Officer of
the Trustee actually knows are so owned shall be so considered.
SECTION 2.10. Temporary Debentures.
--------------------
Until definitive Debentures are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Debentures upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of
29
temporary Debentures to be authenticated and the date on which the temporary
Debentures are to be authenticated. Temporary Debentures shall be substantially
in the form of definitive Debentures but may have variations that the Company
considers appropriate for temporary Debentures. 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 Debentures in
exchange for, and upon surrender of, temporary Debentures. Until so exchanged,
the temporary Debentures shall in all respects be entitled to the same benefits
under this Debenture Indenture as definitive Debentures authenticated and
delivered hereunder.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Debentures to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Debentures 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 Debentures surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new Debentures
to replace Debentures that it has paid or delivered to the Trustee for
cancellation. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Debentures 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 cash interest on the
Debentures (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 Debentures 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 Debentures, and that reliance may be
placed only on the other identification numbers printed on the Debentures. The
Company shall promptly notify the Trustee of any change in a CUSIP number.
30
SECTION 2.14. Deposit of Moneys.
-----------------
Prior to 9:00 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.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Debentures pursuant to Section 3.07
and Paragraph 6 of the Debentures, it shall notify the Trustee and the Paying
Agent in writing in the form of an Officer's Certificate of the (i) Redemption
Date, (ii) the principal amount of the Debentures to be redeemed and (iii) the
redemption price.
The Company shall give each notice provided for in this Section 3.01
at least 30 days but no more than 60 days before the Redemption Date, together
with an Officers' Certificate stating that such redemption shall comply with the
conditions contained herein and in the Debentures.
SECTION 3.02. Selection of Debentures To Be Redeemed.
--------------------------------------
If fewer than all of the Debentures are to be redeemed, selection of
the Debentures 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
Debentures are listed or, if the Debentures 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 pursuant to Section 3.07(b), selection of the Debentures 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 Debentures are listed on a principal
national securities exchange. The Trustee shall make the selection from the
Debentures outstanding and not previously called for redemption and shall
promptly notify the Company in writing of the Debentures selected for redemption
and, in the case of any Debenture selected for partial redemption, the principal
amount at maturity thereof to be redeemed. Debentures in denominations of $1,000
principal amount at maturity 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 amount at maturity of Debentures that have
denominations larger than $1,000
31
principal amount at maturity. Provisions of this Debenture Indenture that apply
to Debentures called for redemption also apply to portions of Debentures 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 Debentures are to be redeemed,
with a copy to the Trustee and any Paying Agent. At the Company's written
request no less than 35 days prior to the Redemption Date, 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 Debentures 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 Debentures pursuant to which such
redemption is being made;
(5) that Debentures called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, the Accreted Value on Debentures called for redemption ceases to
accrue and interest on the Debentures cease to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such
Debentures is to receive payment of the Redemption Price plus accrued
interest, if any, upon surrender to the Paying Agent of the Debentures
redeemed;
(7) if any Debenture is being redeemed in part, the portion of the
principal amount at maturity of such Debenture to be redeemed and that,
after the Redemption Date, and upon surrender of such Debenture, a new
Debenture or Debentures in the aggregate principal amount at maturity equal
to the unredeemed portion thereof will be issued;
(8) if fewer than all the Debentures are to be redeemed, the
aggregate principal amount at maturity of Debentures to be redeemed and the
aggregate principal amount at maturity of Debentures to be outstanding
after such partial redemption and, if the redemption is not made pro rata,
the identification of the particular Debentures (or portion thereof) to be
redeemed; 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
Debentures.
32
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03,
Debentures 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 Debentures called for redemption shall be paid at
the Redemption Price and the amount of accrued interest payable thereon,
provided that if a Debenture 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.
Except in connection with a defeasance pursuant to Section 8.02, at
any time prior to the mailing of a notice of redemption to the Holders pursuant
to Section 3.03, the Company may withdraw, revoke or rescind any notice of
redemption delivered to the Trustee without any continuing obligation to redeem
the Debentures.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
On or before 9:00 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 Debentures to be
redeemed on that date (other than Debentures or portions of Debentures 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, the Accreted Value on the Debentures to be redeemed will cease to accrue
on and after the applicable Redemption Date, whether or not such Debentures are
presented for payment.
SECTION 3.06. Debentures Redeemed in Part.
---------------------------
Upon surrender of a Debenture that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate for the Holder a new
Debenture or Debentures equal in principal amount to the unredeemed portion of
the Debenture surrendered.
SECTION 3.07. Optional Redemption.
-------------------
(a) The Debentures will be redeemable at the Company's option, in
whole or in part, at any time on or after July 15, 2004, at the respective
redemption price (expressed as a percentage of Accreted Value) set forth below,
plus accrued and unpaid interest to the redemption date
33
(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 beginning on July 15 of the year indicated below:
Redemption
Period Price
------ ----------
2004 ....................... 107.500%
2005 ....................... 105.000%
2006 ....................... 102.500%
2007 and thereafter ........ 100.000%
(b) Notwithstanding the foregoing, before July 15, 2002, the Company
may at its option redeem all of the outstanding Debentures with the proceeds of
one or more Public Equity Offerings, at a redemption price (expressed as a
percentage of Accreted Value) of 115% 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 that such
redemption must occur within 60 days of the Public Equity Offering.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Debentures.
---------------------
The Company shall pay or cause to be paid the principal of and
interest on the Debentures on the dates and in the manner provided in the
Debentures and in this Debenture Indenture. An installment of principal of or
interest on the Debentures 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 Debenture Indenture.
Notwithstanding anything to the contrary contained in this Debenture
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
34
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 10.02.
SECTION 4.03. Corporate Existence.
-------------------
Except as otherwise permitted by Article Five, 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 (as the same may be amended
from time to time) 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, or the corporate, partnership or
other existence of any Restricted Subsidiary, if the Board of Directors of the
Company shall reasonably determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole.
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 reserves, to the extent required
under and in accordance with 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 reasonable good faith judgment 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.
(b) The Company shall provide or cause to be provided, for itself and
each of its Restricted Subsidiaries, insurance (including reasonably appropriate
self-insurance consistent
35
with past practice) 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 reasonable 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 Debenture 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 contained in this Debenture Indenture and no Default or Event of
Default occurred during 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. Such Officer's
Certificate shall comply with TIA Section 314(a)(4).
(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 Debenture 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 Debenture Indenture or the Debentures,
the Company shall deliver to the Trustee, at its address set forth in Section
10.02, 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.
36
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.
-----------
Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15 (d) of the Exchange Act, the Company
will file with the SEC (to the extent the SEC will accept such filings) and
provide the Trustee and Debentureholders with such annual reports and such
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so filed and
provided at the times specified for the filing of such information, documents
and reports under such Sections.
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 Debentures as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Debenture 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 will not, and will not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:
(i) a Default will have occurred and be continuing (or would result
therefrom);
(ii) the Company is not able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of the covenant described under
Section 4.13; or
37
(iii) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from July 3, 1999 to the end of the
most recent fiscal quarter ending at least 45 days prior to the date
of such Restricted Payment (or, in case such Consolidated Net Income
will be a deficit, minus 100% of such deficit);
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of the Company's Capital Stock
(other than Disqualified Stock) or an equity contribution from a
holder of the Company's Capital Stock subsequent to the Issue Date
(other than an issuance or sale to any of the Company's Subsidiaries
and other than an issuance or sale to an employee stock ownership plan
or to a trust established by the Company or any of its Subsidiaries
for the benefit of their employees) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to the
Company or a Subsidiary of the Company), together with the net
proceeds received by the Company upon such conversion or exchange, if
any, plus;
(C) an amount equal to the aggregate net proceeds (including the
fair market value (as determined in good faith by a Board Resolution
of the Company) of property other than cash that would constitute
Marketable Securities or a Related Business so long as there is no
restriction on the sale of such property) of any
(i) sale or other disposition of Investments made by the Company
and its Restricted Subsidiaries, or
(ii) dividend from, or the sale of the stock of, an Unrestricted
Subsidiary;
provided, however, that the foregoing amount shall not exceed the amount of such
Investment previously made (and treated as a Restricted Payment) by the Company
or any Restricted Subsidiary, and, in the case of any such clause (ii), 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 the foregoing paragraph (a) will not
prohibit:
(i) any acquisition of any Capital Stock of the Company made out of
the proceeds of the substantially concurrent sale of, or made by exchange
for, the Company's Capital Stock (other than Disqualified Stock and other
than Capital Stock issued or sold to any of the Company's Subsidiaries or
an employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of the Company or their
employees); provided,
38
however, that (A) such acquisition of Capital Stock will be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale will be excluded from the calculation of amounts
under clause (iii)(B) of paragraph (a) above;
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company which is permitted to be Incurred pursuant
to the covenant described under Section 4.13; provided, however, that such
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value will be excluded in the calculation of the amount of
Restricted Payments;
(iii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Disqualified Stock made by exchange
for, or out of the proceeds of the substantially concurrent sale of,
Disqualified Stock of the Company which is permitted to be issued pursuant
to this Debenture Indenture; provided, however, that such purchase,
repurchase, redemption, defeasance or other acquisition or retirement for
value will be excluded in the calculation of the amount of Restricted
Payments;
(iv) dividends paid or the consummation at any irrevocable redemption
within 60 days after the date of declaration or notice of redemption
thereof if at such date of declaration or notice such dividend or
redemption would have complied with this covenant; provided, however, that
such dividend will be included in the calculation of the amount of
Restricted Payments;
(v) so long as no Default has occurred or will occur as a result of
such payment, the repurchase or other acquisition of shares of, or options to
purchase shares of, the Company's common stock or the common stock of any of the
Company's Subsidiaries from former employees or former directors of the
Company's or any of the Company's Subsidiaries (or permitted transferees of such
former employees, or former directors), pursuant to the terms of the agreements
(including employment agreements) or plans (or amendments thereto) approved by
the Company's 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 and other
acquisitions will not exceed $1 million in any calendar year; provided further,
however, that such repurchases and other acquisitions will be deducted in the
calculation of the amount of Restricted Payments;
(vi) prepayments, repayments or purchases of Indebtedness pursuant to
Section 4.16(ii)(D); provided, however, that such prepayment, repayment or
purchase will be included in the calculation of the amount of Restricted
Payments;
(vii) repurchase of Equity Interests of the Company deemed to occur
upon the exercise of stock options to the extent Equity Interests represent
a portion of the Exercise Price of such options; or
39
(viii) so long as no Default has occurred and is continuing or would
be caused thereby, other Restricted Payments in an aggregate amount not to
exceed $3 million since the date of this Debenture Indenture.
(c) The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this covenant shall be determined in good faith by the Board of Directors
whose resolution with respect thereto shall be conclusive. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million.
(d) The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under clause (a) of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
fair market value of such Investments as the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
SECTION 4.11. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company will not, and will not permit any of the Company's
Restricted Subsidiaries to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual 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 any of its Restricted Subsidiaries or pay any
Indebtedness owed to the Company,
(ii) make any loans or advances to the Company or
(iii) transfer any of its property or assets to the Company,
except:
(i) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the Issue Date (including restrictions under this
Debenture Indenture, the Debentures, the Notes Indenture, the Notes and the
Guarantees of the Notes);
40
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on
such date;
(iii) any such encumbrance or restriction consisting of customary
non-assignment provisions in leases governing leasehold interests to the
extent such provisions restrict the transfer of the lease or the property
leased thereunder;
(iv) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such restrictions restrict the transfer of the
property subject to such security agreements or mortgages; provided that
such security agreements or mortgages constitute Permitted Liens and such
Indebtedness is permitted to be Incurred under this Debenture Indenture;
(v) 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;
(vi) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(vii) restrictions on the transfer of assets subject to any Lien
permitted under this Debenture Indenture imposed by the holder of such
Lien;
(viii) encumbrances or restrictions existing under or arising pursuant
to Credit Facilities entered into in accordance with this Debenture
Indenture; provided that the encumbrances or restrictions in such Credit
Facilities are not materially more restrictive than those contained in the
Senior Credit Agreement as in effect on the date hereof;
(ix) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so acquired of
the nature described in clause (iii) of the first paragraph of this
covenant;
(x) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business;
(xi) any agreement or instrument governing Capital Stock (other than
Disqualified Stock) of any Person that is in effect on the date such Person
is acquired by the Company or a Restricted Subsidiary; and
41
(xii) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (i) through (xi) above; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of
the Board of Directors of the Company, not materially more restrictive with
respect to such dividend and other payment restrictions than those
contained in the dividends or other payment restrictions prior to such
amendment, modification, restatement, renewal, increase, supplement,
refunding, replacement or refinancing.
SECTION 4.12. Limitation on Affiliate Transactions.
------------------------------------
(a) the Company will not, and will not permit any Restricted Subsidiary
to, enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property, employee compensation arrangements or the
rendering of any service) with any of the Company's Affiliates (an "Affiliate
Transaction") unless the terms thereof:
(i) are no less favorable to the Company or such Restricted Subsidiary
than those that could be obtained at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate,
(ii) if such Affiliate Transaction involves an amount in excess of $1
million, (A) are set forth in writing and (B) have been approved by a
majority of the members of the Company's Board of Directors having no
personal stake in such Affiliate Transaction; and
(iii) if such Affiliate Transaction involves as amount in excess of
$10 million, have been determined by nationally recognized investment
banking or accounting firm to be fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) will not
prohibit:
(i) any Restricted Payment permitted to be paid pursuant to the
covenant described under Section 4.10,
(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
Company's Board of Directors,
(iii) the grant of stock options or similar rights to the Company's
employees and directors pursuant to plans approved by the Company's Board
of Directors,
42
(iv) loans or advances to employees in the ordinary course of business
in accordance with the Company's past practices or past practices of the
Company's Restricted Subsidiaries, but in any event not to exceed $1
million in the aggregate outstanding at any one time,
(v) the payment of reasonable fees to the Company's directors and
directors of Restricted Subsidiaries who are not the Company's employees or
employees of Restricted Subsidiaries,
(vi) any Affiliate Transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries,
(vii) the issuance or sale of any Capital Stock of the Company (other
than Disqualified Stock),
(viii) any employment agreement with reasonable terms entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Restricted Subsidiary,
(ix) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in such Person, so long
as no other Affiliate of the Company owns an interest in such Person,
(x) the payment of transaction, management, consulting and advisory
fees and related expenses to Madison Dearborn Partners, LLC and its
Affiliates; provided that such fees shall not, in the aggregate, exceed:
(A) in the case of a management fee, $600,000 in any twelve-
month period, and
(B) in the case of a transaction fee, 1.0% of the total equity
value of, plus the Indebtedness assumed from, the business
acquired in such transaction or series of related transactions.
(xi) reasonable fees and expenses and compensation paid to, and
indemnity provided on behalf of, officers, directors or employees of the
Company or any Subsidiary as determined in good faith by the Board of
Directors of the Company or senior management; and
(xii) any agreement as in effect as of the Issue Date or any amendment
thereto so long as such amendment is not more disadvantageous to the
Holders in any material respect.
SECTION 4.13. Limitation on Indebtedness.
--------------------------
(a) the Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur, directly or indirectly, any Indebtedness; provided,
however, that the Company and any Restricted Subsidiary may Incur Indebtedness
if, on the date of such Incurrence and after giving
43
effect thereto, the Consolidated Coverage Ratio exceeds 1.75 to 1 if such
Indebtedness is Incurred prior to July 31, 2001 or 2 to 1 if such Indebtedness
in Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur any or all of the following Indebtedness:
(i) Indebtedness Incurred pursuant to the Senior Credit Facility;
provided, however, that, after giving effect to any such Incurrence, the
aggregate principal amount of such Indebtedness then outstanding does not
exceed $40 million less the sum of all principal payments with respect to
such Indebtedness pursuant to Section 4.16(a)(ii)(A);
(ii) Indebtedness owed to and held by the Company or any of its
Restricted Subsidiaries; provided, however, that (x) any subsequent
issuance or transfer of any Capital Stock which results in any such
Restricted Subsidiary ceasing to be a Subsidiary or any subsequent transfer
of such Indebtedness (other than to the Company or any of its Restricted
Subsidiaries) will be deemed, in each case, to constitute the Incurrence of
such Indebtedness by the obligor thereon that is not permitted to be
Incurred under this clause (ii) and (y) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations with respect to the Debenture;
(iii) the Debentures, the Notes issued by WEC on the issue date and
their respective Exchange Notes;
(iv) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (i), (ii) or (iii) of this covenant);
(v) Indebtedness of a Subsidiary Incurred and outstanding on or prior
to the date on which such Subsidiary was acquired by the Company (other
than Indebtedness Incurred in connection with, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary became a Subsidiary or was acquired by the Company); provided,
however, that on the date of such acquisition and after giving effect
thereto, the Company would have been able to Incur at least $1.00 of
additional Indebtedness pursuant to clause (a) above;
(vi) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to paragraph (a) above or pursuant to clause (iii), (iv) or (v)
above or this clause (vi);
(vii) Hedging Obligations or Commodity Agreements not entered into for
speculative purposes and directly related to Indebtedness permitted to be
Incurred by the Company or any of its Restricted Subsidiaries pursuant to
this Debenture Indenture;
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
44
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiaries, in an aggregate
principal amount to not exceed $5.0 million at any time outstanding;
(ix) the guarantee by the Company of Indebtedness of a Restricted
Subsidiary that was permitted to be incurred by another provision of this
covenant;
(x) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock for purposes of this covenant;
provided, in each case, that the amount thereof is included in Consolidated
Interest Expense of the Company as accrued;
(xi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary,
other than guarantees of Indebtedness incurred by any person acquiring all
or any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition; provided, however, that (a) such Indebtedness
is not reflected on the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to financial
statements and not otherwise reflected on the balance sheet will not be
deemed to be reflected on such balance sheet for purposes of this clause
(a)) and (b) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds including noncash
proceeds (the fair market value of such noncash proceeds being measured at
the time received and without giving effect to any subsequent changes in
value) actually received by the Company and its Restricted Subsidiaries in
connection with such disposition;
(xii) the incurrence of obligations in respect of performance and
surety bonds provided by the Company or any of its Restricted Subsidiaries
in the ordinary course of business;
(xiii) the incurrence of Indebtedness consisting of guarantees of
loans made to management for the purpose of permitting management to
purchase Equity Interests of the Company, in an amount not to exceed $1.0
million at any one time outstanding;
(xiv) Indebtedness of the Company or any Restricted Subsidiary arising
from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business, provided that such Indebtedness is satisfied within five business
days of Incurrence;
(xv) Indebtedness of the Company or WEC issued to directors,
employees, officers or consultants of the Company, WEC or a Restricted
Subsidiary in connection with the redemption or purchase of Capital Stock
of the Company or WEC that, by its terms, is
45
subordinated to the Debentures, is not secured by any assets of the
Company, WEC or its Restricted Subsidiaries and does not require cash
payments prior to the Stated Maturity of the Debentures and Refinancing
Indebtedness in respect thereof, in an aggregate principal amount which,
when added together with the amount of Indebtedness Incurred pursuant to
this clause (15) and then outstanding, does not exceed $1.0 million; and
(xvi) Indebtedness in an aggregate principal amount which, together
with the Company's other Indebtedness outstanding on the date of such
Incurrence (other than Indebtedness permitted by clauses (i) through (xv)
above or paragraph (a)) does not exceed $10 million at any one time
outstanding.
(c) Notwithstanding the foregoing, neither the Company nor any of its
Restricted Subsidiaries will Incur any Indebtedness pursuant to the foregoing
paragraph (b) if the proceeds thereof are used, directly or indirectly, to
Refinance any of the Company's Subordinated Obligations unless such Indebtedness
will be subordinated to the Debentures to at least the same extent as such
Subordinated Obligations.
(d) For purposes of determining compliance with the foregoing covenant,
(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) If the Company incurs Indebtedness which is subordinate or junior
in right of payment to any other Indebtedness of the Company, the Company shall
cause such subordinate or junior Indebtedness to be subordinated to the
Debentures to the same extent as such other Indebtedness.
(f) the Company will not permit any Unrestricted Subsidiary to incur
any Indebtedness other than Non-Recourse Debt; provided, however, that if any
such Indebtedness ceases to be Non-Recourse Debt, such event will be deemed to
constitute an Incurrence of Indebtedness by the Company or any of its Restricted
Subsidiaries.
SECTION 4.14. Limitation on the Sale or Issuance of Preferred Stock
-----------------------------------------------------
of Restricted Subsidiaries.
--------------------------
The Company will not sell or otherwise dispose of any Preferred Stock
of a Restricted Subsidiary, and will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell or otherwise dispose of any of its
Preferred Stock except to the Company or any of its Wholly Owned Subsidiaries.
46
SECTION 4.15. Change of Control.
-----------------
(a) Upon the occurrence of any of the following events (each a "Change
of Control"), each Holder will have the right to require the Company to
repurchase such Holder's Debentures at a purchase price in cash equal to 101% of
the Accreted Value 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 due on the relevant Interest Payment Date):
(i) prior to the first public offering of the Company's common stock,
the Permitted Holders cease to be the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
at least 35% of the aggregate of the total voting power of the Company's
Voting Stock, whether as a result of issuance of the Company's securities,
the Company's merger, consolidation, liquidation or dissolution, any direct
or indirect transfer of securities by the Company or otherwise (for
purposes of this clause (i) and clause (ii) below, the Permitted Holders
will 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) 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 for
purposes of this clause (ii) such person will 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 Company's Voting Stock; provided, however, that 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 Company's Voting Stock 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 Company's Board of Directors (for
the purposes of this clause (ii), such other person will be deemed to
beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person is the beneficial owner (as
defined in this clause (ii)), directly or indirectly, of more than 35% 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) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Company's Board of Directors
(together with any new directors whose election by the Company's Board of
Directors or whose nomination for election by the Company's shareholders,
as applicable, was approved by a vote of a majority of the Company's
directors, as applicable, then still in office who were either directors at
the
47
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 Company's Board of Directors, as applicable, then in office;
(iv) the adoption of a plan relating to the Company's liquidation or
dissolution; or
(v) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all of the Company's assets to another Person
(other than a Person that is controlled by the Permitted Holders), and, in
the case of any such merger or consolidation, the Company's securities that
are outstanding immediately prior to such transaction and which represent
100% of the aggregate voting power of the Company's Voting Stock 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 aggregate voting power of the Voting Stock of the surviving
corporation.
(b) Within 30 days following any Change of Control, the Company will
mail a notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:
(i) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Debentures at a
purchase price in cash equal to 101% of the Accreted Value 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);
(ii) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization after giving effect to such Change of
Control);
(iii) the repurchase date (which will be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(iv) the instructions determined by the Company, consistent with the
covenant described hereunder, that a Holder must follow in order to have
its Debentures purchased.
(c) Holders electing to have a Debenture purchased will be required to
surrender the Debenture, 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 not later than 3 p.m., New York City time, 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 Days prior to the purchase date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Debenture which was delivered for
48
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Debenture purchased.
(d) On the purchase date, all Debentures purchased by the Company under
this Section shall be delivered to the Trustee for cancellation, and the Company
shall pay or cause to be paid the purchase price plus accrued and unpaid
interest, if any, to the Holders entitled thereto.
(e) At the time the Company delivers Debentures to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Debentures are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Debenture 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 will 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 Debentures pursuant to this
covenant described hereunder. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the covenant
described hereunder, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached the Company's
obligations under the covenant described hereunder by virtue thereof.
SECTION 4.16. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) The Company will not, and will not permit any of the Company's
Restricted Subsidiaries to, directly or indirectly, consummate 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 (including as to the value of all non-cash consideration), as
determined in good faith by the Company's Board of Directors, of the shares
and assets subject to such Asset Disposition and at least 75% of the
consideration thereof received by the Company or such Restricted Subsidiary
is in the form of cash or cash equivalents or Marketable Securities 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 Indebtedness), to prepay, repay, redeem or purchase
Indebtedness under the Senior Credit Facility or Indebtedness (other
than any Disqualified Stock) of a Restricted Subsidiary required to be
repaid upon such Asset Sale, including the Notes (in each case other
than Indebtedness owed to the Company or any of its Affiliates) within
one year from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash;
49
(B) second, to the extent of the balance of such Net Available
------
Cash after application in accordance with clause (A), to the extent
the Company elects, to acquire Additional Assets within one year from
the later of 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) and to
the extent the Net Available Cash is permitted to be distributed to
the Company pursuant to the terms of the Notes Indenture, to make an
offer (the "Offer") to the holders of the Debentures (and to holders
of other Indebtedness that is pari passu with the Debentures
designated by the Company) to purchase Debentures (and such other pari
passu Indebtedness) pursuant to and subject to the conditions
contained in this Debenture Indenture; 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 of its Restricted
Subsidiaries of Additional Assets or (y) the prepayment, repayment or
purchase of the Company's Indebtedness (other than any Disqualified
Stock and other than Indebtedness owed to any of the Company's
Affiliates) or Indebtedness of any Subsidiary (other than Indebtedness
owed to the Company or any of its Affiliates), in each case within one
year from the later of the receipt of such Net Available Cash and the
date the offer described in clause (b) below 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 any
such Restricted Subsidiary will permanently retire such Indebtedness and will
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 paragraph, the Company and its
Restricted Subsidiaries will not be required to apply any Net Available Cash in
accordance with this paragraph except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in accordance
with this paragraph exceeds $1.0 million. Pending application of Net Available
Cash pursuant to this covenant, such Net Available Cash will be invested in
Permitted Investments.
For the purposes of this covenant, the following are deemed to be cash or
cash equivalents: any liabilities (as shown on the Company or such Restricted
Subsidiary's most recent balance sheet), of the Company's or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Debentures) that are assumed by the transferee of any
such assets; and any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
converted, sold or exchanged by the Company or such Restricted Subsidiary into
cash within 30 days of the related Asset Sale (to the extent of the cash
received in that conversation).
(b) In the event of an Asset Disposition that requires the purchase of
the Debentures (and other pari passu Indebtedness) pursuant to clause (a)(ii)(C)
above, the Company will be
50
required to purchase Debentures tendered pursuant to an offer by the Company for
the Debentures (and other pari passu Indebtedness) at a purchase price of 100%
of their Accreted Value (without premium) plus accrued but unpaid interest (or,
in respect of such other pari passu Indebtedness, 100% of the principal amount
or such lesser price, if any, as may be provided for by the terms of such pari
passu Indebtedness) in accordance with the procedures (including prorating in
the event of oversubscription) set forth in this Debenture Indenture. If the
aggregate purchase price of Debentures (and any other pari passu Indebtedness)
tendered pursuant to such offer is less than the Net Available Cash allotted to
the purchase thereof, the Company will be required to apply the remaining Net
Available Cash in accordance with clause (a)(ii)(D) above. The Company will not
be required to make such an offer to purchase Debentures (and other pari passu
Indebtedness) pursuant to this covenant if the Net Available Cash available
therefor is less than $5.0 million (which lesser amount will 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) Notwithstanding paragraphs (a) and (b) above, the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Disposition
with respect to assets in any transaction or series of related transactions with
a fair market value of $2.0 million or less without complying with such
paragraphs to the extent (i) at least 75% of the consideration for such Asset
Sale constitutes cash, cash equivalents, Marketable Securities or Productive
Assets and (ii) such Asset Disposition is for fair market value (as determined
in good faith by the Company's Board of Directors); provided that any
consideration not constituting Productive Assets received by the Company or any
Restricted Subsidiary in connection with an Asset Disposition permitted to be
consummated under this paragraph shall be subject to the provisions of
paragraphs (a) and (b) above and included in Net Available Cash.
(d) (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 to have his Debentures 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
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 above, 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
Debentures 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
51
event that the aggregate purchase price of the Debentures 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 Debenture purchased shall be required to
surrender the Debenture, with an appropriate form duly completed, to the
Company at the address specified in the notice not later than 3:00 p.m.,
New York City time, 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, two Business Days
prior to the Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Debenture which was delivered for purchase by the Holder and a statement
that such Holder is withdrawing his election to have such Debenture
purchased. If at the expiration of the Offer Period the aggregate principal
amount of Debentures surrendered by Holders exceeds the Offer Amount, the
Company shall select the Debentures 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 Debentures in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Debentures are purchased only in part shall be issued new Debentures equal
in principal amount to the unpurchased portion of the Debentures
surrendered.
(4) At the time the Company delivers Debentures to the Trustee which
are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Debentures are to be accepted by
the Company pursuant to and in accordance with the terms of this Section. A
Debenture 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.
(e) The Company will 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 Debentures pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached the Company's obligations under this clause by virtue thereof.
SECTION 4.17. Limitation on Liens.
-------------------
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create or permit to exist any Lien on any of its
property or assets (including Capital Stock), whether owned on the Issue Date or
thereafter acquired, securing any obligation, other than Permitted Liens, unless
contemporaneously therewith effective provision is made to secure the Debentures
equally and ratably with (or on a senior basis to the Subordinated Obligations)
such obligation for so long as such obligation is so secured.
52
SECTION 4.18. Limitation on Sale/Leaseback Transactions.
-----------------------------------------
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction with respect to any property unless
(i) the Company or such Restricted Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable Debt with respect
to such Sale/Leaseback Transaction pursuant to the covenant described under
Section 4.13 and (B) create a Lien on such property securing such
Attributable Indebtedness without equally and ratably securing the
Debentures pursuant to the covenant described under Section 4.17, and
(ii) the transfer of such property is permitted by, and the Company or
such Restricted Subsidiary applies the proceeds of such transaction in
compliance with, the covenant described under Section 4.16.
SECTION 4.19. Limitations on Status as Investment Company.
-------------------------------------------
The Company shall not and shall not permit its Subsidiaries from
becoming "investment companies" (as that term is defined in the Investment
Company Act of 1940, as amended), or from otherwise becoming subject to
regulation under the Investment Company Act.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the
-----------------------------------------------
Company.
-------
(a) The Company will not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all the Company's assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") will be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) will expressly assume, by an
indenture supplemental thereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the Company's obligations under the
Debentures and this Debenture Indenture;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company or
any Subsidiary as a result of such
53
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default will have occurred
and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of the covenant described under
Section 4.13; and
(iv) the Company will have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Debenture Indenture.
(b) The Successor Company will be the Company's successor and will
succeed to, and be substituted for, and may exercise every right and power the
Company has under this Debenture Indenture, but the Company's predecessor in the
case of a conveyance, transfer or lease will not be released from the obligation
to pay the principal of and interest on the Debentures.
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 cash interest on any
Debentures when the same becomes due and payable and the Default continues
for a period of 30 days; or
(2) the Company defaults in the payment of the principal on any
Debentures when such principal becomes due and payable, at maturity, upon
optional redemption, upon required repurchase, upon declaration or
otherwise (including the failure to make a payment to purchase Debentures
tendered pursuant to a Change of Control under Section 4.15 or an Offer
under Section 4.16); 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 (other than a failure to purchase the Debentures) and 4.16 (other than
a failure to purchase the Debentures); or
(5) the Company's failure to comply for 60 days after notice with its
other agreements contained in this Debenture Indenture; or
54
(6) Indebtedness of the Company or any of its Significant Subsidiaries
is not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5 million; 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 excess of $5
million is entered against the Company or any of its Significant
Subsidiaries, remains outstanding for a period of 90 days following such
judgment and is not discharged, waived or stayed within 10 days after
notice; or
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.
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 at
maturity of outstanding Debentures by notice in writing to the Company and the
Trustee may declare the Accreted Value of and accrued but unpaid interest on all
the Debentures to be due and payable specifying the respective Event of Default
and that it is a "notice of acceleration."
55
(b) If an Event of Default specified in 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 Debentures 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 Debentures
may, on behalf of the Holders of all of the Debentures, 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, premium, if any, or interest on the Debentures or to enforce the
performance of any provision of the Debentures or this Debenture Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Debentures 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 at maturity of the then outstanding Debentures by written
notice to the Trustee may, on behalf of the Holders of all of the Debentures,
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Debenture 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 to exist for every purpose of this Debenture
Indenture.
SECTION 6.05. Control by Majority.
-------------------
Subject to Section 2.09, the Holders of a majority in principal amount
at maturity of the then outstanding Debentures 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,
56
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 believes conflicts with any law or this Debenture 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 Debenture 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 Debenture may pursue any remedy
with respect to this Debenture Indenture or the Debentures 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 at maturity of the
outstanding Debentures 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 at maturity of the outstanding Debentures 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 Debenture Indenture, the
right of any Holder to receive payment of principal of and interest on a
Debenture, on or after the respective due dates expressed in such Debenture, 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.
57
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal, premium or interest
specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Debentures for the whole amount
of principal, premium, if any, 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 Debentures, 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 Debentures
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;
58
Third: to Holders for amounts due and unpaid on the Debentures for
-----
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Debentures for
principal and interest, respectively; and
Fourth: to the Company or any other obligor on the Debentures, as
------
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior notice to the Company, may fix a Record Date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Debenture 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 at maturity of the outstanding Debentures.
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 Debenture
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 Debenture Indenture and no covenants or obligations shall be
implied in this Debenture 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 Debenture
59
Indenture. However, the Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements of this
Debenture 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.
(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 Debenture 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
Debenture 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, Debenture or
other paper or document reasonably 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
60
Sections 10.04 and 10.05. 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 conferred upon it by this Debenture Indenture.
(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 Debenture Indenture at the request, order
or direction of any of the Holders pursuant to the provisions of this Debenture
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 Debenture Indenture and
the Debentures 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.
61
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures 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.
SECTION 7.04. Trustee's Disclaimer.
--------------------
The Offering Circular and the recitals contained herein and in the
Debentures 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 Debenture Indenture or the Debentures, and
it shall not be accountable for the Company's use of the proceeds from the
Debentures, and it shall not be responsible for any statement of the Company in
this Debenture Indenture or the Debentures 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 actually known by
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, premium, if any, or interest on, any Debenture, including an
accelerated payment and the failure to make payment on the purchase date
pursuant to a Change in Control under Section 4.15 or on the Purchase Date
pursuant to an Offer under Section 4.16 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 reasonably
determines that withholding the notice is in the best 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 complying with Section 4.06 regarding
knowledge of the Company's compliance with all covenants and conditions under
this Debenture Indenture. 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 Debenture 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).
62
The Company shall promptly notify the Trustee if the Debentures 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 promptly 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 Debenture Indenture. Such expenses
shall include the reasonable fees and expenses of the Trustee's agents,
consultants, experts and counsel, except such disbursements, advances and
expenses as may be attributable to its gross negligence.
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. The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Debentures 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 Debentures. 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 Debentures 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.
63
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 Debentures may
remove the Trustee by so notifying the Company and the Trustee and may appoint a
successor Trustee. The Company may remove the Trustee if:
(A) the Trustee fails to comply with Section 7.10;
(B) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(C) a receiver or other public officer takes charge of the Trustee or
its property; or
(D) the Trustee becomes incapable of acting.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
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 Debentures 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
Debenture 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 at maturity of the then outstanding
Debentures 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.
64
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,
consolidation or transfer of assets to the Trustee shall succeed to the trust
created by this Debenture Indenture any of the Debentures 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
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee may authenticate
such Debentures 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 it is anywhere in the Debentures or in this Debenture
Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
This Debenture Indenture shall always have a Trustee who satisfies the
requirements 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 Debenture Indenture or Debenture 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 Debentures.
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.
65
ARTICLE EIGHT
DISCHARGE OF DEBENTURE INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Debentures; Defeasance.
------------------------------------------------
(a) When (i) the Company delivers to the Trustee all outstanding
Debentures (other than Debentures replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Debentures 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 Three hereof, in each case, and the
Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Debentures, including interest
thereon to maturity or such redemption date (other than Debentures replaced
pursuant to Section 2.07), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Debenture Indenture shall, subject
to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Debenture 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
Debenture 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 Debentures and this Debenture
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.10 through 4.17 and the operation of Section 6.01(4) and the limitations
contained in Section 5.01("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
Debentures may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Debentures may not be
accelerated because of an Event of Default specified in Section 6.01(4) or
because of the failure of the Company to comply with Section 5.01.
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, 2.07, 2.08, 7.07, 7.08, 8.05, 8.06 and
the Appendix shall survive until the Debentures have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.05 and 8.06 shall
survive.
66
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, interest and
premium, if any, on the Debentures to maturity or redemption (including, in
the case of payment of principal, interest and premium, if any, to
redemption, under arrangements reasonably satisfactory to the Trustee
providing for redemption pursuant to irrevocable instructions delivered to
the Trustee prior to 60 days before a Redemption Date), as the case may be;
(2) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent public accountants or a nationally
recognized investment banking firm 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, premium, if any, and interest when due on all
outstanding Debentures to maturity or redemption, as the case may be;
(3) (x) no Default or Event of Default with respect to the Debentures
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) 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;
(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;
(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
67
been published by, the Internal Revenue Service a ruling, or (ii) since the
date of this Debenture Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Debentureholders
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
Debentureholders 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 Debentures as contemplated by this Article
Eight have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Debentures 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 Debenture Indenture to the payment of principal of
and interest on the Debentures.
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 Debenture 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, Debentureholders 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.
68
SECTION 8.06. Reinstatement.
-------------
If the funds deposited with the Trustee to effect legal defeasance or
covenant defeasance are insufficient to pay the principal of, premium, if any,
and interest on the Debentures when due, then the obligations of the Company
under this Debenture Indenture will be revived and no such defeasance will be
deemed to have occurred.
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 Debenture Indenture and the
Debentures 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 Eight; provided, however, that, if the Company has
made any payment of interest on or principal of any Debentures because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Debentures 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 Debenture Indenture or the Debentures
without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency; provided
that such amendment or supplement does not, in the reasonable 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 Debentures in addition to or in place
of certificated Debentures (provided that the uncertificated Debentures are
issued in registered form for purposes of Section 163(f) of the Code, or in
a manner such that the uncertificated Debentures 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 Debenture Indenture under the TIA;
69
(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 Debentures;
(7) to secure the Debentures; or
(8) to make any other change that does not 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 then
outstanding Debentures, may amend or supplement this Debenture Indenture or the
Debentures, without notice to any other Holders. Subject to Section 6.07, the
Holder or Holders of at least a majority in aggregate principal amount at
maturity of the then outstanding Debentures may waive compliance by the Company
with any provision of this Debenture Indenture or the Debentures 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
Debenture affected thereby:
(1) reduce amount of Debentures whose Holders must consent to an
amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Debenture or make any change to the calculation of the Accreted Value
of the Debentures;
(3) reduce the principal of or change or have the effect of changing
the Stated Maturity of any Debenture, or change the date on which any
Debentures may be subject to repurchase, or reduce the premium payable upon
the redemption of any Debenture or change the time at which any Debenture
may be redeemed in accordance with Article Three, or alter the provisions
(including definitions) set forth in Section 4.15 in a manner adverse to
the Holders;
70
(4) make any Debentures payable in money or payable in a place other
than that stated in the Debentures;
(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.
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. Compliance with TIA.
-------------------
If at the time of an amendment to this Debenture Indenture or the
Debentures, this Debenture Indenture shall be qualified under the TIA, every
amendment, waiver or supplement of this Debenture Indenture or the Debentures
shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Debenture or portion of a Debenture that evidences the same debt as
the consenting Holder's Debenture, even if notation of the consent is not made
on any Debenture. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Debenture or
portion of such Debenture 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 (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.05 above or (ii) such other date as the Company may designate. 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
71
continue to be Holders after such Record Date. No such consent shall be valid or
effective for more than 180 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
(7) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Debenture who has consented to it and every
subsequent Holder of a Debenture or portion of a Debenture that evidences the
same debt as the consenting Holder's Debenture; provided that, without the
consent of a Holder, any such waiver shall not impair or affect the right of
such Holder to receive payment of principal of and interest on a Debenture, on
or after the respective due dates expressed in such Debenture, or to bring suit
for the enforcement of any such payment on or after such respective dates.
SECTION 9.05. Notation on or Exchange of Debentures.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Debenture, the
Trustee may require the Holder of such Debenture to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Debenture 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 Debenture shall issue and the
Trustee shall authenticate a new Debenture 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 Debenture
shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.06. 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 Debenture 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 Debenture Indenture. Such
Opinion of Counsel shall not be an expense of the Trustee.
SECTION 9.07. 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 Debenture
Indenture or the Debentures, 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.
72
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. TIA Controls.
------------
If any provision of this Debenture Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Debenture Indenture by the TIA, the required provision shall control.
SECTION 10.02. 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, by telex, by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company:
▇▇▇▇▇ Equipment Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
73
if to the Trustee:
United States Trust Company of Texas, N.A.
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Corporate Trust Administration
Each of the Company 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 and 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.
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 10.03. 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 Debenture Indenture or the
Debentures. The Company, the Trustee, the Registrar and any other Person shall
have the protection of the TIA (S) 312(c).
SECTION 10.04. 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 Debenture 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
Debenture Indenture relating to the proposed action have been complied
with; and
74
(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 Debenture Indenture relating to the proposed
action have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Debenture Indenture, 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
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with;
provided, that with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or a certificate of an appropriate public
official.
SECTION 10.06. 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 10.07. 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 10.08. Governing Law.
-------------
75
THIS DEBENTURE INDENTURE AND THE DEBENTURES 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 DEBENTURE INDENTURE.
SECTION 10.09. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Debenture Indenture may not be used to interpret another
Debenture Indenture, loan or debt agreement of the Company or any of its
Subsidiaries or of any other Person. Any such Debenture Indenture, loan or debt
agreement may not be used to interpret this Debenture Indenture.
SECTION 10.10. 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 Debentures or
this Debenture Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting a Debenture
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Debentures.
SECTION 10.11. Successors.
----------
All agreements of the Company in this Debenture Indenture and
the Debentures shall bind their respective successors. All agreements of the
Trustee in this Debenture Indenture shall bind its successors.
SECTION 10.12. Duplicate Originals.
-------------------
All parties may sign any number of copies of this Debenture
Indenture. Each signed copy shall be an original, but all of them together shall
represent the same agreement.
SECTION 10.13. Severability.
------------
In case any one or more of the provisions in this Debenture
Indenture or in the Debentures 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.
76
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Debenture Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Debenture
Indenture and shall in no way modify or restrict any of the terms of provisions
hereof.
77
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Debenture
Indenture to be duly executed, all as of the date first written above.
Issuer:
▇▇▇▇▇ EQUIPMENT COMPANY
By: /s/ D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VP & CFO
Trustee:
UNITED STATES TRUST COMPANY
OF TEXAS, N.A.,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Authorized Signatory
RULE 144A APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS
PURSUANT TO RULE 144A
PROVISIONS RELATING TO INITIAL DEBENTURES,
-----------------------------------------
PRIVATE EXCHANGE DEBENTURES
---------------------------
AND EXCHANGE DEBENTURES
-----------------------
1. Definitions.
-----------
1.1 Definitions.
-----------
For the purposes of this Appendix the following terms shall have the
meanings indicated below, provided that all capitalized terms used but not
defined shall have the meanings given such terms in the Debenture Indenture:
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns.
"Exchange Debentures" means the 15% Senior Discount Debentures due
July 15, 2011 to be issued pursuant to the Debenture Indenture in connection
with a Registered Exchange Offer pursuant to a Registration Rights Agreement.
"Initial Purchaser" means with respect to the Initial Debentures
issued on July 28, 1999, Credit Suisse First Boston Corporation.
"Initial Debentures" means (i) $52,204,000 principal amount at
maturity of 15% Senior Discount Debentures due July 15, 2011, issued on July 28,
1999.
"principal"of a Debenture means the Accreted Value of the Debenture
plus the premium, if any, payable on the Debenture which is due or overdue or is
to become due at the relevant time.
"principal amount at maturity" of a Debenture means the amount
specified as such on the face of such Debenture.
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchaser to issue and deliver to
each Initial Purchaser, in exchange for the Initial Debentures held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Debentures.
"Private Exchange Debentures" means the 15% Senior Private Exchange
Debentures due July 15, 2011, if any, to be issued pursuant to the Debenture
Indenture to the Initial Purchaser in a Private Exchange.
"Purchase Agreement" means with respect to the Initial Debentures
issued on July 28, 1999, the Purchase Agreement dated July 23, 1999, between the
Company and the Initial Purchaser named therein.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Debentures, to
issue and deliver to such Holders, in exchange for such Initial Debentures, a
like aggregate principal amount of Exchange Debentures registered under the
Securities Act.
"Registration Rights Agreement" means with respect to the Initial
Debentures issued on July 28, 1999, the Registration Rights Agreement dated July
28, 1999 among the Company and the Initial Purchaser named therein.
"Securities" means the Initial Debentures, the Exchange Debentures and
the Private Exchange Debentures, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the shelf registration statement
issued by the Company, in connection with the offer and sale of Initial
Debentures, Exchange Debentures or Private Exchange Debentures, pursuant to a
Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions
-----------------
Term Defined in Section:
---- ------------------
"Agent Members"...................................... 2.1(b)
"Global Security".................................... 2.1(a)
"Rule 144A".......................................... 2.1(a)
2. The Securities.
--------------
2.1 Form and Dating.
---------------
On July 28, 1999, $52,204,000 principal amount at maturity of the
Initial Debentures are being offered and sold by the Company pursuant to the
Purchase Agreement.
(a) Global Securities. Initial Debentures offered and sold to a QIB
-----------------
in reliance on Rule 144A under the Securities Act ("Rule 144A") as provided in
the Purchase Agreement issued in the form of Exchange Debentures, shall be
issued initially in the form of one or more permanent global Securities in
definitive, fully registered form without interest coupons with the global
securities legend and restricted securities legend set forth in Exhibit 1 hereto
(each, a "Global Security"), which shall be deposited on behalf of the
purchasers of the Initial Debentures represented thereby with the Trustee as
custodian for the Depositary (or with such other custodian as the Depositary may
direct), and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
---------------------
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under the Debenture Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security 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 Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section 2.1
-----------------------
or Section 2.3 or 2.4 of this Appendix, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of certificated
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
--------------
On July 28, 1999, $52,204,000 principal amount at maturity of 15% Discount
Debentures due July 15, 2011, and (2) Exchange Debentures or Private Exchange
Debentures for issue in a Registered Exchange Offer or a Private Exchange,
respectively, in exchange for a like principal amount of Initial Debentures, in
each case upon a written order of the Company in the form of an Officers'
Certificate. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Debentures is to be
authenticated and whether the Securities are to be Initial Debentures, Exchange
Debentures or Private Exchange Debentures.
2.3 Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Global Securities.
------------------------------------------
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in accordance
with the Debenture Indenture (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Depositary therefor. A
transferor of a beneficial interest in a Global Security shall deliver to
the Registrar a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in the Global
Security. The Registrar shall, in accordance with such instructions
instruct the Depositary to credit to the account of the Person specified in
such instructions a beneficial interest in the Global Security and to debit
the account of the Person making the transfer the beneficial interest in
the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4 of this Appendix), a Global
Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(iii) In the event that a Global Security is exchanged for Securities
in definitive registered form pursuant to Section 2.4 of this Appendix or
Section 2.10 of the Debenture Indenture, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities may be exchanged
only in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Debentures intended to
ensure that such transfers comply with Rule 144A) and such other procedures
as may from time to time be adopted by the Company.
(b) Legend.
------
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing Initial Debentures and Private
Exchange Debentures (and all Securities issued in exchange therefor or in
substitution thereof, other than Exchange Debentures) shall bear a legend
in substantially the following form:
"THIS DEBENTURE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS DEBENTURE MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS DEBENTURE IS HEREBY NOTIFIED THAT THE SELLER OF THIS
DEBENTURE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS DEBENTURE AGREES FOR THE BENEFIT OF THE ISSUER THAT
(A) THIS DEBENTURE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS DEBENTURE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act, the Registrar
shall permit the Holder thereof to exchange such Transfer Restricted
Security for a certificated Security that does not bear the legend set
forth above and rescind any restriction on the transfer of such Transfer
Restricted Security, if the Holder certifies in writing to the Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Debentures or Private Exchange
Debentures during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Debentures or Private Exchange
Debentures, as the case may be,
all requirements pertaining to legends on such Initial Debentures or such
Private Exchange Debentures will cease to apply, but the requirements
requiring such Initial Debentures or such Private Exchange Debentures
issued to certain Holders be issued in global form will continue to apply,
and Initial Debentures or Private Exchange Debentures in global form
without legends will be available to the transferee of the Holder of such
Initial Debentures or Private Exchange Debentures upon exchange of such
transferring Holder's Initial Debentures or Private Exchange Debentures or
directions to transfer such Holder's interest in the Global Security, as
applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Debentures pursuant to which Holders of such Initial
Debentures are offered Exchange Debentures in exchange for their Initial
Debentures, all requirements pertaining to such Initial Debentures that
Initial Debentures issued to certain Holders be issued in global form will
continue to apply and Initial Debentures in global form with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Debentures that do not exchange their Initial
Debentures, and Exchange Debentures in global form without the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Debentures in such Registered Exchange
Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Debentures pursuant to which Holders of such Initial Debentures are
offered Private Exchange Debentures in exchange for their Initial
Debentures, all requirements pertaining to such Initial Debentures that
Initial Debentures issued to certain Holders be issued in global form will
still apply, and Private Exchange Debentures in global form with the
restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Debentures in such Private
Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to the Depositary for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
repurchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
----------
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall, upon receipt of a written order
complying with Section 2.2 of this Debenture Indenture, authenticate
certificated Securities and Global Securities at the Registrar's or any co-
registrar's request.
(ii) 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, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.15 and Section 9.06 of the
Debenture Indenture).
(iii) The Registrar or any co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Security
selected for redemption in whole or in part pursuant to Article Three of
the Debenture Indenture, except the unredeemed portion of any certificated
Security being redeemed in part, or (b) any Security for a period beginning
15 Business Days before the mailing of a notice of an offer to repurchase
or redeem Securities or 15 Business Days before an Interest Payment Date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of the Debenture Indenture shall evidence the same debt and shall
be entitled to the same benefits under the Debenture Indenture as the
Securities surrendered upon such transfer or exchange.
(e) No Obligation of the Trustee.
----------------------------
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depositary or other Person with respect to the accuracy of the records of
the Depositary or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Securities or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depositary or its nominee in the case of a Global Security). The rights
of beneficial owners in any Global Security shall be exercised only through
the Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depositary with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under the Debenture Indenture or under applicable law with respect
to any transfer of any interest in any Security (including any transfers
between or among Depositary participants, members or beneficial owners in
any Global Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and to do
so if and when expressly required by, the terms of the Debenture Indenture,
and to examine the same to determine substantial compliance as to form with
the express requirements hereof.
2.4 Certificated Securities,
-----------------------
(a) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act 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 or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under the Debenture Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depositary to the
Trustee, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate principal amount of
certificated Securities of authorized denominations. Any portion of a Global
Security transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 principal amount at maturity and
any integral multiple thereof and registered in such names as the Depositary
shall direct. Any certificated Initial Debenture delivered in exchange for an
interest in the Global Security shall, except as otherwise provided by Section
2.3(b), bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security 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 the
Debenture Indenture or the Securities.
(d) In the event of the occurrence of either of the events specified
in Section 2.4(a) above, the Company will promptly make available to the Trustee
a reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 1
TO RULE 144A
APPENDIX
[GLOBAL SECURITIES LEGEND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT 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 DTC 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 THIS
DEBENTURE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[RESTRICTED SECURITIES LEGEND]
THIS DEBENTURE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS DEBENTURE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS DEBENTURE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS DEBENTURE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS DEBENTURE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS
DEBENTURE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS DEBENTURE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Amount of decrease in Amount of increase in Principal Amount of this Global Signature of authorized
Principal Amount of this Principal Amount of this Security following such decrease officer of Trustee or
Date of Exchange Global Security Global Security or increase Securities Custodian
EXHIBIT A
---------
FORM OF INITIAL DEBENTURE
-------------------------
CUSIP No.:
▇▇▇▇▇ EQUIPMENT COMPANY
15% SENIOR DISCOUNT DEBENTURE DUE JULY 15, 2011
No. $
▇▇▇▇▇ EQUIPMENT COMPANY, 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 _____ __,
2011.
Interest Payment Dates: January 15, April 15, July 15 and October 15
Record Dates: January 1, April 1, July 1 and October 1
Reference is made to the further provisions of this Debenture
contained herein, which will for all purposes have the same effect as if set
forth at this place.
This Debenture was issued on July 28, 1999 with original issue
discount ("OID") for federal income tax purposes. For further
information, please contact D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial
Officer, ▇▇▇▇▇ Equipment Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇.
IN WITNESS WHEREOF, ▇▇▇▇▇ EQUIPMENT COMPANY has caused this Debenture
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.
▇▇▇▇▇ EQUIPMENT COMPANY
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
Dated: _____________
Certificate of Authentication
This is one of the 15% Senior Discount Debentures due July 15, 2011
referred to in the within-mentioned Debenture Indenture.
________________________________,
as Trustee
Dated: ____________ By:__________________________________________
Authorized Signatory
(REVERSE OF SECURITY)
15% SENIOR DISCOUNT DEBENTURE DUE JULY 15, 2011
1. Interest. ▇▇▇▇▇ EQUIPMENT COMPANY, a Delaware corporation (the
--------
"Company"), promises to pay interest on this Debentures as set forth below. This
Debenture will accrete at a rate of 15% per annum, compounded quarterly from an
initial Accreted Value of $481.45 per $1,000 principal amount at Stated Maturity
on the Issue Date to a principal amount in arrears of $1,000 principal amount at
Stated Maturity by July 15, 2004.
The Company shall pay interest at a rate of 15% per annum, from July
15, 2004, or from the most recent date on which interest has been paid or, if no
interest has been paid, from July 15, 2004. The Company will pay interest
quarterly in arrears on each Interest Payment Date, commencing October 15, 2004.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
[Notwithstanding the foregoing, if a Registration Default (as defined
in the Registration Rights Agreement) occurs, additional interest will accrue on
this Debenture at a rate of 0.50% 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, calculated on the principal
amount of this Debenture as of the date on which such interest is payable. Such
interest is payable in addition to any other interest payable from time to time
with respect to this Debenture. The Trustee will not be deemed to have notice of
a Registration Default until it shall have received actual notice of such
Registration Default.]/1/
The Company shall pay interest on overdue principal at the rate borne
by the Debentures plus 2% per annum and will pay cash interest on overdue
installments of cash 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
-----------------
Debentures (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 Debentures are cancelled on registration of
transfer or registration of exchange after such Record Date. Holders must
surrender Debentures 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.
_______________________
/1/ To be included in the Initial Debentures.
3. Paying Agent and Registrar. Initially, United States Trust
--------------------------
Company of Texas, a Texas 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. Debenture Indenture. The Company issued the Debentures under an
-------------------
Indenture, dated as of July 28, 1999 (the "Debenture Indenture"), among the
Company and the Trustee. This Debenture is one of a duly authorized issue of
Initial Debentures of the Company designated as its 15% Senior Discount
Debentures due July 15, 2011. The Initial Debentures issued on July 28, 1999 and
any Private Exchange Debentures and Exchange Debentures issued pursuant to the
Debenture Indenture are treated as a single class of securities under the
Debenture Indenture. Capitalized terms herein are used as defined in the
Debenture Indenture unless otherwise defined herein. The terms of the Debentures
include those stated in the Debenture Indenture and those made part of the
Debenture 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 Debenture
Indenture. Notwithstanding anything to the contrary herein, the Debentures are
subject to all such terms, and Holders of Debentures are referred to the
Debenture Indenture and the TIA Act for a statement of them. The Debentures are
general unsecured obligations of the Company. To the extent of any conflict
between the terms of the Debentures and the Debenture Indenture, the applicable
terms of the Debenture Indenture shall govern.
5. Redemption.
----------
(a) The Debentures will be redeemable at the Company's option, in whole
or in part, at any time on or after July 15, 2004, at the respective redemption
price (expressed as a percentage of Accreted Value) set forth below, plus
accrued and unpaid 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
beginning on July 15 of the year indicated below:
Redemption
Period Price
------ ----------
2004 ............................................... 107.500%
2005 ............................................... 105.000%
2006 ............................................... 102.500%
2007 and thereafter ................................ 100.000%
(b) Notwithstanding the foregoing, before July 15, 2002, the Company may
at its option redeem all of the outstanding Debentures with the proceeds of one
or more Public Equity Offerings, at a redemption price (expressed as a
percentage of Accreted Value) of 115% 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 that such
redemption must occur within 60 days of the Public Equity Offering.
6. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Debentures to be redeemed at such Holder's registered address.
Debentures in denominations of $1,000 principal amount at maturity may be
redeemed only in whole. Debentures in denominations larger than $1,000 principal
amount at maturity may be redeemed in part but only in multiples of $1,000
principal amount at maturity.
Except as set forth in the Debenture Indenture, if monies for the
redemption of the Debentures 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 Debentures called for redemption will cease to bear
interest from and after such Redemption Date and the only right of the Holders
of such Debentures will be to receive payment of the Redemption Price plus
accrued and unpaid interest, if any.
7. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement (as defined in the Debenture Indenture), the Company will be obligated
to consummate an exchange offer pursuant to which the Holder of this Debenture
shall have the right to exchange this Debenture for the Company's 15% Senior
Discount Debentures due July 15, 2011 in the form of Exchange Debentures, which
shall have been registered under the Securities Act, or the Company's 15% Senior
Private Exchange Debentures due July 15, 2011 (the "Private Exchange
Debentures"), in each case in like principal amount and having terms identical
in all material respects to the Initial Debentures. The Holders of the Initial
Debentures 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. The Company shall notify the Trustee of the amount of any such
payments./2/
8. Denominations; Transfer; Exchange. The Debentures are in
---------------------------------
registered form, without coupons, in denominations of $1,000 principal amount at
maturity and integral multiples of $1,000 principal amount at maturity. A Holder
shall register the transfer of or exchange of Debentures in accordance with the
Debenture 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 Debenture Indenture. The Registrar need not register the
transfer of or exchange of any Debentures or portions thereof selected for
redemption (except, in the case of Debentures to be redeemed in part, the
portion of such Debentures not to be redeemed) or any Debenture for a period
beginning 15 Business Days before the mailing of a notice of an offer to
repurchase or a notice of redemption or 15 Business Days before any Interest
Payment Date.
___________________
/2/ To be included in the Initial Debentures issued on the Issue Date and, to
the extent applicable.
9. Persons Deemed Owners. The registered Holder of a Debenture
---------------------
shall be treated as the owner of it for all purposes.
10. 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 (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
11. 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 Debentures to redemption
or maturity and complies with the other provisions of the Debenture Indenture
relating thereto, the Company will be discharged from certain provisions of the
Debenture Indenture and the Debentures (including certain covenants, but
excluding its obligation to pay the principal of and interest on the
Debentures).
12. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Debenture Indenture or the Debentures may be amended or supplemented with
the written consent of the Holders of at least a majority in aggregate principal
amount of the Debentures 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
Debentures then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Debenture Indenture or the
Debentures to, among other things, cure any ambiguity, omission, defect or
inconsistency, provide for uncertificated Debentures in addition to or in place
of certificated Debentures, or comply with Article Five of the Debenture
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Debenture.
13. Restrictive Covenants. This Debenture 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.
14. Successors. When a successor assumes, in accordance with the
----------
Debenture Indenture, all the obligations of its predecessor under the Debentures
and the Debenture Indenture, the predecessor will be released from those
obligations.
15. 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 at maturity of Debentures then outstanding may declare all the Debentures
to be due and payable in the manner, at the time and with the effect provided in
the Debenture Indenture. Certain events of bankruptcy and insolvency are Events
of Default which will result in the Debentures being due
and payable immediately upon the occurrence of such Events of Default. Holders
of Debentures may not enforce the Debenture Indenture or the Debentures except
as provided in the Debenture Indenture. The Trustee is not obligated to enforce
the Debenture Indenture or the Debentures unless it has received indemnity
reasonably satisfactory to it. This Debenture Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Debentures then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of
Debentures notice of any continuing Default or Event of Default (except a
Default in payment of principal, premium, if any, or interest) if it determines
that withholding notice is in their interest.
16. Trustee Dealings with Company. The Trustee under the Debenture
-----------------------------
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Debentures and may otherwise deal with the Company, its Subsidiaries
or their respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others. No past, present or future
--------------------------
stockholder, director, officer, employee or incorporator, as such, of the
Company, shall have any liability for any obligation of the Company under the
Debentures or the Debenture Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Debenture
by accepting a Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Debentures.
18. Authentication. This Debenture shall not be valid until the
--------------
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Debenture.
19. Governing Law. The Laws of the State of New York shall govern
-------------
this Debenture and the Debenture Indenture, without regard to principles of
conflict of laws.
20. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Debenture 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).
21. 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 Debentures as a convenience to the Holders of
the Debentures. No representation is made as to the accuracy of such numbers as
printed on the Debentures and reliance may be placed only on the other
identification numbers printed hereon.
22. Debenture Indenture. Each Holder, by accepting a Debenture,
-------------------
agrees to be bound by all of the terms and provisions of the Debenture
Indenture, as the same may be amended from time to time.
23. Holders' Compliance with Registration Rights Agreement. Each
------------------------------------------------------
Holder of a Debenture, 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./3/
The Company will furnish to any Holder of a Debenture upon written
request and without charge a copy of the Debenture Indenture. Requests may be
made to: ▇▇▇▇▇ Equipment Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.:
D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
_______________
/3/ To be included in the Initial Debentures issued on the Issue Date and, to
the extent applicable.
ASSIGNMENT FORM
If you the Holder want to assign this Debenture, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Debenture 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 Debenture
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 Debenture)
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 Debenture 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 Debenture (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) [two years from date of original issuance], the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Debenture is being
transferred:
[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) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(4) __ pursuant to an effective registration statement under the Securities
Act; or
(5) __ 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 Debentures evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided that if box (3) or (5) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Debentures, in its sole discretion, such legal opinions, certifications
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.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Debenture 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 the Appendix to the Debenture 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
Debenture 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
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Debenture purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Debenture Indenture, check the
appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Debenture purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Debenture 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 Debenture 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).
EXHIBIT B
---------
FORM OF EXCHANGE DEBENTURE AND PRIVATE EXCHANGE DEBENTURE
---------------------------------------------------------
CUSIP No.:__________
▇▇▇▇▇ EQUIPMENT COMPANY
15% SENIOR [PRIVATE EXCHANGE] DISCOUNT DEBENTURE DUE JULY 15, 2011
No. $
▇▇▇▇▇ EQUIPMENT COMPANY, 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 July
15, 2011.
Interest Payment Dates: January 15, April 15, July 15 and October 15.
Record Dates: January 1, April 1, July 1 and October 1.
Reference is made to the further provisions of this Debenture
contained herein, which will for all purposes have the same effect as if set
forth at this place.
This Debenture was issued on July 28, 1999 with original issue
discount ("OID") for federal income tax purposes. For further
information, contact D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer, ▇▇▇▇▇
Equipment Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (815) 381-
6000.
IN WITNESS WHEREOF, ▇▇▇▇▇ EQUIPMENT COMPANY has caused this Debenture
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.
▇▇▇▇▇ EQUIPMENT COMPANY
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Dated: ____________________
Certificate of Authentication
This is one of the 15% Senior [Private Exchange] Debentures due July
15, 2011 referred to in the within-mentioned Debenture Indenture.
____________________________________,
as Trustee
Dated: __________________ By:__________________________________________
Authorized Signatory
[If the Debenture is to be issued in global form add the Global Securities
Legend from Exhibit 1 to the Appendix and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
[If the Debenture is a Private Exchange Debenture issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the restricted securities legend from Exhibit 1 to Appendix A and replace the
Assignment Form with that included in Exhibit A.]
(REVERSE OF SECURITY)
15% SENIOR [PRIVATE EXCHANGE] DISCOUNT DEBENTURE DUE JULY 15, 2011
1. Interest. ▇▇▇▇▇ EQUIPMENT COMPANY, a Delaware corporation (the
--------
"Company"), promises to pay interest on this Debentures as set forth below. This
Debenture will accrete at a rate of 15% per annum, compounded quarterly from an
initial Accreted Value of $481.45 per $1,000 principal amount at Stated Maturity
on the Issue Date to a principal amount in arrears of $1,000 principal amount at
Stated Maturity by July 15, 2004.
The Company shall pay interest at a rate of 15% per annum, from July
15, 2004, or from [the most recent date on which interest has been paid on the
Initial Debenture in exchange for which this [Exchange Debenture] [Private
Exchange Debenture] was issued]. The Company will pay interest quarterly in
arrears on each Interest Payment Date, commencing October 15, 1999. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
[Notwithstanding the foregoing, if a Registration Default (as defined
in the Registration Rights Agreement) occurs, additional interest will accrue on
this Debenture at a rate of 0.50% 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, calculated on the principal
amount of this Debenture as of the date on which such interest is payable. Such
interest is payable in addition to any other interest payable from time to time
with respect to this Debenture. The Trustee will not be deemed to have notice of
a Registration Default until it shall have received actual notice of such
Registration Default.]/4/
The Company shall pay interest on overdue principal at the rate borne
by the Debentures plus 2% per annum and will pay cash interest on overdue
installments of cash 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
-----------------
Debentures (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 Debentures are cancelled on registration of
transfer or registration of exchange after such Record Date. Holders must
surrender Debentures 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.
_____________________
/4/ To be included in the Initial Debentures issued on the Issue Date and, to
the extent applicable.
3. Paying Agent and Registrar. Initially, United States Trust
--------------------------
Company of Texas, a Texas 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. Debenture Indenture. The Company issued the Debentures under an
-------------------
Indenture, dated as of July 28, 1999 (the "Debenture Indenture"), among the
Company and the Trustee. [This Debenture is one of a duly authorized issue of
Exchange Debentures of the Company designated as its 15% Senior Discount
Debentures due July 15, 2011.] [This Debenture is one of a duly authorized issue
of Private Exchange Debentures of the Company designated as its 15% Senior
Private Exchange Debentures due July 15, 2011.] The Initial Debentures issued on
July 28, 1999 and any Private Exchange Debentures and Exchange Debentures issued
pursuant to the Debenture Indenture are treated as a single class of securities
under the Debenture Indenture. Capitalized terms herein are used as defined in
the Debenture Indenture unless otherwise defined herein. The terms of the
Debentures include those stated in the Debenture Indenture and those made part
of the Debenture 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
Debenture Indenture. Notwithstanding anything to the contrary herein, the
Debentures are subject to all such terms, and Holders of Debentures are referred
to the Debenture Indenture and the TIA for a statement of them. The Debentures
are general unsecured obligations of the Company. To the extent of any conflict
between the terms of the Debentures and the Debenture Indenture, the applicable
terms of the Debenture Indenture shall govern.
5. Redemption.
----------
(a) The Debentures will be redeemable at the Company's option, in whole or
in part, at any time on or after July 15, 2004, at the respective redemption
price (expressed as a percentage of Accreted Value) set forth below, plus
accrued and unpaid 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
beginning on July 15 of the year indicated below:
Redemption
Period Price
------ ----------
2004 ............................................... 107.500%
2005 ............................................... 105.000%
2006 ............................................... 102.500%
2007 and thereafter ................................ 100.000%
(b) Notwithstanding the foregoing, before July 15, 2002, the Company may
at its option redeem all of the outstanding Debentures with the proceeds of one
or more Public Equity Offerings, at a redemption price (expressed as a
percentage of Accreted Value) of 115% 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 that such redemption must occur within 60 days of the
Public Equity Offering.
6. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Debentures to be redeemed at such Holder's registered address.
Debentures in denominations of $1,000 principal amount at maturity may be
redeemed only in whole. Debentures in denominations larger than $1,000 principal
amount at maturity may be redeemed in part but only in multiples of $1,000
principal amount at maturity.
Except as set forth in the Debenture Indenture, if monies for the
redemption of the Debentures 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 Debentures called for redemption will cease to bear
interest from and after such Redemption Date and the only right of the Holders
of such Debentures will be to receive payment of the Redemption Price plus
accrued and unpaid interest, if any.
7. Denominations; Transfer; Exchange. The Debentures are in
---------------------------------
registered form, without coupons, in denominations of $1,000 principal amount at
maturity and integral multiples of $1,000 principal amount at maturity. A Holder
shall register the transfer of or exchange of Debentures in accordance with the
Debenture 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 Debenture Indenture. The Registrar need not register the
transfer of or exchange of any Debentures or portions thereof selected for
redemption (except, in the case of Debentures to be redeemed in part, the
portion of such Debentures not to be redeemed) or any Debenture for a period
beginning 15 Business Days before the mailing of a notice of an offer to
repurchase or a notice of redemption or 15 Business Days before any Interest
Payment Date.
8. Persons Deemed Owners. The registered Holder of a Debenture
---------------------
shall be treated as the owner of it for all purposes.
9. 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 (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
10. 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 Debentures to redemption
or maturity and complies with the other provisions of the Debenture Indenture
relating thereto, the Company will be discharged from certain provisions of the
Debenture Indenture and the Debentures (including certain covenants, but
excluding its obligation to pay the principal of and interest on the
Debentures).
11. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Debenture Indenture or the Debentures may be amended or supplemented with
the written consent of the Holders of at least a majority in aggregate principal
amount of the Debentures 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
Debentures then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Debenture Indenture or the
Debentures to, among other things, cure any ambiguity, omission, defect or
inconsistency, provide for uncertificated Debentures in addition to or in place
of certificated Debentures, or comply with Article Five of the Debenture
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Debenture.
12. Restrictive Covenants. This Debenture 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.
13. Successors. When a successor assumes, in accordance with the
----------
Debenture Indenture, all the obligations of its predecessor under the Debentures
and the Debenture Indenture, the predecessor will be released from those
obligations.
14. 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 at maturity of Debentures then outstanding may declare all the Debentures
to be due and payable in the manner, at the time and with the effect provided in
the Debenture Indenture. Certain events of bankruptcy and insolvency are Events
of Default which will result in the Debentures being due and payable immediately
upon the occurrence of such Events of Default. Holders of Debentures may not
enforce the Debenture Indenture or the Debentures except as provided in the
Debenture Indenture. The Trustee is not obligated to enforce the Debenture
Indenture or the Debentures unless it has received indemnity reasonably
satisfactory to it. This Debenture Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Debentures then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Debentures
notice of any continuing Default or Event of Default (except a Default in
payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest.
15. Trustee Dealings with Company. The Trustee under the Debenture
-----------------------------
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Debentures and may otherwise deal with the Company, its Subsidiaries
or their respective Affiliates as if it were not the Trustee.
16. No Recourse Against Others. No past, present or future
--------------------------
stockholder, director, officer, employee or incorporator, as such, of the
Company shall have any liability for any obligation of the Company under the
Debentures or the Debenture Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Debenture
by accepting a Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Debentures.
17. Authentication. This Debenture shall not be valid until the
--------------
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Debenture.
18. Governing Law. The Laws of the State of New York shall govern
-------------
this Debenture and the Debenture Indenture, without regard to principles of
conflict of laws.
19. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Debenture 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).
20. 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 Debentures as a convenience to the Holders of
the Debentures. No representation is made as to the accuracy of such numbers as
printed on the Debentures and reliance may be placed only on the other
identification numbers printed hereon.
21. Debenture Indenture. Each Holder, by accepting a Debenture,
-------------------
agrees to be bound by all of the terms and provisions of the Debenture
Indenture, as the same may be amended from time to time.
[22. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement (as defined in the Debenture Indenture), the Company will have certain
obligations to the Holders of the Exchange Debentures and the Private Exchange
Debentures. The Holders of the Exchange Debentures and the Private Exchange
Debentures shall be entitled to receive certain additional interest payments
upon certain conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement. The Company shall notify the Trustee of the
amount of any such payments.]/5/
The Company will furnish to any Holder of a Debenture upon written
request and without charge a copy of the Debenture Indenture. Requests may be
made to: ▇▇▇▇▇ Equipment Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.:
D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
_______________________
/5/ To be included if applicable.
ASSIGNMENT FORM/6/
If you the Holder want to assign this Debenture, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Debenture 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
Debenture 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 Debenture)
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).
_______________________
/6/ If the Debenture is a Private Exchange Debenture, replace the Assignment
Form with that included in Exhibit A to this Debenture Indenture.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Debenture purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Debenture Indenture, check the
appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Debenture purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Debenture 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 Debenture 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).
CROSS-REFERENCE TABLE
TIA Debenture 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; 10.02
(c) ....................................................... N.A.
311(a) .......................................................
7.11
(b) ....................................................... 7.11
(c) ....................................................... N.A.
312(a) .......................................................
2.05
(b) ....................................................... 10.03
(c) ....................................................... 10.03
313(a) .......................................................
7.06
(b)(1) ....................................................... N.A.
(b)(2) ....................................................... 7.06
(c) ....................................................... 7.06; 10.02
(d) ....................................................... 7.06
314(a) ....................................................... 4.07; 4.08; 10.02
(b) ....................................................... N.A.
(c)(1) ....................................................... 10.04
(c)(2) ....................................................... 10.04
(c)(3) ....................................................... N.A.
(d) ....................................................... N.A.
(e) ....................................................... 10.05
(f) ....................................................... N.A.
315(a) ....................................................... 7.01(b)
(b) ....................................................... 7.05; 10.02
(c) ....................................................... 7.01(a)
(d) ....................................................... 7.01(c)
(e) ....................................................... 6.11
316(a)(last sentence)...................................................... 2.09
(a)(1)(A) ....................................................... 6.05
(a)(1)(B) ....................................................... 6.04
(a)(2) ....................................................... N.A.
(b) ....................................................... 6.07
(c) ....................................................... 9.04
317(a)(1) ....................................................... 6.08
(a)(2) ....................................................... 6.09
(b) ....................................................... 2.04
318(a) ....................................................... 10.01
(c) ....................................................... 10.01
_________
N.A. means Not Applicable
Debenture: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of this Debenture Indenture.