EXHIBIT 10.2
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▇▇▇▇ NATIONAL GROUP, INC.
8 7/8% SENIOR SUBORDINATED NOTES DUE 2012
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INDENTURE
Dated as of May 22, 2002
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▇▇▇▇▇ Fargo Bank Minnesota, N.A.
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................... 7.10
(a)(2)................................................................. 7.10
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(a)(5)................................................................. 7.10
(b).................................................................... 7.10
(c).................................................................... N.A.
311 (a).................................................................... 7.11
(b).................................................................... 7.11
(c).................................................................... N.A.
312 (a).................................................................... 2.05
(b).................................................................... 13.03
(c).................................................................... 13.03
313 (a).................................................................... 7.06
(b)(1)................................................................. N.A.
(b)(2)................................................................. 7.06; 7.07
(c).................................................................... 7.06; 13.02
(d).................................................................... 7.06
314 (a).................................................................... 4.03; 13.02; 13.05
(b).................................................................... N.A.
(c)(1)................................................................. 13.04
(c)(2)................................................................. 13.04
(c)(3)................................................................. N.A.
(d).................................................................... N.A.
(e).................................................................... 13.05
(f).................................................................... N.A.
315 (a).................................................................... 7.01
(b).................................................................... 7.05; 13.02
(c).................................................................... 7.01
(d).................................................................... 7.01
(e).................................................................... 6.11
316 (a) (last sentence).................................................... 2.09
(a)(1)(A).............................................................. 6.05
(a)(1)(B).............................................................. 6.04
(a)(2)................................................................. N.A.
(b).................................................................... 6.07
(c).................................................................... 2.12
317 (a)(1)................................................................. 6.08
(a)(2)................................................................. 6.09
(b).................................................................... 2.04
318 (a).................................................................... 13.01
(b).................................................................... N.A.
(c).................................................................... 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.................................................................................1
Section 1.02 Other Definitions..........................................................................21
Section 1.03 Incorporation by Reference of Trust Indenture Act..........................................21
Section 1.04 Rules of Construction......................................................................22
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating............................................................................22
Section 2.02 Execution and Authentication...............................................................23
Section 2.03 Registrar and Paying Agent.................................................................23
Section 2.04 Paying Agent to Hold Money in Trust........................................................24
Section 2.05 Holder Lists...............................................................................24
Section 2.06 Transfer and Exchange......................................................................24
Section 2.07 Replacement Notes..........................................................................35
Section 2.08 Outstanding Notes..........................................................................35
Section 2.09 Treasury Notes.............................................................................36
Section 2.10 Temporary Notes............................................................................36
Section 2.11 Cancellation...............................................................................36
Section 2.12 Defaulted Interest.........................................................................36
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.........................................................................37
Section 3.02 Selection of Notes to Be Redeemed or Purchased.............................................37
Section 3.03 Notice of Redemption.......................................................................37
Section 3.04 Effect of Notice of Redemption.............................................................38
Section 3.05 Deposit of Redemption or Purchase Price....................................................38
Section 3.06 Notes Redeemed or Purchased in Part........................................................39
Section 3.07 Optional Redemption........................................................................39
Section 3.08 Mandatory Redemption.......................................................................40
Section 3.09 Offer to Purchase by Application of Excess Proceeds........................................40
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes...........................................................................41
Section 4.02 Maintenance of Office or Agency............................................................42
Section 4.03 Reports....................................................................................42
Section 4.04 Compliance Certificate.....................................................................43
Section 4.05 Taxes......................................................................................43
Section 4.06 Stay, Extension and Usury Laws.............................................................44
Section 4.07 Restricted Payments........................................................................44
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.............................47
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.................................48
Section 4.10 Asset Sales................................................................................50
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Section 4.11 Transactions with Affiliates...............................................................52
Section 4.12 Liens......................................................................................53
Section 4.13 Corporate Existence........................................................................53
Section 4.14 Offer to Repurchase Upon Change of Control.................................................53
Section 4.15 No Senior Subordinated Debt................................................................55
Section 4.16 Limitation on Sale and Leaseback Transactions..............................................55
Section 4.17 Limitation on Capital Stock of Restricted Subsidiaries.....................................55
Section 4.18 Future Note Guarantees.....................................................................56
Section 4.19 Limitation on Designation of Restricted and Unrestricted Subsidiaries......................56
Section 4.20 Payments for Consent.......................................................................57
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets...................................................57
Section 5.02 Successor Corporation Substituted..........................................................58
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..........................................................................58
Section 6.02 Acceleration...............................................................................59
Section 6.03 Other Remedies.............................................................................60
Section 6.04 Waiver of Past Defaults....................................................................60
Section 6.05 Control by Majority........................................................................61
Section 6.06 Limitation on Suits........................................................................61
Section 6.07 Rights of Holders of Notes to Receive Payment..............................................61
Section 6.08 Collection Suit by Trustee.................................................................61
Section 6.09 Trustee May File Proofs of Claim...........................................................62
Section 6.10 Priorities.................................................................................62
Section 6.11 Undertaking for Costs......................................................................62
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee..........................................................................63
Section 7.02 Rights of Trustee..........................................................................64
Section 7.03 Individual Rights of Trustee...............................................................64
Section 7.04 Trustee's Disclaimer.......................................................................64
Section 7.05 Notice of Defaults.........................................................................65
Section 7.06 Reports by Trustee to Holders of the Notes.................................................65
Section 7.07 Compensation and Indemnity.................................................................65
Section 7.08 Replacement of Trustee.....................................................................66
Section 7.09 Successor Trustee by Merger, etc...........................................................67
Section 7.10 Eligibility; Disqualification..............................................................67
Section 7.11 Preferential Collection of Claims Against Company..........................................67
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...................................67
Section 8.02 Legal Defeasance and Discharge.............................................................67
Section 8.03 Covenant Defeasance........................................................................68
Section 8.04 Conditions to Legal or Covenant Defeasance.................................................68
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Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions ............................................................................................69
Section 8.06 Repayment to Company.......................................................................70
Section 8.07 Reinstatement..............................................................................70
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................71
Section 9.02 With Consent of Holders of Notes...........................................................71
Section 9.03 Compliance with Trust Indenture Act........................................................73
Section 9.04 Revocation and Effect of Consents..........................................................73
Section 9.05 Notation on or Exchange of Notes...........................................................73
Section 9.06 Trustee to Sign Amendments, etc............................................................73
ARTICLE 10.
Subordination
Section 10.01 Notes Subordinate to Senior Debt...........................................................73
Section 10.02 Payment Over of Proceeds upon Dissolution, etc.............................................74
Section 10.03 Suspension of Payment When Senior Indebtedness in Default..................................75
Section 10.04 Trustee's Relation to Senior Debt..........................................................76
Section 10.05 Subrogation to Rights of Holders of Senior Debt............................................76
Section 10.06 Provisions Solely to Define Relative Rights................................................77
Section 10.07 Trustee to Effectuate Subordination........................................................77
Section 10.08 No Waiver of Subordination Provisions......................................................77
Section 10.09 Notice to Trustee..........................................................................78
Section 10.10 Reliance on Judicial Order or Certificate of Liquidating Agent.............................79
Section 10.11 Rights of Trustee as a Holder of Senior Debt; Preservation of Trustee's Rights.............79
Section 10.12 Article Applicable to Paying Agents........................................................79
Section 10.13 No Suspension of Remedies..................................................................79
Section 10.14 Amendments.................................................................................79
ARTICLE 11.
NOTE GUARANTEES
Section 11.01 Guarantee..................................................................................80
Section 11.02 Subordination of Note Guarantee............................................................81
Section 11.03 Limitation on Guarantor Liability..........................................................81
Section 11.04 Execution and Delivery of Note Guarantee...................................................81
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms.........................................81
Section 11.06 Releases Following Sale of Assets..........................................................82
Section 11.07 Operation..................................................................................83
ARTICLE 12.
satisfaction and discharge
Section 12.01 Satisfaction and Discharge.................................................................83
Section 12.02 Application of Trust Money.................................................................84
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls...............................................................84
Section 13.02 Notices....................................................................................84
Section 13.03 Communication by Holders of Notes with Other Holders of Notes..............................85
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Section 13.04 Certificate and Opinion as to Conditions Precedent.........................................85
Section 13.05 Statements Required in Certificate or Opinion..............................................86
Section 13.06 Rules by Trustee and Agents................................................................86
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders...................86
Section 13.08 Governing Law..............................................................................86
Section 13.09 No Adverse Interpretation of Other Agreements..............................................86
Section 13.10 Successors.................................................................................87
Section 13.11 Severability...............................................................................87
Section 13.12 Counterpart Originals......................................................................87
Section 13.13 Table of Contents, Headings, etc...........................................................87
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of May 22, 2002 between ▇▇▇▇ National Group, Inc., a
Delaware corporation (the "Company"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as
trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders (as defined) of the
8 7/8% Senior Subordinated Notes due 2012 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"8 5/8% Notes" means the Company's 8 5/8% Senior Subordinated Notes due
2007.
"8 5/8% Notes Indenture" means the indenture relating to the 8 5/8%
Notes.
"9 7/8% Notes" means the Company's 9 7/8% Senior Subordinated Notes due
2006.
"9 7/8% Notes Indenture" means the indenture relating to the 9 7/8%
Notes.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person was merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with
or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Notes" means any Notes (other than the Initial Notes)
issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as
part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
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"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights; provided that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company
and its Subsidiaries taken as a whole will be governed by the
provisions of Section 4.14 and/or Section 5.01 and not by the
provisions of Section 4.10 hereof; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:
(1) any single transaction or series of related transactions
that involves assets having a fair market value of less than $5.0
million;
(2) a transfer of assets or other disposition between or among
the Company and its Wholly-Owned Restricted Subsidiaries or between the
Company and another Person if, after giving effect to such transaction,
the other Person becomes a Wholly-Owned Restricted Subsidiary of the
Company;
(3) an issuance of Equity Interests by a Restricted Subsidiary
to the Company or to another Wholly-Owned Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of
equipment, inventory, accounts receivable or other assets in the
ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof;
(7) the licensing or sublicensing of intellectual property or
other general intangibles and licenses, leases or subleases of other
property in the ordinary course of business and that do not materially
interfere with the business of the Company and its Subsidiaries;
(8) bona fide foreclosures on assets;
(9) any sale, transfer or other disposition to any Person if,
after such sale, transfer or other disposition, such Person becomes a
Wholly-Owned Restricted Subsidiary; and
(10) any release of intangible claims or rights in connection
with a bona fide lawsuit, dispute or other controversy.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
2
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the Board of Directors of
the general partner of the partnership; and
(3) with respect to any other Person, the board or any
committee of such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) marketable, direct obligations issued or guaranteed by the
United States of America, or by any governmental agency or political
subdivision thereof, maturing with 365 days of the date of purchase;
(2) United States dollar denominated time deposits and United
States dollar denominated certificates of deposit (including Eurodollar
time deposits and certificates of deposit) maturing within 365 days of
the date of purchase thereof issued by any United States or Canadian
national, provincial or state (including the District of Columbia)
banking institution having capital, surplus and undivided profits
aggregating at least $250.0 million, or by any
3
British, French, German, Japanese or Swiss national banking institution
having capital, surplus and undivided profits aggregating at least $1.0
billion, in each case that is (a) rated at least "A" by Standard &
Poor's Corporation or at least "A-2" by ▇▇▇▇▇ Investors Service Inc.,
or (b) that is a party to the Senior Credit Facility;
(3) commercial paper maturing within 270 days after the
issuance thereof that has the highest credit rating of either of such
rating agencies;
(4) readily marketable direct obligations issued by any state
of the United States of America or any political subdivision thereof
having the highest rating obtainable from either of such rating
agencies;
(5) tax exempted and tax advantaged instruments including,
without limitation, municipal bonds, commercial paper, auction rate
preferred stock and variable rate demand obligations with the highest
short-term ratings by either of such rating agencies or a long-term
debt rating of "AAA" from Standard & Poor's Corporation;
(6) repurchase agreements and reverse repurchase agreements
with institutions described in clause (2) above that are fully secured
by obligations described in clause (1) above; and
(7) money market funds not exceeding 365 days in duration that
invest substantially all of such funds' assets in the terms described
in the preceding clauses (1) through (5).
"Clearstream" means Clearstream Banking, S.A.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as that term is used in Section
13(d)(3) of the Exchange Act) other than a Permitted Holder;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company or the Parent;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above), other than a Permitted Holder, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company or the Parent, measured by voting power
rather than number of shares;
(4) the first day on which a majority of the members of the
Board of Directors of the Company or the Parent are not Continuing
Directors; or
(5) the first day on which the Parent ceases to own 80% of the
outstanding Voting Stock of the Company.
"Company" means ▇▇▇▇ National Group, Inc., and any and all successors
thereto.
4
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any net loss realized by such Person or
any of its Restricted Subsidiaries in connection with an Asset Sale, to
the extent such loss was deducted in computing such Consolidated Net
Income; plus
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect
of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net
Income; minus
(5) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course
of business,
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company will be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a
Wholly-Owned Restricted Subsidiary of the Person;
5
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its
stockholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition will be excluded;
(4) the cumulative effect of a change in accounting principles
will be excluded;
(5) the Net Income (but not loss) of any Unrestricted
Subsidiary will be excluded, whether or not distributed to the
specified Person or one of its Subsidiaries; and
(6) extraordinary, unusual and non-recurring gains, charges
and losses will be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or the Parent who:
(1) was a member of such Board of Directors on the date of
this Indenture; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or
election.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Senior Credit
Facility; and
6
(2) after payment in full of all Obligations under the Senior
Credit Facility, any other Senior Debt permitted under this Indenture
the principal amount of which is $25.0 million or more and that has
been designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Senior Credit
Facility) in existence on the date of this Indenture, until such amounts are
repaid and commitments are permanently reduced.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed
interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person
that is Guaranteed by such Person or one of its Restricted Subsidiaries
(other than Permitted Guarantees, except to the
7
extent called on) or secured by a Lien on assets of such Person or one
of its Restricted Subsidiaries, whether or not such Guarantee or Lien
is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividends on
Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted
Subsidiary of the Company, times (b) a fraction, the numerator of which
is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions and dispositions that have been made by the
specified Person or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date will be
given pro forma effect as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such
reference period will be calculated on a pro forma basis in accordance
with Regulation S-X under the Securities Act, but without giving effect
to clause (3) of the proviso set forth in the definition of
Consolidated Net Income;
(2) if since the beginning of the reference period any Person
(that subsequently became a Restricted Subsidiary of the Company or was
merged with or into the Company or any Restricted Subsidiary of the
Company since the beginning of that period) has made any acquisitions
and dispositions including through mergers or consolidations and
including any related financing transactions that would have required
adjustment pursuant to this definition, then the Fixed Charge Coverage
Ratio will be calculated giving pro forma effect thereto (as described
in paragraph (1) above) for the reference period as if the acquisition
or disposition had occurred at the beginning of the applicable
four-quarter period;
(3) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be excluded;
and
(4) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be
8
obligations of the specified Person or any of its Restricted
Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each Restricted Subsidiary of the Company that
executes a Note Guarantee in accordance with the provisions of this Indenture,
and its successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements;
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates; and
(3) agreements entered into solely for the purpose of fixing
or hedging the risks associated with fluctuations in foreign currency
exchange rates,
in each case, in reasonable relation to the Person's business and not for
speculative purposes.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of banker's acceptances;
9
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable or other accrued
liabilities arising in the ordinary course of business; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with
any interest on the Indebtedness that is more than 30 days past due, in
the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $150.0 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means ▇▇▇▇▇▇ Brothers Inc., CIBC World Markets
Corp. and McDonald Investments Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. Investments
shall exclude (1) extensions of trade credit on commercially reasonably terms in
accordance with normal trade practices and (2) the repurchase of securities of
any Person by such Person. If the Company or any Restricted Subsidiary of the
Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Company, the Company will be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Company's Investments in such Restricted Subsidiary that were not sold or
disposed of in an amount determined as provided in the final paragraph of
Section 4.07 hereof. The acquisition by the Company or any Restricted
10
Subsidiary of the Company of a Person that holds an Investment in a third Person
will be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person in an amount equal to the fair market value of the
Investments held by the acquired Person in such third Person in an amount
determined as provided in the final paragraph of Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with:
(a) any Asset Sale; or
(b) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (or loss), together with any
related provision for taxes on such extraordinary gain (or loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness, other than
Senior Debt secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
11
"Non-Payment Event of Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Debt.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries
(a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness),
(b) is directly or indirectly liable as a guarantor or
otherwise, or
(c) constitutes the lender;
(2) no default with respect to which (including any rights
that the holders of the Indebtedness may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon notice,
lapse of time or both any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment of
the Indebtedness to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company
or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. Unless the context otherwise requires, all references to the Notes
shall include the Initial Notes and any Additional Notes.
"Obligations" means any principal, interest (including, without
limitation, interest accruing or that would have accrued but for the filing of a
bankruptcy, reorganization or other insolvency proceeding whether or not such
interest constitutes an allowable claim in such proceeding), penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing, securing or otherwise entered into in connection
with any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
12
"Parent" means ▇▇▇▇ National Corporation, a Delaware corporation and
the Company's sole stockholder, or any successor entity thereto pursuant to a
merger or consolidation that results in the voting securities of Parent being
held immediately after the merger or consolidation by the same holders (other
than those that exercise statutory dissenters' rights) that held the voting
securities of Parent immediately before the merger or consolidation and which
merger or consolidation is solely for the purpose of reincorporating Parent in
another State of the United States.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Payment Default" means any default, whether or not any requirement for
the giving of notice, the lapse of time or both, or any other condition to such
default becoming an event of default has occurred, in the payment of principal
of (or premium, if any) or interest on or any other amount payable in connection
with Designated Senior Debt.
"Permitted Business" means any business in which the Company and its
Subsidiaries were engaged on the date of this Indenture, and any business
reasonably related or complementary thereto.
"Permitted Guarantees" means Guarantees of obligations of franchisees
for Indebtedness permitted pursuant to Section 4.09(b)(10) hereof, and any
Guarantees of obligations of franchisees for Indebtedness in existence on the
date of this Indenture, together with any renewals or extensions thereof or
modifications or supplements thereto.
"Permitted Holder" means:
(1) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇;
(2) any employee stock ownership plan or "group" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act) in which employees of
the Parent or its Subsidiaries beneficially own at least 25% of the
common stock of the Company or the Parent owned by such group;
(3) the Parent; and
(4) any Person that is controlled by one or more of the
Persons set forth in (1) through (3) above.
"Permitted Investments" means:
(1) any Investment in the Company or in a Wholly-Owned
Restricted Subsidiary of the Company or in any Guarantor;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Wholly-Owned Restricted
Subsidiary of the Company and, if required under Section 4.18 hereof, a
Guarantor;
13
(b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or a Restricted Subsidiary of
the Company that, if required under Section 4.18 hereof, is a
Guarantor; or
(c) at the time of such Investment, such Person becomes a
Guarantor;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof;
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(6) any Investments received in compromise of obligations of
such persons incurred in the ordinary course of trade creditors or
customers that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) reasonable and customary loans made to employees in
connection with their relocation;
(9) Investments made by the Company or any Restricted
Subsidiary of the Company in franchises in a business related to the
optical business of the Company as conducted on the date of this
Indenture; provided that, immediately after giving pro forma effect to
such Investment, the Company could incur $1.00 of additional
Indebtedness (other than Permitted Debt) under Section 4.09 hereof;
provided, however, that if the Company may not incur $1.00 of
additional Indebtedness, but otherwise satisfies the requirement of
this clause (9), the Company may make Investments in such franchises in
an amount not to exceed $7.5 million in any fiscal year, which unused
portion of any such annual amount, if any, may not be applied to any
Investment in a subsequent fiscal year;
(10) other 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 (10)
that are at any time outstanding not to exceed $15.0 million, without
giving effect to any reduction for any writedown or writeoff of such
Investment or reduction to the extent credit has already been given
under Section 4.07(a)(3)(c), (d) or (e) hereof;
(11) Investments in securities of trade creditors or customers
received pursuant to a plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers;
and
(12) extensions of trade credit in the ordinary course of
business.
"Permitted Liens" means:
(1) Liens of the Company and any Guarantor securing Senior
Debt that was permitted by the terms of this Indenture to be incurred;
14
(2) Liens in favor of the Company or any of its Restricted
Subsidiaries;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or acquired by or consolidated with the
Company or any Restricted Subsidiary of the Company; provided that such
Liens were in existence prior to the contemplation of such merger or
consolidation or acquisition and do not extend to any assets other than
those of the Person merged with or into or acquired by or consolidated
with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of
the property by the Company or any Restricted Subsidiary of the
Company; provided that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any assets other
than those of the Person merged into or consolidated with the Company
or the Restricted Subsidiary;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(4) hereof covering only the
assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision as
is required in conformity with GAAP has been made therefor;
(9) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
(10) Liens securing Hedging Obligations;
(11) other Liens securing obligations incurred in the ordinary
course of business, which obligations do not exceed $5.0 million in the
aggregate at any one time outstanding;
(12) judgment Liens not giving rise to an Event of Default;
(13) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customer duties in connection
with the importation of goods;
(14) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, governmental contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
15
(15) Liens imposed by law, such as carriers', landlords',
warehouseman's and mechanics' Liens, in each case, for sums not yet due
or being contested in good faith through diligent proceedings;
(16) Liens securing Indebtedness of a Restricted Subsidiary of
the Company owing solely to the Company or any Guarantor to the extent
such Indebtedness is permitted to be incurred in accordance with
Section 4.09 hereof;
(17) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations with respect
of bankers' acceptances issued or created for the account of such
Person to facilitate the purchase, shipment or storage of such
inventory or other goods;
(18) Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into by the
Company and its Restricted Subsidiaries in the ordinary course of
business;
(19) minor survey exceptions, minor 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, building or other restrictions or any similar
laws, ordinances, orders, rules or regulations as to the use of real
properties or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties that do not in the
aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such
Person;
(20) licenses, leases and subleases entered into in the
ordinary course of business and consistent with past practice; and
(21) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating
to such letters of credit and the products and proceeds thereof.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any Guarantor, or any Permitted Debt of any Restricted Subsidiary of
the Company that is not a Guarantor, issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any Guarantor, or any Permitted Debt of any such
Restricted Subsidiary (in each case, other than intercompany Indebtedness);
provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing
16
Indebtedness has a final maturity date later than the final maturity
date of, and is subordinated in right of payment to, the Notes on terms
at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company, the
Guarantor or by the Restricted Subsidiary that is not a Guarantor who
is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Productive Assets" means:
(1) long-term assets that are used or useful in a Permitted
Business or
(2) a majority of the Voting Stock of any Person engaged in a
Permitted Business that becomes a Restricted Subsidiary.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Equity Offering" means an offering by the Company or the
Parent of shares of its common stock (however designated and whether voting or
non-voting) and any and all rights, warrants on options to acquire such common
stock, whether registered or exempt from registration under the Securities Act;
provided, however, that, in connection with a Qualified Equity Offering of the
Parent, the Company will only be able to redeem Notes as set forth in Section
3.07(a) hereof to the extent the net proceeds of such Qualified Equity Offering
are contributed to the Company as common equity.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of May 22, 2002, between the Company and the other parties
named on the signature pages thereof, as such agreement may be amended, modified
or supplemented from time to time and, with respect to any Additional Notes, one
or more registration rights agreements among the Company, the Guarantors, if
any, and the other parties thereto, as such agreement(s) may be amended,
modified or supplemented from time to time, relating to rights given by the
Company to the purchasers of Additional Notes to register such Additional Notes
under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Responsible Officer," when used with respect to the Trustee, 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.
17
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means that certain Credit Agreement, dated as
of November 15, 1996, as amended, by and among ▇▇▇▇ Vision Corporation, Things
Remembered, Inc., ▇▇▇▇ Gift Centers, Inc., Pearle, Inc. and Pearle Service
Corporation, as borrowers, Canadian Imperial Bank of Commerce, as administrative
agent, and the several banks and other financial institutions party thereto,
providing for up to $75.0 million of revolving credit borrowings and other
extensions of credit, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, increased, renewed, refunded, replaced or
refinanced from time to time.
"Senior Debt" means:
(1) all Indebtedness of the Company or any Subsidiary
outstanding under the Senior Credit Facility and all Hedging
Obligations of the Company or any Subsidiary;
(2) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides
that it is subordinated to any Senior Debt or on a parity with or
subordinated in right of payment to the Notes or any Note Guarantee;
and
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt
will not include:
(1) any liability for federal, state, local or other taxes
owed or owing by the Company;
(2) any intercompany Indebtedness of the Company or any of its
Subsidiaries to the Company, any of its Subsidiaries or any of its
Affiliates (other than the Parent);
(3) any trade payables; or
18
(4) the portion of any Indebtedness (other than that under the
Senior Credit Facility described in clause (1) above) that is incurred
in violation of this Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned
or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership:
(a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or
one or more Subsidiaries of that Person (or any combination thereof).
"Tax Allocation Agreement" means the Tax Allocation Agreement, dated as
of August 23, 1985, as amended, between the Parent and its subsidiaries,
including the Company, as the same may be amended or extended from time to time;
provided that no such amendment may create greater additional liability of the
Company and its Subsidiaries than existing as of the date of this Indenture
under such agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Triggering Default Event" means a Default or Event of Default
described in Sections 6.01(1), (2), (3), (5), (6), (7), (8) or (9) hereof or any
breach or violation of Sections 4.01, 4.02, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11,
4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 hereof.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests
19
in the Global Note" attached thereto, and that is deposited with or on behalf of
and registered in the name of the Depositary, representing a series of Notes
that do not bear the Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that
is not a director or executive officer of the Company or any of its
Restricted Subsidiaries and has at least one executive officer that is
not a director or executive officer of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of Section 4.09. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09, calculated on a pro forma basis as
if such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence following
such designation. Upon any such designation as a Restricted Subsidiary, such
Subsidiary will become a Guarantor and execute a supplemental indenture if so
required under Section 4.18 hereof.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
20
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Wholly-Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
will at the time be owned by such Person or by one or more Wholly-Owned
Restricted Subsidiaries of such Person and one or more Wholly-Owned Restricted
Subsidiaries of such Person.
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"............................................................. 4.11
"Asset Sale Offer".................................................................. 3.09
"Authentication Order".............................................................. 2.02
"Authorized Person"................................................................. 10.03
"Change of Control Offer"........................................................... 4.14
"Change of Control Payment"......................................................... 4.14
"Change of Control Payment Date".................................................... 4.14
"Covenant Defeasance"............................................................... 8.03
"DTC"............................................................................... 2.03
"Event of Default".................................................................. 6.01
"Excess Proceeds"................................................................... 4.10
"incur"............................................................................. 4.09
"Initial Blockage Period"........................................................... 10.03
"Legal Defeasance".................................................................. 8.02
"Offer Amount"...................................................................... 3.09
"Offer Period"...................................................................... 3.09
"Paying Agent"...................................................................... 2.03
"Payment Blockage Period"........................................................... 10.03
"Permitted Debt".................................................................... 4.09
"Purchase Date"..................................................................... 3.09
"Registrar"......................................................................... 2.03
"Restricted Payments"............................................................... 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
21
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
and
(7) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company may use "CUSIP" numbers in issuing the Notes. Each Note will
be dated the date of its authentication. The Notes shall be issuable only in
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof except that Notes used to pay Liquidated Damages may be in
other denominations.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors (if any) and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
22
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) Global Notes. Notes issued in global form will be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note will represent such of the outstanding Notes as will
be specified therein and each shall provide that it represents the aggregate
principal amount of outstanding Notes from time to time endorsed thereon and
that the aggregate principal amount of outstanding Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearsteam.
Section 2.02 Execution and Authentication.
Two Officers must sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed
by an Officer (an "Authentication Order"), authenticate Notes for original
issue.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
All Notes issued under this Indenture shall be treated as a single
class for all purposes under this Indenture.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company
23
will notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The Company
or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary; or
(2) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee.
24
Upon the occurrence of either of the preceding events in (1) or (2)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Regulation S Global
Note may not be made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser). Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Registrar either:
(A) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or
exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding
the Participant account to be credited with such
increase; or
(B) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be
transferred or exchanged; and
25
(ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to
effect the transfer or exchange referred to in (1)
above. Upon consummation of an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(2) shall be deemed
to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture
and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to
Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2)
thereof.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal or via the Depositary's book-entry system that it
is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an
26
Unrestricted Global Note, a certificate from such
holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
27
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b)
thereof; or
28
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(2) hereof, the Trustee will cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company will execute and the Trustee
will authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(3) will be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest requests through instructions to the Registrar from
or through the Depositary and the Participant or Indirect Participant.
The Trustee will deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(3)
will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with
Rule 144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note and
increase or cause to be increased the aggregate principal
amount of the appropriate Restricted Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
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and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
31
(2) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
broker-dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(ii) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered into the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal
that (A) they are not Broker-Dealers, (B) they are not participating in
a distribution of the Exchange Notes and (z) they are not affiliates
(as defined in Rule 144) of the Company; and
32
(2) Unrestricted Definitive Notes in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4), (c)(2),
(c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06
(and all Notes issued in exchange therefor or substitution thereof)
will not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV)
33
THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF ▇▇▇▇ NATIONAL GROUP, INC.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE 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. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), 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 MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Company will execute and the Trustee will authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance
with Section 2.02 or at the Registrar's request.
(2) No service charge will be made to a Holder of a Global
Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).
(3) The Registrar will not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Company,
34
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon
such registration of transfer or exchange.
(5) The Company will not be required:
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to exchange any
Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. However, Notes held by the Company or a Subsidiary
of the Company shall not be deemed to be outstanding for purposes of Section
3.07(a) hereof. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note.
35
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser or a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay all of the principal, premium, if any, and interest and
Liquidated Damages, if any on the Notes payable on that date, then on and after
that date such Notes will cease to be outstanding and will cease to accrue
interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes will be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation. If the Company
or any Guarantor shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Notes unless and until the Notes are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest
36
proposed to be paid on each Note and the date of the proposed payment. The
Company will fix or cause to be fixed each such special record date and payment
date; provided that no such special record date may be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) will mail or
cause to be mailed to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities
exchange, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
37
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company will mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Articles 8 or 12 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or purchase price date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Liquidated
Damages, if any, on all Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent will promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or
38
purchase price of, and accrued interest and Liquidated Damages, if any, on, all
Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase, whether or
not such Notes are presented for payment. If a Note is redeemed or purchased on
or after an interest record date but on or prior to the related interest payment
date, then any accrued and unpaid interest shall be paid to the Person in whose
name such Note was registered at the close of business on such record date. If
any Note called for redemption or purchase is not so paid upon surrender for
redemption or purchase because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption or purchase date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to May 15, 2005, the Company may on any one or
more occasions redeem up to 40% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 108.875% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the redemption date, with the net cash proceeds of one or more Qualified
Equity Offering; provided that:
(1) at least 60% of the aggregate principal amount of Notes
issued under this Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and
its Subsidiaries); and
(2) the redemption occurs within 60 days of the date of the
closing of such Qualified Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Company's option prior to May 15, 2007.
(c) After May 15, 2007, the Company may redeem all or, from time to
time, a part of the Notes upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the applicable redemption date, if redeemed during the twelve-month
period beginning on May 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2007....................................... 104.438%
2008....................................... 102.958%
2009....................................... 101.479%
2010 and thereafter........................ 100.000%
39
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales and assets. The Asset Sale Offer will
remain open for a period of at least 20 Business Days following its commencement
and not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than three Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company will apply all Excess Proceeds (the "Offer Amount") to the purchase of
Notes and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for any
Notes so purchased will be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer will
cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(6) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the
40
Company, a Depositary, if appointed by the Company, or a Paying Agent
at the address specified in the notice at least three days before the
Purchase Date;
(7) that Holders will be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and other
pari passu Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company will select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal
amount of Notes and such other pari passu Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. An installment of principal, premium, if
any, and interest and Liquidated Damages, if any, will be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest and Liquidated Damages, if any,
then due. If the Company or a Subsidiary thereof acts as the Paying Agent, an
installment of principal, premium, if any, interest or Liquidated Damages, if
any, shall be considered paid on the date due if the separate trust fund for the
benefit of the Holders created in compliance with the
41
penultimate sentence of Section 2.04 hereof holds as of 10:00 a.m. Eastern Time
on the due date money in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, interest and Liquidated
Damages, if any, then due. The Company will pay all Liquidated Damages, if any,
in the same manner on the dates and in the amounts set forth in the Registration
Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will 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
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03 Reports.
(a) Whether or not required by rules and regulations of the SEC, as
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes, within the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms
10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with
respect to the annual information only, a report on the
annual financial statements by the Company's certified
independent accountants; and
(2) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file
such reports.
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by paragraph (a) above will include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial
42
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
(c) Following the consummation of the Exchange Offer contemplated by
the Registration Rights Agreement, whether or not required by the SEC, the
Company will file a copy of all of the information and reports referred to in
clauses (1) and (2) of paragraph (a) above with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Company will at
all times comply with TIA ss. 314(a).
(d) For so long as any Notes remain outstanding, the Company will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor, if any (to the extent that such
Guarantor is so required under the TIA), shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default has occurred, describing all
such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by
43
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each Guarantor, if any, 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,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors, if any (to the extent that it may lawfully
do so), hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, 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 has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or dividends or distributions
payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or any Note Guarantees,
except a payment of interest or principal at the Stated Maturity
thereof or any payment to the Company with respect to Indebtedness owed
solely to the Company; or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Triggering Default Event has occurred and is continuing
or would occur as a consequence of such Restricted Payment; and
(2) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a) hereof; and
44
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by Sections 4.07(b)(2), (3), (4), (6),
(7) and (8) hereof), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after August 2, 1997 to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (which amount as of February 2, 2002 was $24.4 million) (or, if
such Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus
(b) 100% of the aggregate net cash proceeds and the fair
market value (as determined in good faith by the Board of Directors of
the Company) of Productive Assets received by the Company since the
date of this Indenture as a contribution to its common equity capital
or from the issue or sale of Equity Interests of the Company (other
than Disqualified Stock) 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 a Subsidiary of the Company);
provided that if the fair market value of such Productive Assets
received by the Company is in excess of $20.0 million, then the Company
must deliver to the Trustee an opinion as to the value of such
consideration issued by an accounting, appraisal or investment banking
firm of national standing, plus
(c) to the extent that any Restricted Investment that was
made after the date of this Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (ii) the initial amount of such Restricted
Investment, plus
(d) 50% of the amount of any dividends paid in cash
received by the Company or a Restricted Subsidiary of the Company after
the date of this Indenture from an Unrestricted Subsidiary of the
Company, to the extent that the dividends were not otherwise included
in Consolidated Net Income of the Company for the period, plus
(e) to the extent that any Unrestricted Subsidiary of the
Company is redesignated as a Restricted Subsidiary after the date of
this Indenture, the lesser of (i) the fair market value of the
Company's Investment in that Subsidiary as of the date of the
redesignation and (ii) the initial amount of such Restricted
Investment.
(b) The provisions of Section 4.07(a) will not prohibit:
(1) so long as no Default has occurred and is continuing or
would be caused thereby, the payment of any dividend within 60 days
after the date of declaration of the dividend, if at the date of
declaration the dividend payment would have complied with the
provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of the Company or
any Guarantor or of any Equity Interests of the Company in exchange
for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, Equity
Interests of the Company (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized
45
for any such redemption, repurchase, retirement, defeasance or other
acquisition will be excluded from clause (3) (b) of the preceding
paragraph;
(3) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any
Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its Equity Interests on a pro rata basis;
(5) so long as no Default has occurred and is continuing or
would be caused thereby, the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the
Company or the Parent or any current or former Restricted Subsidiary of
the Company held by any current or former employee, officer, director
or consultant of the Company (or any of its Restricted Subsidiaries)
under any management equity subscription agreement, stock option
agreement or other employee or management plan or agreement or
employment benefit plan; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall
not exceed $4.0 million;
(6) the payment of dividends to the Parent solely for the
purpose of enabling Parent to pay the ordinary operating and
administrative expenses of the Parent (including all reasonable
professional fees and expenses) in connection with complying with its
reporting obligations and obligations to prepare and distribute
business records in the ordinary course of business and the Parent's
costs and expenses relating to taxes (which taxes are attributable to
the operations of the Company and its Subsidiaries or to the Parent's
ownership thereof); provided, however, that the aggregate dividend
payment paid in each fiscal year pursuant to this clause (6) will at no
time exceed 0.25% of the Company's "Net Revenue," as shown on the
Company's audited consolidated statements of income for such fiscal
year;
(7) payments to the Parent for income taxes pursuant to the
Tax Allocation Agreement;
(8) the payment of dividends to the Parent solely for the
purpose of enabling the Parent to pay taxes other than income taxes, to
the extent actually owed and attributable to the operations of the
Company and its Subsidiaries or to the Parent's ownership thereof;
(9) repurchases of Capital Stock deemed to occur upon the
exercise of stock options if such Capital Stock represents a portion of
the exercise price thereof; and
(10) so long as no Default has occurred and is continuing or
would be caused thereby, other Restricted Payments not to exceed $25.0
million in the aggregate.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.07 will be determined by the Board of Directors. 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. Not later than the date of making any
Restricted Payment, the Company will deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the
46
calculations required by this Section 4.07 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or
measured by, its profits, or pay any indebtedness owed to the
Company or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) will not apply to encumbrances
or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and the Senior
Credit Facility as in effect on the date of this Indenture and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those
agreements; provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or
refinancings are no more restrictive, taken as a whole, with respect to
such dividend and other payment restrictions than those contained in
those agreements on the date of this Indenture;
(2) this Indenture, the Notes and any Note Guarantee;
(3) applicable law or regulation;
(4) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person,
so acquired; provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be
incurred;
(5) customary non-assignment provisions in leases entered into
in the ordinary course of business;
(6) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on that property
of the nature described in clause (3) of Section 4.06(a);
(7) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
47
(8) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;
(9) Liens securing Indebtedness otherwise permitted to be
incurred under Section 4.12 hereof that limit the right of the debtor
to dispose of the assets subject to such Liens;
(10) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, assets
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
(11) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
(12) Indebtedness (other than Permitted Refinancing
Indebtedness) incurred after the date of this Indenture in accordance
with the terms of the Indenture; provided that the restrictions
contained in the agreements governing such Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements
governing Indebtedness outstanding on the date of the Indenture; and
(13) 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 (1) through (12)
above; provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings are no more restrictive, taken as a whole, with respect to
the dividend and other payment restrictions than those contained in the
dividend or other payment restrictions before the amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock other
than to the Company; provided, however, that, so long as no Triggering Default
Event has occurred and is continuing, the Company and any Guarantor may incur
Indebtedness (including Acquired Debt) or issue Disqualified Stock if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least 2.0 to
1, determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
preferred stock or Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any of its Restricted
Subsidiaries of Indebtedness and letters of credit under the Senior
Credit Facility in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit being deemed
to
48
have a principal amount equal to the maximum potential liability of the
Company and its Restricted Subsidiaries thereunder) not to exceed the
greater of (a) $100.0 million less any permanent commitment reductions
since the date of this Indenture associated with the application of Net
Proceeds of Asset Sales or (b) the sum of (x) 80% of consolidated
accounts receivable of the Company and its Restricted Subsidiaries and
(y) 50% of consolidated inventory of the Company and its Restricted
Subsidiaries;
(2) the incurrence by the Company and its Restricted
Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Company and any Guarantors of
Indebtedness represented by the Notes to be issued on the date of this
Indenture and the Note Guarantees, if any, and the Exchange Notes to be
issued pursuant to the Registration Rights Agreement and the Note
Guarantees, if any, thereon;
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of the Company or such Restricted
Subsidiary, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (4), not to exceed $15.0
million at any time outstanding;
(5) the incurrence by the Company or any of the Guarantors of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by this Indenture to
be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5),
(10), (11) or (12) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that (i) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary of the Company and (ii) any sale or other
transfer of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary of the Company; will be deemed, in
each case, to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose
of fixing or hedging (a) interest rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or (b) risk associated with fluctuations in foreign
currency exchange rates;
(8) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09;
(9) 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
49
issuance of Disqualified Stock for purposes of this Section 4.09;
provided, in each such case, that the amount thereof is included in
Fixed Charges of the Company as accrued;
(10) Indebtedness of the Company or its Restricted
Subsidiaries that do not in the aggregate exceed $10.0 million in
principal amount at any time outstanding with respect to guarantees of
obligations of franchisees in a business related to the optical
business of the Company or any Restricted Subsidiary of the Company as
conducted on the date of this Indenture;
(11) the incurrence by the Company or any of the Guarantors of
additional Indebtedness or the issuance of Disqualified Stock in an
aggregate principal amount (or accreted value, as applicable) at any
time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (11), not to exceed $50.0 million;
(12) the incurrence of Indebtedness owing to any insurance
company in connection with the financing of insurance premiums
permitted by the insurance company in the ordinary course of business;
and
(13) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case, incurred or assumed in connection with the acquisition or
disposition of any business, assets or a Restricted Subsidiary of the
Company, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of that business, assets or Restricted
Subsidiary of the Company for the purpose of financing that
acquisition; provided that the maximum assumable liability in respect
of all of this Indebtedness shall at no time exceed the gross proceeds
actually received by the Company and its Restricted Subsidiaries in
connection with the disposition.
Notwithstanding any other provision of this Section 4.09, the maximum
amount of Indebtedness that the Company or any Restricted Subsidiary of the
Company may incur pursuant to this Section 4.09 shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rates of currencies.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (13) above,
or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company
will be permitted to classify such item of Indebtedness on the date of its
incurrence, or later reclassify all or a portion of such item of Indebtedness,
in any manner that complies with this Section 4.09. Indebtedness under the
Senior Credit Facility outstanding on the date on which Notes are first issued
and authenticated under this Indenture will be deemed to have been incurred on
such date in reliance on the exception provided by clause (1) of the definition
of Permitted Debt.
Section 4.10 Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or the Restricted Subsidiary receives
consideration at the time of the Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
50
(2) the fair market value is determined by the Company's Board
of Directors; and
(3) except in the case of the sale, transfer or other
disposition of the Company owned stores to franchisees in a business
related to the optical business that results in the conversion of such
stores to franchised stores, at least 75% of the consideration received
in the Asset Sale by the Company or such Restricted Subsidiary is in
the form of cash, Cash Equivalents or Productive Assets. For purposes
of this provision, each of the following will be deemed to be cash:
(a) any liabilities, as shown on the Company's most recent
consolidated balance sheet, of the Company or any Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any Note Guarantee) that are assumed
by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from
further liability; and
(b) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such transferee that
are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Restricted Subsidiary into cash, to
the extent of the cash received in that conversion.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply those Net Proceeds at its option:
(1) to repay Senior Debt or Indebtedness of the Company or a
Restricted Subsidiary of the Company and to correspondingly permanently
reduce commitments with respect thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure relating to a Permitted
Business; or
(4) to acquire other long-term assets that are used or useful
in a Permitted Business.
Pending the final application of any Net Proceeds, the Company may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the second preceding paragraph will constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company
will (a) first, make an Excess Proceeds Offer (as defined in the 9 7/8% Notes
Indenture) with respect to any outstanding 9 7/8% Notes, (b) second, make an
Excess Proceeds Offer (as defined in the 8 5/8% Notes Indenture) with respect to
any outstanding 8 5/8% Notes, and (c) third, make an Asset Sale Offer to all
Holders of Notes and all holders of other Indebtedness that is pari passu with
the Notes containing provisions similar to those set forth in this Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets in accordance with Section 3.09 hereof to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to
100% of principal amount plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of purchase, and will be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Company
may use those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee will select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal amount
of Notes
51
and such other pari passu Indebtedness tendered. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Section 3.09 hereof or this Section 4.10, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the provisions of Section 3.09 hereof or this
Section 4.10 by virtue of such conflict.
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with this Section 4.11 and that such Affiliate
Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and
(b) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in
excess of $10.0 million, an opinion as to the fairness to the Company
of such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national
standing.
(b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph of
this Section 4.11.
(1) any employment agreement or other compensation-related
transaction, approved by an independent committee of the Board of
Directors of the Company, entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business of the
Company or such Restricted Subsidiary;
(2) transactions between or among the Company and/or its
Wholly-Owned Restricted Subsidiaries;
(3) transactions with a Person that is an Affiliate of the
Company solely because the Company owns an Equity Interest in, or
controls, such Person;
52
(4) payment of reasonable directors fees to Persons who are
not otherwise Affiliates of the Company;
(5) Restricted Payments that are permitted by Section 4.07
hereof;
(6) the Tax Allocation Agreement;
(7) Indebtedness incurred by the Company to the Parent;
provided such Indebtedness has terms no more onerous than those
contained in the Senior Credit Facility;
(8) providing indemnity to current or former officers,
directors, employees or consultants of the Company or any of its
Subsidiaries as determined in good faith by the Board of Directors of
the Company.
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness that is pari passu or
subordinated in right of payment to the Notes upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under this
Indenture and the Notes are secured on an equal and ratable basis with the
obligations so secured until such time as such obligations are no longer secured
by a Lien, in each case, except Permitted Liens.
Section 4.13 Corporate Existence.
Subject to Article 5 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any
of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.14 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000) of each Holder's Notes
at a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages on the Notes repurchased, if
any, to the date of purchase (the "Change of Control Payment"). Within 15 days
following any Change of Control, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.14 and that all Notes tendered will be
accepted for payment;
53
(2) the purchase price and the purchase date, which shall be no
earlier than 25 days and no later than 55 days from the
date such notice is mailed (the "Change of Control Payment
Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer will cease to
accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant
to a Change of Control Offer will be required to surrender
the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to
the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day
preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing
his election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09 or 4.14 of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under Section 3.09 or this Section 4.14 by virtue
of such conflict.
(b) On the Change of Control Payment Date, the Company will, to the
extent lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
principal amount of
54
$1,000 or an integral multiple thereof. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
Prior to complying with any of the provisions of this Section 4.14, but
in any event within 90 days following a Change of Control, the Company will
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this Section 4.14.
(c) Notwithstanding anything to the contrary in this Section 4.14, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.14 and Section 3.09 hereof and purchases all Notes validly tendered
and not withdrawn under the Change of Control Offer.
Section 4.15 No Senior Subordinated Debt.
The Company will not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of the Company and senior in any respect in
right of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to the Senior Debt of such Guarantor and senior in
any respect in right of payment to such Guarantor's Note Guarantee.
Section 4.16 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(1) the Company or that Restricted Subsidiary, as applicable,
could have (a) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction under
the Fixed Charge Coverage Ratio test in Section 4.09(a) hereof and (b)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12
hereof;
(2) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value, as determined
in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee, of the property that is the
subject of that sale and leaseback transaction; and
(3) the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, Section 4.10 hereof.
Section 4.17 Limitation on Capital Stock of Restricted Subsidiaries.
The Company will not:
(1) sell, pledge, hypothecate or otherwise convey or dispose
of any Capital Stock of a Restricted Subsidiary (other than under the
Senior Credit Facility or a successor facility or under the terms of
any Designated Senior Debt) other than to the Company or a Wholly-Owned
Restricted Subsidiary of the Company; or
55
(2) permit any of its Restricted Subsidiaries to issue any
Capital Stock, other than to the Company or a Wholly-Owned Restricted
Subsidiary of the Company.
The foregoing restrictions shall not apply to an Asset Sale (other than
the sale of Preferred Stock of a Restricted Subsidiary of the Company) made in
compliance with Section 4.10 hereof.
Section 4.18 Future Note Guarantees.
If any Restricted Subsidiary of the Company guarantees any Indebtedness
of another Person (other than under the Senior Credit Facility or any Permitted
Guarantee), pledges any of its assets to secure any Indebtedness of another
Person or otherwise provides direct credit support for any Indebtedness of
another Person, in each case, then such Restricted Subsidiary will become a
Guarantor of the Notes and execute a Supplemental Indenture and deliver an
Opinion of Counsel satisfactory to the Trustee within 10 Business Days of the
date on which such Restricted Subsidiary so guarantees, pledges its assets or
otherwise provides direct credit support. In addition, the Company may elect
that any Subsidiary of the Company become a Guarantor. Each such Note Guarantee
will be subordinated to the prior payment in full of all Senior Debt of such
Guarantor.
The Note Guarantee of a Guarantor will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or
after giving effect to such transaction) a Subsidiary of the Company,
if the sale or other disposition complies with the provisions of
Sections 3.09 and 4.10 of this Indenture; or
(2) in connection with any sale of all of the Capital Stock of
a Guarantor to a Person that is not (either before or after giving
effect to such transaction) a Subsidiary of the Company; provided that
such sale shall be subject to the provisions of Sections 3.09 and 4.10
of this Indenture.
Notwithstanding the preceding paragraph, any such Guarantee by a
Subsidiary of the Notes must provide by its terms that it will be automatically
and unconditionally released and discharged upon any sale, exchange or transfer,
to any Person not an Affiliate of the Company, of all of the Company's stock in,
or all or substantially all the assets of, such Subsidiary, which sale, exchange
or transfer is made in compliance with the applicable provisions of this
Indenture. The form of such Note Guarantee is attached as Exhibit E hereto.
Section 4.19 Limitation on Designation of Restricted and Unrestricted
Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary properly
designated will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for (1) Restricted Payments
under Section 4.07(a) hereof or (2) reduce the amount available for future
investments under one or more clauses of the definition of Permitted
Investments, as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would
not cause a Default. Upon any such redesignation or other designation as a
56
Restricted Subsidiary, such Subsidiary will become a Guarantor and execute a
supplemental indenture if so required under Section 4.18.
Section 4.20 Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation), or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:
(1) either:
(a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which
such sale, assignment, transfer, conveyance or other disposition
has been made is a corporation organized or existing under the
laws of the United States, any state of the United States or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made
assumes all the obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default or Event of
Default exists; and
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition has been made
will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period,
(a) have a Fixed Charge Coverage Ratio equal to or greater
than the Fixed Charge Coverage Ratio of the Company immediately before
the transaction or
(b) be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09(a) hereof.
57
In addition, the Company will not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Wholly-Owned Restricted Subsidiaries.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets in a transaction that is subject to, and that complies with
the provisions of, Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes whether or not prohibited
by the subordination provisions of this Indenture;
(2) default in payment when due of the principal of, or premium,
if any, on the Notes, whether or not prohibited by the subordination
provisions of this Indenture;
(3) failure by the Company or any of its Subsidiaries to comply
with Section 4.14 or 5.01 hereof;
(4) failure by the Company or any of its Subsidiaries for 60 days
after written notice from the Trustee or the Holders of at least 25% in
principal amount of Notes then outstanding to observe, perform or comply
with any of the other covenant, representation, warranty or other
agreement in this Indenture or the Notes;
(5) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Subsidiaries) whether such Indebtedness or guarantee now exists,
or is created after the date of this Indenture, if that default (a) is
caused by a failure to pay at final maturity (within the grace period
provided in such Indebtedness) principal, interest or premium in an
aggregate amount of $5.0 million or more with respect to such
Indebtedness or (b) results in the acceleration of any such Indebtedness
aggregating $5.0 million or more, which default or acceleration shall not
be cured, waived or postponed pursuant to an agreement with the holders
of such
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Indebtedness within 60 days after written notice, or such acceleration
shall not be rescinded or annulled within 20 days after written notice;
(6) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against the
Company or any of its Subsidiaries which judgment or judgments are not
paid, discharged or stayed for a period of 60 days; provided that the
aggregate of all such undischarged judgments exceeds $10.0 million;
(7) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it
in an involuntary case,
(c) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due; or
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary case;
(b) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(c) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
(9) except as permitted by this Indenture, any Note Guarantee is
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Note Guarantee.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (7) or (8) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of
59
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately; provided that so long as any Indebtedness permitted
to be incurred under this Indenture as part of the Senior Credit Facility is
outstanding, no acceleration shall be effective until the earlier of (1) five
Business Days after the giving of written notice to the Company and the
administrative agent under the Senior Credit Facility of the acceleration or (2)
the acceleration of any Indebtedness under the Senior Credit Facility.
Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (7) or (8) of Section 6.01 hereof occurs with respect to the Company, any
Restricted Subsidiary that is a Significant Subsidiary or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
all outstanding Notes shall be due and payable immediately without further
action or notice. The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under this Indenture except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages on, or the principal
of, the Notes.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07 hereof, then an equivalent premium will also become and be immediately due
and payable, to the extent permitted by law, upon the acceleration of the Notes.
If an Event of Default occurs prior to May 15, 2007, by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
May 15, 2007, then, upon acceleration of the Notes, an additional premium will
also become immediately due and payable in an amount, for each of the years
beginning on May 15 of the years set forth below, as set forth below (expressed
as a percentage of the principal amount of the Notes on the date of payment that
would otherwise be due but for the provisions of this sentence):
YEAR PERCENTAGE
---- ----------
2002.................................... 8.875%
2003.................................... 7.988%
2004.................................... 7.100%
2005.................................... 6.213%
2006.................................... 5.325%
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
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Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of Notes may not enforce the Notes or this Indenture except as
provided in this Indenture. Holders of a majority in principal amount of the
then outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to
pursue the remedy;
(3) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
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If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10 upon five Business Days prior
notice to the Company.
Section 6.11 Undertaking for Costs.
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In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in
this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the
Trustee will examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
grossly negligent action, its own grossly 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 will not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any financial liability in the performance of any
of its rights or powers if it has reasonable grounds to believe that repayment
of such funds or adequate indemnity satisfactory to it against such risk or
liability is not reasonably assured to it. The Trustee will be under no
obligation to exercise any of its
63
rights and powers under this Indenture at the request of any Holders, unless
such Holder has offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent (other than an
agent that is an employee of the Trustee) appointed with due care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in
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the Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal or interest or
Liquidated Damages, if any, on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA ss. 313(b)(2). The Trustee will also transmit by mail all
reports as required by TIA ss. 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA ss. 313(d). The Company will promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and out-of-pocket
expenses incurred or made by it in addition to the compensation for its services
except such disbursements, expenses and advances as may be attributable to the
Trustee's gross negligence, bad faith or willful misconduct. Such expenses will
include the reasonable compensation, disbursements and out-of-pocket expenses of
the Trustee's agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its gross negligence or
bad faith. The Trustee will notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company will not
relieve the Company or any of the Guarantors of their obligations hereunder. The
Company or such Guarantor will defend the claim and the Trustee will cooperate
in the defense. The Trustee may have separate counsel and the Company will pay
the reasonable fees and expenses of such counsel. Neither the Company nor any
Guarantor need pay for any settlement made without its consent, which consent
will not be unreasonably withheld.
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(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section 7.07,
the Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(7) or (8) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this
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Indenture. The successor Trustee will mail a notice of its succession to
Holders. The retiring Trustee will promptly transfer all property held by it as
Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and the Guarantors will be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes (including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute
67
proper instruments acknowledging the same), except for the following provisions
which will survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, or interest or premium and
Liquidated Damages, if any, on such Notes when such payments
are due from the trust referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors'
obligations in connection therewith; and
(4) this Article 8.
Upon Legal Defeasance the Trustee shall promptly execute and deliver to
the Company any documents reasonably requested by the Company to evidence or
effect the foregoing. Subject to Compliance with this Article 8, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 3.09,
4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18,
4.19 and 4.20 hereof and clause (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes will
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and Note
Guarantees, the Company and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Note Guarantees will be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(5)
hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
(1) the Company shall have irrevocably deposited or caused to
be deposited with the Trustee, in trust, for the benefit of the Holders
of the Notes, cash in United States dollars, non-
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callable Government Securities, or a combination of cash in United
States dollars and non-callable Government Securities, in amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants or of a nationally recognized investment
bank, to pay the principal of, or interest and premium and Liquidated
Damages, if any, on the outstanding Notes on the stated maturity or on
the applicable redemption date, as the case may be, and the Company
must specify whether the Notes are being defeased to maturity or to a
particular redemption date. The Trustee shall promptly advise the
Paying Agent in writing of any deposit pursuant to this Section 8.04;
(2) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
confirming that
(A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or
(B) since the date of this Indenture, there has been
a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel will confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) or, insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day
after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(6) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Notes over the
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(7) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
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Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter, as an unsecured general creditor, be
permitted to look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, will thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in The New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which will not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and each Guarantor's obligations under this
Indenture and the Notes and the Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
Liquidated Damages, if any, or interest on any Note following the reinstatement
of its obligations, the Company will be subrogated to the rights of the Holders
of such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees or the Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions
of Article 2 hereof (including the related definitions)
in a manner that does not materially adversely affect
any Holder;
(3) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a
successor to the Company pursuant to Article 5 hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights hereunder of
any such Holder;
(5) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture
under the TIA;
(6) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this
Indenture as of the date hereof; or
(7) to allow any Guarantor to execute a supplemental
indenture and/or a Note Guarantee with respect to the
Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Sections 3.09, 4.10 and 4.14 hereof), the Note Guarantees and the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes
(including, without limitation, Additional Notes, if any) then outstanding
voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium or Liquidated Damages, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Note Guarantees or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class (including
consents obtained in connection with a
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tender offer or exchange offer for, or purchase of, the Notes). Without the
consent of at least 75% in aggregate principal amount of the Notes then
outstanding, no waiver or amendment to this Indenture may make any change in the
provisions of Article 10 hereof that adversely affects the rights of any Holder
of Notes. Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes (other than the 30-day prior notice requirement described in
Section 3.07(c) hereto and as provided above with respect to Sections
3.09, 4.10 and 4.14 hereof);
(3) reduce the rate of or change the time for payment of interest
including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the then outstanding
Notes and a waiver of the payment default that resulted from such
acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if
any, on the Notes;
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(7) waive a redemption payment with respect to any Note (other than
a payment required by Sections 3.09, 4.10 or 4.14 hereof);
(8) release any Guarantor from any of its obligations under its Note
Guarantee or this Indenture, except in accordance with the terms of this
Indenture; or
(9) make any change in the foregoing amendment and waiver
provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in clauses (1) through (9)
of the last paragraph of Section 9.02, in which case, the amendment, supplement
or waiver shall bind only each Holder of Notes who has consented to it and every
subsequent Holder of Notes or portion of Notes that evidences the same
Indebtedness as the consenting Holder's Notes.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01 hereof) will be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental Indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01 Notes Subordinate to Senior Debt.
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The Company covenants and agrees, and each Holder of Notes, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 10, the Indebtedness
represented by the Notes and the payment of the principal of, premium, if any,
and interest on, and Liquidated Damages with respect to, the Notes are hereby
expressly made subordinate and subject in right of payment as provided in this
Article 10 to the prior payment in full in cash of all Senior Debt.
This Article 10 shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of or continue to hold Senior
Debt; and such provisions are made for the benefit of the holders of Senior
Debt; and such holders are made obligees hereunder and they or each of them may
enforce such provisions.
The Notes are hereby expressly made subordinate in right of payment to
Senior Indebtedness (as defined in the 9 7/8% Notes Indenture and the 8 5/8%
Notes Indenture) at least to the same extent as the 9 7/8% Notes and the 8 5/8%
Notes are subordinate to Senior Indebtedness.
Section 10.02 Payment Over of Proceeds upon Dissolution, etc.
In the event of:
(1) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, whether voluntary or involuntary,
(2) any liquidation, dissolution or other winding-up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or
(3) any general assignment for the benefit of creditors or any
other marshalling of assets or liabilities of the Company,
then and in any such event:
(a) the holders of Senior Debt shall be entitled to
receive payment in full in cash of all amounts due on or in respect of
all Senior Debt, or provision shall be made for such payment, before
the Holders of the Notes are entitled to receive any payment or
distribution of any kind or character on account of principal of,
premium, if any, or interest on, or Liquidated Damages with respect to,
the Notes; and
(b) any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, by
set-off or otherwise, to which the Holders or the Trustee would be
entitled but for the provisions of this Article 10 shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior
Debt or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Debt held
or represented by each, to the extent necessary to make payment in full
in cash of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution, or provision therefor, to the
holders of such Senior Debt; and
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(c) in the event that, notwithstanding the foregoing
provisions of this Section 10.02, the Trustee or the Holder of any Note
shall have received any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or
securities, including, without limitation, by way of set-off or
otherwise, in respect of principal of, premium, if any, or interest on,
or Liquidated Damages with respect to, the Notes before all Senior Debt
is paid in full or payment thereof provided for, then and in such event
such payment or distribution shall be paid over or delivered forthwith
to the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in
full in cash after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of Senior
Debt.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Article 10 if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in such Article 5 hereof.
Section 10.03 Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 10.02 hereof shall be applicable, after the
occurrence of a Payment Default no payment or distribution of any assets or
securities of the Company or any Subsidiary of any kind or character (including,
without limitation, cash, property and any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness of the
Company being subordinated to the payment of the Notes by the Company) may be
made by or on behalf of the Company or any Subsidiary, including, without
limitation, by way of set-off or otherwise, for or on account of principal of,
premium, if any, or interest or Liquidated Damages on the Notes, or for or on
account of the purchase, redemption or other acquisition of the Notes, and
neither the Trustee nor any holder or owner of any Notes shall take or receive
from the Company or any Subsidiary, directly or indirectly in any manner,
payment in respect of all or any portion of Notes following the occurrence of a
Payment Default, and in any such event, such prohibition shall continue until
such Payment Default is cured, waived in writing or ceases to exist. At such
time as the prohibition set forth in the preceding sentence shall no longer be
in effect, subject to the provisions of the following paragraph (b), the Company
shall resume making any and all required payments in respect of the Notes,
including any missed payments.
(b) Unless Section 10.02 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Debt, no
payment or distribution of any assets of the Company of any kind or character
shall be made by the Company, including, without limitation, by way of set-off
or otherwise, on account of any principal of, premium, if any, or interest on,
or Liquidated Damages with respect to, the Notes or on account of the purchase,
redemption, defeasance or other acquisition of Notes and neither the Trustee nor
any holder or owner of Notes shall take or receive from the Company or any
Subsidiary, directly or indirectly, in any manner, payment in respect of all or
any portion of the Notes for a period ("Payment Blockage Period") commencing on
the date of receipt by the Trustee of written notice from an authorized Person
on behalf of the holders of Designated Senior Debt (the "Authorized Person") of
such Non-Payment Event of Default unless and until (subject to any blockage of
payments that may then be in effect under the preceding paragraph (a)) the
earliest to occur of the following events: (w) more than 179 days shall have
elapsed since the date of receipt of such written notice by the Trustee, (x)
such
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Non-Payment Event of Default shall have been cured or waived in writing or shall
have ceased to exist, (y) such Designated Senior Debt shall have been discharged
or paid in full in cash or (z) such Payment Blockage Period shall have been
terminated by written notice to the Company or the Trustee from such Authorized
Person initiating such Payment Blockage Period, after which, in the case of
clause (w), (x), (y) or (z), the Company shall resume making any and all
required payments in respect of the Notes, including any missed payments.
Notwithstanding any other provisions of this Indenture, no Non-Payment Event of
Default with respect to Designated Senior Debt which existed or was continuing
on the date of the commencement of any Payment Blockage Period initiated by such
Authorized Person shall be, or be made, the basis for the commencement of a
second Payment Blockage Period initiated by such Authorized Person unless such
event of default shall have been cured or waived for a period of not less than
90 consecutive days. In no event shall a Payment Blockage Period extend beyond
179 days from the date of the receipt by the Trustee of the notice referred to
in this Section 10.03(b) (the "Initial Blockage Period"). Any number of
additional Payment Blockage Periods may be commenced during the Initial Blockage
Period; provided, however, that no such additional Payment Blockage Period shall
extend beyond the Initial Blockage Period. After the expiration of the Initial
Blockage Period, no Payment Blockage Period may be commenced under this Section
10.03(b) until at least 180 consecutive days have elapsed from the last day of
the Initial Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or
the Holder of any Note shall have received any payment prohibited by the
foregoing provisions of this Section 10.03, then and in such event such payment
shall be paid over and delivered forthwith to the Authorized Person initiating
the Payment Blockage Period, in trust for distribution to the holders of Senior
Debt or, if no amounts are then due in respect of Senior Debt, promptly returned
to the Company, or otherwise as a court of competent jurisdiction shall direct.
Section 10.04 Trustee's Relation to Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and the Trustee shall not be
liable to any holder of Senior Debt if it shall mistakenly pay over or deliver
to Holders, the Company or any other Person moneys or assets to which any holder
of Senior Debt shall be entitled by virtue of this Article 10 or otherwise.
Section 10.05 Subrogation to Rights of Holders of Senior Debt.
Upon the payment in full of all Senior Debt, the Holders of the Notes
shall be subrogated to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of, premium, if any and interest on, or
Liquidated Damages with respect to, the Notes shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Debt of any cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the provisions of this Article
10, and no payments over pursuant to the provisions of this Article 10 to the
holders of Senior Debt by Holders of the Notes or the Trustee, shall, as among
the Company, its creditors other than holders of Senior Debt and the Holders of
the Notes, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 10 shall have been
applied, pursuant to the provisions of this Article 10, to the payment of all
amounts payable under the Senior Debt of the Company, then and in such case the
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Holders shall be entitled to receive from the holders of such Senior Debt at the
time outstanding any payments or distributions received by such holders of such
Senior Debt in excess of the amount sufficient to pay all amounts payable under
or in respect of such Senior Debt in full in cash.
Section 10.06 Provisions Solely to Define Relative Rights.
The provisions of this Article 10 are and are intended solely for the
purpose of defining the relative rights of the Holders of the Notes on the one
hand and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is intended to or shall:
(a) impair, as among the Company, its creditors other than holders of Senior
Debt and the Holders of the Notes, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders of the Notes the principal of,
premium, if any, and interest on, or Liquidated Damages with respect to, the
Notes as and when the same shall become due and payable in accordance with their
terms; or
(b) affect the relative rights against the Company of the Holders of
the Notes and creditors of the Company other than the holders of Senior Debt; or
(c) prevent the Trustee or the Holder of any Note from exercising all
remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under this Article
10 of the holders of Senior Debt (1) in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of the Company referred to in Section
10.02 hereof, to receive, pursuant to and in accordance with such Section, cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder, or (2) under the conditions specified in Section 10.03, to prevent any
payment prohibited by such Section or enforce their rights pursuant to Section
10.03(c) hereof.
The failure to make a payment on account of principal of, premium, if
any, or interest on, or Liquidated Damages with respect to, the Notes by reason
of any provision of this Article 10 shall not be construed as preventing the
occurrence of a Default or an Event of Default hereunder.
Section 10.07 Trustee to Effectuate Subordination.
Each Holder of a Note by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of the
Company whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of the Company owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved. If the Trustee does
not file such a claim prior to 30 days before the expiration of the time to file
such a claim, the holders of Senior Debt, or any Authorized Person, may file
such a claim on behalf of Holders of the Notes.
Section 10.08 No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance
77
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of subsection (a) of this Section
10.08, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Notes,
without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article 10 or the
obligations hereunder of the Holders of the Notes to the holders of Senior Debt,
do any one or more of the following:
(1) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is
outstanding;
(2) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt;
(3) release any Person liable in any manner for the collection
or payment of Senior Debt; and
(4) exercise or refrain from exercising any rights against the
Company and any other Person; provided, however, that in no event shall
any such actions limit the right of the Holders of the Notes to take
any action to accelerate the maturity of the Notes pursuant to Article
6 hereof or to pursue any rights or remedies hereunder or under
applicable laws if the taking of such action does not otherwise violate
the terms of this Indenture.
Section 10.09 Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee at its Corporate Trust Office in respect of the Notes.
Notwithstanding the provisions of this Article 10 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Notes, unless and until the Trustee shall have received written
notice thereof from the Company or a holder of Senior Debt or from any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of this Section 10.09, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 10.09 at least five Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose under this Indenture
(including, without limitation, the payment of the principal of, premium, if
any, or interest on, or Liquidated Damages with respect to, any Note), then,
anything herein contained to the contrary notwithstanding but without limiting
the rights and remedies of the holders of Senior Debt or any trustee, fiduciary
or agent therefor, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within five Business Days prior to such date; nor shall the
Trustee be charged with knowledge of the curing of any such default or the
elimination of the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such effect.
(b) Subject to the provisions of Section 7.01 hereof, the Trustee shall
be entitled to rely on the delivery to it of a written notice to the Trustee and
the Company by a Person representing itself to be a holder of Senior Debt (or a
trustee, fiduciary or agent therefor) to establish that such notice has been
given by a holder of Senior Debt (or a trustee, fiduciary or agent therefor);
provided, however, that failure
78
to give such notice to the Company shall not affect in any way the ability of
the Trustee to rely on such notice. In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article 10, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 10.10 Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee, subject to the provisions of Section 7.01
hereof, and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10; provided that the foregoing shall apply
only if such court has been fully apprised of the provisions of this Article 10.
Section 10.11 Rights of Trustee as a Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 10 with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article 10 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07 hereof.
Section 10.12 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 10 in addition to or in place of the Trustee.
Section 10.13 No Suspension of Remedies.
Nothing contained in this Article 10 shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article 10 of
the holders, from time to time, of Senior Debt.
Section 10.14 Amendments
Any amendment to, or waiver of, the provisions of this Article 10 that
adversely affects the rights of the Holders of the Notes will require the
consent of the Holders of at least 75% in aggregate principal amount of Notes
then outstanding.
79
ARTICLE 11.
NOTE GUARANTEES
Section 11.01 Guarantee.
(a) Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium and Liquidated Damages, if any, and interest
on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and
all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that same will be promptly paid in full
when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will have the right to seek
80
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
Section 11.02 Subordination of Note Guarantee.
The Obligations of each Guarantor under its Note Guarantee pursuant to
this Article 11 will be junior and subordinated to the Senior Debt of such
Guarantor on the same basis as the Notes are junior and subordinated to Senior
Debt of the Company. For the purposes of the foregoing sentence, the Trustee and
the Holders will have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.
Section 11.03 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.
Section 11.04 Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit E hereto will be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that any Restricted Subsidiary of the Company is required
by Section 4.18 hereof to become a Guarantor hereunder, or that the Company
elects that any of its Subsidiaries becomes a Guarantor hereunder, the Company
will cause such Subsidiary to comply with the provisions of Section 4.18 hereof
and this Article 11 to the extent applicable.
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms.
81
Except as otherwise provided in Section 11.05, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor, unless:
(1) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(2) either:
(a) subject to Section 11.05 hereof, the Person
acquiring the property in any such sale or disposition or the Person
formed by or surviving any such consolidation or merger unconditionally
assumes all the obligations of that Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to
the Trustee, under the Notes, this Indenture and the Note Guarantee on
the terms set forth herein or therein; and
(b) the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of
this Indenture, including without limitation, Section 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person will succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 11.06 Releases Following Sale of Assets.
In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all to the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after giving
effect to such transactions) a Restricted Subsidiary of the Company, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Note Guarantee; provided that
the Net Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee will
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Note Guarantee.
82
Any Guarantor not released from its obligations under its Note
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
Section 11.07 Operation.
Notwithstanding anything in this Indenture to the contrary, the
provisions of this Article 11 will not become operative unless and until, and
only for so long as, any Subsidiary of the Company becomes, and is, a Guarantor
of the Notes pursuant to the provisions of Section 4.18 of this Indenture.
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated, except
lost, stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has been deposited in trust and
thereafter repaid to the Company, have been delivered to the Trustee
for cancellation; or
(b) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason of the
mailing of a notice of redemption or otherwise or will become due and
payable within one year and the Company or any Guarantor has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust solely for the benefit of the Holders, cash in
United States dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Liquidated Damages, if any, and
accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or will occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or by which
the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid
all sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case
may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
83
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 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 and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision that is required to be included herein by the TIA, the
required provision will control.
Section 13.02 Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
▇▇▇▇ National Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
84
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Trustee:
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, except for the issuance of the Initial Notes,
the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
85
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e)
and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied; provided,
however, that with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials, and an Officers' Certificate may rely on certificates of
public officials.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its respective functions.
Section 13.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator, Affiliate or stockholder
of the Company or any Guarantor, solely by reason of this status, will have any
liability for any obligations of the Company or the Guarantors under the Notes,
this Indenture, any Note Guarantees, or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.09 No Adverse Interpretation of Other Agreements.
86
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors.
All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.05.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 13.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
87
SIGNATURES
Dated as of May 22, 2002
▇▇▇▇ NATIONAL GROUP, INC.
By:
--------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.
By:
--------------------------------
Name:
Title:
88
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
CUSIP ____________
8 7/8% Senior Subordinated Notes due 2012
No. $____________
---
▇▇▇▇ NATIONAL GROUP, INC.
promises to pay to
------------
or registered assigns,
the principal sum of
-----------------------------------------------------------
Dollars on , 2012.
-------------
Interest Payment Dates: and
------------ ------------
Record Dates: and
------------ ------------
Dated: , 20
--------------- ---
▇▇▇▇ NATIONAL GROUP, INC.
By:
--------------------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
as Trustee
By:
--------------------------------
Authorized Signatory
--------------------------------------------------------------------------------
A-1
[Back of Note]
8 7/8% Senior Subordinated Notes due 2012
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. ▇▇▇▇ National Group, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 8 7/8% per annum from November 15, 2002 until
maturity and shall pay the Liquidated Damages, if any, payable pursuant
to Section 5 of the Registration Rights Agreement referred to below.
The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on May 15 and November 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day
(each, an "Interest Payment Date"). Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if
there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be the first May 15
or November 15 to occur after the date of issuance, unless such May 15
or November 15 occurs within one calendar month of such date of
issuance, in which case the first Interest Payment Date shall be the
second of May 15 or November 15 to occur after the date of issuance.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium,
if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages, if any,
(without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages, if any, to
the Persons who are registered Holders of Notes at the close of
business on the May 1 or November 1 next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. The Notes will be
payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages, if
any, may be made by check mailed to the Holders at their addresses set
forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect
to principal of and interest, premium and Liquidated Damages, if any,
on, all Global Notes and all other Notes the Holders of which will have
provided wire transfer instructions to the Company or the Paying Agent.
Such payment will be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public
and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Company may change
A-2
any Paying Agent or Registrar without notice to any Holder. The Company
or any of its Subsidiaries may act as Paying Agent or Registrar.
(4) INDENTURE. The Company issued the Notes under an Indenture
dated as of May 22, 2002 (the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb).
The Notes are subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms. To the extent
any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured obligations of the Company.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this
Paragraph 5, the Company will not have the option to redeem the Notes
prior to May 15, 2007. Thereafter, the Company will have the option to
redeem all or, from time to time, a part of the Notes upon not less
than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to
the applicable redemption date, if redeemed during the twelve-month
period beginning on May 15 of the years indicated below:
Year Percentage
---- ----------
2007................................. 104.438%
2008................................. 102.958%
2009................................. 101.479%
2010 and thereafter.................. 100.000%
(b) Notwithstanding the provisions of subparagraph
(a) of this Paragraph 5, at any time prior to May 15, 2005, the Company
may on any one or more occasions redeem up to 40% of the aggregated
principal amount of Notes issued under the Indenture at a redemption
price of 108.875% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the redemption date,
with the net cash proceeds of one or more Qualified Equity Offering;
provided that at least 60% of aggregate principal amount of Notes
issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and
its Subsidiaries) and that such redemption occurs within 60 days of the
date of the closing of such Qualified Equity Offering.
(6) MANDATORY REDEMPTION. The Company is not required to make
mandatory redemption payments with respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will
make an offer (a "Change of Control Offer") to each Holder to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price equal to 101% of
the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages on the Notes repurchased, if any, to the date of
purchase (the "Change of Control Payment"). Within 15 days following
any Change of Control, the Company will mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
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(b) If the Company or a Subsidiary consummates any
Asset Sales, and the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company will (a) first, make an Excess Proceeds Offer (as
defined in the 9 7/8% Notes Indenture) with respect to any outstanding
9 7/8% Notes, (b) second, make an Excess Proceeds Offer (as defined in
the 8 5/8% Notes Indenture) with respect to any outstanding 8 5/8%
Notes, and (c) third, make an Asset Sale Offer to all Holders of Notes
and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of
assets (an "Asset Sale Offer") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes and such
other pari passu Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase in
accordance with the procedures set forth in the Indenture. To the
extent that any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use those Excess Proceeds for any purpose
not otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
will select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis based upon the principal amount of Notes
and such other pari passu Indebtedness tendered. Holders of Notes that
are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect
to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
(8) NOTICE OF REDEMPTION. Subject to certain exceptions set
forth in the Indenture, notice of redemption will be mailed at least 30
days but not more than 60 days before a redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes and
portions of Notes selected will be in amounts of $1,000 and whole
multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed or purchased, the entire outstanding amount of Notes held
by such Holder, even if not a multiple of $1,000, shall be redeemed or
purchased. On and after the redemption date interest ceases to accrue
on Notes called for redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note selected for redemption in whole or in part,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before the day of any selection of Notes
to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Note Guarantees or the Notes may be
amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class, and any existing
default or compliance with any
A-4
provision of the Indenture, the Note Guarantees or the Notes may be
waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class. Without
the consent of any Holder of a Note, the Indenture, the Note Guarantees
or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to alter Article 2 of
the Indenture relating to the Notes in a manner that does not
materially adversely affect any Holder, to provide for the assumption
of the Company's or any Guarantor's obligations to Holders of the Notes
by a successor to the Company in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to
the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the
requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, to
provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Note
Guarantee with respect to the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes whether or not prohibited
by the subordination provisions of the Indenture; (ii) default in
payment when due of principal of, or premium, if any, on the Notes
whether or not prohibited by the subordination provisions of the
Indenture, (iii) failure by the Company to comply with Sections 4.14 or
5.01 of the Indenture; (iv) failure by the Company or any of its
Subsidiaries for 60 days after written notice from the Trustee or the
Holders of at least 25% in principal amount of the Notes then
outstanding to observe, perform or comply with any of the other
covenant, representation, warranty or other agreement in the Indenture
or the Notes; (v) default under certain other agreements relating to
Indebtedness of the Company which default (A) is caused by a failure to
pay at final maturity (within the grace period provided in such
Indebtedness) principal, interest or premium in an aggregate amount of
$5.0 million or more with respect to such Indebtedness or (B) results
in the acceleration of any such Indebtedness aggregating $5.0 million
or more, which default or acceleration shall not be cured, waived or
postponed pursuant to an agreement with the holders of such
Indebtedness within 60 days after written notice, or such acceleration
shall not be rescinded or annulled within 20 days after written notice;
(vi) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (vii) certain events of
bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries; and (viii) except as permitted by the
Indenture, any Note Guarantee shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor, or any Person acting on behalf
of any Guarantor, shall deny or disaffirm its obligations under its
Note Guarantee. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately; provided that so long as any Indebtedness permitted to be
incurred under this Indenture as part of the Senior Credit Facility is
outstanding, no acceleration shall be effective until the earlier of
(A) five Business Days after the giving of written notice to the
Company and the administrative agent under the Senior Credit Facility
of the acceleration or (B) the acceleration of any Indebtedness under
the Senior Credit Facility. Notwithstanding the foregoing, in the case
of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without
further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default if and so long as a
committee of its Responsible Officers in good faith determines that
withholding notice is in the interests of the Holders, except a Default
or Event of
A-5
Default relating to the payment of principal or interest or Liquidated
Damages. The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or Liquidated
Damages on, or the principal of, the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with
the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
(13) SUBORDINATION. Payment of principal, interest and premium
and Liquidated Damages, if any, on the Notes is subordinated to the
prior payment of Senior Debt on the terms provided in the Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company or its Affiliates with
the same right as it would have if it were not the Trustee.
(15) NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator, Affiliate or stockholder, of the Company or any
Guarantor, solely by reason of this status, will have any liability for
any obligations of the Company or Guarantor under the Notes, any Note
Guarantees or the Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes will have all the rights set
forth in the Registration Rights Agreement dated as of May 22, 2002,
between the Company and the other parties named on the signature pages
thereof or, in the case of Additional Notes, Holders of Restricted
Global Notes and Restricted Definitive Notes will have the rights set
forth in one or more registration rights agreements, if any, among the
Company, the Guarantors, if any, and the other parties thereto,
relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act
(collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the
Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
A-6
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
▇▇▇▇ National Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
-----------------------------------
(Insert assignee's legal name)
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
---------------
Your Signature:
----------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:
------------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$
-------------
Date:
----------------
Your Signature:
----------------------------
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.:
-------------------
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
of this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount decrease of Trustee or
Date of Exchange of this Global Note of this Global Note (or increase) Custodian
---------------- ------------------- ------------------- ------------- ---------
* This schedule should be included only if the Note is issued in global form.
A-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
▇▇▇▇ National Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: 8 7/8% Senior Subordinated Notes Due 2012
-----------------------------------------
Reference is hereby made to the Indenture, dated as of May 22, 2002
(the "Indenture"), between ▇▇▇▇ National Group, Inc., as issuer (the "Company"),
and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
___________________ (the "Transferor"), owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the
B-1
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE RESTRICTED GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT
TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount
of Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Definitive Notes and in the
Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private
B-2
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
------------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated:
----------------------
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
▇▇▇▇ National Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: 8 7/8% Senior Subordinated Notes Due 2012
-----------------------------------------
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of May 22, 2002
(the "Indenture"), between ▇▇▇▇ National Group, Inc., issuer (the "Company"),
and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
__________________________ (the "Owner"), owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
-----------------------------------------------------------------------
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
--------------------------------------------------------------------------------
IN AN UNRESTRICTED GLOBAL NOTE
------------------------------
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for
C-1
a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. [ ] EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
----------------------------------------------------------------------
IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
------------------------------------------------------------------------
INTERESTS IN RESTRICTED GLOBAL NOTES
------------------------------------
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any state
of the United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued will be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
--------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated:
-----------------------
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
▇▇▇▇ National Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: 8 7/8% Senior Subordinated Notes
--------------------------------
Reference is hereby made to the Indenture, dated as of May 22, 2002
(the "Indenture"), between ▇▇▇▇ National Group, Inc., as issuer (the "Company"),
and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and if such transfer is in respect of a
principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------------------------
Name:
Title:
Dated:
----------------------
D-2
EXHIBIT E
FORM OF NOTE GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of May 22, 2002 (the "Indenture") among
▇▇▇▇ National Group, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇
Fargo Bank Minnesota, N.A., as trustee (the "Trustee"), (a) the due and punctual
payment of the principal of, premium and Liquidated Damages, if any, and
interest on the Notes (as defined in the Indenture), whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal of and interest on the Notes, if any, if lawful, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and
the Indenture are expressly set forth in Article 11 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Note
Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee, on behalf
of such Holder, to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Trustee attorney-in-fact of such Holder for such purpose; provided, however,
that the Indebtedness evidenced by this Note Guarantee shall cease to be so
subordinated and subject in right of payment upon any defeasance of this Note in
accordance with the provisions of the Indenture.
[NAME OF GUARANTOR(S)]
By:
--------------------------------------
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of ▇▇▇▇ National Group, Inc. (or its permitted
successor), a Delaware corporation (the "Company"), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of May 22, 2002 providing for
the issuance of 8 7/8% Senior Subordinated Notes due 2012 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Note Guarantee and in the Indenture, including but not limited
to Article 11 thereof.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Note Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
4. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator, Affiliate or stockholder of the Company or any Guaranteeing
Subsidiary or other Guarantor, solely by reason of this status, will have any
liability for any obligations of the Company or the Guaranteeing Subsidiary or
other Guarantor under the Notes, this Indenture, any Note Guarantees, or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. The waiver may not be effective to waive liabilities under the
federal securities laws.
5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
F-1
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
F-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By:
-------------------------------
Name:
Title:
▇▇▇▇ NATIONAL GROUP, INC.
By:
-------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
-------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
as Trustee
By:
-------------------------------
Authorized Signatory
F-3