EXHIBIT 4.4
-----------------------
HEXCEL CORPORATION
and each of the Guarantors named herein
9.875% SENIOR SECURED NOTES DUE 2008
-----------------------
INDENTURE
Dated as of March 19, 2003
-----------------------
-----------------------
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Trustee
-----------------------
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).................................................................... 12.03
(c).................................................................... 12.03
313(a).................................................................... 7.06
(b)(1)................................................................. 4.21
(b)(2)................................................................. 7.06; 7.07
(c).................................................................... 7.06; 12.02
(d).................................................................... 7.06
314(a).................................................................... 4.03;12.02; 12.05
(b).................................................................... 4.21
(c)(1)................................................................. 12.04
(c)(2)................................................................. 12.04
(c)(3)................................................................. N.A.
(d).................................................................... 4.21
(e).................................................................... 12.05
(f).................................................................... N.A.
315(a).................................................................... 7.01
(b).................................................................... 7.05,12.02
(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).................................................................... 12.01
(b).................................................................... N.A.
(c).................................................................... 12.01
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..........................................................................33
Section 1.03 Incorporation by Reference of Trust Indenture Act..........................................33
Section 1.04 Rules of Construction......................................................................34
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating............................................................................34
Section 2.02 Execution and Authentication...............................................................35
Section 2.03 Registrar and Paying Agent.................................................................35
Section 2.04 Paying Agent to Hold Money in Trust........................................................35
Section 2.05 Holder Lists...............................................................................36
Section 2.06 Transfer and Exchange......................................................................36
Section 2.07 Replacement Notes..........................................................................47
Section 2.08 Outstanding Notes..........................................................................47
Section 2.09 Treasury Notes.............................................................................48
Section 2.10 Temporary Notes............................................................................48
Section 2.11 Cancellation...............................................................................48
Section 2.12 Defaulted Interest.........................................................................48
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.........................................................................48
Section 3.02 Selection of Notes to Be Redeemed or Purchased.............................................49
Section 3.03 Notice of Redemption.......................................................................49
Section 3.04 Effect of Notice of Redemption.............................................................50
Section 3.05 Deposit of Redemption or Purchase Price....................................................50
Section 3.06 Notes Redeemed or Purchased in Part........................................................51
Section 3.07 Optional Redemption........................................................................51
Section 3.08 Mandatory Redemption.......................................................................51
Section 3.09 Offer to Purchase by Application of Excess Proceeds........................................51
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes...........................................................................53
Section 4.02 Maintenance of Office or Agency............................................................53
Section 4.03 Reports....................................................................................54
Section 4.04 Compliance Certificate.....................................................................55
Section 4.05 Taxes......................................................................................55
Section 4.06 Stay, Extension and Usury Laws.............................................................55
Section 4.07 Restricted Payments........................................................................55
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.............................59
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.................................60
Section 4.10 Asset Sales................................................................................62
i
Section 4.11 Transactions with Affiliates...............................................................64
Section 4.12 Liens......................................................................................65
Section 4.13 Line of Business...........................................................................65
Section 4.14 Offer to Repurchase Upon Change of Control.................................................65
Section 4.15 Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries..............67
Section 4.16 Advances to Restricted Subsidiaries........................................................67
Section 4.17 Payments for Consent.......................................................................67
Section 4.18 Additional Subsidiary Guarantees and Liens.................................................68
Section 4.19 Failure to Deliver Security Documents; Increased Interest Rate.............................69
Section 4.20 Further Assurances; Collateral Inspections and Reports; Costs
and Indemnification........................................................................69
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets...................................................71
Section 5.02 Successor Corporation Substituted..........................................................71
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..........................................................................72
Section 6.02 Acceleration...............................................................................74
Section 6.03 Other Remedies.............................................................................74
Section 6.04 Waiver of Past Defaults....................................................................75
Section 6.05 Control by Majority........................................................................75
Section 6.06 Limitation on Suits........................................................................75
Section 6.07 Rights of Holders of Notes to Receive Payment..............................................76
Section 6.08 Collection Suit by Trustee.................................................................76
Section 6.09 Trustee May File Proofs of Claim...........................................................76
Section 6.10 Priorities.................................................................................76
Section 6.11 Undertaking for Costs......................................................................77
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee..........................................................................77
Section 7.02 Rights of Trustee..........................................................................78
Section 7.03 Individual Rights of Trustee...............................................................78
Section 7.04 Trustee's Disclaimer.......................................................................79
Section 7.05 Notice of Defaults.........................................................................79
Section 7.06 Reports by Trustee to Holders of the Notes.................................................79
Section 7.07 Compensation and Indemnity.................................................................79
Section 7.08 Replacement of Trustee.....................................................................80
Section 7.09 Successor Trustee by Merger, etc...........................................................81
Section 7.10 Eligibility; Disqualification..............................................................81
Section 7.11 Preferential Collection of Claims Against Company..........................................81
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...................................81
Section 8.02 Legal Defeasance and Discharge.............................................................81
Section 8.03 Covenant Defeasance........................................................................82
Section 8.04 Conditions to Legal or Covenant Defeasance.................................................82
ii
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions...................................................................84
Section 8.06 Repayment to Company.......................................................................84
Section 8.07 Reinstatement..............................................................................84
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................85
Section 9.02 With Consent of Holders of Notes...........................................................86
Section 9.03 Compliance with Trust
Indenture Act........................................................87
Section 9.04 Revocation and Effect of Consents..........................................................87
Section 9.05 Notation on or Exchange of Notes...........................................................88
Section 9.06 Trustee to Sign Amendments, etc............................................................88
ARTICLE 10.
NOTE GUARANTEES
Section 10.01 Guarantee..................................................................................88
Section 10.02 Limitation on Guarantor Liability..........................................................89
Section 10.03 Execution and Delivery of Subsidiary Guarantee.............................................89
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.........................................90
Section 10.05 Releases Following Sale of Assets..........................................................91
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.................................................................91
Section 11.02 Application of Trust Money.................................................................92
ARTICLE 12.
COLLATERAL SHARING WITH PARITY LIENS
Section 12.01 Prerequisites to incurring Parity Lien Debt................................................92
Section 12.02 Equal and Ratable Lien Sharing by Holders of Notes and
Holders of Parity Lien Debt................................................................94
Section 12.03 Enforcement................................................................................94
Section 12.04 Amendment..................................................................................94
ARTICLE 13.
INTERCREDITOR PROVISIONS RELATING TO
WORKING CAPITAL FACILITY LIENS
Section 13.01 Agreement between the Collateral Agent and Credit Facility Agent...........................95
Section 13.02 Equal and Ratable Sharing of Liens on Foreign Subsidiary Collateral........................96
Section 13.03 Disclaimer of Consensual Liens.............................................................96
Section 13.04 Notice of Intent to Foreclose..............................................................97
Section 13.05 Consent to License to Use Intellectual Property; Access to
Information; Access to Real Property to Process and Sell Inventory.........................98
Section 13.06 Complete Agreement........................................................................100
Section 13.07 No Subrogation, Marshalling or Duty.......................................................100
Section 13.08 Limitation on Certain Relief, Defenses and Damage Claims..................................100
Section 13.09 Amendment; Waiver.........................................................................101
Section 13.10 Enforcement...............................................................................101
Section 13.11 Relative Rights...........................................................................102
iii
ARTICLE 14.
COLLATERAL AND SECURITY
Section 14.01 Security Documents........................................................................102
Section 14.02 Collateral Agent..........................................................................103
Section 14.03 Authorization of Actions to Be Taken......................................................104
Section 14.04 Release of Note Liens.....................................................................104
ARTICLE 15.
MISCELLANEOUS
Section 15.01 Trust
Indenture Act Controls..............................................................106
Section 15.02 Notices...................................................................................106
Section 15.03 Communication by Holders of Notes with Other Holders of Notes.............................107
Section 15.04 Certificate and Opinion as to Conditions Precedent........................................107
Section 15.05 Statements Required in Certificate or Opinion.............................................108
Section 15.06 Rules by Trustee and Agents...............................................................108
Section 15.07 No Personal Liability of Directors, Officers, Employees and Stockholders..................108
Section 15.08 Governing Law.............................................................................108
Section 15.09 No Adverse Interpretation of Other Agreements.............................................108
Section 15.10 Successors................................................................................109
Section 15.11 Severability..............................................................................109
Section 15.12 Counterpart Originals.....................................................................109
Section 15.13 Table of Contents, Headings, etc..........................................................109
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
Exhibit G FORM OF INTERCOMPANY NOTE
iv
INDENTURE dated as of March 19, 2003 among Hexcel Corporation, a Delaware
corporation (the "COMPANY"), the Guarantors (as defined) and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as trustee (the "TRUSTEE").
The Company, the Guarantors 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 9.875% Senior Secured Notes due 2008 (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.
"ADDITIONAL NOTES" means an unlimited amount of 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" means:
(1) any other person, directly or indirectly, controlling or
controlled by or under direct or indirect common control with such
specified person; or
(2) any other person who is a director or officer (A) of such
specified person, (B) of any Subsidiary of such specified person or (C) of
any person described in clause (1).
For the purposes of this definition, "control" when used with respect to
any person means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. For purposes of Sections 4.10 and Section
4.11 only, "affiliate" shall also mean any beneficial owner of capital stock
representing 10% or more of the total voting power of the voting stock (on a
fully diluted basis) of the Company or of rights or warrants to purchase such
capital stock (whether or not currently exercisable) and any person who would be
an affiliate of any such beneficial owner pursuant to the first sentence hereof.
"AGENT" means any Registrar, 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.
"ASSET SALE" means any direct or indirect sale, lease, transfer, conveyance
or other disposition (or series of related sales, leases, transfers, conveyances
or dispositions) of shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares), property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Company or any
Restricted Subsidiary (including
1
any disposition by means of a merger, consolidation or similar transaction)
involving an amount in excess of $3.0 million other than:
(1) a disposition by a Restricted Subsidiary to the Company, by the
Company or a Restricted Subsidiary to a Restricted Subsidiary or between
Restricted Subsidiaries;
(2) a disposition of property or assets at fair market value in the
ordinary course of business and consistent with past practices of the
Company or any of its Restricted Subsidiaries, as applicable (including
sales of products to customers, disposition of excess inventory and
dispositions of used or replaced equipment);
(3) the disposition or grant of licenses to third parties in respect
of intellectual property;
(4) a sale or disposition of assets for the purpose of forming any
Joint Venture, in exchange for an interest in such Joint Venture;
(5) the sale or other disposition of Equity Interests held by the
Company on the date hereof in Asahi-▇▇▇▇▇▇▇▇ Co., Ltd.;
(6) the sale of Specified Properties;
(7) a disposition by the Company or any Subsidiary of assets within 24
months after such assets were directly or indirectly acquired as part of an
acquisition of other properties or assets (including Capital Stock) (the
"PRIMARY ACQUISITION"), if the assets being disposed of are "non-core"
assets (as determined in good faith by a majority of the Board of
Directors) or are required to be disposed of pursuant to any law, rule or
regulation or any order of or settlement with any court or governmental
authority, and the proceeds therefrom are used within 18 months after the
date of sale to repay any Indebtedness Incurred in connection with the
Primary Acquisition of such assets;
(8) for purposes of Section 4.10 only, a disposition that constitutes
a Restricted Payment permitted by Section 4.07; or
(9) an Asset Sale that also constitutes a Change of Control; PROVIDED,
HOWEVER, that the Company complies with Section 4.14.
"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 or not such right is exercisable
immediately. The terms "Beneficially Owns" and "Beneficially Owned" have a
corresponding meaning.
"BOARD OF DIRECTORS" means the board of directors of the Company or any
committee thereof duly authorized to act on behalf thereof.
2
"BORROWING BASE" means, as of any date, an amount equal to:
(1) 85% of the face amount of all accounts receivable owned by the
Company and its Domestic Subsidiaries as of the end of the most recent
fiscal quarter preceding such date that were not more than 180 days past
due; PLUS
(2) 85% of the then most recently reported net book value of all
inventory owned by the Company and its Domestic Subsidiaries as of the end
of the most recent fiscal quarter preceding such date; PROVIDED that the
amount of this clause (2) shall not exceed 55% of the Borrowing Base on any
date of calculation.
"BROKER-DEALER" has the meaning set forth in the Exchange Registration
Rights Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP. The amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP. The Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty.
"CAPITAL STOCK" 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) United States dollars;
(2) investments in U.S. government obligations;
(3) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws
of the United States of America, any State thereof or any foreign country
recognized by the United States of America having capital, surplus and
undivided profits aggregating in excess of $50.0 million (or the U.S.
dollar equivalent thereof) and whose long-term debt is rated "A-" or higher
(or such equivalent rating), at the time as of which any investment therein
is made, by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act);
3
(4) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (2) above entered
into with a bank meeting the qualifications described in clause (3) above,
at the time as of which any investment therein is made;
(5) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country with a rating at the time
as of which any investment therein is made of "P-1" (or higher) according
to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or higher) according to
Standard & Poor's Ratings Group; and
(6) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any State,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at the time as
of which any investment therein is made at least "A" by Standard & Poor's
Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service, Inc.
"CLEARSTREAM" means Clearstream Banking, S.A.
"CHANGE OF CONTROL" events are:
(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;
(3) any Person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) other than one or more Permitted Holders, becomes the
Beneficial Owner of more than 40% of the total voting power of Voting Stock
of the Company; PROVIDED, HOWEVER, that the Permitted Holders beneficially
own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) in the
aggregate a lesser percentage of the total voting power of Voting Stock of
the Company than the other Person and do not have the right or ability to
elect or designate for election a majority of the Board of Directors;
(4) during any period of two consecutive years, individuals who at the
beginning of that period constituted the Board of Directors, together with
any new directors whose election by the Board of Directors or whose
nomination for election by the stockholders of the Company was approved
under the Governance Agreement, the Stockholders Agreement or by a vote of
66 2/3% of the directors of the Company then still in office who were
either directors at the beginning of the two-year period or whose election
or nomination for election was previously so approved, cease for any reason
to constitute a majority of the Board of Directors then in office; or
(5) the merger or consolidation of the Company with or into another
Person other than a Permitted Holder, or the merger of another Person other
than a Permitted Holder with the Company, and in the case of any such
merger or consolidation, the securities of the Company that are outstanding
immediately prior to the transaction and that represent 100% of the
aggregate voting power of the Voting Stock of the Company are changed into
or exchanged for cash, securities or property, unless pursuant to the
transaction, the securities are changed into or exchanged for, in addition
to any other consideration, securities of the surviving Person that
represent, immediately
4
after the transaction, at least a majority of the aggregate voting power of
the Voting Stock of the surviving Person or transferee.
"▇▇▇▇▇-▇▇▇▇▇▇▇▇ LEASE" means the Lease Agreement dated as of September 15,
1998 between CSI Leasing Trust, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and the Company CS Corporation.
"COLLATERAL" means property in which the Company or any other Obligor now
or hereafter has rights (or the power to transfer a security interest) that is
subject to a Note Lien.
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency Agreement dated
March 19, 2003 among the Company, the Joint Collateral Agent, the Trustee and
the representatives of Parity Lien Debt.
"COMPANY" means the issuer, and any and all successors thereto.
"CONSOLIDATED COVERAGE RATIO" as of any date of determination means
the ratio of (x) the aggregate amount of EBITDA for the most recent four
consecutive fiscal quarters ending at least 45 days prior to the date of such
determination to (y) Consolidated Interest Expense for such four fiscal
quarters; PROVIDED, HOWEVER, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding on
such date of determination or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
or both, EBITDA and Consolidated Interest Expense for such period shall
calculated after giving effect on a pro forma basis to (a) such
Indebtedness as if such Indebtedness had been Incurred on the first day of
such period and (b) the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such
period;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary has not earned the interest income actually earned
during such period in respect of cash or Cash Equivalents used to repay,
repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Sale, the EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Sale for such period or increased by an amount equal to the EBITDA (if
negative) directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of
the Company or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Sale for such period
(or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and
its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
5
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period; and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Sale, any Investment or acquisition of assets
requiring an adjustment pursuant to clause (3) or (4) above if made by the
Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto as if such Asset Sale, Investment or
acquisition of assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings relating thereto
and the amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness shall be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any interest rate protection
agreement applicable to such Indebtedness if such interest rate protection
agreement has a remaining term as at the date of determination in excess of 12
months).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum of, without
duplication:
(1) total interest expense of the Company and its consolidated
Restricted Subsidiaries for such period, including, to the extent not
otherwise included in such interest expense, and to the extent Incurred by
the Company or its Restricted Subsidiaries in such period, without
duplication:
(a) interest expense attributable to Capital Lease Obligations;
(b) amortization of debt discount and debt issuance cost;
(c) amortization of capitalized interest;
(d) non-cash interest expense;
(e) accrued interest;
(f) amortization of commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing;
(g) interest actually paid by the Company or any such Restricted
Subsidiary under any guarantee of Indebtedness of any other Person;
and
(h) net payments, if any, made pursuant to interest rate
protection agreements (including amortization of fees);
6
(2) preferred stock dividends paid during such period in respect of
all preferred stock of Restricted Subsidiaries of the Company held by
Persons other than the Company; and
(3) cash contributions made during such period to any employee stock
ownership plan or other trust for the benefit of employees to the extent
such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Company) in connection with Indebtedness
Incurred by such plan or trust to purchase Capital Stock of the Company.
Notwithstanding the foregoing, in no event will:
(1) any non-cash dividends or distributions payable on the Company's
Convertible Preferred Stock; or
(2) the accretion or amortization of original issue discount on the
Company's Series B Convertible Preferred Stock,
be included in the calculation of Consolidated Interest Expense.
"CONSOLIDATED NET INCOME" means, for any period, the net income (loss) of
the Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there
shall not be included in such Consolidated Net Income:
(1) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that:
(a) the Company's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash that could have been distributed by such
Person during such period to the Company or a Restricted Subsidiary as
a dividend or other distribution (subject, in the case of a dividend
or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (3) below); and
(b) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net
Income;
(2) any net income (loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that:
(a) the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend to another Restricted
Subsidiary, to the limitation contained in this clause); and
(b) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(3) any gain (but not loss) realized upon the sale or other
disposition of any assets of the Company, its consolidated Subsidiaries or
any other Person which is not sold or otherwise disposed
7
of in the ordinary course of business and any gain (but not loss) realized
upon the sale or other disposition of any Capital Stock of any Person;
(4) any extraordinary gain or loss;
(5) cumulative effect of a change in accounting principles;
(6) compensation expense related to the issuance of stock incentives
pursuant to the Plans;
(7) gains or losses from the early retirement or extinguishment of
Indebtedness; and
(8) restructuring charges, write-downs and reserves (to the extent not
included in clause (4) above) taken by the Company or its Restricted
Subsidiaries prior to December 31, 2003 pursuant to the Restructuring Plan,
PROVIDED that, the aggregate amount of any such charges, write-downs or
reserves shall not in the aggregate exceed $7.5 million and any charges
paid in excess of such amount or after December 31, 2003 shall be included
in the calculation of Consolidated Net Income for the period when such
charges are paid.
Notwithstanding the foregoing, for the purposes of Section 4.07 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Company or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (3)(d) of the first paragraph thereof.
"CONVERTIBLE PREFERRED STOCK" means the Company's Series A Convertible
Preferred Stock and Series B Convertible Preferred Stock.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" will be at the address of the
Trustee specified in Section 15.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"CREDIT FACILITIES" means:
(1) one or more credit agreements, loan agreements, indentures or
similar agreements providing for working capital advances, term loans,
notes, letter of credit facilities or similar advances, loans, notes or
facilities to the Company, any Restricted Subsidiary, domestic or foreign,
or any or all of such persons, including, without limitation, the New
Senior Credit Facility, as the same may be amended, modified, restated or
supplemented from time to time, or any other indebtedness referred to in
clauses (1) or (2) of the second paragraph of Section 4.09; and
(2) any one or more agreements governing advances, notes, loans or
facilities provided to refund, refinance, replace or renew (including
subsequent or successive refundings, financings, replacements and renewals)
Indebtedness under the agreement or agreements referred to in the foregoing
clause (1), as the same may be amended, modified, restated or supplemented
from time to time.
"CREDIT FACILITY AGENT" means, at any time in respect of any Qualified
Credit Facility, the administrative agent, collateral agent or collateral
trustee for holders of Obligations under such Qualified Credit Facility which
holds the Liens securing such Obligations.
"CREDIT FACILITY COLLATERAL" means, at any time in respect of any Qualified
Credit Facility:
8
(1) inventory (as defined in Article 9 of the
New York Uniform
Commercial Code), whether now owned or hereafter acquired, and the cash and
non-cash proceeds thereof, and all rights under any existing or future
policy of property loss or casualty insurance on such inventory, together
with the cash proceeds thereof;
(2) accounts (as defined in Article 9 of the
New York Uniform
Commercial Code), whether now existing or hereafter arising, but only to
the extent that such accounts are:
(a) rights to payment for goods sold or services rendered
(whether or not such goods or services conform to the contract), or
(b) rights to payment for goods to be sold or services to be
rendered, but only, at any time, to the extent inventory (whether
consisting of raw materials, work-in-process or finished goods) is
then on hand that may, upon completion of manufacture, be delivered
for such sale,
in the case of each of paragraphs (1) and (2), together with all rights under
the contract for such sale relating to or affecting the creation or collection
of such account or the completion or sale of such inventory, together with all
Liens, letters of credit, guarantees and other obligations securing or
supporting such accounts, together with the cash and non-cash proceeds thereof;
(3) money, deposit accounts (as defined in Article 9 of the
New York
Uniform Commercial Code) and deposits therein and Cash Equivalents, except
(i) the Asset Sale Proceeds Account and deposits therein and (ii) money,
deposit accounts, deposits and Cash Equivalents (whether held directly or
in securities accounts) constituting identifiable proceeds of Collateral;
and
(4) property of a Foreign Subsidiary owned by a Foreign Subsidiary,
whenever held, acquired or arising, but only if and to the extent securing
Indebtedness permitted by clause (2) of the second paragraph under
Section 4.09.
"CREDIT FACILITY INDEBTEDNESS" means any and all Indebtedness and other
amounts payable under or in respect of the Credit Facilities including
principal, premium (if any), interest (including interest accruing at the
contract rate specified in the Credit Facilities (including any rate applicable
upon default) on or after the filing of any petition in bankruptcy, or the
commencement of any similar state, federal or foreign reorganization or
liquidation proceeding, relating to the Company and interest that would accrue
but for the commencement of such proceeding whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees and all other amounts payable thereunder
or in respect thereof.
"CREDIT FACILITY OBLIGATIONS" means Indebtedness under a Qualified
Credit Facility permitted to be incurred under clauses (1), (2) or (11) of the
second paragraph under Section 4.09 and other Obligations (not constituting
Indebtedness) under such Credit Facility (which may, but need not, include
Hedging Obligations and obligations under deposit account services agreements
and cash management contracts with any lender that is or at any time was party
to such Credit Facility or any of its Affiliates).
"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.
9
"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.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable at the option of the holder) or upon the
happening of any event (1) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (2) is convertible or exchangeable at the
option of the holder for Indebtedness or Disqualified Stock or (3) is
mandatorily redeemable or must be purchased, upon the occurrence of certain
events or otherwise, in whole or in part, in each case on or prior to the first
anniversary of the Stated Maturity of the Securities; PROVIDED, HOWEVER, that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the first anniversary of the Stated
Maturity of the Securities shall not constitute Disqualified Stock if (1) the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are not more favorable to the holders of such Capital Stock than the terms
applicable to the Notes under Sections 3.09, 4.10 and 4.14 and (2) any such
requirement only becomes operative after compliance with such terms applicable
to the Notes, including the purchase of any Notes tendered pursuant thereto; and
PROVIDED, FURTHER, HOWEVER, that Company's Convertible Preferred Stock shall
note be deemed to be Disqualified Stock.
"DOMESTIC FOREIGN HOLDING COMPANY" means any Subsidiary of the Company that
was formed under the laws of the United States or any state of the United States
or the District of Columbia that owns, directly or indirectly, the stock of one
or more Foreign Subsidiaries; PROVIDED that the fair market value of the gross
assets of such Subsidiary (not including the portion of such fair market value
which is attributable to (x) the stock of any Foreign Subsidiary owned, directly
or indirectly, by such Subsidiary and (y) any asset held directly by such
Subsidiary for less than 31 calendar days) does not exceed $1.0 million.
"DOMESTIC SUBSIDIARY" means any Restricted Subsidiary of the Company that
was formed under the laws of the United States or any state of the United States
or the District of Columbia or that guarantees or otherwise provides direct
credit support for any Indebtedness of the Company; PROVIDED, HOWEVER, that a
Domestic Foreign Holding Company shall not constitute a Domestic Subsidiary.
"EBITDA" for any period for any Person means the sum of Consolidated Net
Income PLUS, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income:
(1) all income tax expense of such Person and its consolidated
Restricted Subsidiaries for such period;
(2) Consolidated Interest Expense for such period;
(3) depreciation expense and amortization expense of such Person and
its consolidated Restricted Subsidiaries for such period (excluding
amortization expense attributable to a prepaid cash item that was paid in a
prior period); and
10
(4) all other non-cash items of such Person and its consolidated
Restricted Subsidiaries for such period (including any amounts recorded as
compensation expense related to the issuance of stock incentives pursuant
to the Plans but excluding any such non-cash charge to the extent that it
represents an accrual of or reserve for cash expenditures in any future
period) reducing Consolidated Net Income less all non-cash items increasing
Consolidated Net Income for such period.
Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization of, a Restricted Subsidiary
shall be added to Consolidated Net Income to compute EBITDA only to the extent
(and in the same proportion) that the net income of such Restricted Subsidiary
was included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"ENVIRONMENTAL LAWS" means any all applicable federal, regional, state,
county and local laws, statutes, codes, ordinances, rules, regulations,
directives, binding policies, permits, orders, decrees, directives and judgments
(including common law) that govern or relate to the protection or clean-up of
the environment, the use, treatment, storage, transportation, generation,
manufacture, processing, distribution, handling or disposal of, or emission,
discharge or other release or threatened release of, Hazardous Materials, the
preservation or protection of waterways, groundwater, drinking water, air,
wildlife, plants or other natural resources, or the health and safety of persons
or property, including protection of the health and safety of employees.
"EQUALLY AND RATABLY" means:
(1) in reference to sharing of Liens upon Foreign Subsidiary
Collateral or proceeds thereof as between the holders of Credit Facility
Obligations under a Qualified Credit Facility, on the one hand, and holders
of Note Obligations and Parity Lien Obligations, on the other hand, that:
(a) such Liens and proceeds shall be allocated and distributed
first to the Credit Facility Agent for account of the holders of
Indebtedness constituting Credit Facility Obligations under the
Qualified Credit Facility, on the one hand, and to the Joint
Collateral Agent for account of the Holders of Notes and all Parity
Lien Debt (if any), on the other hand, ratably in proportion to the
Credit Facility Obligations included in the Credit Facilities Sharing
Amount, outstanding on the Sharing Ratio Determination Date, on the
one hand, and the principal of and interest and premium (if any) on
the Notes and all other Parity Lien Debt, outstanding on the Sharing
Ratio Determination Date, on the other hand;
(i) and if, giving effect to payments of any such principal,
interest and premium from any other source:
(x) an amount sufficient to pay in full the Credit Facility
Obligations included in the Credit Facility Sharing Amount has
been so allocated and distributed to the Credit Facility Agent but
any principal, interest or premium remains outstanding on the
Notes or Parity Lien Debt, then thereafter such Liens and proceeds
shall next be allocated and distributed exclusively to the Joint
Collateral Agent for account of the Holders of Notes and Parity
Lien Debt in an amount sufficient to pay in full all the remaining
principal, interest and premium outstanding on the Notes and
Parity Lien Debt; and
11
(y) an amount sufficient to pay in full the principal,
interest and premium of the Notes and Parity Lien Debt has been so
allocated and distributed to the Joint Collateral Agent but any
Credit Facility Obligations included in the Credit Facility
Sharing Amount remain outstanding, then thereafter such Liens and
proceeds shall next be allocated and distributed exclusively to
the Credit Facility Agent for account of the holders of such
Credit Facility Obligations included in the Credit Facility
Sharing Amount in an amount sufficient to pay in full all
remaining principal, interest and premium outstanding on such
Credit Facility Obligations; and thereafter;
(b) such Liens and proceeds (if any remain after payment in full
of all Credit Facility Obligations included in the Credit Facility
Sharing Amount and all of the principal of and interest and premium on
the Notes and all Parity Lien Debt) shall be allocated and distributed
to the Credit Facility Agent for account of the holders of any
remaining Credit Facility Obligations under the Qualified Credit
Facility, on the one hand, and to the Joint Collateral Agent for
account of the holders of any remaining Note Obligations and Parity
Lien Obligations, on the other hand, ratably in proportion to the
aggregate unpaid amount of such remaining Credit Facility Obligations
under the Qualified Credit Facility due and demanded (with written
notice to the Credit Facility Agent, the Trustee and the Joint
Collateral Agent) prior to the date such distribution is made, on the
one hand, and the aggregate unpaid amount of such remaining Note
Obligations and Parity Lien Obligations due and demanded (with written
notice to the Credit Facility Agent, the Trustee and the Joint
Collateral Agent) prior to the date such distribution is made, on the
other hand; and
(2) in reference to sharing of any Liens, guarantees, supporting
obligations or loss sharing rights or proceeds thereof as between the
holders of Note Obligations, on the one hand, and Parity Lien Obligations,
on the other hand, that such Liens, guarantees, supporting obligations or
loss sharing rights or proceeds:
(a) shall be allocated and distributed first to the Trustee for
account of the Holders of Notes, on the one hand, and to an agent or
representative appointed by and acting as paying agent for the holders
of Parity Lien Debt, on the other hand, ratably in proportion to the
principal of and interest and premium (if any) outstanding on the
Notes when the allocation or distribution is made, on the one hand,
and the principal of and interest and premium (if any) outstanding on
the Parity Lien Debt when the allocation or distribution is made, on
the other hand; and thereafter
(b) shall be allocated and distributed (if any remain after
payment in full of all of the principal of and interest and premium on
the Notes and the Parity Lien Debt) to the Trustee for account of the
holders of any remaining Note Obligations, on the one hand, and to
such paying agent for account of the holders of any remaining Parity
Lien Obligations, on the other hand, ratably in proportion to the
aggregate unpaid amount of such remaining Note Obligations due and
demanded (with written notice to the Trustee and the Joint Collateral
Agent) prior to the date such distribution is made, on the one hand,
and the aggregate unpaid amount of such remaining Parity Lien
Obligations due and demanded (with written notice to the Trustee and
the Joint Collateral Agent) prior to the date such distribution is
made, on the other hand.
For the purposes of clause (1) in this definition, (A) the "Credit Facility
Sharing Amount" shall consist solely of reimbursement obligations in respect of
letters of credit that are outstanding on the Sharing
12
Rate Determination Date, the principal of and interest and premium (if any) of
Indebtedness, including the amount of any unfunded revolver commitments that are
funded within 30 calendar days of the Sharing Rate Determination Date,
constituting Credit Facility Obligations under a Qualified Credit Facility and
Hedging Obligations (included at the termination value thereof) and Obligations
under deposit account services agreements and cash management contracts with any
lender that is or at any time was party to such Qualified Credit Facility or any
of its Affiliates; and (B) the "Sharing Ratio Determination Date" shall be the
30th day following the earliest date on which the Indebtedness under the
Qualified Credit Facility has first become due and payable in full, the Notes
have first become due and payable in full, or any Parity Lien Debt has first
become due and payable in full, in each case at maturity, by acceleration or
otherwise PROVIDED, HOWEVER, that in the event that any Hedging Obligation is
terminated within five business days after the earliest such date, the Sharing
Ratio Determination Date for such Hedging Obligation shall be such termination
date otherwise it shall be the earliest such date.
"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).
"EQUITY OFFERING" means an offering of common stock of the Company pursuant
to an effective registration statement under the Securities Act or in a valid
private placement.
"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 Exchange Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the
Exchange Registration Rights Agreement.
"EXCHANGE REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of March 19, 2003, among the Company, the Guarantors 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 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.
"EXCLUDED ASSETS" means:
(1) Credit Facility Collateral;
(2) any lease of premises used only as office space or to warehouse
inventory;
(3) an equity interest in a joint venture or any holding company
holding such equity interest that is not a Subsidiary of the Company, if
and for as long as the creation of a lien on such equity interest or the
equity interests of such holding company is prohibited by the agreement or
agreements governing the joint venture;
13
(4) any fee interest in real estate that, in the good faith judgment
of the Company, has a fair market value of less than $1.0 million;
(5) the portion of the voting stock of a Foreign Subsidiary that
would, if subjected to the Note Liens, cause the aggregate voting stock of
such Foreign Subsidiary subject to the Note Liens to exceed 65% of the
aggregate outstanding voting stock of such Foreign Subsidiary, but only if,
to the extent that and for as long as the amount exceeding 65% of such
voting stock is not subject to any Lien securing any Indebtedness or
Obligations other than the Notes and Note Obligations;
(6) personal property on which by law a perfected security interest
cannot be created;
(7) personal property (such as copyrights, vessels, vehicles or
aircraft) as to which a security interest can be created that must be
perfected other than by the filing of a financing statement and which has,
in the good faith judgment of the Company, an aggregate fair market value,
for all such personal property, of less than $1.0 million;
(8) rights as licensee under any license of patents, trademarks or
other intellectual property, if, to the extent that and for as long as the
creation of a Note Lien on such rights is prohibited by the agreement
granting such license;
(9) any lease, license, contract, property rights or agreement to
which the Company or any Domestic Subsidiary is a party or any of its
rights or interests thereunder if and for so long as the grant of such
security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of the
Company or any Domestic Subsidiary therein or (ii) in a breach or
termination pursuant to the terms of, or a default under, any such lease,
license, contract, property rights or agreement (other than to the extent
that any such term would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity); PROVIDED,
HOWEVER, that such security interest shall attach immediately at such time
as the condition causing such abandonment, invalidation or unenforceability
shall be remedied and to the extent severable, shall attach immediately to
any portion of such lease, license, contract, property rights or agreement
that does not result in any of the consequences specified in (i) or (ii)
above;
(10) any asset subject to a Lien permitted by clause (6), (7) or (9)
of the definition of "Permitted Lien;"
(11) the lease of the Company's existing manufacturing facility
located in Gilbert, Arizona until such time as such facility is used by the
Company or any of its Subsidiaries in manufacturing operations;
(12) the ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Lease and assets subject thereto until such
time as all Obligations under the ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Lease have been relieved
and released;
(13) (i) the Company's unimproved parcel of land located in Livermore,
California unless such parcel is not sold pursuant to the Agreement for
Purchase and Sale of Real Property and Escrow Instructions dated April 10,
2002, between Hexcel Corporation and Northbrook Homes, LLC, and The ▇▇▇▇▇▇▇
Group, LLC as amended or as amended and restated and (ii) the Company's
manufacturing plant located in Kent, Washington unless such property is not
sold prior to December 31, 2003;
14
(14) the Company's manufacturing facilities located in Lancaster, Ohio
and Clearwater, Florida, and the portion of the Company's manufacturing
facility located in Casa Grande, Arizona that is leased by the Company;
(15) any leases of property (a) entered into in connection with or
otherwise resulting from an acquisition by the Company or any Domestic
Subsidiary of any Person or assets or (b) entered into in connection with
an expansion or extension of the Company's or any Domestic Subsidiary's
business and, in the case of clause (a) or (b), that require a landlord's
consent to the security interest if despite the Company's commercially
reasonable efforts the Company or such Domestic Subsidiary is unable to
obtain such consent; PROVIDED, HOWEVER, that any lease resulting from the
transfer of leasehold interests or other assets held by the Company or any
Domestic Subsidiary that are not Excluded Assets shall not be Excluded
Assets by reason of this clause (15);
(16) the patents and patent applications set forth on Schedule VIII(A)
to the Pledge and Security Agreement dated as of March 19, 2003, among the
Company, ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holding Co., ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Corporation, Hexcel
Pottsville Corporation and HSBC Bank USA;
(17) the patents and patent applications set forth on Schedule VII(B)
to the Pledge and Security Agreement dated as of March 19, 2003, among the
Company, ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holding Co., ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Corporation, Hexcel
Pottsville Corporation and HSBC Bank USA (the "Restricted Patents"), if and
only for so long as the grant of a security interest in any Restricted
Patent shall constitute or result in (i) the abandonment, invalidation or
unenforceability of any right, title or interest of any grantor therein or
(ii) in a breach or termination pursuant to the terms of, or a default
under, any agreement relating to such Restricted Patent (other than to the
extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code of any
relevant jurisdiction or any other applicable law) then such Restricted
Patent shall not constitute Collateral hereunder; provided, however that
the security interest shall attach immediately (and such Restricted Patent
shall constitute Collateral hereunder) at such time as the condition
causing such abandonment, invalidation or unenforceability shall be
remedied and, to the extent severable, shall attach immediately to any
portion of such Restricted Patent that does not result in any of the
consequences specified in (i) or (ii); and
(17) the outstanding voting stock of ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holding Corp., CS
Tech-Fab Holding, Inc., Hexcel Technologies, Inc. and ▇▇▇▇▇-▇▇▇▇▇▇▇▇
Corporation.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Senior Credit Facility) in
existence on the date hereof, until such amounts are repaid.
"EXISTING JOINT VENTURES" means:
(1) ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Tech-Fab Company;
(2) BHA Aero Composite Parts, Co., Ltd.
(3) Asian Composites Manufacturing Sdn Bhd;
(4) Hexcel-DIC Partnership;
(5) CS Interglas AG; and
15
(6) Asahi-▇▇▇▇▇▇▇▇ Co., Ltd.
"FINANCING TRANSACTIONS" means:
(1) the issuance and sale of 77,875 shares of the Company's Series A
Convertible Preferred stock and 77,875 shares of the Company's Series B
Convertible Preferred Stock to affiliates of Berkshire Partners LLC and
Greenbriar Equity Group LLC for approximately $77.9 million in cash (before
giving effect to fees and expenses);
(2) the issuance and sale of 47,125 shares of the Company's Series A
Convertible Preferred stock and 47,125 shares of the Company's Series B
Convertible Preferred Stock to affiliates of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc.
for approximately $47.1 million in cash (before giving effect to fees and
expenses);
(3) the execution and delivery of the New Senior Credit Facility and
satisfaction of all conditions of effectiveness and funding conditions
therein set forth; and
(4) application of the net proceeds the Company receives from the sale
of the Notes as set forth under the caption "Use of Proceeds" in the
Offering Circular.
"FOREIGN SUBSIDIARY" means a Subsidiary of the Company that is incorporated
in a jurisdiction other than, and the majority of the assets of which are
located outside of, the United States, a State thereof and the District of
Columbia.
"FOREIGN SUBSIDIARY COLLATERAL" means:
(1) equity interests in Foreign Subsidiaries and intercompany loans to
and other claims against Foreign Subsidiaries, whenever owned, acquired or
arising owned by the Company or any Domestic Subsidiary; and
(2) property of any Foreign Subsidiary, whenever owned, acquired or
arising, except to the extent the same constitutes Credit Facility
Collateral.
"GAAP" means generally accepted accounting principles in the United States
as 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.
"GOVERNANCE AGREEMENT" means the Amended and Restated Governance Agreement
dated as of March 19, 2003, among Hexcel, LXH, L.L.C., LXH II, L.L.C., GS
Capital Partners 2000, L.P., GS Capital Partners 2000 Offshore, L.P., GS Capital
Partners 2000 Employee Fund, L.P., GS Capital Partners 2000 GmbH & Co.
Beteiligungs KG and Stone Street Fund 2000, L.P., as the same may be amended,
modified, restated or supplemented from time to time.
16
"GOVERNING DOCUMENTS" means, with respect to any Person, its certificate or
articles of incorporation, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its Capital Stock, as
applicable in each relevant jurisdiction.
"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 any obligation, contingent or otherwise, of any person
directly or indirectly guaranteeing any Indebtedness of any other person and any
obligation, direct or indirect, contingent or otherwise, of such person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such other person (whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay or to
maintain financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "guarantee" shall not include:
(1) endorsements for collection or deposit in the ordinary course of
business; or
(2) obligations, warranties and indemnities, not with respect to
Indebtedness of any person, that have been or are undertaken or made in the
ordinary course of business or in connection with any Asset Sale permitted
by Section 4.10 and not for the benefit of or in favor of an affiliate of
the Company or any of its Subsidiaries.
The term "guarantee" used as a verb has a corresponding meaning.
"GUARANTORS" means each of:
(1) ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holding Corp.;
(2) ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Corporation;
(3) CS Tech-Fab Holding, Inc.;
(4) Hexcel Pottsville Corporation; and
(5) any other Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture,
and their respective successors and assigns.
"HAZARDOUS MATERIAL" means all pollutants, contaminants, chemicals, wastes,
and any other carcinogenic, mutagenic, ignitable, corrosive, reactive, toxic,
explosive, flammable, infectious, radioactive or otherwise hazardous substances
or materials (whether solids, liquids or gases) subject to regulation, control
or remediation under Environmental Laws or is otherwise defined, listed or
identified
17
as a "hazardous waste" or "hazardous substance" (or other similar term) under
Environmental Laws. By way of example only, the term Hazardous Substances
includes petroleum, petroleum-derived substances and wastes, urea formaldehyde,
polychlorinated biphenyls ("PCBs"), pesticides, herbicides, asbestos, sludge,
slag, acids, metals, solvents and wastewaters.
"HEDGING OBLIGATIONS" of any Person means the obligations of such Person
pursuant to any interest rate protection agreement or currency exchange
protection agreement or other similar agreement or arrangement involving
interest rates, currencies, commodities or otherwise.
"HOLDER" means a Person in whose name a Note is registered.
"IAI 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 to Institutional Accredited Investors.
"INCUR" means issue, assume, guarantee, incur or otherwise become liable
for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary;
PROVIDED, FURTHER, that any amendment, modification or waiver of any provision
of any document pursuant to which Indebtedness was previously Incurred shall not
be deemed to be an Incurrence of Indebtedness as long as such amendment,
modification or waiver does not:
(1) increase the principal or premium thereof or interest rate
thereon;
(2) change to an earlier date the Stated Maturity thereof or the date
of any scheduled or required principal payment thereon or the time or
circumstances under which such Indebtedness may or shall be redeemed; or
(3) if such Indebtedness is contractually subordinated in right of
payment to the Notes or the Subsidiary Guarantees, modify or affect, in any
manner adverse to the Holders, such subordination.
The term "Incurrence" when used as a noun shall have a correlative meaning.
"INDEBTEDNESS" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal of and premium (if any such premium is then due and
owing) in respect of (a) Indebtedness of such Person for money borrowed;
and (b) Indebtedness evidenced by Notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable;
(2) all Capital Lease Obligations of such Person;
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person
and all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of
business);
18
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in (1) through (3)
above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the tenth
business day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of such
Person, or with respect to any Subsidiary of such Person, the liquidation
preference with respect to any preferred stock (but excluding, in each
case, any accrued dividends);
(6) all obligations of the type referred to in clauses (1) through (5)
of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
guarantee;
(7) all obligations of the type referred to in clauses (1) through (6)
of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
For purposes of this definition, the obligation of such Person with respect
to the redemption, repayment or repurchase price of any Disqualified Stock that
does not have a fixed redemption, repayment or repurchase price shall be
calculated in accordance with the terms of such stock as if such stock were
redeemed, repaid or repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture; PROVIDED, HOWEVER, that if
such stock is not then permitted to be redeemed, repaid or repurchased, the
redemption, repayment or repurchase price shall be the book value of such stock
as reflected in the most recent financial statements of such Person. The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and, with respect
to contingent obligations, the amount of liability required by GAAP to be
accrued or reflected on the most recently published balance sheet of such
Person; PROVIDED, HOWEVER, that:
(1) the amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less the
remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP; and
(2) Indebtedness shall not include any liability for federal, state,
local or other taxes.
"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 $125.0 million aggregate principal amount
of Notes issued under this Indenture on the date hereof.
19
"INITIAL PURCHASERS" means ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and Fleet Securities, 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.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Agency Agreement
dated the date hereof among the Joint Collateral Agent, the Trustee, Fleet
Capital Corporation as the Administrative Agent for the lenders and Fleet
Capital Corporation as Intercreditor Agent and Security Trustee (as such
agreement may be amended, modified, supplemented or restated).
"INVESTMENT" by any Person in any other Person means any direct or indirect
advance, loan (other than advances to customers or suppliers in the ordinary
course of business that are recorded as accounts receivable on the balance sheet
of such former Person) or other extension of credit (including by way of
guarantee or similar arrangement) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition of
Capital Stock, Indebtedness or other similar instruments issued by such latter
Person that are or would be classified as investments on a balance sheet of such
former Person prepared in accordance with GAAP. In determining the amount of any
Investment in respect of any property or assets other than cash, such property
or asset shall be valued at its fair market value at the time of such Investment
(unless otherwise specified in this definition), as determined in good faith by
the Board of Directors. For purposes of the definition of "Unrestricted
Subsidiary," the definition of "Restricted Payment" and Section 4.07,
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; PROVIDED, HOWEVER,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment" in
an Unrestricted Subsidiary equal to an amount (if positive) equal to (x)
the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of
such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such transfer, in
each case as determined in good faith by the Board of Directors.
"JOINDER AGREEMENT" means the Joinder Agreement substantially in the form
of Exhibit A to the Collateral Agency Agreement.
"JOINT COLLATERAL AGENT" means a bank or trust company that:
(1) is authorized to exercise corporate trust powers;
(2) is reasonably satisfactory to the Trustee; and
(3) has been appointed by the Company and has agreed, pursuant to a
Joint Collateral Agent Undertaking, to act as collateral agent for the
equal and ratable benefit of all present and future Holders of Notes and
Parity Lien Debt, whenever incurred, and also for the benefit of the
present and future holders of all other Note Obligations and Parity Lien
Obligations,
20
in its capacity as such collateral agent, and any successor in such capacity.
The Joint Collateral Agent shall initially be HSBC Bank USA.
"JOINT COLLATERAL AGENT UNDERTAKING" means a declaration of trust for a
collateral trust, a collateral trust agreement or a collateral agency agreement
executed and delivered by the Company and the Joint Collateral Agent on
customary terms reasonably satisfactory to the Trustee, which shall include
assumption by the Joint Collateral Agent of all of the obligations of the Joint
Collateral Agent set forth in or arising under this Indenture.
"JOINT VENTURE" means the Existing Joint Ventures, and any other joint
venture, partnership or other similar arrangement whether in corporate,
partnership or other legal form which is formed by the Company or any Restricted
Subsidiary and one or more Persons which own, operate or service a Permitted
Business.
"JOINT VENTURE SUBSIDIARY" means a Restricted Subsidiary formed by the
Company or any Restricted Subsidiary and one or more Persons which own, operate
or service a Permitted Business.
"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.
"MAJORITY LENDERS" means, at any time in respect of any Qualified Credit
Facility, lenders party thereto then holding or committed to provide at least a
majority in principal amount of the aggregate loans, letters of credit and other
extensions of credit outstanding or committed thereunder.
"MATERIAL DOMESTIC SUBSIDIARY" means as at any date of determination, any
Domestic Subsidiary whose gross assets have a fair market value exceeding
$100,000; PROVIDED, HOWEVER, that no value shall be attributed to any equity
interest in Joint Ventures.
"NET AVAILABLE CASH" from an Asset Sale means the aggregate amount of cash
received in respect of an Asset Sale (including any cash payments received by
way of deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form) therefrom, in each case net of:
(1) all legal, accounting, title and recording tax expenses,
commissions and other fees and expenses Incurred, and all federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP as a consequence of such Asset Sale;
21
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Sale, in accordance with the terms of any Lien
upon such assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out
of the proceeds from such Asset Sale;
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries or Joint Ventures as a
result of such Asset Sale;
(4) any amount of cash required to be placed in escrow by one or more
parties to a transaction relating to contingent liabilities associated with
an Asset Sale until such cash is released to the Company or a Restricted
Subsidiary; and
(5) the deduction of appropriate amounts to be provided by the seller
as a reserve, in accordance with GAAP, against any liabilities associated
with the assets disposed of in such Asset Sale, including pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sales, all as determined in conformity with GAAP, retained
by the Company or any Restricted Subsidiary after such Asset Sale.
"NET CASH PROCEEDS" with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, printing costs, underwriters' or placement agents' fees,
discounts or commissions and brokerage, stock exchange listing fees, consultant
and other fees actually Incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof.
"NEW SENIOR CREDIT FACILITY" means that certain Credit Agreement, by and
among the Company, Fleet Capital Corporation and Fleet Capital Corporation, as
Administrative Agent and Fronting Bank, Fleet National Bank, London U.K. branch,
as Fronting Bank and Issuing Bank, Fleet National Bank, as Issuing Bank and
Fleet Securities, Inc., as Lead Arranger, providing for up to $115.0 million of
revolving credit borrowings and letters of credit, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time.
"NON-MATERIAL DOMESTIC SUBSIDIARY" means a Domestic Subsidiary that is not
a Material Domestic Subsidiary.
"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.
22
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTE DOCUMENTS" means this Indenture, the Notes, the Subsidiary
Guarantees, the Security Documents, Joint Collateral Undertaking and each
Intercreditor Agreement.
"NOTE LIEN" means, to the extent securing Note Obligations, a Lien granted
by a Security Document as security for Note Obligations and any Parity Lien
Obligations.
"NOTE OBLIGATIONS" means the Notes (including all Additional Notes), the
Subsidiary Guarantees and all other Obligations of any Obligor under the Note
Documents.
"NOTES" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OBLIGOR" means the Company, the Guarantors and each other Subsidiary which
has granted the Joint Collateral Agent a Lien upon any of its property as
security for any Note Obligations.
"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 15.05
hereof.
"OFFERING CIRCULAR" means the offering circular relating to the offering of
the Notes, dated March 7, 2003.
"OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 15.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"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).
"PARITY LIEN" means, to the extent securing Parity Lien Obligations, a Lien
that (a) is granted by a Security Document and held by the Joint Collateral
Agent as security for Note Obligations and Parity Lien Obligations and (b) is
not subordinated, by contract or pursuant to a judicial order requiring
equitable subordination, to any other Lien.
"PARITY LIEN CREDIT DOCUMENT" means each indenture or other agreement or
agreements governing any Parity Lien Debt.
23
"PARITY LIEN DEBT" means the principal of and interest and premium (if any)
on Indebtedness of the Company (other than Additional Notes) permitted to be
incurred if: (x) the condition set forth in the first paragraph of Section 4.09
is satisfied; or (y) such Indebtedness is Permitted Debt permitted to be
incurred pursuant to clause (11) of the second paragraph of Section 4.09 and
such Indebtedness:
(1) is guaranteed by each Subsidiary which, on the date of incurrence
of such Indebtedness, is obligated as a Guarantor under a Subsidiary
Guarantee;
(2) is secured when incurred, Equally and Ratably with the Notes and
all other Parity Lien Debt, by perfected Liens duly granted to the Joint
Collateral Agent (or any agent thereof) by the Company and each Guarantor
upon all of the Collateral;
(3) is not subordinated in right of payment to any other Indebtedness
of the Company or any such Guarantor;
(4) matures no earlier than the maturity of the Notes and requires no
prepayments, sinking fund payments or offer to purchase (except when, as
and to the extent an offer to purchase the Notes is required by the
provisions described under Sections 4.10 and 4.14);
(5) is incurred in a principal amount (net of any original issue
discount) which, when added to the principal amount of Notes (including
Additional Notes) then outstanding and the outstanding principal amount (or
accreted value) of all other Parity Lien Debt then outstanding, does not
exceed the greatest of:
(a) $135.0 million;
(b) 65% of the then most recently reported net book value of
assets of the Company and its Domestic Subsidiaries that are accounted
for on its consolidated balance sheet as "Property, plant and
equipment," after giving pro forma effect to the use of proceeds from
such Incurrence of Indebtedness; and
(c) 65% of the gross orderly liquidation value of the then most
recently reported net book value of assets of the Company and its
Domestic Subsidiaries that are accounted for on its consolidated
balance sheet as "Property, plant and equipment," as most recently
determined and reported to the Collateral Agent by an independent
appraiser of recognized standing selected by the Company, after giving
pro forma effect to the use of proceeds from such Incurrence of
Indebtedness;
(6) is governed by an indenture or agreement which provides (for the
enforceable benefit of the Trustee and Holders of Notes) that all
Obligations in respect of the Notes and Parity Lien Debt shall be and are
secured Equally and Ratably by all liens, guarantees, supporting
obligations and loss sharing rights at any time granted by the Company or
any Subsidiary or any other Person as security for such debt or any
Obligations in respect of such Indebtedness, whether or not otherwise
constituting Collateral, that all such liens, guarantees, supporting
obligations and loss sharing rights are transferred to the Joint Collateral
Agent and shall be enforceable by the Joint Collateral Agent, and that the
holders of such Indebtedness and Obligations in respect of such
Indebtedness consent to and direct the Joint Collateral Agent to perform
its obligations under Sections 12.02 and Article 13; and
24
(7) is designated by the Company, in an Officers' Certificate
delivered to the Trustee on or before the date of incurrence of such
Indebtedness, as Parity Lien Debt for the purposes of this Indenture.
"PARITY LIEN OBLIGATIONS" means Parity Lien Debt and all other Obligations
of any Obligor under each indenture or agreement governing, securing or relating
to any Parity Lien Debt.
"PARITY LIEN REPRESENTATIVE" means the representatives of the holders of
Parity Lien Debt who become a party to the Collateral Agency Agreement.
"PERMITTED BUSINESS" means any business conducted by the Company and its
Restricted Subsidiaries on the issue date and any business reasonably related,
ancillary or complementary to the business of the Company and its Restricted
Subsidiaries on the issue date.
"PERMITTED HOLDERS" means:
(1) The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc.;
(2) Greenbriar Equity Group, LLC;
(3) Berkshire Partners, LLC; and
(4) any Affiliate of any Person described in clauses (1)-(3) above.
"PERMITTED INVESTMENTS" means an Investment:
(1) in the Company or a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary;
PROVIDED, HOWEVER, that the primary business of such Restricted Subsidiary
is a Permitted Business;
(2) in another Person, if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
PROVIDED, HOWEVER, that such Person's primary business is a Permitted
Business;
(3) in Cash Equivalents;
(4) in receivables owing to the Company or any Restricted Subsidiary
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; PROVIDED, HOWEVER,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) in loans or advances to officers, directors or employees of the
Company or any of its Subsidiaries for travel, transportation,
entertainment, and moving and other relocation expenses and other business
expenses that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(6) in loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Subsidiary,
as the case may be;
25
(7) in stock, obligations or securities received:
(a) in settlement of debts created in the ordinary course of
business and owing to the Company or any Subsidiary;
(b) in satisfaction of judgments; or
(c) as consideration in connection with an Asset Sale permitted
pursuant to Section 4.10; and
(8) deemed to have been made as a result of the acquisition of a
Person that at the time of such acquisition held instruments constituting
Investments that were not acquired in contemplation of the acquisition of
such Person.
"PERMITTED LIENS" means:
(1) Note Liens;
(2) Parity Liens securing Parity Lien Debt;
(3) Liens on Credit Facility Collateral securing Credit Facility
Obligations;
(4) Liens on any Foreign Subsidiary Collateral securing Credit
Facility Obligations, but only if the Joint Collateral Agent has been
granted valid, enforceable and perfected Liens upon such Foreign Subsidiary
Collateral Equally and Ratably securing the Note Obligations and any Parity
Lien Obligations;
(5) Liens in favor of the Company or its Restricted Subsidiaries;
(6) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Subsidiary of
the Company; PROVIDED that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company or the Subsidiary;
(7) Liens on property existing at the time of acquisition of the
property by the Company or any Subsidiary of the Company; PROVIDED that
such Liens were in existence prior to the contemplation of such
acquisition;
(8) Liens to secure the performance of statutory obligations, leases,
surety or appeal bonds, performance bonds or other obligations of a like
nature Incurred in the ordinary course of business;
(9) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (8) of the second paragraph of Section 4.09 covering
only the assets acquired with such Indebtedness;
(10) 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;
26
(11) Liens granted to the Trustee as security for Note Obligations;
(12) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
(13) Liens Incurred in the ordinary course of business of the Company
or any Subsidiary of the Company with respect to obligations that do not
exceed $5.0 million at any one time outstanding; and
(14) Liens on property of a Foreign Subsidiary owned by a Foreign
Subsidiary, whenever held, acquired or arising, but only if and to the
extent securing Indebtedness permitted by clause (2) of the second
paragraph under Section 4.09.
"PERMITTED PRIOR LIENS" means (a) Liens described in clauses (6), (7) or
(9) of the definition of "Permitted Liens" and (b) Liens that arise by operation
of law and are not voluntarily granted, to the extent entitled by law to
priority over the security interests created by the Security Documents.
"PERMITTED REFINANCING INDEBTEDNESS" means Indebtedness that refunds,
refinances, replaces, renews, repays or extends (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," and "refinanced"
shall have a correlative meaning) any Indebtedness Incurred in compliance with
this Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Permitted Refinancing Indebtedness;
PROVIDED, HOWEVER, that:
(1) the Permitted Refinancing Indebtedness has Stated Maturity no
earlier than any Stated Maturity of the Indebtedness being refinanced;
(2) the Permitted Refinancing Indebtedness has an Weighted Average
Life to Maturity at the time such Permitted Refinancing Indebtedness is
Incurred that is equal to or greater than the Weighted Average Life to
Maturity of the Indebtedness being refinanced; and
(3) such Permitted Refinancing Indebtedness is Incurred in an
aggregate principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the sum of (x) either
the aggregate principal amount (or if issued with original issue discount,
the aggregate accreted value) of the Indebtedness being refinanced
(including, with respect to both the Permitted Refinancing Indebtedness and
the Indebtedness being refinanced, amounts then outstanding and amounts
available thereunder) or, if the Indebtedness being refinanced is the
Capital Lease Obligation entered into on or about September 15, 1998, the
aggregate purchase price of the property subject thereto, PLUS (y) unpaid
interest, prepayment penalties, redemption premiums, defeasance costs,
fees, expenses and other amounts owing with respect thereto, PLUS
reasonable financing fees and other reasonable out-of-pocket expenses
Incurred in connection therewith;
PROVIDED, FURTHER, HOWEVER, that Permitted Refinancing Indebtedness shall not
include Indebtedness of a Subsidiary that refinances Indebtedness of the
Company.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
27
"PLANS" means any employee benefit plan, retirement plan, deferred
compensation plan, restricted stock plan, health, life, disability or other
insurance plan or program, employee stock purchase plan, employee stock
ownership plan, pension plan, stock option plan or similar plan or arrangement
of the Company or any Subsidiary, or any successor thereof and "Plan" shall have
a correlative meaning.
"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.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"QUALIFIED CREDIT FACILITY" means a Credit Facility:
(1) which is governed by an agreement that provides for the
enforceable benefit of the Holders of Notes, Trustee, Joint Collateral
Agent and holders of Parity Lien Debt, as third party beneficiaries
thereof, that:
(a) all Liens on property described in clause (1) of the
definition of Foreign Subsidiary Collateral and proceeds thereof at
any time securing any Obligations under such Credit Facility shall
secure Equally and Ratably the Obligations under such Credit Facility
and all Note Obligations and Parity Lien Obligations;
(b) all Liens on property described in clause (2) of the
definition of Foreign Subsidiary Collateral and the proceeds thereof
at any time securing any domestic U.S. commitments and borrowings
under such Credit Facility shall secure Equally and Ratably the
Obligations under such Credit Facility and all Note Obligations and
Parity Lien Obligations;
(c) the agent or representative holding the Liens securing
Obligations under such Credit Facility shall be bound by and shall
perform each of the obligations of the Credit Facility Agent as set
forth Article 13; and
(2) in respect of which the agent or representative holding the Liens
securing Obligations under such Credit Facility has delivered to the
Trustee and the Joint Collateral Agent:
(a) written notice (that has not been withdrawn by such agent or
representative) certifying that such Credit Facility is a Qualified
Credit Facility and that such agent or representative is bound by and
will perform the obligations of the Credit Facility Agent; and
(b) if any other Credit Facility Agent previously delivered such
notice and certification in respect of any predecessor Credit
Facility, an instrument reasonably satisfactory to the Trustee and the
Joint Collateral Agent signed by such previous Credit Facility Agent
withdrawing the previous notice and certification and forever
renouncing and discharging all rights and benefits under this
Indenture that otherwise would have been enforceable by such previous
Credit Facility Agent or the holders of Obligations under such
previous Credit Facility.
The New Senior Credit Facility shall constitute a Qualified Credit Facility
upon due authorization, execution and delivery by the Administrative Agent
thereunder of the Intercreditor Agreement. So long as the New Senior Credit
Facility remains outstanding, no other Credit Facility shall become a Qualified
Credit Facility unless such Credit Facility is permitted under the terms of the
New Senior Credit Facility and this Indenture.
28
"REGISTRATION RIGHTS AGREEMENTS" means (1) the Registration Rights
Agreement dated March 19, 2003 among the Company, Berkshire Fund V, Limited
Partnership, Berkshire Fund VI, Limited Partnership, Berkshire Investors LLC,
Greenbriar Co-Investment Partners, L.P. and Greenbriar Equity Fund, L.P. and (2)
the Amended and Restated Registration Rights Agreement dated March 19, 2003
among the Company, LXH, L.L.C., LXH II, L.L.C., GS Capital Partners 2000, L.P.,
GS Capital Partners 2000 Offshore, L.P., GS Capital Partners 2000 Employee Fund,
L.P., GS Capital Partners 2000 GmbH & Co. Beteiligungs KG and Stone Street Fund
2000, L.P.
"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.
"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 SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"RESTRUCTURING PLAN" means the business consolidation and restructuring
actions with respect to: (i) the EuroCore rationalization involving the Duxford,
England, Welkenraedt, Belgium and Casa Grande, Arizona facilities; (ii) the
consolidation and reorganization of carbon weaving and decorative fabric
production involving the Decines and Les Avenieres, France facilities; (iii) the
consolidation and reorganization of fabric production between the Anderson,
South Carolina, Washington, Georgia and Statesville, North Carolina facilities
and (iv) equipment relocation to the Salt Lake City, Utah facility.
"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.
"SECURED INDEBTEDNESS" means any Indebtedness of the Company secured by a
Lien.
29
"SECURED OBLIGATIONS" means Note Obligations, any Parity Lien Obligations
and all obligations hereunder or under any other Security Document (including,
without limitation, any guarantees of any of the foregoing).
"SECURED PARTIES" means the Joint Collateral Agent, the Trustee, the
Holders from time to time of the Notes, each Parity Lien Representative and each
holder from time to time of Parity Lien Debt.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY DOCUMENTS" means the Joint Collateral Undertaking and one or more
security agreements, pledge agreements, collateral assignments, mortgages, deed
of trust or other grants or transfers for security executed and delivered by the
Company or any other Obligor creating (or purporting to create) a Lien upon
property (other than Excluded Assets) owned or to be acquired by the Company or
such other Obligor in favor of the Joint Collateral Agent or the Trustee for the
benefit of the Holders of the Notes (or in favor of an agent of the Joint
Collateral Agent or the Trustee), the Subsidiary Guarantees and any other
Obligations in respect of the Note Obligations.
"SENIOR INDEBTEDNESS" means:
(1) all Credit Facility Indebtedness;
(2) Indebtedness represented by the ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Lease; and
(3) all other Indebtedness of the Company, including interest
(including interest accruing at the contract rate specified in the Credit
Facilities or the documentation governing such other Indebtedness, as
applicable (including any rate applicable upon default) on or after the
filing of any petition in bankruptcy, or the commencement of any similar
state, federal or foreign reorganization or liquidation proceeding,
relating to the Company, whether or not allowed as a claim against the
Company in any such proceeding) and fees thereon, whether outstanding on
the issue date or thereafter issued or Incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such obligations are not superior in right
of payment to the Notes;
PROVIDED, HOWEVER, that Senior Indebtedness shall not include:
(1) any liability for federal, state, local or other taxes owed or
owing by the Company;
(2) any accounts payable or other liabilities to trade creditors
arising in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities);
(3) any Indebtedness, guarantee or obligation of the Company which is
subordinate or junior in right of payment in any respect to any other
Indebtedness, guarantee or obligation of the Company, including any
Subordinated Obligations;
(4) any obligations with respect to any capital stock; and
(5) any intercompany Indebtedness of the Company or any Guarantor to
the Company or any of its Affiliates.
"SENIOR SUBORDINATED INDEBTEDNESS" means the Company's 9 3/4% Senior
Subordinated Notes due 2009 and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank
30
PARI PASSU with the 9 3/4% Senior Subordinated Notes due 2009 in right of
payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as
defined in the Exchange 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
hereof.
"SPECIAL INTEREST" means all liquidated damages then owing pursuant to the
Exchange Registration Rights Agreement.
"SPECIFIED PROPERTIES" shall mean the Company's manufacturing plants
located in Lancaster, Ohio; Livermore, California; Welkenraedt, Belgium; and
Lodi, New Jersey and the property referred to as "Plant Three" in Kent,
Washington.
"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.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated as of
March 19, 2003, among Berkshire Fund V, Limited Partnership, Berkshire Fund VI,
Limited Partnership, Berkshire Fund V Investment Corp., Berkshire Fund VI
Investment Corp., Berkshire Investors LLC, Greenbriar Co-Investment Partners,
L.P., Greenbriar Equity Fund, L.P. and the Company.
"SUBORDINATED NOTES" means the Company's:
(1) 9 3/4% Senior Subordinated Notes due 2009; and
(2) 7% Convertible Subordinated Debentures due 2011.
"SUBORDINATED OBLIGATION" means any Indebtedness of the Company (whether
outstanding on the issue date or thereafter Incurred) that is contractually
subordinated or junior in right of payment to the Notes pursuant to a written
agreement, including the Subordinated Notes.
"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).
31
"SUBSIDIARY 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.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"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 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:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any capital
stock or Indebtedness of, or holds any lien on any property of, the Company or
any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary
to be so designated; PROVIDED, HOWEVER, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.07.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; PROVIDED, HOWEVER, that immediately after giving effect
to such designation (x) the Company could Incur $1.00 of additional Indebtedness
under the first paragraph of Section 4.09 and (y) no Default shall have occurred
and be continuing. Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"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 or other similar governing entity of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, as of the date of determination,
with respect to any Indebtedness, the quotient obtained by dividing (x) the sum
of the products of the numbers of years from the date of determination to the
date of each successive scheduled principal payment of such Indebtedness or
scheduled redemption multiplied by the amount of such payment by (y) the sum of
all such payments.
32
"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
"CHANGE OF CONTROL OFFER"........................................................... 4.14
"CHANGE OF CONTROL PAYMENT"......................................................... 4.14
"CHANGE OF CONTROL PAYMENT DATE".................................................... 4.14
"COVENANT DEFEASANCE"............................................................... 8.03
"EVENT OF DEFAULT".................................................................. 6.01
"EXCESS PROCEEDS"................................................................... 4.10
"INCUR"............................................................................. 4.09
"LEGAL DEFEASANCE".................................................................. 8.02
"OFFER AMOUNT"...................................................................... 3.09
"OFFER PERIOD"...................................................................... 3.09
"PAYING AGENT"...................................................................... 2.03
"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:
"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 Subsidiary Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Subsidiary 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.
33
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. Each Note
will be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
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
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. 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.
34
(1) 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.
One Officer 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
two Officers (an "AUTHENTICATION ORDER"), authenticate Notes for original issue
up to the aggregate principal amount stated in the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
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.
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 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 Special Interest, 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
35
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 Section 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 Section 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.
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:
36
(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
(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:
37
(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;
(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; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, 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.
(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 Exchange 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 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 Exchange Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Exchange
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 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
38
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;
(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,
39
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 Exchange 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 Exchange Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Exchange
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
(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 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.
40
(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
41
(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, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, in the case of clause
(C) above, the Regulation S Global Note, and in all other cases, the
IAI 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 Exchange 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 Exchange Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Exchange
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;
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.
42
(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.
(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 Exchange 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
43
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 Exchange Registration
Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Exchange 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 Exchange 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
(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.
44
(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, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO
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 AND OTHER JURISDICTIONS.
(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) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
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
45
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, 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;
46
(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. 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.
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 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 Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
47
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.
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 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:
48
(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.
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 11 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
49
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 irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
Section 3.05 DEPOSIT OF REDEMPTION 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 Special
Interest, 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 purchase price of, and accrued
interest and Special Interest, 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. 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.
50
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 April 1, 2006, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under this Indenture (including the original principal amount of any Additional
Securities) at a redemption price of 109.875% of the principal amount, plus
accrued and unpaid interest and Special Interest, if any, to the redemption
date, with the Net Cash Proceeds of one or more Equity Offerings; PROVIDED that:
(1) at least 65% of the aggregate principal amount of Notes issued
under this Indenture (including the original principal amount of any
Additional Notes) remains outstanding immediately after the occurrence of
any such redemption (excluding Notes held by the Company and its
Subsidiaries); and
(2) the redemption occurs within 120 days after the date of the
related Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes will not be
redeemable at the Company's option prior to April 1, 2006.
(c) After April 1, 2006, the Company may redeem all or 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 Special Interest, if any, on the Notes redeemed, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on April 1, 2006 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2006........................................ 104.938%
2007........................................ 102.469%
2008 and thereafter......................... 100.000%
(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 except as provided under Sections 3.09, 4.10
and 4.14.
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
51
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
Special Interest, 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 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
52
(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 Special Interest, if any, on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest and
Special Interest, 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 then due. The Company will pay all Special Interest, if
any, in the same manner on the dates and in the amounts set forth in the
Exchange 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
Special Interest (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.
53
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 the Commission's rules and regulations, so
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes, within the time periods specified in the Commission's rules and
regulations:
(1) all quarterly and annual reports that would be required to
be filed with the Commission on Forms 10-Q and 10-K if the Company were
required to file such reports; and
(2) all current reports that would be required to be filed with
the Commission 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
the preceding paragraph 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 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) All such reports will be prepared in all material respects in
accordance with all of the rules and regulations applicable to such reports.
Each annual report on Form 10-K will include a report on the Company's
consolidated financial statements by the Company's certified independent
accountants. In addition, following the consummation of the Exchange Offer
contemplated by the Exchange Registration Rights Agreement, the Company will
file a copy of each of the reports referred to in clauses (1) and (2) above with
the Commission for public availability within the time periods specified in the
rules and regulations applicable to such reports (unless the Commission will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request.
(d) If, at any time after consummation of the Exchange Offer
contemplated by the Exchange Registration Rights Agreement, the Company is no
longer subject to the periodic reporting requirements of the Exchange Act for
any reason, the Company will nevertheless continue filing the reports specified
in the preceding paragraph with the Commission within the time periods specified
above unless the Commission will not accept such a filing. the Company agrees
that it will not take any action for the purpose of causing the Commission not
to accept any such filings. If, notwithstanding the foregoing, the Commission
will not accept the Company's filings for any reason, the Company will post the
reports referred to in the preceding paragraph on its website within the time
periods that would apply if the Company were required to file those reports with
the Commission.
(e) In addition, the Company and the Guarantors agree that, for so long as
any Notes remain outstanding, at any time they are not required to file the
reports required by the preceding paragraphs with
54
the Commission, they 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 (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Trustee, within 120 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 the Security Documents, 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 the Security Documents
and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture or the Security Documents (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 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 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 of the Guarantors 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 (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.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly make a Restricted Payment. "Restricted
Payment," with respect to any Person means:
(1) the declaration or payment of any dividends or any other distributions of
any sort in respect of its Capital Stock (including any payment in
connection with any merger or consolidation involving
55
such Person) or similar payment to the direct or indirect Holders of its
Capital Stock (other than dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary, and
other than pro rata dividends or other distributions made by a Restricted
Subsidiary that is not a Wholly Owned Restricted Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a
Subsidiary that is an entity other than a corporation));
(2) the purchase, redemption or other acquisition or retirement for value of
any Capital Stock of the Company held by any Person or of any Capital Stock
of a Restricted Subsidiary held by any Affiliate of the Company (other than
a Restricted Subsidiary), including the exercise of any option to exchange
any Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment of any Subordinated Obligations (other than
the purchase, repurchase, or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year
of the date of acquisition); or
(4) the making of any Investment (other than a Permitted Investment) in any
Person,
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would
occur as a consequence of such Restricted Payment;
(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
Consolidated Coverage Ratio test set forth in the first paragraph of
Section 4.09; and
(3) the aggregate amount of the Restricted Payment and all other Restricted
Payments made since the issue date would exceed the sum of, without
duplication:
(a) 50% of the Consolidated Net Income accrued during the period, which
will be treated as one accounting period, from the beginning of the
fiscal quarter in which the issue date occurs to the end of the most
recent fiscal quarter ending at least 45 days before the date of the
Restricted Payment, or, in case the Consolidated Net Income is a
deficit, less 100% of that deficit; PLUS
(b) 100% of the aggregate Net Cash Proceeds received by the Company from
the issuance or sale of its Capital Stock, other than Disqualified
Stock and other than Capital Stock issued in connection with the
Financing Transactions, subsequent to the issue date and on or before
the date of the Restricted Payment, other than an issuance or sale to
a Subsidiary of the Company or an issuance or sale to an employee
stock ownership plan or to a trust established by the Company or any
of its Subsidiaries for the benefit of their employees; PLUS
(c) the amount by which the Indebtedness of the Company is reduced on the
Company's balance sheet upon the conversion or exchange, other than by
a Subsidiary of the Company, subsequent to the issue date and on or
before the date of the Restricted Payment, of any
56
Indebtedness of the Company convertible or exchangeable for Capital
Stock, other than Disqualified Stock, of the Company, less the amount
of any cash, or the fair value of any other property, distributed by
the Company upon the conversion or exchange; PLUS
(d) an amount equal to the sum of (x) the net reduction in Investments
since the date hereof in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or advances or other transfers of
assets, in each case to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries, and (y) the portion, proportionate to the
Company's equity interest in the Subsidiary, of the fair market value
of the net assets of an Unrestricted Subsidiary at the time the
Unrestricted Subsidiary is designated a Restricted Subsidiary;
PROVIDED, HOWEVER, that this sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made and
treated as a Restricted Payment by the Company or any Restricted
Subsidiary in the Unrestricted Subsidiary.
The preceding provisions will not prohibit:
(1) any acquisition of any Capital Stock of the Company made by exchange for,
or out of the proceeds of the substantially concurrent sale of, Capital
Stock of the Company, other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary of the Company, or options, warrants
or other rights to purchase the Capital Stock; PROVIDED, HOWEVER, that:
(a) the purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments; and
(b) the Net Cash Proceeds from the sale shall be excluded from
clause (3)(b) of the first paragraph of this Section 4.07;
(2) any purchase, repurchase, redemption, defeasance or acquisition or
retirement for value of Subordinated Obligations made by exchange for, or
out of the proceeds of the substantially concurrent sale of, Capital Stock
of the Company, other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company, or options, warrants or
other rights to purchase the Capital Stock; PROVIDED, HOWEVER, that:
(a) the purchase, repurchase, redemption, defeasance or acquisition or
retirement for value shall be excluded in the calculation of the
amount of Restricted Payments; and
(b) the Net Cash Proceeds from the sale shall be excluded from clause
(3)(b) of the first paragraph of this Section 4.07;
(3) any purchase, repurchase, redemption, defeasance or acquisition or
retirement for value of Subordinated Obligations made by exchange for, or
out of the proceeds of the substantially concurrent sale of, Indebtedness
of the Company which is permitted to be Incurred under Section 4.09;
PROVIDED, HOWEVER, that the Indebtedness:
(a) shall have a Stated Maturity later than the Stated Maturity of the
Notes; and
(b) shall have a Weighted Average Life to Maturity greater than the
remaining Weighted Average Life to Maturity of the Notes;
PROVIDED, FURTHER, HOWEVER, that the purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
57
(4) any purchase or redemption of Subordinated Obligations from Net Available
Cash after application of such Net Available Cash pursuant to the
provisions of Section 4.10; PROVIDED, HOWEVER, that the purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments;
(5) so long as no Default shall have occurred and be continuing, or result
therefrom, the repurchase at any time by the Company of up to $23.0 million
in aggregate principal amount of, and interest on, Subordinated Obligations
with the net cash proceeds of the sale by the Company of its Equity
Interests in Asahi- ▇▇▇▇▇▇▇▇ Co., Ltd. (or the net proceeds from the sale
of any securities received by the Company in connection with the sales of
Equity Interests in Asahi-▇▇▇▇▇▇▇▇ Co., Ltd.); PROVIDED, HOWEVER, that such
repurchases shall be excluded in the calculation of Restricted Payments;
(6) so long as no Default shall have occurred and be continuing, or result
therefrom, the repurchase by the Company of its 9 3/4% Senior Subordinated
Notes due 2009; PROVIDED that, at the time of and after giving effect to
any such repurchases, (a) the Company's EBITDA for the prior four-quarter
period for which internal financial statements are available shall be no
less than $125.0 million and (b) the Consolidated Coverage Ratio shall
exceed 2.25 to 1.0, PROVIDED, FURTHER, HOWEVER, that any such repurchases
shall be included in the calculation of Restricted Payments;
(7) dividends paid within 60 days after the date of declaration thereof if at
the date of declaration the dividend would have complied with this Section
4.07; PROVIDED, HOWEVER, that at the time of payment of the dividend, no
other Default shall have occurred and be continuing or result therefrom;
PROVIDED, FURTHER, HOWEVER, that the declaration, but not the payment, of
such dividend shall be included in the calculation of the amount of
Restricted Payments;
(8) so long as no Default shall have occurred and be continuing, or result
therefrom, Investments in Joint Ventures or other Persons engaged in a
Permitted Business in an aggregate amount which, when added together with
the amount of all other Investments made according to this clause (8) which
at the time have not been repaid through dividends, repayments of loans or
advances or other transfers of assets, does not exceed $60.0 million;
PROVIDED, HOWEVER, that the amount of the Investments shall be excluded in
the calculation of Restricted Payments;
(9) so long as no Default shall have occurred and be continuing, or result
therefrom, payments with respect to employee or director stock options,
stock incentive plans or restricted stock plans of the Company, including
any redemption, repurchase, acquisition, cancellation or other retirement
for value of shares of Capital Stock of the Company, restricted stock,
options on any of these shares or similar securities held by directors,
officers or employees or former directors, officers or employees or by any
Plans upon death, disability, retirement or termination of employment of
any of these Persons under the terms of the Plans or agreement under which
the shares or related rights were issued or acquired; PROVIDED, HOWEVER,
that the amount of any of these payments shall be included in the
calculation of Restricted Payments;
(10) so long as no Default shall have occurred and be continuing, or result
therefrom, any purchase or defeasance of Subordinated Obligations or
Capital Stock upon a Change of Control to the extent required by this
Indenture or other agreement or instrument under which the Subordinated
Obligations or Capital Stock were issued, but only if the Company has first
complied with all its obligations under Section 4.14; PROVIDED, HOWEVER,
that the amount of the purchase or defeasance shall be excluded in the
calculation of Restricted Payments; or
58
(11) so long as no Default shall have occurred and be continuing, or result
therefrom, Restricted Payments in an aggregate amount which, when added
together with the amount of all other Restricted Payments made under, this
clause (11) which at that time have not been repaid through dividends,
repayments of loans or advances or other transfers of assets, does not
exceed $40.0 million; PROVIDED, HOWEVER, that the amount of the Restricted
Payments shall be included in the calculation of Restricted Payments.
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
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined in good faith by the Board of Directors
whose resolution with respect thereto will be delivered to the Trustee. 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 calculations required by
this Section 4.07 were computed.
Section 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
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.
However, the preceding restrictions will not apply to encumbrances
or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities as in
effect on the date hereof 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 hereof;
(2) this Indenture, the Notes and the Subsidiary Guarantees;
(3) applicable law;
(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;
59
(5) customary non-assignment provisions in leases, licenses and other
agreements entered into in the ordinary course of business and consistent
with past practices;
(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 the preceding paragraph;
(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;
(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 the
provisions of Section 4.12 that limit the right of the debtor to dispose of
the assets subject to such Liens;
(10) any encumbrance or restriction contained in the governing documents of any
Joint Venture Subsidiary;
(11) 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; and
(12) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business.
Section 4.09 INCURRENCE OF INDEBTEDNESS.
The Company will not, and will not permit any Restricted Subsidiary to,
Incur, directly or indirectly, any Indebtedness; PROVIDED, HOWEVER, that the
Company or any Restricted Subsidiary may Incur Indebtedness if, on the date of
the Incurrence and after giving effect to the Incurrence on a pro forma basis
(including a pro forma application of the net proceeds therefrom), the
Consolidated Coverage Ratio exceeds 2.0 to 1.0.
The first paragraph of this Section 4.09 will not prohibit the
Incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the incurrence by the Company or any Domestic Subsidiary of additional
Indebtedness and letters of credit under Credit Facilities in an aggregate
principal amount at any one time outstanding and incurred under this clause
(1)(with letters of credit being deemed to have a principal amount equal to
the maximum potential liability of the Company and its Subsidiaries in
respect thereof) not to exceed the greater of:
(a) $200.0 million; or
(b) the amount of the Borrowing Base as of the date of such incurrence;
(2) Indebtedness Incurred by Foreign Subsidiaries that are Restricted
Subsidiaries to finance the working capital requirements of such
Subsidiaries; PROVIDED, HOWEVER, that the aggregate principal amount of
such Indebtedness, when added together with the amount of Indebtedness
Incurred by all
60
Foreign Subsidiaries that are Restricted Subsidiaries under this clause (2)
and then outstanding, does not exceed the sum of:
(a) 85% of the then most recently reported net book value of all inventory
owned by Foreign Subsidiaries that are Restricted Subsidiaries as of
the end of the most recent fiscal quarter preceding such date;
PROVIDED that the amount of this clause (a) shall not exceed 55% of
the total of clauses (a) and (b) of this clause (2) on any date of
calculation; PLUS
(b) 85% of the face amount of all accounts receivable owned by Foreign
Subsidiaries as of the end of the most recent fiscal quarter preceding
such date that were not more than 180 days past due;
(3) Indebtedness owed to and held by the Company or any Wholly Owned Restricted
Subsidiary; PROVIDED, HOWEVER, that (a) any subsequent issuance or transfer
of any Capital Stock which results in the Wholly Owned Restricted
Subsidiary ceasing to be a Wholly Owned Restricted Subsidiary or any
subsequent transfer of the Indebtedness, other than to the Company or a
Wholly Owned Restricted Subsidiary, shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness and (b) if the Company or
any Guarantor is the obligor on such Indebtedness, the payment of such
Indebtedness is expressly subordinate to the prior payment in full in cash
of all obligations with respect to the Notes, in the case of the Company,
or the Subsidiary Guarantee in the case of a Guarantor;
(4) the Incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the related Subsidiary Guarantees issued on
the date hereof and the Exchange Notes and the related Subsidiary
Guarantees to be issued pursuant to the Exchange Registration Rights
Agreement;
(5) the Incurrence by the Company and its Restricted Subsidiaries of the
Existing Indebtedness, other than Indebtedness described in clauses (1),
(2), (3) or (4) above;
(6) the Incurrence by the Company or any of its Restricted Subsidiaries 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 the first paragraph of this Section 4.09 or clause (4) or
(5) above or this clause (6);
(7) Hedging Obligations directly related to Indebtedness permitted to be
Incurred by the Company and Restricted Subsidiaries under this Indenture
or, in the case of a currency exchange protection agreement, reasonably
related to the ordinary course of business of the Company and its
Restricted Subsidiaries;
(8) Indebtedness, including Capital Lease Obligations and purchase money
Indebtedness, Incurred by the Company or its Restricted Subsidiaries to
finance the acquisition of tangible assets or other capital expenditures,
and Indebtedness Incurred by the Company or its Restricted Subsidiaries to
refinance such Capital Lease Obligations and purchase money Indebtedness,
in an aggregate outstanding principal amount which, when added together
with the amount of Indebtedness Incurred under this clause (8) and then
outstanding, does not exceed $20.0 million;
(9) Indebtedness in respect of performance, surety or appeal bonds provided in
the ordinary course of the Company and its Restricted Subsidiaries;
(10) 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
61
payment of dividends on Disqualified Stock in the form of additional shares
of the same class of Disqualified Stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this Section 4.09; PROVIDED, in each such case, that the amount
thereof is included in Consolidated Interest Expense of the Company as
accrued; and
(11) Indebtedness in an aggregate principal amount which, together with all
other Indebtedness of the Company and Restricted Subsidiaries outstanding
on the date of the Incurrence, other than Indebtedness permitted by clauses
(1) through (10) above or the first paragraph of this Section 4.09, does
not exceed $40.0 million.
The Company will not Incur:
(1) any Indebtedness if that Indebtedness is contractually subordinate in right
of payment to any Senior Indebtedness, unless the Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of
payment to the Notes; PROVIDED, HOWEVER, that no Indebtedness of the
Company will be deemed to be contractually subordinated in right of payment
to any other Indebtedness of the Company solely by virtue of being
unsecured, or
(2) any Secured Indebtedness that is not Senior Indebtedness.
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 (11) above,
or is entitled to be Incurred pursuant to the first paragraph of this Section
4.09, 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 Credit Facilities 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 clauses (1) or (2) of the
definition of Permitted Debt, as applicable.
In determining amounts of Indebtedness outstanding under this Section
4.09 and to avoid duplication, Indebtedness of a Person resulting from the grant
by that Person of security interests with respect to, or from the issuance by
that Person of guarantees of, or from the assumption of obligations with respect
to letters of credit supporting, Indebtedness Incurred by that Person under this
Indenture, or Indebtedness which that Person is otherwise permitted to Incur
under this Indenture, shall not be deemed to be a separate Incurrence of
Indebtedness by that Person.
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, as the case may be) 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; and
(2) at least 75% of the consideration received in the Asset Sale by the Company
or such Restricted Subsidiary is in the form of cash. For purposes of this
provision, each of the following will be deemed to be cash:
(a) the assumption of Indebtedness of the Company or any Restricted
Subsidiary and the release of the Company or the Restricted Subsidiary
from all liability with respect to the
62
Indebtedness in connection with the Asset Sale; PROVIDED, HOWEVER,
that the amount of the Indebtedness shall not be deemed to be cash for
the purpose of the term "Net Available Cash;" and
(b) securities received by the Company or any Restricted Subsidiary
from the transferee that are promptly converted by the Company or the
Restricted Subsidiary into cash.
Within 360 days after the receipt of the Net Available Cash from the
Asset Sale, an amount equal to 100% of the Net Available Cash from the Asset
Sale, subject to the following two paragraphs, shall be applied by the Company
or the Restricted Subsidiary, as the case may be:
(1) to acquire all or substantially all of the assets of, or a majority of the
Voting Stock of, another Permitted Business which, in the case of an Asset
Sale of Equity Interests or assets of a Domestic Subsidiary, must be owned
by the Company or a Domestic Subsidiary;
(2) to make a capital expenditure which, in the case of an Asset Sale of Equity
Interests or assets of a Domestic Subsidiary, will be a capital expenditure
of the Company or a Domestic Subsidiary; or
(3) to acquire other long-term assets that are used or useful in a Permitted
Business which, in the case of an Asset Sale of Equity Interests or assets
of a Domestic Subsidiary, must be owned by the Company or a Domestic
Subsidiary.
Notwithstanding the above, the Company and the Restricted Subsidiaries
will not be required to apply any Net Available Cash according to the foregoing
paragraph except to the extent that the aggregate Net Available Cash from all
Asset Sales which are not applied according to the foregoing paragraph exceeds
$15.0 million. Pending application of Net Available Cash under this Section
4.10, the Net Available Cash will be invested in Cash Equivalents which, in the
case of an Asset Sale of Equity Interests or assets of a Domestic Subsidiary,
must be held by the Joint Collateral Agent as part of the Collateral in a
segregated account that includes only proceeds of Asset Sales and interest
earned thereon (an "ASSET SALE PROCEEDS ACCOUNT").
Any Net Available Cash from Asset Sales, as set forth in the preceding
paragraph, that is not applied or invested as provided in the preceding
paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $10.0 million, within five days thereof, the Company will make
an Asset Sale Offer to all Holders of Notes and all holders of Parity Lien Debt
that contains provisions similar to those set forth herein with respect to
offers to purchase or redeem with the proceeds of sales of assets to purchase
the maximum principal amount of Notes and such other Parity Lien Debt 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
Special Interest, 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 Parity Lien
Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds,
the Notes and the Parity Lien Debt will be purchased on a pro rata basis. 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 the securities laws in
connection with the purchase of the Notes under this Section 4.10. To the extent
that the provisions of any securities laws conflict with provisions of this
Section 4.10, the Company will comply with the applicable securities laws and
shall not be deemed to have breached its obligations under this Section 4.10.
63
Section 4.11 TRANSACTIONS WITH AFFILIATES.
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 made in good faith and on terms which are fair
and reasonable to the Company or the Restricted Subsidiary, as the case may
be; 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.
The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the prior
paragraph:
(1) the Financing Transactions;
(2) any Permitted Investment and any Restricted Payment permitted to be paid
under Section 4.07;
(3) any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise under, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the Board of Directors;
(4) the payment of reasonable fees to directors of the Company and its
Restricted Subsidiaries;
(5) transactions between the Company or a Restricted Subsidiary and one or more
Restricted Subsidiaries; PROVIDED, HOWEVER, that no Affiliate of the
Company, other than another Restricted Subsidiary, owns, directly or
indirectly, any Capital Stock in any of the Restricted Subsidiaries;
(6) transactions in the ordinary course of business, including loans, expense
advances and reimbursements, between the Company or any of its Restricted
Subsidiaries, on the one hand, and any employee of the Company or any of
its Restricted Subsidiaries, on the other hand;
(7) transactions with affiliates entered into in the ordinary course of
business of the Company or its Restricted Subsidiaries, on terms which are,
in the opinion of the Company's management or the Board of Directors, fair
and reasonable to the Company or its Restricted Subsidiaries;
(8) the granting and performance of registration rights for shares of Capital
Stock of the Company under a written registration rights agreement approved
by a majority of directors of the Company that are disinterested with
respect to the transactions;
64
(9) transactions with Affiliates solely in their capacity as holders of
Indebtedness or Capital Stock of the Company or any of its Subsidiaries, so
long as Indebtedness or Capital Stock of the same class is also held by
Persons that are not Affiliates of the Company and these Affiliates are
treated no more favorably than holders of the Indebtedness or the Capital
Stock generally;
(10) transactions pursuant to the Governance Agreement, the Stockholders
Agreement, or either of the Registration Rights Agreements and any
amendments to, or waivers of any provision of, any such agreements that are
not adverse to the interests of the Holders of the Notes and which are
approved by a majority of the directors of the Company disinterested with
respect to the amendment or waiver, as applicable; and
(11) any transaction between the Company or any Restricted Subsidiaries and any
of the Existing Joint Ventures under agreements in effect on the issue
date.
Section 4.12 LIENS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, Incur, assume or suffer to exist any Lien of any
kind on any asset now owned or hereafter acquired, except Permitted Liens. The
Company will not and will not permit any of its Subsidiaries to, create, incur,
assume or otherwise cause or suffer to exist or become effective any pledge of
or other Lien on the outstanding Equity Interests of ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holding
Corp. or ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Corporation.
Additionally, the Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien of any kind:
(1) upon any property as security for any Parity Lien Obligation, unless the
Company or such Subsidiary causes such Lien (a) to be granted to the Joint
Collateral Agent and (b) to extend to and secure the Note Obligations upon
substantially the same terms but subject to the provisions of this
Indenture and causes such Lien to be duly perfected; or
(2) securing any Parity Lien Debt, unless this Indenture or agreement governing
such Parity Lien Debt (a) provides (for the enforceable benefit of the
Trustee and Holders of Notes) that (x) the holder of such Parity Lien Debt
is bound by the terms of the Joint Collateral Agent Undertakings and (y)
all obligations in respect of the Notes are Equally and Ratably secured by
all Liens, guarantees, supporting obligations and loss sharing rights at
any time granted by the Company or any of its Subsidiaries or any other
Person as security for such Parity Lien Debt, whether or not otherwise
constituting Collateral, and (b) authorizes the Joint Collateral Agent to
perform its obligations set forth herein and the Joint Collateral Agent
Undertakings.
Section 4.13 BUSINESS ACTIVITIES.
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than a Permitted Business.
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 Special Interest on the Notes repurchased, if
any, to
65
the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30 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;
(2) the circumstances and relevant facts regarding the Change of
Control, including a statement of pro forma historical income, cash flow
and capitalization after giving effect to the Change of Control;
(3) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 60 days from the date such notice is
mailed (the "CHANGE OF CONTROL PAYMENT DATE");
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its purchased.
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 $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.
(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.
66
Section 4.15 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
The Company will not sell any shares of Capital Stock of a Restricted
Subsidiary, and shall not permit any Restricted Subsidiary to issue or sell
shares of its Capital Stock, in each case, other than preferred stock within the
meaning of "Qualified Preferred Stock," as defined herein, except:
(1) to the Company or a Wholly Owned Restricted Subsidiary;
(2) directors' qualifying shares;
(3) if, immediately after giving effect to the issuance or sale, neither the
Company nor any of its Subsidiaries own any Capital Stock of the Restricted
Subsidiary; or
(4) if, immediately after giving effect to the issuance or sale, the Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any
Investment in the Person remaining after giving effect to the issuance or
sale would have been permitted to be made under Section 4.07 if made on the
date of the issuance or sale.
The issuance or sale of shares of Capital Stock of any Restricted
Subsidiary of the Company will not violate the provisions above if the shares
are issued or sold in connection with:
(1) the formation or capitalization of a Restricted Subsidiary which, at the
time of the issuance or sale or immediately after the issuance or sale, is
a Joint Venture Subsidiary; or
(2) a single transaction or a series of substantially contemporaneous
transactions by which the Restricted Subsidiary becomes a Restricted
Subsidiary of the Company by reason of the acquisition of securities or
assets from another Person.
Section 4.16 ADVANCES TO RESTRICTED SUBSIDIARIES.
All advances to Restricted Subsidiaries made by the Company or any
Guarantor after the date hereof will be evidenced by intercompany notes in favor
of the Company or such Guarantor, as applicable. These intercompany notes will
be pledged pursuant to the Security Documents to secure the Note Obligations and
any Parity Lien Obligations. Each intercompany note will be payable upon demand
and will bear interest at the same rate as the Notes. The intercompany notes
will each be in the form attached as Exhibit G hereto.
The Company and any Guarantor will not permit any Restricted Subsidiary in
respect of which the Company or such Guarantor, as applicable is a creditor by
virtue of an intercompany note to Incur any Indebtedness that is subordinate or
junior in right of payment to any Indebtedness of such Restricted Subsidiary
unless the Indebtedness so incurred is also subordinated in right of payment to
all intercompany notes of such Restricted Subsidiary.
Section 4.17 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.
67
Section 4.18 ADDITIONAL SUBSIDIARY GUARANTEES AND LIENS.
If:
(1) any Domestic Subsidiary has EBITDA for the last four-quarter period for
which internal financial statements are available in excess of $2.5
million;
(2) any group of Domestic Subsidiaries, taken together, have EBITDA in excess
of $2.5 million for the last four-quarter period for which internal
financial statements are available; or
(3) any Subsidiary guarantees or otherwise provides direct credit support for
any Indebtedness of the Company,
(each such event set forth in clauses (1) through (3) above, a "Triggering
Event"), then such Subsidiary or group of Subsidiaries will become a Guarantor
or Guarantors and execute a supplemental indenture within 10 Business Days of
the date on which such Triggering Event occurred; PROVIDED, HOWEVER, this
Section 4.18 will not apply to Subsidiaries that have properly been designated
as Unrestricted Subsidiaries in accordance with this Indenture for so long as
they continue to constitute Unrestricted Subsidiaries; and PROVIDED, FURTHER,
HOWEVER, that clause (2) above will not apply to any Domestic Subsidiary with an
EBITDA for the last four-quarter period for which internal financial statements
are available of less than $250,000. The form of such Subsidiary Guarantee is
attached as Exhibit E hereto.
If the Company or any other Obligor at any time owns or acquires property
(except property that is at such time an Excluded Asset) that is not subject to
a valid, enforceable and perfected Note Lien held by the Joint Collateral Agent
as security for the Note Obligations and any Parity Lien Obligations, or if the
Company or any of its Subsidiaries at any time grants or permits to exist any
consensual lien upon any property constituting an Excluded Asset, except Credit
Facility Collateral, as security for any Parity Lien Obligation or Credit
Facility Obligation, then the Company will, or will cause such Subsidiary to,
concurrently:
(1) execute and deliver to the Joint Collateral Agent a Security Document upon
substantially the same terms as the Security Documents delivered in
connection with the issuance of the Notes, granting a Lien upon such
property to the Joint Collateral Agent for the benefit of the Holders of
Note Obligations and Parity Lien Obligations;
(2) cause the Lien granted in such Security Document to be duly perfected in
any manner permitted by law; and
(3) deliver to the Joint Collateral Agent an opinion of counsel reasonably
satisfactory to the Joint Collateral Agent, confirming as to such Security
Document the matters set forth as to the Security Documents and Liens
thereunder in the opinions of counsel delivered on behalf of the Company to
the Initial Purchasers of the Notes in connection with the issuance of the
Notes and, if the property subject to such Security Document is an interest
in real estate, such local counsel opinions, title and flood insurance
policies, surveys and other supporting documents as the Joint Collateral
Agent may reasonably request, PROVIDED, HOWEVER, that no such opinion will
be required if in the reasonable judgment of the Company the fair market
value of all such collateral is less than $1.0 million.
If the Company or any Subsidiary creates or permits to exist any Lien on
any Foreign Subsidiary Collateral as security for any Obligations under any
Qualified Credit Facility, then the Company will, or will cause such Subsidiary
to, concurrently grant the Joint Collateral Agent valid, enforceable and
perfected Liens upon such Foreign Subsidiary Collateral as security for Note
Obligations and Parity Lien Obligations.
68
Section 4.19 FAILURE TO DELIVER SECURITY DOCUMENTS; INCREASED INTEREST RATE.
As of the date of this Indenture, the Company may not have delivered to the
Joint Collateral Agent each Security Document granting the first-priority
security interests in the Collateral. If this occurs, the Company will use its
best efforts to deliver all of the Security Documents to the Joint Collateral
Agent after the date hereof. If the Company is unable to deliver to the Joint
Collateral Agent, within the time periods set forth below, all of the Security
Documents, the following shall occur:
(1) if all the Security Documents have not been delivered within 60 days after
the date hereof, the annual interest rate on the Notes will increase by
0.25%;
(2) if all the Security Documents have not been delivered within 150 days after
the date hereof, the annual interest rate on the Notes will increase by an
additional 0.25%;
(3) if all Security Documents have not been delivered within 240 days after the
date hereof, the annual interest rate on the Notes will increase by an
additional 0.25%; and
(4) if all the Security Documents have not been delivered within 330 days after
the date hereof, the annual interest rate on the Notes will increase by an
additional 0.25%;
PROVIDED, that the increase in the annual interest rate on the Notes described
above will not exceed 1% in the aggregate and, PROVIDED, FURTHER, that (i) when
all the Security Documents are delivered at any time after the date hereof or
(ii) if the failure by the Company to deliver all Security Documents results
solely from the refusal by any third-party or governmental authority to take any
action required for Hexcel to make such delivery of all Security Documents, the
annual interest rate on the Notes will return to 9.875%.
Section 4.20 FURTHER ASSURANCES; COLLATERAL INSPECTIONS AND REPORTS; COSTS AND
INDEMNIFICATION.
(a) The Company will, and will cause each of its Subsidiaries to, do
or cause to be done all acts and things which may be required, or which the
Joint Collateral Agent from time to time may reasonably request, to assure and
confirm that the Joint Collateral Agent holds, for the benefit of the holders of
Note Obligations and Parity Lien Obligations, duly created, enforceable and
perfected Liens upon the Collateral as contemplated by this Indenture and the
Security Documents, so as to render the same available for the security and
benefit of this Indenture and of the Notes, Subsidiary Guarantees and all other
Note Obligations and Parity Lien Obligations, according to the intent and
purposes herein expressed.
(b) Upon request of the Joint Collateral Agent at any time and from
time to time, the Company will, and will cause each of its Subsidiaries to,
promptly execute, acknowledge and deliver such Security Documents, instruments,
certificates, notices and other documents and take such other actions as the
Joint Collateral Agent may reasonably request to create, perfect, protect,
assure or enforce the Liens and benefits intended to be conferred as
contemplated by this Indenture for the benefit of the holders of Note
Obligations and the holders of Parity Lien Obligations. If the Company or such
Subsidiary fails to do so, the Collateral Agent is hereby irrevocably authorized
and empowered, with full power of substitution, to execute, acknowledge and
deliver such Security Documents, instruments, certificates, notices and other
documents and, subject to Article 12, take such other actions in the name, place
and stead of the Company or such Subsidiary, but the Joint Collateral Agent will
have no obligation to do so and no liability for any action taken or omitted by
it in good faith in connection therewith.
(c) Upon request of the Collateral Agent at any time and from time to
time, the Company will, and will cause its Subsidiaries to, (i) permit the Joint
Collateral Agent or any advisor, auditor,
69
consultant, attorney or representative acting for the Joint Collateral Agent,
upon reasonable notice to the Company and during normal business hours unless an
Event of Default is continuing, to visit and inspect any of the property of the
Company and its Subsidiaries, to review, make extracts from and copy the books
and records of the Company and its Subsidiaries relating to any such property,
and to discuss any matter pertaining to any such property with the officers and
employees of the Company and its Subsidiaries, and (ii) deliver to the Joint
Collateral Agent such reports, including valuations, relating to any such
property or any Lien thereon as the Collateral Agent may request.
(d) The Company will bear and pay all legal expenses, collateral audit
and valuation costs, filing fees, insurance premiums and other costs associated
with the performance of the obligations of the Company and its Subsidiaries set
forth in this Section 4.20 and also will pay, or promptly reimburse the Trustee
and Joint Collateral Agent for, all costs and expenses incurred by the Trustee
or Collateral Agent in connection therewith, including all reasonable fees and
charges of any advisors, auditors, consultants, attorneys or representatives
acting for the Trustee or for the Joint Collateral Agent.
(e) The Company will pay, reimburse the Trustee, the Joint Collateral
Agent and the Holders of Notes for, and, to the fullest extent lawful, defend
and indemnify each of them against, all claims, liabilities, taxes, costs and
expenses of every type and nature (including, without limitation, the reasonable
fees and charges of attorneys, advisors, auditors and consultants acting for any
of them) incurred by any of them as a result of or in connection with the
creation, perfection, protection or enforcement of the Note Liens or the
exercise or enforcement of any right or remedy under the Security Documents or
to prove, preserve, protect or enforce any Note Lien or any claim based upon the
Note Liens in any legal proceeding, including any Insolvency or Liquidation
Proceeding. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee, as Holder of Notes, or the
Joint Collateral Agent through the Trustee's, such Holder of Notes, or the Joint
Collateral Agent's, as applicable, own willful misconduct, gross negligence or
bad faith.
(f) The Company will pay, reimburse the Trustee, the Joint Collateral
Agent and the Holders of Notes for, and, to the fullest extent lawful, defend
and indemnify each of them against, all claims, liabilities, taxes, costs and
expenses of every type and nature (including, without limitation, the reasonable
fees and charges of attorneys, advisors, auditors and consultants acting for any
of them) incurred by any of them as a result of or in connection with: (A) the
presence, Release, or threatened Release of or exposure to any Hazardous
Material at, from, in, to, on, or under any Property currently or formerly
owned, leased or otherwise used or occupied by the Company; (B) the
transportation, treatment, storage, handling, recycling or disposal or
arrangement for transportation, treatment, storage, handling, recycling or
disposal of any Hazardous Material at or to any location by or on behalf of the
Company; or (C) any violation of Environmental Law by the Company.
(g) The Company will comply with the provisions of TIA Section 314(b).
To the extent applicable, the Company will cause TIA Section 313(b), relating to
reports, and TIA Section 314(d), relating to the release of property or
securities or relating to the substitution therefore of any property or
securities to be subjected to the Lien of the Security Documents, to be complied
with. Any certificate or opinion required by TIA Section 314(d) may be made by
an officer of the Company except in cases where TIA Section 314(d) requires that
such certificate or opinion be made by an independent Person, which Person will
be an independent engineer, appraiser or other expert selected or reasonably
satisfactory to the Trustee.
To the extent applicable, the Company will furnish to the Trustee, prior to
each proposed release of Collateral pursuant to the Security Documents:
(1) all documents required by TIA Section 314(d); and
70
(2) an opinion of counsel to the effect that such accompanying
documents constitute all documents required by TIA Section 314(d).
If any Collateral is released in accordance with this Indenture or any
Security Document at a time when the Trustee is not itself also the Joint
Collateral Agent and if the Company has delivered the certificates and documents
required by the Security Documents and this Section 4.20, the Trustee will
determine whether it has received all documentation required by TIA Section
314(d) in connection with such release and, based on such determination and the
opinion of counsel delivered pursuant to this Indenture, will deliver a
certificate to the Joint Collateral Agent setting forth such determination.
ARTICLE 5.
SUCCESSORS
Section 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company may not, directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted 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, the Exchange
Registration Rights Agreement and the Security Documents 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, be permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Coverage Ratio test
set forth in the first paragraph of Section 4.09.
In addition, the Company may 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 Domestic Restricted Subsidiary of the Company or a merger of
a Domestic Restricted Subsidiary into the Company.
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
71
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) the Company defaults for 30 days in the payment when due of
interest on, or Special Interest with respect to, the Notes;
(2) the Company defaults in the payment when due (at maturity, upon
redemption or otherwise) of the principal of, or premium, if any, on the
Notes;
(3) the Company or any of its Subsidiaries fails to comply with the
provisions of Section 4.16 or 5.01 hereof;
(4) the Company fails to comply with any of its obligations in Section
4.14, other than a failure to purchase Notes, or Section 4.10, other than a
failure to purchase Notes, Section 4.03, Section 4.07, Section 4.09,
Section 4.08, Section 4.11, Section 4.15, Section 4.13 or Section 4.18 for
30 days after notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of Notes then outstanding voting as
a single class;
(5) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture, the Notes or
the Security Documents for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class; PROVIDED, HOWEVER, that in
no event shall a failure by the Company to observe or perform any
representation or warranty be an Event of Default unless such failure would
have a material adverse effect on the management, the condition (financial
or other), business, properties or results of operations of the Company and
its Subsidiaries, taken as a whole;
(6) a default occurs 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 Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary (or the payment of which is guaranteed
by the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary), whether such Indebtedness or guarantee now exists, or is
created after the date of this Indenture, if that default:
72
(A) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or
(B) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness or
the maturity of which has been so accelerated, aggregates $10.0
million or more;
(7) 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 Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, which judgment
or judgments remains outstanding for 60 days following such judgment or
judgments and are not discharged, waived or stayed within 10 days after
notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a single
class; provided that the aggregate of all such undischarged judgments
exceeds $10.0 million;
(8) any Security Document or any Lien purported to be granted thereby
and having a fair market value in excess of $10.0 million is held in any
judicial proceeding to be unenforceable or invalid, in whole or in part, or
ceases for any reason (other than pursuant to a release that is delivered
or becomes effective as set forth herein) to be fully enforceable and
perfected;
(9) the Company or any Guarantor, or any Person acting on behalf of
any of them, denies or disaffirms, in writing, any obligation of the
Company or any Guarantor set forth in or arising under any Security
Document;
(10) except as permitted by this Indenture, any Subsidiary 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 Subsidiary Guarantee;
(11) 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
73
(12) 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.
The Company is required to deliver to the Trustee, within 30 days after its
occurrence, written notice of any event which would constitute a Default, its
status and what action the Company is taking or proposes to take in respect to
the event.
Section 6.02 ACCELERATION.
In the case of an Event of Default specified in clause (11) or (12) of
Section 6.01 hereof, with respect to the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable immediately without further action or notice. If any other 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.
Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (11) or (12) of Section 6.01 hereof occurs with respect to the Company,
any of its Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, 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 then outstanding Notes by
written notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
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 Special
Interest, 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
74
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.
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 an Event of Default in the payment of the
principal of, premium and Special Interest, 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 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.
Except to enforce the right to receive payment of principal, premium,
Special Interest, if any, or interest when due no Holder of a Note may pursue a
remedy with respect to this Indenture or the Notes unless:
(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 have requested 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.
75
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 Special Interest,
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.
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 Special Interest, 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 Special Interest, if any, and interest, ratably,
without preference or priority of any
76
kind, according to the amounts due and payable on the Notes for principal,
premium and Special Interest, 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.
Section 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as 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
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee 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
77
(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 liability. The Trustee will be under no
obligation to exercise any of its 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 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; PROVIDED, HOWEVER, that the
Trustee's conduct does not constitute willful misconduct or gross negligence.
(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.
78
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 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 of, premium or Special
Interest, if any, or interest 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 Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA Section 313(b)(2). The Trustee will also transmit by mail
all reports as required by TIA Section 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 Section 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 expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company and the Guarantor 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,
willful misconduct 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
79
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.
(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(11) or (12) 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
Section 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.
80
(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 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 Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 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 Subsidiary Guarantees) on the date the
conditions set forth below are
81
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 Subsidiary 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 Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute 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 Special Interest,
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.
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 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 Subsidiary
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 Subsidiary 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(6)
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:
82
(1) the Company must irrevocably deposit with the Trustee, in trust,
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, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium and Special Interest,
if any, and interest on the outstanding Notes on the stated date for
payment thereof 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;
(2) in the case of an election under Section 8.02 hereof, the Company
has delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee 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 shall 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
must deliver to the Trustee an Opinion of Counsel in the United States
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);
(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 must deliver 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 any other
creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for or relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
Additionally, the Collateral will be released in whole as provided in
Section 14.04 upon either a Legal Defeasance or Covenant Defeasance under either
Section 8.02 or 8.03 hereof.
83
Section 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
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 Special Interest, 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 Special
Interest, if any, or interest on any Note and remaining unclaimed for two years
after such principal, premium or Special Interest, 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 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 the Guarantor's obligations under this
Indenture and the Notes and the Subsidiary 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 Special Interest, if any, or interest on any Note following the
reinstatement of its obligations, the Company will be
84
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
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 Subsidiary
Guarantees, the Notes or any Security Documents 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 or Article 10 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 Holder of the Note;
(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;
(7) to allow any Guarantor to execute a supplemental indenture and/or
a Subsidiary Guarantee with respect to the Notes;
(8) to make, complete or confirm any grant of Collateral permitted or
required by this Indenture or Security Documents or any release of
Collateral that becomes effective as set forth in this Indenture or
Security Documents;
(9) to conform the text of this Indenture, the Subsidiary Guarantees,
the Security Documents or the Notes to any provision of the Description of
Notes contained in the Offering Circular to the extent that such provision
in that Description of Notes was intended to be a verbatim recitation of a
provision of this Indenture, the Subsidiary Guarantees, the Security
Documents or the Notes;
(10) reflect any waiver or termination of any right arising under
Article 12 that otherwise would be enforceable by any holder of a Parity
Lien Obligation or Parity Lien, if such waiver or termination is set forth
or provided herein or agreement governing or giving rise to such Parity
Lien Obligation or Parity Lien; PROVIDED, that no such waiver or amendment
pursuant to this clause (10) shall adversely affect the rights of Holders
of Notes; or
85
(11) to make any amendment or supplement approved in accordance with
Section 13.09.
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, Section
3.09, 4.10 and 4.14 hereof), the Subsidiary Guarantees, the Notes or any
Security Documents 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 Special Interest, 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 Subsidiary Guarantees, the Notes or any Security Documents 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 tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
An amendment or supplement to, or wavier of, Article 13 will become
effective only as set forth under Section 13.09.
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
86
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 except 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 Special Interest, 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 Special Interest, if
any, on the Notes;
(7) make any change in the amendment and waiver provisions set forth
in this fifth paragraph of Section 9.02;
(8) release any Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the terms
of this Indenture; or
(9) release any Collateral from the obligations created by the
Security Documents except as provided in the Security Documents.
In addition, no amendment or supplement to the provisions of Articles 12,
13 or 14 will impose any obligation on the Trustee or adversely affect the
rights of the Trustee in its individual capacity without the consent of the
Trustee.
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. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
87
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
15.04 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.
SUBSIDIARY GUARANTEES
Section 10.01 GUARANTEE.
(a) Subject to this Article 10, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to the Secured Parties and their
successors and assigns, irrespective of the validity and enforceability of the
Secured Obligations, this Indenture or the obligations of the Company hereunder
or thereunder, that:
(1) the principal of, premium and Special Interest, 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 Secured Parties 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
Secured Obligations 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
Secured Obligations or this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Secured Party 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
88
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 Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Secured Obligations and this
Indenture.
(c) If any Secured Party 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 such Secured Party, this Subsidiary 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 Secured Parties 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 Secured Parties, 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 Subsidiary 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 Subsidiary Guarantee. The Guarantors will have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Secured Parties under the Subsidiary
Guarantee.
Section 10.02 LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and each Secured Party, hereby confirms that it is the
intention of all such parties that the Subsidiary 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 Subsidiary
Guarantee. To effectuate the foregoing intention, the Secured Parties 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 10, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
Section 10.03 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Subsidiary 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 Subsidiary Guarantee set forth in
Section 10.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
89
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in
this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Domestic Subsidiary
after the date of this Indenture, if required by Section 4.18 hereof, the
Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.18 hereof and this Article 10, to the extent applicable.
Section 10.04 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 10.05, 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 10.05 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger assumes all the obligations of
that Guarantor pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Joint Collateral Agent, under (i) the
Secured Obligations, this Indenture and the Subsidiary Guarantee (ii) the
Exchange Registration Rights Agreement and (iii) the Security Documents
delivered by that Guarantor 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
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the Secured Obligations
and 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 Subsidiary 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 Subsidiary Guarantees so issued
will in all respects have the same legal rank and benefit under this Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of the Secured Obligations and this Indenture as though all of
such Subsidiary 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 the Secured Obligations or 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.
90
Section 10.05 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 of 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 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 Subsidiary Guarantee and all security interests granted by
that Guarantor to the Joint Collateral Agent; 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 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 Subsidiary
Guarantee.
Additionally, the Subsidiary Guarantee of a Guarantor and all security
interests granted by that Guarantor to the Joint Collateral Agent will be
released if the Company designates any Restricted Subsidiary that is a Guarantor
as an Unrestricted Subsidiary.
Any Guarantor not released from its obligations under its Subsidiary
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 the Secured
Obligations and this Indenture as provided in this Article 10.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 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 theretofore 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 making 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 U.S. 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 Special Interest, if any, and
accrued interest to the date of maturity or redemption;
91
(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 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.
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 11.02 and Section 8.06 will survive. In
addition, nothing in this Section 11.01 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 11.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 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 11.01 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
11.01; 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 12.
COLLATERAL SHARING WITH PARITY LIENS
Section 12.01 PREREQUISITES TO INCURRING PARITY LIEN DEBT.
(1) Prior to incurring any Parity Lien Debt, the Company will
deliver to the Trustee and the Joint Collateral Agent an Officer's
Certificate stating that:
(a) the Company intends to incur, on a date stated therein,
Indebtedness that will constitute Parity Lien Debt;
92
(b) no Default or Event of Default exists on the date of such
Officer's Certificate or will exist after giving effect to the incurrence
of such Indebtedness;
(c) the Company has appointed the Joint Collateral Agent to
hold the security interest on behalf of such Parity Lien Debt in accordance
with the Joint Collateral Agent Undertaking and has taken all steps
necessary to make such Joint Collateral Agent Undertaking applicable to the
Parity Lien Debt;
(d) the Company will, on the date of such incurrence, execute
and deliver such additional Security Documents and take all such action as
may be necessary to grant or confirm the grant of Collateral to the Joint
Collateral Agent as security for all present and future Note Obligations
and Parity Lien Obligations, and shall take such action to perfect such
security interest such that after giving effect thereto the Joint
Collateral Agent will hold as security for all present and future Note
Obligations and Parity Lien Obligations, a valid and perfected security
interest upon all or substantially all of the Collateral that, immediately
prior to giving effect thereto, was subject to the Note Liens;
(e) the Liens securing such proposed Parity Lien Debt will not
be subject or subordinate to any Lien securing Indebtedness other than
Liens permitted by clause (9) of the definition of "Permitted Liens;" and
(f) the Company and its Subsidiaries will, on such date, enter
into all amendments, if any, to the Security Documents then in effect that
are necessary to add Parity Lien Obligations to the obligations secured
thereby, pursuant to amendments delivered to the Joint Collateral Agent
therewith, to be executed on such date by the Joint Collateral Agent and
the Company or the Subsidiary party to such Security Documents;
(2) the holders of any Parity Lien Obligations, or a
representative on their behalf, shall execute and deliver a contractual
undertaking in substantially the form of the Joinder Agreement attached as
an exhibit to the Collateral Agency Agreement or the Joint Collateral Agent
Undertaking whereby such persons agree to be bound by the lien sharing
provisions of this Indenture;
(3) the Company will deliver to the Trustee and Joint Collateral
Agent, as the case may be, opinions of counsel confirming on customary
terms:
(a) the validity and enforceability of the Joint Collateral
Agent Undertaking and all additional and amended Security Documents
delivered to the Joint Collateral Agent;
(b) the validity, enforceability and perfection of the Liens
granted by such Security Documents;
(c) that the Note Obligations and Parity Lien Obligations (i)
are secured by equal and ratable security interests in the Collateral and
(ii) that the holders of any such Parity Lien Obligations or their
representative have duly executed and delivered a contractual undertaking
in substantially the form of the Joinder Agreement attached as an exhibit
to the Collateral Agency Agreement whereby such persons agree to be bound
by the lien sharing provisions of this Indenture and the Joint Collateral
Agent Undertaking and that such contractual undertaking is legally binding
and enforceable on such holders of Parity Lien Debt; and
93
(d) the continued perfection of the Note Liens, without loss
of priority as against any Lien other than Parity Liens, upon giving effect
to the inclusion of such Parity Lien Obligation in the Joint Collateral
Undertaking and any such amendment of the Security Documents,
then, subject to the terms of the Joint Collateral Agent Undertaking, the
Trustee will direct the Joint Collateral Agent to execute and deliver such
amendment to the Security Documents, if any, as may be necessary to accomplish
the foregoing and the Joint Collateral Agent will countersign the Joinder
Agreement thereby confirming that it will hold the Note Liens and all such
Security Documents and the Liens granted thereby for the benefit of the holders
of the Note Obligations and Parity Lien Obligations on the terms of such Joint
Collateral Agent Undertaking.
Section 12.02 EQUAL AND RATABLE LIEN SHARING BY HOLDERS OF NOTES AND HOLDERS OF
PARITY LIEN DEBT.
Notwithstanding (i) anything to the contrary contained in the Note
Documents or any indenture, agreement or instrument governing, evidencing or
relating to any Parity Lien Obligations, (ii) the time, order or method of
attachment of the Note Liens or the Parity Liens, (iii) the time or order of
filing or recording of financing statements or other documents filed or recorded
to perfect any Lien upon any Collateral, (iv) the time of taking possession or
control over any Collateral or (v) the rules for determining priority under the
Uniform Commercial Code or any other law governing relative priorities of
secured creditors:
(1) the Note Liens will rank Equally and Ratably with all valid,
enforceable and perfected Parity Liens, whenever granted upon any present
or future Collateral, but only to the extent such Parity Liens secure
Parity Lien Obligations, and
(2) all proceeds of the Note Liens and Parity Liens shall be allocated
and distributed Equally and Ratably on account of the Note Obligations and
Parity Lien Obligations.
Section 12.03 ENFORCEMENT.
The provisions of Section 12.01(2) are intended for the benefit solely of
the Company and shall be enforceable by the Company against the Trustee, the
Joint Collateral Agent and the Holders of Notes. The provisions of Section 12.02
are binding upon and intended for the benefit of the Joint Collateral Agent and
each present and future holder of Note Obligations and Parity Lien Obligations,
each of whom shall be entitled to enforce such provisions as a third party
beneficiary hereof.
Section 12.04 AMENDMENT.
(a) No amendment or supplement to the provisions of this Article 12
will:
(1) be effective unless set forth in a writing signed by the
Trustee with the consent of the Holders of at least a majority in principal
amount of the Notes (including, without limitation, Additional Notes) then
outstanding voting as a single class, except that any such amendment which
increases the obligations or adversely affects the rights of the Holders of
Notes will be effective only with the consent of the Holders of at least
66?% in principal amount of the Notes (including, without limitation,
Additional Notes) then outstanding, voting as a single class; or
(2) be effective without the written consent of the Company and,
if any Parity Lien Debt is then outstanding, the Holders of at least a
majority in principal amount of all Parity Lien Debt then outstanding
voting as a single class, except that any such amendment which increases
94
the obligations or adversely affects the rights of the holders of Parity
Lien Debt will be effective only with the consent of the Holders of at
least 66 2/3% in principal amount of all Parity Lien Debt then outstanding,
voting as a single class.
Any such amendment or supplement that imposes any obligation upon the Joint
Collateral Agent or adversely affects the rights of the Joint Collateral Agent
in its individual capacity at any time when the Trustee is not the Joint
Collateral Agent will become effective only with the consent of the Joint
Collateral Agent.
(b) No waiver of any of the provisions of this Article 12 will in any
event be effective unless set forth in a writing signed and consented to, as
required for an amendment under this Section 12.04, by the party to be bound
thereby.
ARTICLE 13.
INTERCREDITOR PROVISIONS
RELATING TO
WORKING CAPITAL FACILITY LIENS
Section 13.01 AGREEMENT BETWEEN THE COLLATERAL AGENT AND CREDIT FACILITY AGENT.
(a) If and whenever any Credit Facility becomes a Qualified Credit
Facility, the Joint Collateral Agent and the Credit Facility Agent under such
Qualified Credit Facility shall become obligated to perform, each for the
benefit of the other, the obligations set forth in this Article 13.
(b) No agent or representative under any Credit Facility that is not a
Qualified Credit Facility shall ever have the right to rely on or enforce any
obligation of the Joint Collateral Agent set forth in this Article 13.
(c) The obligations of the Joint Collateral Agent set forth in this
Article 13 shall be enforceable by the Credit Facility Agent under each
Qualified Credit Facility to which such Credit Facility Agent is a party as a
third party beneficiary hereof, without need for any additional agreement or
undertaking between the Joint Collateral Agent and such Credit Facility Agent.
(d) The Joint Collateral Agent may require the Credit Facility Agent
to execute and deliver an instrument reasonably satisfactory to the Joint
Collateral Agent, by which the Credit Facility Agent confirms to the Joint
Collateral Agent its agreement to be bound by and perform the obligations of the
Credit Facility Agent set forth in this Article 13.
(e) At the request of the Company from time to time, the Joint
Collateral Agent will enter into an agreement with the Credit Facility Agent by
which each of them confirms to the other its agreement to be bound by and
perform its obligations set forth in this Article 13, and the Joint Collateral
Agent is authorized, at the request of the Company, to enter into such
additional agreements with the Credit Facility Agent as may be necessary or
appropriate, in the opinion of the Joint Collateral Agent, to confirm, elaborate
upon, perform, implement or give further assurance for any obligations of the
Joint Collateral Agent or such Credit Facility Agent in any respect that is not
materially inconsistent with the provisions, intents and purposes of this
Article 13 and does not impose any additional material obligation or material
liability on the Joint Collateral Agent or any holder of Note Obligations or
Parity Lien Obligations.
95
Section 13.02 EQUAL AND RATABLE SHARING OF LIENS ON FOREIGN SUBSIDIARY
COLLATERAL.
(a) Notwithstanding (i) anything to the contrary contained in the Note
Documents, any indenture, agreement or instrument governing, evidencing or
relating to any Parity Lien Obligations or any Obligations in respect of any
Qualified Credit Facility, (ii) the time, order or method of attachment of Liens
securing any Obligations under any Qualified Credit Facility or any Note Liens
or Parity Liens, (iii) the time or order of filing or recording of financing
statements or other documents filed or recorded to perfect any Lien upon any
Foreign Subsidiary Collateral or proceeds thereof, (iv) the time of taking
possession or control over any Foreign Subsidiary Collateral or proceeds thereof
or (v) the rules for determining priority under the Uniform Commercial Code or
any other law governing relative priorities of secured creditors, and regardless
of whether Liens upon Foreign Subsidiary Collateral or proceeds thereof are
enforced by the Credit Facility Agent or the Joint Collateral Agent or any agent
on their behalf:
(1) to the extent (and only to the extent) attaching to Foreign
Subsidiary Collateral and proceeds thereof, all valid, enforceable and
perfected Note Liens, all valid, enforceable and perfected Parity Liens and
all valid, enforceable and perfected Liens securing Obligations under a
Qualified Credit Facility, in each case whenever granted, will rank Equally
and Ratably, and
(2) to the extent (and only extent attributable to Foreign Subsidiary
Collateral or the proceeds thereof), the proceeds of all such valid,
enforceable and perfected Note Liens, Parity Liens and Liens securing
Obligations under a Qualified Credit Facility upon (and only upon) Foreign
Subsidiary Collateral and proceeds thereof shall be allocated and
distributed Equally and Ratably on account of the Note Obligations, Parity
Lien Obligations and Obligations under a Qualified Credit Facility.
(b) The provisions of this clause (b)(1) of Section 13.02 shall not apply
to:
(1) any Lien upon any property other than Foreign Subsidiary
Collateral and proceeds thereof;
(2) any payment or distribution to which any Person may become
entitled as a creditor of the owner of any Foreign Subsidiary Collateral
other than as a result of the enforcement of a Lien upon, or the allowance
of a secured claim to the extent predicated solely on a Lien upon, such
Foreign Subsidiary Collateral.
Section 13.03 DISCLAIMER OF CONSENSUAL LIENS.
(1) The Joint Collateral Agent will not claim or enforce any
consensual lien upon any Credit Facility Collateral.
(2) The Credit Facility Agent will not claim or enforce any consensual
lien upon any Collateral or Excluded Asset other than (a) Credit Facility
Collateral and (b) Foreign Subsidiary Collateral and proceeds thereof.
(3) The holders of Note Obligations and Parity Lien Obligations shall
be entitled to receive and retain, free from any Lien securing Credit
Facility Obligations, all payments made in cash by the Company or any other
Obligor and all amounts received with respect to Note Obligations and
Parity Lien Obligations through the exercise of a set-off or other similar
right, even if such cash constitutes proceeds of property subject to a Lien
securing Credit Facility Obligations.
96
(4) The holders of Credit Facility Obligations shall be entitled to
receive and retain, free from any Note Lien or Parity Lien thereon, all
payments made in cash by the Company or any other Obligor and all amounts
received with respect to Credit Facility Obligations through the exercise
of a set-off or other similar right, even if such cash constitutes proceeds
of property subject to a Note Lien or Parity Lien.
(5) If any cash proceeds of Credit Facility Collateral or Foreign
Subsidiary Collateral are converted into, or invested in property subject
to Note Liens or Parity Liens at any time when the Joint Collateral Agent
has not received written notice from the Credit Facility Agent or any
holder of Indebtedness outstanding under a Qualified Credit Facility
stating that such Indebtedness has become due and payable in full (whether
at maturity, upon acceleration or otherwise), then all Liens upon such cash
proceeds securing Credit Facility Obligations shall be released and
discharged concurrently with such conversion, or investment.
(6) If any cash proceeds of Collateral are converted into, or invested
in property subject to Liens securing Credit Facility Obligations at any
time when the Credit Facility Agent has not received written notice from
the Joint Collateral Agent or any Holder of Notes or Parity Lien Debt
stating that the Notes or Parity Lien Debt has become due and payable in
full (whether at maturity, upon acceleration or otherwise), then all Note
Liens and Parity Liens upon such cash proceeds shall be released and
discharged concurrently with such conversion, or investment.
(7) The provisions of this Section 13.03 do not apply to, restrict or
affect any judicial lien, including any attachment or judgment lien.
Section 13.04 NOTICE OF INTENT TO FORECLOSE.
(a) The Credit Facility Agent will give the Joint Collateral Agent
notice of its intent to enforce any consensual Lien upon any Credit Facility
Collateral or Foreign Subsidiary Collateral.
(b) The Joint Collateral Agent will give the Credit Facility Agent
notice of its intent to enforce any consensual Lien upon any Collateral.
(c) The notice required by Sections 13.04(a) and 13.04(b):
(1) shall be required to be given by a party only if it intends
to:
(A) deliver to the Company or a Subsidiary written notice of
its intent to foreclose a consensual Lien or a written proposal
to retain property subject to a consensual Lien in full or
partial satisfaction of any obligation secured thereby;
(B) commence legal action against the Company or a
Subsidiary for foreclosure or replevin or other enforcement of a
consensual Lien; or
(C) take possession of goods or real property of the Company
or a Subsidiary upon which it holds a consensual Lien;
(2) shall not be required in any other instance or as to any
other action or event (including, for purposes of illustration and not
by way of limitation, any incurrence, payment or acceleration of any
Indebtedness or Obligation or any amendment or waiver of the terms
thereof, any exercise of a right of setoff, any notification to
account debtors to make payment directly to the secured party or any
other exercise of collection rights or the institution of any other
legal
97
proceedings, including suit to collect any debt or claim or the
commencement of any bankruptcy case, receivership or insolvency
proceeding);
(3) need only state that it is given pursuant to the provisions
of Section 13.04 of this Indenture and that lien enforcement action
may be taken by the party giving the notice, and need not disclose or
describe the action to be taken;
(4) need only be given once by or to any particular Credit
Facility Agent;
(5) may be given by electronic mail, telefax, postal mail or
courier or personal delivery or in any other manner permitted by law
for service of legal process;
(6) shall be given to a party at the address (including an e-mail
address, telecopy address or office address within the State of
New
York) specified by such party by notice to the other party and shall
not be required if no address is so specified; and
(7) shall be given at least five Business Days prior to the date
on which any enforcement action described in Section 13.04(c)(1) is
taken, except that a party may give such notice promptly after taking
such enforcement action if it in good faith believes that immediate
enforcement action is or may be required to protect its interest in
the property subject to its Liens.
(d) The party giving any notice required by this Section 13.04 shall
endeavor, promptly after delivery such notice, to deliver a copy thereof to the
Company, but neither the Company nor any Subsidiary shall be entitled to demand
or receive any such notice or copy thereof.
(e) No liability or defense shall ever arise, no Lien shall ever be
lost, invalidated or impaired, and no action taken in enforcement of a Lien
shall ever be annulled, set aside, affected or impaired, if any notice required
by this Section 13.04 is not given or is defectively given.
(f) The provisions of this Section 13.04 do not apply to, restrict or
affect any judicial lien, including any attachment or judgment lien.
Section 13.05 CONSENT TO LICENSE TO USE INTELLECTUAL PROPERTY; ACCESS TO
INFORMATION; ACCESS TO REAL PROPERTY TO PROCESS AND SELL
INVENTORY.
(a) If so requested at any time by the Credit Facility Agent, the
Joint Collateral Agent shall deliver its written consent (given without any
representation, warranty or obligation whatsoever) to any grant by any Obligor
to the Credit Facility Agent of a non-exclusive royalty-free license to use any
patent, trademark or proprietary information of such Obligor that is subject to
a consensual Lien held by the Joint Collateral Agent, in connection with the
enforcement of any consensual Lien held by the Credit Facility Agent upon any
inventory of the Company or any Subsidiary and to the extent the use of such
patent, trademark or proprietary information is necessary or appropriate, in the
good faith opinion of the Credit Facility Agent, to manufacture, produce,
complete, remove or sell any such inventory in any lawful manner. Any consent so
delivered by the Joint Collateral Agent shall be binding on its successors and
assigns, including a purchaser of the patent, trademark or proprietary
information subject to such license at a foreclosure sale conducted in
foreclosure of any Note Lien or Parity Lien thereon.
(b) If the Joint Collateral Agent or a purchaser at a foreclosure sale
conducted in foreclosure of any Note Lien or Parity Lien takes actual possession
of any documentation of the Company or a Subsidiary (whether such documentation
is in the form of a writing or is stored in any data equipment or data record in
the physical possession of the Joint Collateral Agent or the foreclosure
purchaser), then
98
upon request of the Credit Facility Agent and reasonable advance notice, the
Joint Collateral Agent or such foreclosure purchaser will permit the Credit
Facility Agent or its representative to inspect and copy such documentation if
and to the extent the Credit Facility Agent certifies to the Joint Collateral
Agent that:
(1) such documentation contains or may contain information necessary
or appropriate, in the good faith opinion of the Credit Facility Agent, to
the enforcement of the Credit Facility Agent's liens upon any Credit
Facility Collateral or Foreign Subsidiary Collateral; and
(2) the Credit Facility Agent and the lenders under the Credit
Facility are entitled to receive and use such information as against the
Company and the Subsidiaries and their suppliers, customers and contractors
and under applicable law and, in doing so, will comply with all obligations
imposed by law or contract in respect of the disclosure or use of such
information.
(c) If, upon enforcement of any Note Lien or Parity Lien held by the Joint
Collateral Agent, the Joint Collateral Agent or a purchaser at a foreclosure
sale conducted in foreclosure of any Note Lien or Parity Lien takes actual
possession of any real property, equipment or fixture of any Obligor, then, if
so requested by the Credit Facility Agent and upon reasonable advance notice,
the Joint Collateral Agent or such foreclosure purchaser will allow the Credit
Facility Agent and its officers, employees and agents (but not any of its
transferees) reasonable and non-exclusive access to and use of such real
property, equipment and fixtures, for a period not exceeding 180 consecutive
calendar days (the "Processing and Sale Period"), as necessary or reasonably
appropriate to manufacture, produce, complete, remove or sell, in any lawful
manner, any inventory upon which the Credit Facility Agent holds a Lien, subject
to the following conditions and limitations:
(1) The Processing and Sale Period shall commence on the date the
Joint Collateral Agent or, if the Joint Collateral Agent has not taken
possession, the foreclosure purchaser takes possession of such real
property and shall terminate on the earlier of (i) the day which is 180
days thereafter and (ii) the day on which all inventory (other than
inventory abandoned by the Credit Facility Agent) has been removed from
such real property.
(2) Each of the Joint Collateral Agent and foreclosure purchaser shall
be entitled, as a condition of permitting such access and use, to demand
and receive assurances reasonably satisfactory to it that the access or use
requested and all activities incidental thereto:
(A) will be permitted, lawful and enforceable as against the
Company and the Subsidiaries and their suppliers, customers and
contractors and under applicable law and will be conducted in
accordance with prudent manufacturing practices; and
(B) will be adequately insured for damage to property and
liability to persons, including property and liability insurance for
the benefit of the Joint Collateral Agent and the holders of Note
Obligations and Parity Lien Obligations, at no cost to the Joint
Collateral Agent or such holders.
The Joint Collateral Agent and such purchaser (i) shall provide
reasonable cooperation, reasonable support and reasonable assistance
to the Credit Facility Agent in connection with the manufacture,
production, completion, removal and sale of any Credit Facility
Collateral by the Credit Facility Agent as provided above and (ii)
shall be entitled to receive, from the Credit Facility Agent, fair
compensation and reimbursement for their reasonable costs and expenses
incurred in connection with such cooperation, support and
99
assistance to the Credit Facility Agent. The Joint Collateral Agent
and such purchaser (or its transferee or successor) shall not
otherwise be required to manufacture, produce, complete, remove,
insure, protect, store, safeguard, sell or deliver any inventory
subject to any Lien held by the Credit Facility Agent or to provide
any support, assistance or cooperation to the Credit Facility Agent in
respect thereof.
(d) The Company and other Obligors consent to the performance by the Joint
Collateral Agent and foreclosure purchaser of the obligations set forth in this
Section 13.05 and acknowledge and agree that, in the absence of gross negligence
or willful misconduct by the Joint Collateral Agent, neither the Joint
Collateral Agent (nor any holder of Note Obligations or Parity Lien Obligations)
nor any foreclosure purchaser shall ever be accountable or liable for any action
taken or omitted by the Credit Facility Agent or its officers, employees and
agents in connection therewith or incidental thereto or in consequence thereof,
including any improper use or disclosure of any proprietary information by the
Credit Facility Agent or its officers, employees, agents, successors or assigns
or any other damage to or misuse or loss of any property of the Company and the
Subsidiaries as a result of any action taken or omitted by the Credit Facility
Agent or its officers, employees, agents, successors or assigns.
Section 13.06 COMPLETE AGREEMENT.
(a) This Article 13 and the Intercreditor Agreement sets forth
exhaustively the complete agreement and sole contractual obligations and rights
as between the Joint Collateral Agent and the Credit Facility Agent.
(b) Neither the Joint Collateral Agent and nor the Credit Facility
Agent will be restricted in any respect not expressly set forth herein as to any
matter relating to the creation, perfection, protection or enforcement of their
respective Liens and their rights and obligations in respect of such matters
shall be based solely on the legal rights and duties, if any, that they would
have if they had not entered into any agreement whatsoever with each other
relating to their Liens.
Section 13.07 NO SUBROGATION, MARSHALLING OR DUTY.
Neither the assumption nor the performance of any obligation set forth in
or arising under this Article 13 shall ever create or give rise to any right of
subrogation, right of marshalling, duty of care, duty of loyalty, duty of
disclosure or other fiduciary duty whatsoever enforceable by the Joint
Collateral Agent, the Credit Facility Agent or any holder of Note Obligations,
Parity Lien Obligations or Credit Facility Obligations.
Section 13.08 LIMITATION ON CERTAIN RELIEF, DEFENSES AND DAMAGE CLAIMS.
(a) None of the Note Obligations, Note Liens, Parity Lien Obligations,
Parity Liens, Credit Facility Obligations and Credit Facility Liens will ever be
forfeited, invalidated, discharged, reduced, subordinated or restricted or
otherwise affected or impaired by any breach of any obligation set forth in or
arising under this Article 13.
(b) No claim shall ever be made against the Joint Collateral Agent or
the Credit Facility Agent for any special or (to the fullest extent a claim for
punitive damages may lawfully be waived) for any punitive damages based on any
claim arising, on any theory of liability, from or in connection with to any
act, omission, breach, wrongful conduct, event or circumstance occurring
relating in any respect to the performance or breach of any obligation set forth
in or arising under this Article 13.
100
Section 13.09 AMENDMENT; WAIVER.
(a) No amendment or supplement to the provisions of this Article 13
will:
(1) be effective unless set forth in a writing signed by the
Trustee with the consent of the Holders of at least a majority in principal
amount of the Notes (including, without limitation, Additional Notes) then
outstanding voting as a single class, except that any such amendment which
increases the obligations or adversely affects the rights of the Holders of
Notes will be effective only with the consent of the Holders of at least
66?% in principal amount of the Notes (including, without limitation,
Additional Notes) then outstanding, voting as a single class;
(2) become effective at any time when any Credit Facility
Obligations are outstanding or committed under any Qualified Credit
Facility unless such amendment or supplement is consented to in a writing
signed by the Credit Facility Agent acting upon the direction or with the
consent of the Majority Lenders; or
(3) be effective at any time when any Parity Lien Debt is
outstanding unless such amendment or supplement is consented to in a
writing signed by the Holders of at least a majority in principal amount of
all Parity Lien Debt then outstanding voting as a single class, except that
any such amendment which increases the obligations or adversely affects the
rights of the holders of Parity Lien Debt will be effective only with the
consent of the holders of at least 66?% in principal amount of all Parity
Lien Debt then outstanding, voting as a single class.
Any such amendment or supplement that:
(A) imposes any additional obligation upon the Company or
adversely affects the rights or benefits of the Company, if any,
specifically afforded to the Company under Article 13 will become
effective only with the consent of the Company; or
(B) imposes any obligation upon the Joint Collateral Agent or
adversely affects the rights of the Joint Collateral Agent in its
individual capacity will become effective only with the consent of the
Joint Collateral Agent.
(b) No waiver of any of the provisions of this Article 13 will in any
event be effective unless set forth in a writing signed and consented to, as
required for an amendment under Section 13.09(a), by the party to be bound
thereby.
(c) No exercise, delay in exercising or failure to exercise any right
arising under this Article 13, no act or omission of any Obligor or holder of
Note Obligations, Parity Lien Obligations or Credit Facility Obligations, no
change, impairment, or suspension of any right or remedy, and no other lawful
act, failure to act, circumstance, occurrence or event which, but for this
provision, would or could act as a release or exoneration of any obligation
arising under this Article 13 will in any way affect, decrease, diminish or
impair any such obligation.
Section 13.10 ENFORCEMENT.
The rights and obligations set forth in or arising under this Article 13
are enforceable only by the Joint Collateral Agent and Credit Facility Agent
under a Qualified Credit Facility against each other (and their respective
successors, including, but only to the extent expressly provided herein, a
purchaser at a foreclosure sale conducted in foreclosure of Note Liens or Parity
Liens) and against the Obligors. No
101
other Person (including holders of Note Obligations, Parity Lien Obligations or
Credit Facility Obligations) shall be entitled to enforce any such right or
shall be obligated to perform any such obligation; however, such provisions will
be binding on the holders of Note Obligations, Parity Lien Obligations and
Credit Facility Obligations.
Section 13.11 RELATIVE RIGHTS.
This Article 13 sets forth certain relative rights, as lienholders, of the
Joint Collateral Agent and the Credit Facility Agent. Nothing in this Indenture
will:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of, premium and interest and Special Interest, if any, on the
Notes in accordance with their terms or to perform any other obligation of
the Company or any other Obligor under the Note Documents;
(2) affect the relative rights of Holders of Notes and holders of
Parity Lien Obligations or Credit Facility Obligations and other creditors
of the Company or any of its Subsidiaries;
(3) restrict the right of any Holder of Notes or any holder of Parity
Lien Obligations or Credit Facility Obligations to ▇▇▇ for payments that
are then due and owing;
(4) prevent the Trustee, the Joint Collateral Agent or the Credit
Facility Agent or any Holder of Notes or holder of Parity Lien Obligations
or Credit Facility Obligations from exercising against the Company or any
other Obligor any of its other available remedies upon a default or event
of default; or
(5) restrict the right of the Trustee, the Joint Collateral Agent or
the Credit Facility Agent or any Holder of Notes or holder of Parity Lien
Obligations or Credit Facility Obligations to file and prosecute a petition
seeking an order for relief in an involuntary bankruptcy case as to any
Obligor or otherwise to commence, or seek relief commencing, any insolvency
or liquidation proceeding involuntarily against any Obligor or to assert or
enforce any claim, Lien, right or remedy in any voluntary or involuntary
bankruptcy case or insolvency or liquidation proceeding.
ARTICLE 14.
COLLATERAL AND SECURITY
Section 14.01 SECURITY DOCUMENTS.
(a) The payment of the principal of and interest and premium and
Special Interest, if any, on the Notes when due, whether on an interest payment
date, at maturity, by acceleration, repurchase, redemption or otherwise and
whether by the Company pursuant to the Notes or by any Guarantor pursuant to the
Subsidiary Guarantees, the payment of all other Note Obligations and the
performance of all other obligations of the Company and its Subsidiaries under
the Note Documents are secured as provided in the Security Documents which the
Company and the Guarantors have entered into simultaneously with the execution
of this Indenture and will be secured by all Security Documents hereafter
delivered as required or permitted by this Indenture. Such security interests
will also secure any Parity Lien Obligations.
(b) The Company will cause each Material Domestic Subsidiary created,
acquired or otherwise existing on or after the date hereof, including but not
limited to any Nonmaterial Domestic
102
Subsidiary that becomes a Material Domestic Subsidiary, to promptly, and in any
event, immediately after becoming a Material Domestic Subsidiary, execute and
deliver each applicable Security Document to the Joint Collateral Agent and
certified copies of such Subsidiary's Governing Documents, together with legal
opinions in form and substance reasonably satisfactory to the Joint Collateral
Agent opining as to authorization, validity and enforceability of such Secuity
Documents. In addition, the Company will not at any time permit aggregate fair
market value of all Nonmaterial Domestic Subsidiaries' gross assets to equal or
exceed $250,000. In such case, the Company shall require all Nonmaterial
Domestic Subsidiaries to execute and deliver each applicable Security Document
to the Joint Collateral Agent and certified copies of each Nonmaterial Domestic
Subsidiary's Governing Documents, together with legal opinions in form and
substance reasonably satisfactory to the Joint Collateral Agent opining as to
authorization, validity and enforceability of such Secuity Documents.
Section 14.02 JOINT COLLATERAL AGENT.
(a) The Company will appoint a bank or trust company to serve as Joint
Collateral Agent for the benefit of the Holders of the Notes and the other
Parity Lien Obligations from time to time. The Joint Collateral Agent may, but
need not be, the same institution serving at any time as Trustee under this
Indenture.
(b) The Joint Collateral Agent is authorized and empowered to appoint
one or more co-Collateral Agents or sub-agents or bailees to hold Collateral or
to take such other action as it deems necessary or appropriate.
(c) Neither the Trustee nor the Joint Collateral Agent nor any of
their respective officers, directors, employees, attorneys or agents will be
responsible or liable for the existence, genuineness, value or protection of any
Collateral, for the legality, enforceability, effectiveness or sufficiency of
the Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Note Lien, or for any defect or deficiency as to any such
matters, or for any failure to demand, collect, foreclose or realize upon or
otherwise enforce any of the Note Liens or Security Documents or any delay in
doing so.
(d) The Joint Collateral Agent will be subject to such directions as
may be given it by the Trustee from time to time as required or permitted by
this Indenture and by any trustee or other representative of any holder of any
Parity Lien Obligations. The relative rights with respect to control of the
Joint Collateral Agent will be specified in any Joint Collateral Agent
Undertaking. Except as directed by the Trustee as required or permitted by this
Indenture or any Joint Collateral Agent Undertaking, the Collateral Agent will
not be obligated:
(1) to act upon directions purported to be delivered to it by any
other Person;
(2) to foreclose upon or otherwise enforce any Note Lien; or
(3) to take any other action whatsoever with regard to any or all
of the Note Liens, Security Documents or Collateral.
(e) The Joint Collateral Agent will be accountable only for amounts
that it actually receives as a result of the enforcement of the Note Liens or
Security Documents.
(f) In acting as Joint Collateral Agent or co-Collateral Agent, the
Joint Collateral Agent and each co-Collateral Agent may rely upon and enforce
each and all of the rights, powers, immunities, indemnities and benefits of the
Trustee under Article 7.
103
(g) The Company will deliver to the Trustee copies of all Security
Documents delivered to the Joint Collateral Agent and copies of all documents
delivered to the Joint Collateral Agent pursuant to the Security Documents.
Section 14.03 AUTHORIZATION OF ACTIONS TO BE TAKEN.
(a) Each Holder of Notes, by its acceptance thereof, consents and
agrees to the terms of each Security Document and Intercreditor Agreement, as
originally in effect and as amended, supplemented or replaced from time to time
in accordance with its terms or the terms of this Indenture, authorizes and
directs the Trustee and the Joint Collateral Agent to enter into the Security
Documents, authorizes and empowers the Trustee to direct the Joint Collateral
Agent to enter into, and the Joint Collateral Agent to execute and deliver, each
Intercreditor Agreement, and authorizes and empowers the Trustee and the Joint
Collateral Agent to bind the Holders of Notes and other holders of Note
Obligations as set forth in the Security Documents and each Intercreditor
Agreement and to perform its obligations and exercise its rights and powers
thereunder.
(b) The Joint Collateral Agent and the Trustee are authorized and
empowered to receive for the benefit of the Holders of Notes any funds collected
or distributed under the Security Documents and to make further distributions of
such funds to the Holders of Notes according to the provisions of this
Indenture.
(c) Subject to the provisions of Section 7.01 and 7.02 and Article 12,
the Trustee may, in its sole discretion and without the consent of the Holders
of Notes, direct, on behalf of the Holders of Notes, the Joint Collateral Agent
to take all actions it deems necessary or appropriate in order to:
(1) foreclose upon or otherwise enforce any or all of the Note
Liens;
(2) enforce any of the terms of the Security Documents; or
(3) collect and receive payment of any and all Note Obligations.
The Trustee is authorized and empowered to institute and maintain, or direct the
Joint Collateral Agent to institute and maintain, such suits and proceedings as
it may deem expedient to protect or enforce the Note Liens or the Security
Documents or to prevent any impairment of Collateral by any acts that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee or the Joint Collateral Agent may deem
expedient to preserve or protect its interests and the interests of the Holders
of Notes in the Collateral, including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of Holders of Notes, the Trustee or the Joint Collateral Agent.
The right of the Trustee to direct the Joint Collateral Agent is subject to the
terms of the Joint Collateral Agent Undertaking.
Section 14.04 RELEASE OF NOTE LIENS.
(a) The Note Liens will be released with respect to the Notes:
(1) in whole, upon payment in full of the principal of, accrued
and unpaid interest and premium and Special Interest, if any, on the Notes
and payment in full of all other Note
104
Obligations that are due and payable at or prior to the time such
principal, accrued and unpaid interest and premium and Special Interest, if
any, are paid;
(2) in whole, upon satisfaction and discharge of this Indenture
pursuant to Section 11.01;
(3) in whole, upon a legal defeasance or covenant defeasance
pursuant to Article 8;
(4) in part, as to any property constituting Collateral that (a)
is sold or otherwise disposed of by the Company or one of its Subsidiaries
in a transaction permitted by this Indenture, at the time of such sale or
disposition, to the extent of the interest sold or disposed of, or (b) is
owned or at any time acquired by a Subsidiary that has been released from
its Subsidiary Guarantee, concurrently with the release of such Subsidiary
Guarantee, PROVIDED, HOWEVER, that in the event the Note Liens then secure
any Parity Lien Obligations and the fair market value of the Collateral
subject to the Note Lien being released exceeds $500,000, any such release
shall be conditioned upon written notification to the Joint Collateral
Agent by any Parity Lien Representative that such disposition is also
authorized by all applicable Parity Lien Credit Documents;
(5) if the Collateral subject to the proposed release of the Note
Liens constitutes all or substantially all of the Collateral, with the
consent of at least 66?% in principal amount of the Notes (including,
without limitation, Additional Notes, if any) then outstanding Notes as a
single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of,
Notes) PROVIDED, HOWEVER, that in the event the Note Liens then secure any
Parity Lien Obligations, any such release shall be conditioned upon written
notification to the Joint Collateral Agent by any Parity Lien
Representative that such disposition is also authorized by all applicable
Parity Lien Credit Documents (including any vote required thereunder); or
(6) if the Collateral subject to the proposed release of the Note
Liens constitutes less than all or substantially all of the Collateral,
with the consent 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) PROVIDED, HOWEVER, that in the event the Note Liens then secure
any Parity Lien Obligations and the fair market value of the Collateral
subject to the Note Lien being released exceeds $500,000, any such release
shall be conditioned upon written notification to the Joint Collateral
Agent by any Parity Lien Representative that such disposition is also
authorized by all applicable Parity Lien Credit Documents (including any
vote required thereunder) PROVIDED, FURTHER, HOWEVER, that in the case of
paragraphs (4) and (5) above and this paragraph (6), any such release will
be conditioned on the holders of any Parity Lien Obligations also releasing
their security interest in such property.
(b) Upon delivery to the Trustee of an Officers' Certificate
requesting release of the Note Liens pursuant to Section 14.04(a), accompanied
by:
(1) an Opinion of Counsel confirming that such release complies
with Section 14.04(a); PROVIDED, HOWEVER, that no such Opinion of Counsel
shall be required in the event of a release pursuant to Section 14.04(a) or
when the fair market value of the Collateral subject to the Note Lien being
released does not exceed $500,000;
105
(2) all instruments requested by the Company to effectuate or
confirm such release; and
(3) such other certificates and documents as the Trustee or
Collateral Agent may reasonably request to confirm the matters set forth in
Section 14.04(a),
the Trustee will, if such instruments and confirmation are reasonably
satisfactory to the Trustee and Joint Collateral Agent, instruct the Joint
Collateral Agent to execute and deliver, and the Collateral Agent will promptly
execute and deliver, such instruments.
(c) All instruments effectuating or confirming any release of any Note
Liens will have the effect solely of releasing such Note Liens as to the
Collateral described therein, on customary terms and without any recourse,
representation, warranty or liability whatsoever.
(d) The Trustee and Joint Collateral Agent are not required to serve,
file, register or record any instrument releasing Collateral; PROVIDED, HOWEVER,
that the Company may serve, file, register or record any such instrument upon
authorization from the Trustee and the Joint Collateral Agent.
(e) The Company will bear and pay all costs and expenses associated
with any release of Note Liens pursuant to this Section 14.04, including all
reasonable fees and disbursements of any attorneys or representatives acting for
the Trustee or for the Joint Collateral Agent.
ARTICLE 15.
MISCELLANEOUS
Section 15.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties will control.
Section 15.02 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:
Hexcel Corporation
Two Stamford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Coco, Esq. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Trustee:
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇, Trust Officer
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 Section 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 15.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 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 Section
312(c).
Section 15.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 15.05 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
107
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 15.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 15.05 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 Section 314(a)(4)) must comply with the provisions of TIA
Section 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.
Section 15.06 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 functions.
Section 15.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Subsidiary Guarantees, the Security Documents 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 15.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF
NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES, THE SECURITY DOCUMENTS AND THE SUBSIDIARY
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 15.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
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.
108
Section 15.10 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 10.05.
Section 15.11 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 15.12 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 15.13 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]
109
SIGNATURES
Dated as of March 19, 2003
HEXCEL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
▇▇▇▇▇-▇▇▇▇▇▇▇▇ HOLDING. CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇-▇▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Finance and
Treasurer
CS TECH-FAB HOLDING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
HEXCEL POTTSVILE CORPORATION.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
Attest:
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President, General Counsel
and Secretary
110
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Corporate Trust Officer
Attest:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Authorized Signatory
Date: March 19, 2003
111
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under this Indenture as of the date
hereof:
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holding Corp.
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Corporation
CS Tech-Fab Holding, Inc.
Hexcel Pottsville Corporation
I-1
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
CUSIP/CINS ____________
9.875% Senior Secured Notes due 2008
No. ___ $____________
HEXCEL CORPORATION
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of __________________________________________________________
Dollars on October 1, 2008.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: March 19, 2003
HEXCEL CORPORATION
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------------------
Authorized Signatory
________________________________________________________________________________
A-1
[Back of Note]
9.875% Senior Secured Notes due 2008
[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]
[INSERT THE UNIT 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. Hexcel Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note
at 9.875% per annum from March 19, 2003 until maturity and shall pay the
Special Interest, if any, payable pursuant to the Exchange Registration
Rights Agreement referred to below. The Company will pay interest and
Special Interest, if any, semi-annually in arrears on April 1 and October 1
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 October 1, 2003. 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 Special Interest, 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 Special Interest, if any, to the Persons
who are registered Holders of Notes at the close of business on the March
15 or September 15 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 Special Interest, 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 Special Interest, if any, may be made by check mailed to the Holders at
their addresses set forth in the register of Holders. 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, National Association, the Trustee under the Indenture, will act
as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of March 19, 2003 (the "Indenture") among the Company, the Guarantors
and the Trustee. The
A-2
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 Sections 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 secured
obligations of the Company limited to $125.0 million in aggregate principal
amount. The Notes and the Subsidiary Guarantees will be secured by first
priority security interests (subject to Permitted Prior Liens) and subject
to Lien sharing in favor of the holders of future Parity Lien Debt, in
substantially all of the Company's and its Domestic Subsidiaries' property,
plant and equipment, patents, trademarks and other intellectual property,
customer and supplier contracts (which will not include accounts and
related rights that are Credit Facility Collateral) and other general
intangibles, intercompany notes and other instruments and obligations
receivable, and certain other investment property, 100% of the outstanding
voting stock of the Company's Domestic Subsidiaries, other than
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holding Corp., CS Tech-Fab Holding, Inc., Hexcel
Technologies, Inc. and ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Corporation, and, as described under
Section 13.02, the outstanding voting stock of the Company's material
first-tier Foreign Subsidiaries (but not more than 65% of the voting stock
of such Foreign Subsidiaries) and intercompany notes outstanding from the
Company's Foreign Subsidiaries. Collateral shall not include Credit
Facility Collateral (which includes inventory, and accounts receivable) and
other Excluded Assets. The Notes, the Subsidiary Guarantees and future
Parity Lien Debt will also be secured by first priority security interests,
subject to Lien sharing provisions in favor of the holders of Obligations
under a Qualified Credit Facility, upon Equity Interests issued and
intercompany notes owing by Foreign Subsidiaries to the extent the same
secures such Qualified Credit Facility.
(5) OPTIONAL REDEMPTION.
(a) After April 1, 2006, the Company may redeem all or 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 Special Interest, if any, on the Notes redeemed, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on April 1 of the years indicated below:
Year Percentage
---- ----------
2006.............................................. 104.938%
2007.............................................. 102.469%
2008 and thereafter............................... 100.000%
(b) At any time prior to April 1, 2006, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under this Indenture (including the original principal amount of any Additional
Securities) at a redemption price of 109.875% of the principal amount, plus
accrued and unpaid interest and Special Interest, if any, to the redemption
date, with the Net Cash Proceeds of Equity Offerings; PROVIDED that at least 65%
of the aggregate principal amount of Notes issued under this Indenture
(including the original principal amount of any Additional Notes) remains
outstanding immediately after the occurrence of any such redemption (excluding
Notes held by the Company and its Subsidiaries); and the redemption occurs
within 120 days after the date of the related Equity Offering.
(6) MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes except as provided under Sections 3.09, 4.10
and 4.14.
A-3
(7) REPURCHASE AT OPTION OF HOLDER.
(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 Special Interest on the
Notes repurchased, if any, to the date of purchase (the "CHANGE OF CONTROL
PAYMENT"). Within 30 days following any Change of Control, the Company will
mail a notice to each Holder as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, when the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company will make an Asset Sale Offer to all Holders of Notes
and all holders of Parity Lien Debt that contains provisions similar to
those set forth herein with respect to offers to purchase or redeem with
the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other Parity Lien Debt 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 Special
Interest, 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 Parity Lien Debt tendered into such Asset Sale Offer exceeds the amount
of Excess Proceeds, the Notes and the Parity Lien Debt will be purchased on
a pro rata basis. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds will be reset at zero. 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. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof 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 or portion of a Note
selected for redemption, 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 a 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 Subsidiary Guarantees or the Notes may be amended or
supplemented with the
A-4
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 provision of the
Indenture, the Subsidiary Guarantees or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then
outstanding Notes and Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture, the Subsidiary
Guarantees or the Notes may be amended to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article 2 of the
Indenture (including the related definitions) in a manner that does not
materially adversely affect any Holder; 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 or Article 10 of the
Indenture; 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 Holder of the Note; to comply with
requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the TIA; to provide for the issuance of Additional
Notes in accordance with the limitations set forth in the Indenture as of
the date thereof; to allow any Guarantor to execute a supplemental
indenture and/or a Subsidiary Guarantee with respect to the Notes; to make,
complete or confirm any grant of Collateral permitted or required by this
Indenture or Security Documents or any release of Collateral that becomes
effective as set forth in the Indenture or Security Documents; to conform
the text of the Indenture, the Subsidiary Guarantees, the Security
Documents or the Notes to any provision of the Description of Notes
contained in the Offering Circular to the extent that such provision in
that Description of Notes was intended to be a verbatim recitation of a
provision of the Indenture, the Subsidiary Guarantees, the Security
Documents or the Notes; reflect any waiver or termination of any right
arising under Article 12 of the Indenture that otherwise would be
enforceable by any holder of a Parity Lien Obligation or Parity Lien, if
such waiver or termination is set forth or provided herein or agreement
governing or giving rise to such Parity Lien Obligation or Parity Lien;
PROVIDED, that no such waiver or amendment shall adversely affect the
rights of Holders of Notes; or except as otherwise provided under Section
13.09 of the Indenture make any change in the amendment and waiver
provisions.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) the Company
defaults for 30 days in the payment when due of interest on, or Special
Interest with respect to, the Notes; (ii) the Company defaults in the
payment when due (at maturity, upon redemption or otherwise) of the
principal of, or premium, if any, on the Notes; (iii) the Company or any of
its Subsidiaries fails to comply with the provisions of Section 4.16 or
5.01 of the Indenture; the Company fails to comply with any of its
obligations in Section 4.14, other than a failure to purchase Notes, or
Section 4.10, other than a failure to purchase Notes, Section 4.03, Section
4.07, Section 4.09, Section 4.08, Section 4.11, Section 4.15, Section 4.13
or Section 4.18 in the Indenture for 30 days after notice to the Company by
the Trustee or the Holders of at least 25% in aggregate principal amount of
Notes then outstanding voting as a single class; (iv) the Company fails to
observe or perform any other covenant, representation, warranty or other
agreement in the Indenture, the Notes or the Security Documents for 60 days
after notice to the Company by the Trustee or the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding voting as a
single class; PROVIDED, HOWEVER, that in no event shall a failure by the
Company to observe or perform any representation or warranty be an Event of
Default unless such failure would have a material adverse effect on the
management, the condition (financial or other), business, properties or
results of operations of the Company and its Subsidiaries, taken as a
whole; (v) a default occurs 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
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary, (or the payment of which
is guaranteed by the Company or
A-5
any of its Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary), 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 principal of,
or interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default"); or (B) results in the acceleration of
such Indebtedness prior to its express maturity, and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness or the maturity of which has been so
accelerated, aggregates $10.0 million or more; (vi) 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 Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, which judgment or judgments remains
outstanding for 60 days following such judgment or judgments and are not
discharged, waived or stayed within 10 days after notice to the Company by
the Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding voting as a single class ; provided that the
aggregate of all such undischarged judgments exceeds $10.0 million; (vii)
any Security Document or any Lien purported to be granted thereby and
having a fair market value in excess of $10.0 million is held in any
judicial proceeding to be unenforceable or invalid, in whole or in part, or
ceases for any reason (other than pursuant to a release that is delivered
or becomes effective as set forth herein) to be fully enforceable and
perfected; (viii) the Company or any Guarantor, or any Person acting on
behalf of any of them, denies or disaffirms, in writing, any obligation of
the Company or any Guarantor set forth in or arising under any Security
Document; (ix) except as permitted by the Indenture, any Subsidiary
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 Subsidiary Guarantee; (x) 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 (xi) 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.
However, a default under clauses (iv), (v) or (vii) will not constitute an
Event of Default until the Trustee or the Holders of 25% in principal
amount of the outstanding Notes notify the Company of the Default and the
Company does not cure the Default within the time specified after receipt
of the notice. 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.
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 (except
A-6
a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
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 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) LIEN SHARING; INTERCREDITOR OBLIGATIONS. The Notes, the
Subsidiary Guarantees and the other Note Obligations are secured by Note
Liens upon the Collateral pursuant to the Security Documents. If the
Company incurs any Parity Lien Debt, the Note Liens will rank Equally and
Ratably with certain Parity Liens as set forth in Article 12 of the
Indenture. In addition, as to certain Foreign Subsidiary Collateral and
proceeds thereof, the Note Liens and any Parity Liens will rank Equally and
Ratably with Liens securing certain Credit Facility Obligations under a
Qualified Credit Facility. The Collateral Agent is or may become required
to perform certain obligations relating to the Collateral for the benefit
of the Credit Facility Agent under a Qualified Credit Facility as set forth
in Article 13 of the Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as
such, will not have any liability for any obligations of the Company or
such Guarantor under the Notes, the Subsidiary 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
Exchange Registration Rights Agreement dated as of March 19, 2003, among
the Company, the Guarantors and the other parties named on the signature
pages thereof.
(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
A-7
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.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Exchange Registration Rights
Agreement. Requests may be made to:
Hexcel Corporation
Two Stamford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
A-8
EXHIBIT E
[FORM OF NOTATION OF 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 March 19, 2003 (the "INDENTURE") among
Hexcel Corporation (the "Company"), the Guarantors listed on Schedule I thereto
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee (the
"TRUSTEE"), (a) the due and punctual payment of the principal of, premium and
Special Interest, 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 Subsidiary Guarantee and the Indenture are expressly set forth
in Article 10 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Subsidiary 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 Subsidiary 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:
▇-▇
▇-▇