Exhibit 4.5
WEC COMPANY,
as Issuer
▇▇▇▇▇ EQUIPMENT COMPANY,
as Parent Guarantor
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
_________
NOTES INDENTURE
Dated as of July 28, 1999
_________
12% Senior Notes due July 15, 2009
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions................................................................................... 1
SECTION 1.02. Incorporation by Reference of TIA............................................................. 26
SECTION 1.03. Rules of Construction......................................................................... 26
SECTION 1.04. One Class of Securities....................................................................... 27
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating............................................................................... 27
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount...................................... 27
SECTION 2.03. Registrar and Paying Agent.................................................................... 28
SECTION 2.04. Paying Agent To Hold Assets in Trust.......................................................... 29
SECTION 2.05. Noteholder Lists.............................................................................. 29
SECTION 2.06. [Intentionally Omitted]....................................................................... 29
SECTION 2.07. Replacement Notes............................................................................. 30
SECTION 2.08. Outstanding Notes............................................................................. 30
SECTION 2.09. Treasury Notes................................................................................ 30
SECTION 2.10. Temporary Notes............................................................................... 31
SECTION 2.11. Cancellation.................................................................................. 31
SECTION 2.12. Defaulted Interest............................................................................ 31
SECTION 2.13. CUSIP Number.................................................................................. 31
SECTION 2.14. Deposit of Moneys............................................................................. 32
SECTION 2.15. Issuance of Additional Notes.................................................................. 32
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee............................................................................ 32
SECTION 3.02. Selection of Notes To Be Redeemed............................................................. 33
SECTION 3.03. Notice of Redemption.......................................................................... 33
SECTION 3.04. Effect of Notice of Redemption................................................................ 34
SECTION 3.05. Deposit of Redemption Price................................................................... 34
SECTION 3.06. Notes Redeemed in Part........................................................................ 35
SECTION 3.07. Optional Redemption........................................................................... 35
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.............................................................................. 36
SECTION 4.02. Maintenance of Office or Agency............................................................... 36
SECTION 4.03. Corporate Existence........................................................................... 36
SECTION 4.04. Payment of Taxes and Other Claims............................................................. 36
SECTION 4.05. Maintenance of Properties and Insurance....................................................... 37
SECTION 4.06. Compliance Certificate; Notice of Default..................................................... 38
SECTION 4.07. Compliance with Laws.......................................................................... 38
SECTION 4.08. SEC Reports................................................................................... 39
SECTION 4.09. Waiver of Stay, Extension or Usury Laws....................................................... 39
SECTION 4.10. Limitation on Restricted Payments............................................................. 39
SECTION 4.11. Limitation on Restrictions on Distributions from Restricted Subsidiaries...................... 42
SECTION 4.12. Limitation on Affiliate Transactions.......................................................... 44
SECTION 4.13. Limitation on Indebtedness.................................................................... 46
SECTION 4.14. Limitation on the Sale or Issuance of Preferred Stock of
Restricted Subsidiaries..................................................... 49
SECTION 4.15. Change of Control............................................................................. 49
SECTION 4.16. Limitation on Sales of Assets and Subsidiary Stock............................................ 52
SECTION 4.17. Limitation on Liens........................................................................... 55
SECTION 4.18. Future Guarantors............................................................................. 55
SECTION 4.19. Limitation on Issuances of Guarantees of and Pledges for Debt:
Subsidiary Guarantors....................................................... 55
SECTION 4.20. Limitation on Sale/Leaseback Transactions..................................................... 56
SECTION 4.21. Limitations on Status as Investment Company................................................... 56
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the Company....................................... 56
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default............................................................................. 59
SECTION 6.02. Acceleration.................................................................................. 60
SECTION 6.03. Other Remedies................................................................................ 61
SECTION 6.04. Waiver of Past Defaults....................................................................... 61
SECTION 6.05. Control by Majority........................................................................... 61
SECTION 6.06. Limitation on Suits........................................................................... 62
SECTION 6.07. Rights of Holders To Receive Payment.......................................................... 62
SECTION 6.08. Collection Suit by Trustee.................................................................... 62
SECTION 6.09. Trustee May File Proofs of Claim.............................................................. 62
SECTION 6.10. Priorities.................................................................................... 63
SECTION 6.11. Undertaking for Costs......................................................................... 63
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee............................................................................. 64
SECTION 7.02. Rights of Trustee............................................................................. 65
SECTION 7.03. Individual Rights of Trustee.................................................................. 66
SECTION 7.04. Trustee's Disclaimer.......................................................................... 66
SECTION 7.05. Notice of Default............................................................................. 66
SECTION 7.06. Reports by Trustee to Holders................................................................. 67
SECTION 7.07. Compensation and Indemnity.................................................................... 67
SECTION 7.08. Replacement of Trustee........................................................................ 68
SECTION 7.09. Successor Trustee by Merger, Etc.............................................................. 69
SECTION 7.10. Eligibility; Disqualification................................................................. 69
SECTION 7.11. Preferential Collection of Claims Against Company............................................. 70
ARTICLE EIGHT
DISCHARGE OF NOTES INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance................................................... 70
SECTION 8.02. Conditions to Defeasance...................................................................... 71
SECTION 8.03. Application of Trust Money.................................................................... 72
SECTION 8.04. Repayment to Company.......................................................................... 72
SECTION 8.05. Indemnity for Government Obligations.......................................................... 73
SECTION 8.06. Reinstatement................................................................................. 73
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.................................................................... 74
SECTION 9.02. With Consent of Holders....................................................................... 75
SECTION 9.03. Compliance with TIA........................................................................... 76
SECTION 9.04. Revocation and Effect of Consents............................................................. 76
SECTION 9.05. Notation on or Exchange of Notes.............................................................. 76
SECTION 9.06. Trustee To Sign Amendments, Etc............................................................... 77
SECTION 9.07. Payment for Consent........................................................................... 77
ARTICLE TEN
GUARANTEES
SECTION 10.01. Unconditional Guarantee....................................................................... 77
SECTION 10.02. Severability.................................................................................. 79
SECTION 10.03. Release of Subsidiary Guarantor from the Subsidiary Guarantee................................. 79
SECTION 10.04. Limitation on Amount Guaranteed; Contribution by
Subsidiary Guarantors................................................................ 79
SECTION 10.05. Waiver of Subrogation......................................................................... 80
SECTION 10.06. Execution of Subsidiary Guarantee............................................................. 81
SECTION 10.07. Waiver of Stay, Extension or Usury Laws....................................................... 81
SECTION 10.08. Effectiveness of Subsidiary Guarantee......................................................... 82
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.................................................................................. 82
SECTION 11.02. Notices....................................................................................... 83
SECTION 11.03. Communications by Holders with Other Holders.................................................. 84
SECTION 11.04. Certificate and Opinion as to Conditions Precedent............................................ 84
SECTION 11.05. Statements Required in Certificate or Opinion................................................. 84
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar..................................................... 85
SECTION 11.07. Legal Holidays................................................................................ 85
SECTION 11.08. Governing Law................................................................................. 85
SECTION 11.09. No Adverse Interpretation of Other Agreements................................................. 85
SECTION 11.10. No Recourse Against Others.................................................................... 85
SECTION 11.11. Successors.................................................................................... 86
SECTION 11.12. Duplicate Originals........................................................................... 86
SECTION 11.13. Severability.................................................................................. 86
Appendix ..................................................................................... I
Exhibit A - Form of Initial Note and Guarantee.................................................................. A-1
Exhibit B - Form of Exchange Note and Private Exchange Note and Guarantee....................................... B-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this Notes Indenture.
NOTES INDENTURE, dated as of July 28, 1999, among WEC COMPANY,
a Delaware corporation (the "Company"), ▇▇▇▇▇ EQUIPMENT COMPANY, a Delaware
corporation (the "Parent Guarantor") and United States Trust Company of New
York, a New York banking corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of
$130,000,000 12% Senior Notes due July 15, 2009 in the form of Initial Notes (as
defined below) and, if and when issued in connection with a registered exchange
for such Initial Notes, 12% Senior Notes due July 15, 2009 in the form of
Exchange Notes (as defined below) and, if and when issued in connection with a
private exchange for such Initial Notes, 12% Senior Notes due July 15, 2009 in
the form of Private Exchange Notes (as defined below), and such Additional Notes
(as defined below) that the Company may from time to time choose to issue
pursuant to the Notes Indenture, and, to provide therefor, the Company and each
of the Subsidiary Guarantors has duly authorized the execution and delivery of
this Notes Indenture. The Parent Guarantor has agreed to guarantee the Notes on
a senior basis.
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
-----------
"Additional Assets" means
-----------------
(i) any property or assets (other than Indebtedness and Capital Stock)
in a Related Business;
(ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary or
(iii) Capital Stock constituting a minority interest in any Person
that at such time is a Restricted Subsidiary; provided, however, that any
such Restricted Subsidiary described in clauses (ii) or (iii) above is
primarily engaged in a Related Business.
"Additional Notes" means, subject to the Company's compliance with
Section 4.13, any series of Senior Notes in an aggregate principal amount of $50
million issued from time to time after July 28, 1999 under the terms of this
Indenture which shall have identical terms as the Notes issued on July 28, 1999,
other than with respect to the date of issuance, issue price and amount of
interest payable on the first payment date applicable thereto (other than
pursuant to Section
1
2.07, 2.10, 3.06, 4.15, 4.16 or 9.06 of this Indenture or
Section 2.03 of the Appendix and other than Exchange Notes or Private Exchange
Notes issued pursuant to an exchange offer for other Notes outstanding under
this Indenture).
"Adjusted Maximum Amount" has the meaning provided in Section 10.04.
-----------------------
"Affiliate" of any specified Person means any other Person which,
---------
directly or indirectly, is in control of, is controlled by or is under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of the provisions described under Sections 4.10, 4.12
and 4.16 only, "Affiliate" will also mean any beneficial owner of the Company's
Capital Stock representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) or of rights or warrants to purchase such
Capital Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Agent" means any Registrar, Paying Agent or co-Registrar.
-----
"Aggregate Payments" has the meaning provided in Section 10.04.
------------------
"Appendix" has the meaning provided in Section 2.01.
--------
"Asset Disposition" means any sale, lease, transfer or other
-----------------
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(i) any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary),
(ii) all or substantially all the assets of any division or line of
business of the Company's or any Restricted Subsidiary or
(iii) any other assets of the Company or any Restricted Subsidiary
outside of the Company's ordinary course of business or such Restricted
Subsidiary.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Dispositions:
(i) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
2
(ii) a transfer of assets between or among the Company and its Wholly
Owned Subsidiaries,
(iii) an issuance of Equity Interests by a Wholly Owned Subsidiary to
the Company or to another Wholly Owned Subsidiary;
(iv) the sale, license or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business;
(v) the sale or other disposition of cash or Cash Equivalents or
Marketable Securities;
(vi) a Restricted Payment that is permitted by the covenant described
above under Section 4.10.
"Attributable Debt" when used with respect to any Sale/Leaseback
-----------------
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Notes, compounded annually) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Authenticating Agent" has the meaning provided in Section 2.02.
--------------------
"Average Life" means, as of the date of determination, with respect to
------------
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Banks" has the meaning specified in the Senior Credit Facility.
-----
"Bank Indebtedness" means all Obligations pursuant to the Senior Credit
-----------------
Facility.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
--------------
state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
------------------
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means, with respect to any Person, a copy of a
----------------
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
3
"Business Day" means each day which is not a Legal Holiday.
------------
"Capital Lease Obligations" of a Person means any obligation which is
-------------------------
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP; the amount of such obligation shall
be the capitalized amount thereof, determined in accordance with GAAP; and the
Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Capital Stock"of any Person means any and all shares, interests,
-------------
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Cash Equivalents" means:
----------------
(i) United States dollars;
(ii) securities issued or directly and fully guaranteed or insured by
the Untied States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of no more than six months from the date
of acquisition;
(iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding twelve months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better;
(iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institutions meeting the
qualifications specified in clause (iii) above;
(v) commercial paper having the highest rating obtainable from ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Rating Services and in each
case maturing within twelve months after the date of acquisition; and
(vi) money marked funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (i) through (v) of this
definition.
"Code" means the Internal Revenue Code of 1986, as amended.
----
4
"Commodity Agreement" means in respect of a Person, any commodity
-------------------
futures contract, commodity option or other similar agreement or arrangement
designed to protect such Person against fluctuations in the price of energy,
commodities and raw materials.
"Company" means the party named as such in this Notes Indenture until a
-------
successor replaces it pursuant to this Notes Indenture and thereafter means such
successor.
"Consolidated Coverage Ratio" as of any date of determination means the
---------------------------
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters prior to the date of such determination to (ii)
Consolidated Interest Expense for such four fiscal quarters; provided, however,
that
(i) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period will be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period,
(ii) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period will be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as the Company or such
Restricted Subsidiary has not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used to
repay, repurchase, defease or otherwise discharge such Indebtedness,
(iii) if since the beginning of such period the Company or any
Restricted Subsidiary will have made any Asset Disposition, the EBITDA for
such period will be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to the EBITDA
(if negative), directly attributable thereto for such period and
Consolidated Interest Expense for such period will be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to the
Company's Indebtedness or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its
continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and
5
its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale),
(iv) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) will have made an Investment
in any Restricted Subsidiary (or any person which becomes a Restricted
Subsidiary) or an acquisition of assets, including any acquisition of
assets occurring in connection with a transaction requiring a calculation
to be made hereunder, which constitutes all or substantially all of an
operating unit of a business, EBITDA and Consolidated Interest Expense for
such period will be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness or any cost saving permitted
to be adjusted in accordance with Article 11 of Regulation S-X) as if such
Investment or acquisition occurred on the first day of such period and
(v) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
will have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (iii) or
(iv) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period will be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations will be determined
by the Company in good faith by a responsible financial or accounting Officer.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest of such Indebtedness will be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).
"Consolidated Interest Expense" means, for any period, the Company's
-----------------------------
total interest expense and that of the Company's consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries,
without duplication,
(i) interest expense attributable to capital leases and the interest
expense attributable to leases constituting part of a Sale/Leaseback
Transaction,
(ii) amortization of debt discount and debt issuance cost,
(iii) capitalized interest,
6
(iv) non-cash interest expenses,
(v) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing,
(vi) net costs associated with Hedging Obligations (including
amortization of fees),
(vii) preferred Stock dividends in respect of all Preferred Stock held
by Persons other than the Company or a Wholly Owned Subsidiary,
(viii) interest incurred in connection with Investments in
discontinued operations,
(ix) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of) the
Company or any Restricted Subsidiary and
(x) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the Company's net
-----------------------
income and that of the Company's consolidated Subsidiaries; provided, however,
that there will not be included in such Consolidated Net Income:
(i) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that
(A) subject to the exclusion contained in clause (iv) below, the
Company's equity in the net income of any such Person for such period
will be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period
to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and
(B) the Company's equity in a net loss of any such Person for
such period will be included in determining such Consolidated Net
Income;
(ii) any net income (or loss) of any Person acquired by the Company or
a Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that
7
(A) subject to the exclusion contained in clause (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period will be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Restricted
Subsidiary during such period to the Company or another Restricted
Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause) and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period will be included in determining such
Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any of the Company's assets, the Company's consolidated
Subsidiaries or any other Person (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise disposed of
in the ordinary course of business and any gain (but not loss) realized
upon the sale or other disposition of any Capital Stock of any Person;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of the covenant described under
Section 4.10 only, there will be excluded from Consolidated Net Income any
dividends, repayments of loans or advances or other transfers of assets from
Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the
extent such dividends, repayments or transfers increase the amount of Restricted
Payments permitted under such covenant.
"Consolidated Net Worth" means the total of the amounts shown on our
balance sheet and that of our consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of our most recent
fiscal quarter ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as
(i) the par or stated value of all our outstanding Capital Stock; plus
(ii) paid-in capital or capital surplus relating to such Capital Stock;
plus
(iii) any retained earnings or earned surplus less (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock.
"covenant defeasance option" has the meaning provided in Section 8.01.
--------------------------
"Credit Facilities" means, one or more debt facilities or commercial
-----------------
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), working
capital
8
loans, swing lines, advances or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced, restructured or refinanced in
whole or in part from time to time.
"Currency Agreement" means in respect of a Person any foreign exchange
------------------
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
sequestrator or similar official under any Bankruptcy Law.
"Debentures" means the Initial Debentures, the Exchange Debentures and
----------
the Private Exchange Debentures of ▇▇▇▇▇ treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms hereof, that are issued pursuant to the Debenture Indenture.
"Debenture Indenture" means the indenture dated as of July 28, 1999
-------------------
among ▇▇▇▇▇, as issuer, and United States Trust Company of Texas, N.A., as
trustee.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and their
----------
respective successors.
"Disqualified Stock" means, with respect to any Person, any Capital
------------------
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise,
(ii) is convertible or exchangeable for Indebtedness or Disqualified
Stock or
(iii) is redeemable or must be purchased, upon the occurrence of
certain events or otherwise, by such Person at the option of the holder
thereof, in whole or in part,
in each case on or prior to the first anniversary of the Stated Maturity of the
Notes; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Notes will not constitute
Disqualified Stock if (x) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the terms applicable to the Notes and described under
Sections 4.15 and 4.16 and (y) any such requirement only becomes operative after
9
compliance with such terms applicable to the Notes, including the purchase of
any Notes tendered pursuant thereto.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
------
Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income:
(i) all the Company's income tax expense and that of the Company's
consolidated Restricted Subsidiaries,
(ii) the Company's depreciation expense and that of the Company's
consolidated Restricted Subsidiaries,
(iii) the Company's amortization expense and that of the Company's
consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period),
(iv) all the Company's other non-cash charges and those of the
Company's consolidated Restricted Subsidiaries (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
expenditures in any future period), in each case for such period, and
(v) all one-time compensation payments made in connection with the
Recapitalization.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and non-cash charges of, a
Restricted Subsidiary will be added to Consolidated Net Income to compute EBITDA
only to the extent (and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Net Income and
only if a corresponding amount would be permitted at the date of determination
to be dividended to the Company by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders. If since the beginning of the relevant period, the Company or any
Restricted Subsidiary will have made an Investment in any Restricted Subsidiary
(or any person which becomes a Restricted Subsidiary) or an acquisition of
assets, including any acquisition of assets occurring in connection with a
transaction requiring a calculation to be made hereunder, which constitutes all
or substantially all of an operating unit of a business, EBITDA for such period
will be calculated after giving pro forma effect thereto (including any cost
saving permitted to be adjusted in accordance with Article 11 of Regulation
S-X).
"Equity Interest" means Capital Stock and all warrants, options or
---------------
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.
10
"Equity Offering" means an offering of common stock of the Company or
---------------
Parent.
"Event of Default" has the meaning provided in Section 6.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the Appendix.
--------------
"Fair Share" has the meaning provided in Section 10.04.
----------
"Fair Share Shortfall" has the meaning provided in Section 10.04.
--------------------
"Fraudulent Transfer Laws" has the meaning provided in Section 10.04.
------------------------
"Funding Subsidiary Guarantor" has the meaning provided in Section
10.04.
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the Issue Date, including those set forth
in
(i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants,
(ii) statements and pronouncements of the Financial Accounting
Standards Board,
(iii) such other statements by such other entity as approved by a
significant segment of the accounting profession and
(iv) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in periodic
reports required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such Person (whether
arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof
11
(in whole or in part); provided, however, that the term "Guarantee" will
not include endorsements for collection or deposit in the ordinary course
of business.
The term "Guarantee" used as a verb has a corresponding meaning. The term
"Guarantor" will mean any Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
-------------------
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
------ ----------
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
-----
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes the Company's Subsidiary
(whether by merger, consolidation, acquisition or otherwise) will be deemed to
be Incurred by such Subsidiary at the time it becomes a Subsidiary. The term
"Incurrence" when used as a noun will have a correlative meaning. The accretion
of principal of a non-interest bearing or other discount security will be deemed
the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication):
(i) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment
of which such Person is responsible or liable, including, in each case, any
premium on such indebtedness to the extent such premium has become due and
payable;
(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into by
such Person;
(iii) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person
and all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of
business);
(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (i)
through (iii) above) entered into in the ordinary course of business of
such Person to the extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(v) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such
12
Person, the liquidation preference with respect to, any Preferred Stock
(but excluding, in each case, any accrued dividends);
(vi) all obligations of the type referred to in clauses (i) through
(v) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(vii) all obligations of the type referred to in clauses (i) through
(v) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured; and
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date will be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Initial Notes" has the meaning provided in the Appendix.
-------------
"Initial Purchaser" has the meaning provided in the Appendix.
-----------------
"Interest Payment Date" means the stated maturity of an installment of
---------------------
interest on the Notes.
"Investment" in any Person means any direct or indirect advance, loan
----------
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and the
covenant described under Section 4.10,
(i) "Investment" will include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company will be deemed to continue to have a permanent "Investment" in
an Unrestricted Subsidiary equal to an amount (if positive) equal to (x)
the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in
13
such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and
(ii) any property transferred to or from an Unrestricted Subsidiary
will be valued at its fair market value at the time of such transfer, in
each case as determined in good faith by the Board of Directors.
"issue" means issue, assume, Guarantee, Incur or otherwise become
-----
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be issued by such
Subsidiary at the time it becomes a Subsidiary; and the term "issuance" has a
corresponding meaning.
"Issue Date" means the date of original issuance of the Notes.
----------
"legal defeasance option" has the meaning provided in Section 8.01.
-----------------------
"Legal Holiday" has the meaning provided in Section 11.07.
-------------
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
----
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Marketable Securities" means publicly traded debt or equity
---------------------
securities that are listed for trading on a national securities exchange and
that were issued by a corporation whose debt securities are rated in one of the
three highest categories by either Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, Inc.
"Maturity Date" means July 15, 2009.
-------------
"Net Available Cash" from an Asset Disposition means cash payments,
------------------
cash equivalents and Marketable Securities received therefrom (including any
cash payments received by way of deferred payment of principal pursuant to a
note or installment receivable or otherwise and proceeds from the sale or other
disposition of any securities received as consideration, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to such properties or assets or received in any other noncash form), in each
case net of
(i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be accrued as a liability under GAAP,
as a consequence of such Asset Disposition,
(ii) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement
14
of any kind with respect to such assets, or which must by its terms, or in
order to obtain a necessary consent to such Asset Disposition, or by
applicable law, be repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition and
(iv) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds" with respect to any issuance or sale of Capital
-----------------
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Recourse Debt" means Indebtedness
-----------------
(i) as to which neither the Company nor any Restricted Subsidiary
(A) provides any guarantee or credit support of any kind
(including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or
(B) is directly or indirectly liable (as a guarantor or
otherwise) and
(ii) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of
the Company's other Indebtedness or that of any Restricted Subsidiary to
declare a default under such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity.
"Notes" means the Initial Notes, the Exchange Notes, the Private
-----
Exchange Notes and any Additional Notes treated as a single class of securities,
as amended or supplemented from time to time in accordance with the terms
hereof, that are issued pursuant to this Notes Indenture.
"Notes Indenture" means this Notes Indenture, as amended or
---------------
supplemented from time to time in accordance with the terms hereof.
"Obligations" means with respect to any Indebtedness all obligations
-----------
for principal, premium, interest (including, without limitation, interest after
the commencement of any bankruptcy, reorganization, insolvency or similar
proceeding against the Company or any of its Subsidiaries, whether or not
allowed in any such proceeding), penalties, fees, indemnifications,
15
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offer" has the meaning provided in Section 4.16.
-----
"Offer Amount" has the meaning provided in Section 4.16.
-----
"Offer Period" has the meaning provided in Section 4.16.
-----
"Offering Circular" means (i) with respect to the Initial Notes issued
-----------------
on July 28, 1999, the Offering Circular dated July 26, 1999, pursuant to which
the $130.0 million of 12% Senior Notes due July 15, 2009 in the form of Initial
Notes were offered, and any supplement thereto and (ii) with respect to each
issuance of Additional Notes, the offering circular, prospectus or other similar
offering document pursuant to which such Additional Notes were offered, and any
supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the Board,
-------
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, the Treasurer, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Officers or by an Officer and either a Treasurer or
Assistant Treasurer or an Assistant Secretary of such Person and otherwise
complying with the requirements of Sections 11.04 and 11.05, to the extent they
relate to the making of an Officers' Certificate.
"Opinion of Counsel" means a written opinion from legal counsel, who
------------------
may be counsel for the Company, and who is reasonably acceptable to the Trustee
complying with the requirements of Sections 11.04 and 11.05, to the extent they
relate to the giving of an Opinion of Counsel.
"Parent Guaranty" means the Guarantee of the Notes by Parent.
---------------
"Parent Subordinated Obligation" means any Indebtedness of Parent
------------------------------
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the obligations of Parent under the
Parent Guaranty pursuant to a written agreement.
"Paying Agent" has the meaning provided in Section 2.03.
------------
"Permitted Holders" means Madison Dearborn Partners, Inc. and any
-----------------
affiliate thereof.
"Permitted Investment" means an Investment by the Company or any
--------------------
Restricted Subsidiary in
16
(i) the Company, a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business;
(ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related
Business;
(iii) Investments in Cash Equivalents and Marketable Securities;
(iv) receivables owing to the Company or any Restricted Subsidiary,
including negotiable interests held for deposit or collecting, if created
or acquired in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms; provided, however, that such
trade terms may include such concessionary trade terms as the Company or
any such Restricted Subsidiary deems reasonable under the circumstances;
(v) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(vi) loans or advances to employees made in the ordinary course of
business consistent with the Company's past practices or that of such
Restricted Subsidiary;
(vii) any Person to the extent such Investment represents the non-cash
portion of the consideration received for an Asset Disposition as permitted
pursuant to the covenant described under Section 4.16;
(viii) any acquisition of assets to the extent acquired in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(ix) Hedging Obligations permitted by Section 4.13(vii);
(x) an Investment existing on the date hereof;
(xi) any Investment in securities of trade creditors or customers
received in compromise of obligations of such persons incurred in the
ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of
such trade creditors or customers; and
(xii) any Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (xii) that are at the time
outstanding not to exceed the greater of $5.0 million or 5% of Total
Assets.
17
"Permitted Liens" means, with respect to any Person,
---------------
(i) pledges or deposits by such Person under workmen's compensation
laws, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or
deposits or cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent, in each case
incurred in the ordinary course of business;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanic's Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceeding or other Liens arising out of
judgments or awards against such Person with respect to which such Person
will then be proceeding with an appeal or other proceedings for review;
(iii) Liens for property taxes not yet subject to penalties for
non-payment, which are being contested in good faith by appropriate
proceedings or with respect to which adequate reserves have been recorded
in accordance with GAAP;
(iv) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business;
(v) survey exceptions, encumbrances, easements or reservations of,
or rights of others for, licenses, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to use of real properties or liens incidental to the
conduct of the business of such Person or to the ownership of its
properties;
(vi) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under the Notes Indenture, secured
by a Lien on the same property securing such Hedging Obligations;
(vii) leases and subleases of real property which do not interfere
with the ordinary conduct of the Company's business or that of any of the
Company's Restricted Subsidiaries, and which are made on customary and
usual terms applicable to similar properties;
(viii) Liens existing as of the Issue Date and Liens created by the
Notes Indenture;
(ix) Liens created solely for the purpose of securing the payment of
all or a part of the purchase price of assets or property acquired or
constructed in the ordinary course of business after the date on which the
Notes are originally issued; provided, however, that
(A) the aggregate principal amount of Indebtedness secured by
such Liens will not exceed the lesser of cost or fair market value of
the assets or property so acquired or constructed,
18
(B) the Indebtedness secured by such Liens will have otherwise
been permitted to be issued under the Notes Indenture and
(C) such Liens will not encumber any of the Company's other
assets or property or that of any of the Company's Restricted
Subsidiaries and will attach to such assets or property within 180
days of the construction or acquisition of such assets or property;
(x) Liens on the assets or property of any of the Company's
Restricted Subsidiaries existing at the time such Restricted Subsidiary
became a Subsidiary of the Company and not incurred as a result of (or in
connection with or in anticipation of) such Restricted Subsidiary becoming
a Subsidiary of the Company; provided, however, that:
(A) any such Lien does not by its terms cover any property or
assets after the time such Restricted Subsidiary becomes a Subsidiary
which were not covered immediately prior to such transaction,
(B) the incurrence of the Indebtedness secured by such Lien will
have otherwise been permitted to be issued under the Notes Indenture,
and
(C) such Liens do not extend to or cover any of the Company's
other property or assets or that of any of the Company's Restricted
Subsidiaries;
(xi) Liens to secure Capitalized Lease Obligations permitted to be
Incurred under the Notes Indenture;
(xii) Liens securing Indebtedness outstanding or committed under the
Senior Credit Facility;
(xiii) Liens extending, renewing or replacing in whole or in part a
Lien permitted by this Notes Indenture; provided, however, that:
(A) such Liens do not extend beyond the property subject to the
existing Lien and improvements and construction on such property and
(B) the Indebtedness secured by the Lien may not exceed the
Indebtedness secured at the time by the existing Lien;
(xiv) Liens on inventory deemed to arise by reason of the consignment
of inventory in the Company's ordinary course of business and that of the
Company's Restricted Subsidiaries;
(xv) Liens on the assets or property of any of the Company's
Restricted Subsidiaries to secure Indebtedness of such Restricted
Subsidiary owing to and held by the Company; and
19
(xvi) Liens incurred in the ordinary course of business with respect
to obligations that do not exceed $1.0 million at any one time outstanding.
"Person" means any individual, corporation, limited liability company,
------
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
---------------
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person.
"principal" of a Note means the principal of the Note plus the premium,
---------
if any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Private Exchange Notes" has the meaning provided in the Appendix.
----------------------
"pro forma" means, with respect to any calculation made or required to
---------
be made pursuant to the terms of this Notes Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act, as
determined by the Board of Directors of the Company.
"Productive Assets" means assets (including Capital Stock) that are
-----------------
used or useable by WEC and its Restricted Subsidiaries in a Related Business.
"Public Equity Offering" means an underwritten primary public offering
----------------------
of the Company's common stock or that of Parent pursuant to an effective
registration statement under the Securities Act.
"Purchase Date" has the meaning provided in Section 4.16.
-------------
"Record Date" means each Record Date specified in the Notes, whether or
-----------
not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
---------------
means the date fixed for such redemption pursuant to this Notes Indenture and
the Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
----------------
means the price fixed for such redemption pursuant to this Notes Indenture and
the Notes.
"Refinance" means, in respect of any Indebtedness, to refinance,
---------
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
20
"Refinancing Indebtedness" means Indebtedness that Refinances any of
------------------------
the Company's Indebtedness or that of any Restricted Subsidiary referred to in
Section 4.13(b)(vi), including Indebtedness that Refinances Refinancing
Indebtedness; provided, however, that:
(i) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced,
(ii) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being Refinanced and
(iii) such Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided
further, however, that Refinancing Indebtedness will not include (x)
Indebtedness of a Subsidiary that Refinances the Company's Indebtedness,
(y) the Company's Indebtedness or that of a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary or (z) the Company's
Indebtedness or that of a Subsidiary Guarantor that Refinances Indebtedness
of a Restricted Subsidiary that is not a Subsidiary Guarantor.
"Registrar" has the meaning provided in Section 2.03.
---------
"Registration Rights Agreement" has the meaning set forth in the
-----------------------------
Appendix.
"Regulation S" means Regulation S under the Securities Act.
------------
"Related Business" means any business related, ancillary or
----------------
complementary to the Company's businesses and that of the Restricted
Subsidiaries on the Issue Date.
"Restricted Investment" means an Investment other than a Permitted
---------------------
Investment.
"Restricted Payment" with respect to any Person means
------------------
(i) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its Capital
Stock (other than dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) and dividends or distributions
payable solely to the Company or a Restricted Subsidiary, and other than
pro rata dividends or other distributions made by a Subsidiary that is not
a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation)),
21
(ii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company's (other than a Restricted Subsidiary), including the exercise of
any option to exchange any Capital Stock (other than into the Company's
Capital Stock that is not Disqualified Stock),
(iii) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment of any Subordinated Obligations
(other than the purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition) or
(iv) the making of any Investment in any Person (other than a
Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is not
---------------------
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"Sale/Leaseback Transaction" means an arrangement relating to property
--------------------------
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means, the Securities Act of 1933, as amended, or any
--------------
successor statute or statutes thereto.
"Senior Credit Facility" means that certain Credit Agreement, dated
----------------------
on or about July 28, 1999, among the Company, Parent, the Subsidiaries named
therein and the lenders from time to time party thereto, including any
collateral documents, instruments and agreements executed in connection
therewith, and the term Senior Credit Facility will also include any amendments,
supplements, modifications, extensions, renewals, restatements or refundings
thereof and any credit facilities that replace, refund or refinance any part of
the loans, other credit facilities or commitments thereunder, including any such
replacement, refunding or refinancing facility that increases the amount
borrowable thereunder or alters the maturity thereof.
"Significant Subsidiary" means any Restricted Subsidiary that would be
----------------------
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the final date
---------------
specified in such security as the fixed date on which all outstanding principal
of such security is due and payable,
22
including pursuant to any mandatory redemption provision (but excluding any
provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Company
-----------------------
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement to that effect, it being understood that any accrued but unpaid fees
or expenses not permitted to be paid to Madison Dearborn Partners LLC or its
Affiliates due to restriction under the covenant described under Section 4.12
shall be considered Subordinated Obligations.
"Subsidiary" means, in respect of any Person, any corporation,
----------
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by:
(1) such Person,
(2) such Person and one or more Subsidiaries of such Person or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of
--------------------
the Company's Obligations with respect to the Notes.
"Subsidiary Guarantor" means each Subsidiary of the Company that is a
--------------------
Subsidiary on the Issue Date and any other Subsidiary that Guarantees the
Company's obligations with respect to the Notes.
"Temporary Cash Investments" means any of the following:
--------------------------
(i) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof,
(ii) investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of
$50,000,000 (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor,
23
(iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above,
(iv) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company's) organized and in existence under the laws of
the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to ▇▇▇▇▇'▇
Investors Service, Inc. or "A-1" (or higher) according to Standard and
Poor's Ratings Group, and
(v) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard & Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service,
Inc.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
---
▇▇.▇▇. 77aaa-77bbbb), as in effect on the date of this Notes Indenture.
"Total Assets" means the total consolidated assets of the Company and
------------
its Restricted Subsidiaries as set forth on the Company's most recent balance
sheet.
"Trust Officer" means any officer within the Corporate Trust
-------------
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject, or in the case of a successor trustee, an authorized officer assigned
to the department, division or group performing the corporation trust work of
such successor and assigned to administer this Notes Indenture.
"Trustee" means the United States Trust Company of New York until a
-------
successor replaces it in accordance with the provisions of this Notes Indenture
and thereafter means such successor.
"Unrestricted Subsidiary" means
-----------------------
(i) any Subsidiary of the Company that at the time of determination
will be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below and
(ii) any Subsidiary of an Unrestricted Subsidiary.
The Company's Board of Directors may designate any of its Subsidiaries
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any of the
Company's Capital Stock or Indebtedness,
24
or holds any Lien on the Company's property or that of any Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so designated;
provided, however, that either (A) the Subsidiary to be so designated has total
assets of $1,000 or less or (B) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under the covenant described under
Section 4.10.
The Company's Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (x) the Company could Incur $1.00 of
additional Indebtedness under paragraph (a) of the covenant described under
Section 4.13 and (y) no Default will have occurred and be continuing. Any such
designation by the Company's Board of Directors will be evidenced to the Trustee
by promptly filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or certificates
---------------------------
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States of
-----------------
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" of a Person means all classes of Capital Stock or other
------------
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
-----------------------
Stock of which (other than directors' qualifying shares) is owned by the Company
or one or more Wholly Owned Subsidiaries.
25
SECTION 1.02. Incorporation by Reference of TIA.
---------------------------------
Whenever this Notes Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Notes
Indenture. The following TIA terms used in this Notes Indenture have the
following meanings:
"Indenture securities" means the Notes.
"Indenture security holder" means a Holder or a Noteholder.
"Indenture to be qualified" means this Notes Indenture.
"Indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Notes Indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Notes Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) "herein," "hereof" and other words of similar import refer to this
Notes Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(6) reference to Sections or Articles means reference to such Section
or Article in this Notes Indenture, unless stated otherwise.
26
SECTION 1.04. One Class of Securities.
-----------------------
The Initial Notes, the Private Exchange Notes, the Exchange Notes and
any Additional Notes shall vote and consent together on all matters as one class
and none of the Initial Notes, the Private Exchange Notes or the Exchange Notes
shall have the right to vote or consent as a separate class on any matter.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
---------------
(a) Provisions relating to the Initial Notes, the Private Exchange
Notes, the Exchange Notes and any Additional Notes are set forth in the Rule
144A/Regulation S Appendix attached hereto (the "Appendix"), which is hereby
--------
incorporated in and expressly made a part of this Notes Indenture. The Initial
Notes and the Trustee's certificate of authentication shall be substantially in
the form of Exhibit A hereto. The Exchange Notes, the Private Exchange Notes and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit B hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or depository rule or usage. The Company shall approve the
forms of the Notes and any notation, legend or endorsement on them. Each Note
shall be dated the date of its issuance and shall show the date of its
authentication.
(b) The terms and provisions contained in the Appendix and in the
forms of the Notes, annexed hereto as Exhibits A and B, shall constitute, and
are hereby expressly made, a part of this Notes Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Notes Indenture, expressly agree to such terms and provisions and to be bound
thereby.
SECTION 2.02. Execution and Authentication; Aggregate Principal
-------------------------------------------------
Amount.
------
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
27
On July 28, 1999, the Trustee shall authenticate and deliver $130.0
million of 12% Senior Notes due July 15, 2009 in the form of Initial Notes. In
addition, the Trustee shall authenticate Exchange Notes and Private Exchange
Notes, as applicable, for original issue in the aggregate principal amount not
to exceed $130.0 million, in each case upon receipt of a written order of the
Company in the form of an Officers' Certificate, provided that such Exchange
Notes and Private Exchange Notes shall be issuable only upon the valid surrender
for cancellation of such Initial Notes of a like aggregate principal amount.
Further, at any time and from time to time thereafter, the Trustee shall
authenticate and deliver Notes for original issue in an aggregate principal
amount specified, in each case upon receipt of a written order of the Company in
the form of an Officers' Certificate. Such order shall specify the amount of the
Notes to be authenticated and the date on which the original issue of Notes is
to be authenticated and, in the case of an issuance of Additional Notes pursuant
to Section 2.15 after July 28, 1999, shall certify that such issuance will not
be prohibited by Section 4.13.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Notes Indenture.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Notes Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain or designate an office or agency (which
shall be located in the Borough of Manhattan in the City of New York, State of
New York and which may be the office of the Trustee) where (a) Notes may be
presented or surrendered for registration of transfer or for exchange
("Registrar"), (b) Notes may be presented or surrendered for payment ("Paying
Agent") and (c) notices and demands to or upon the Company in respect of the
Notes and this Notes Indenture may be served. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may have
one or more co-Registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional Paying Agent. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar, except that for purposes of
Articles Three and Eight and Sections 4.15 and 4.16, neither the Company nor any
of its Subsidiaries or Affiliates shall act as Paying Agent. The Company may
change any Paying Agent or Registrar without notice to any Holder.
28
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Notes Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Notes Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Paying Agent or Registrar may resign upon 30 days notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may, and
upon direction of a majority of the Holders shall, at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company or any other obligor on the
Notes to the Paying Agent, the Paying Agent shall have no further liability for
such assets.
SECTION 2.05. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish or cause the Registrar to furnish
to the Trustee before each Record Date and at least seven Business Days before
each Interest Payment Date and at such other times as the Trustee may request in
writing a list as of such date and in such form as the Trustee may reasonably
require of the names and addresses of the Holders, which list may be
conclusively relied upon by the Trustee and the Company shall otherwise comply
with TIA ss. 312(a).
SECTION 2.06. [Intentionally Omitted]
-----------------------
29
SECTION 2.07. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, subject
to the terms of the next succeeding sentence, the Company shall issue and the
Trustee, upon the receipt of a written order complying with Section 2.02, shall
authenticate a replacement Note if the Trustee's reasonable requirements for
replacement Notes are met. If required by the Trustee or the Company, such
Holder must provide an affidavit of lost certificate and an indemnity bond or
other indemnity, sufficient in the judgment of both the Company and the Trustee,
to protect the Company, the Trustee, any Agent or any Authenticating Agent from
any loss which any of them may suffer if a Note is replaced. The Company and the
Trustee may charge such Holder for their out-of-pocket expenses in replacing a
Note, including reasonable fees and expenses of counsel, and for any tax that
may be imposed in replacing such Notes. Every replacement Note shall constitute
an additional obligation of the Company.
SECTION 2.08. Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.09, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.
Except as otherwise provided in Article 8, if on a Redemption Date or
the Maturity Date the Paying Agent holds U.S. Legal Tender or U.S. Government
Obligations sufficient to pay all of the principal and interest due on the Notes
payable on that date and is not prohibited from paying such money to the Holders
thereof pursuant to the terms of this Notes Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or any of its Affiliates shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver, consent or notice,
only Notes which a Trust Officer of the Trustee actually knows are so owned
shall be so considered.
30
SECTION 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate upon receipt
of a written order of the Company pursuant to Section 2.02 definitive Notes in
exchange for, and upon surrender of, temporary Notes. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Notes Indenture as definitive Notes authenticated and delivered hereunder.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Company, shall dispose
of all Notes surrendered for transfer, exchange, payment or cancellation.
Subject to Section 2.07, the Company may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation. If the Company
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.11.
SECTION 2.12. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Notes (without
regard to any grace period therefor), it shall pay the defaulted interest, plus
(to the extent lawful) any interest payable on the defaulted interest to the
Persons who are Holders on a subsequent special Record Date, which date shall be
the fifteenth day preceding the date fixed by the Company for the payment of
defaulted interest or the next succeeding Business Day if such date is not a
Business Day. At least 15 days before the subsequent special Record Date, the
Company shall mail to each Holder, as of a recent date selected by the Company,
with a copy to the Trustee, a notice that states the subsequent special Record
Date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
------------
The Company in issuing the Notes may use "CUSIP" numbers, and if so,
the Trustee shall use such CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of such CUSIP numbers
printed in the notice or on the Notes, and that reliance may
31
be placed only on the other identification numbers printed on the Notes. The
Company shall promptly notify the Trustee of any change in a CUSIP number.
SECTION 2.14. Deposit of Moneys.
-----------------
Prior to 9:00 a.m. New York City time on each Interest Payment Date and
on the Maturity Date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be.
SECTION 2.15. Issuance of Additional Notes.
----------------------------
With respect to any Additional Notes, the Company shall set forth in a
Board Resolution and in an Officers' Certificate, a copy of each which shall be
delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Notes Indenture;
(2) the issue price, the issue date and the CUSIP number of such
Additional Notes and the amount of interest payable on the first payment
date applicable thereto; provided, however, that no Additional Notes may be
issued at a price that would cause such Additional Notes to have "original
issue discount" within the meaning of Section 1273 of the Code; and
(3) whether such Additional Notes shall be transfer restricted
securities and issued in the form of Initial Notes or shall be registered
securities issued in the form of Exchange Notes as set forth in the
Appendix.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to Section 3.07 and
Paragraph 6 of the Notes, it shall notify the Trustee and the Paying Agent in
writing in the form of an Officer's Certificate of the (i) Redemption Date, (ii)
the principal amount of the Notes to be redeemed and (iii) the redemption price.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days but no more than 60 days before the Redemption Date, together with
an Officers' Certificate stating that such redemption shall comply with the
conditions contained herein and in the Notes.
32
SECTION 3.02. Selection of Notes To Be Redeemed.
---------------------------------
If fewer than all of the Notes are to be redeemed, selection of the
Notes to be redeemed will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not then listed on a national securities
exchange, on a pro rata basis, by lot or in such other fair and reasonable
manner chosen at the discretion of the Trustee; provided, however, that if a
partial redemption is made with the proceeds of a Public Equity Offering or
other Equity Offering pursuant to Section 3.07(b), selection of the Notes or
portion thereof for redemption shall be made by the Trustee only on a pro rata
basis, unless such method is otherwise prohibited. The Company shall promptly
notify the Trustee and the Paying Agent in writing of the date of listing and
the name of the securities exchange if and when the Notes are listed on a
principal national securities exchange. The Trustee shall make the selection
from the Notes outstanding and not previously called for redemption and shall
promptly notify the Company in writing of the Notes selected for redemption and,
in the case of any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes in denominations of $1,000 may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Notes that have denominations
larger than $1,000. Provisions of this Notes Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail, postage prepaid, to each Holder whose Notes are to be redeemed, with
a copy to the Trustee and any Paying Agent. At the Company's written request no
less than 35 days prior to the Redemption Date, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense.
Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption is
being made;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only
33
remaining right of the Holders of such Notes is to receive payment of the
Redemption Price plus accrued interest, if any, upon surrender to the
Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(8) if fewer than all the Notes are to be redeemed, the aggregate
principal amount of Notes to be redeemed and the aggregate principal amount
of Notes to be outstanding after such partial redemption and, if the
redemption is not made pro rata, the identification of the particular Notes
(or portion thereof) to be redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price and the amount of accrued interest payable thereon, provided
that if a Note is redeemed on or after a Record Date for an interest payment but
on or prior to the related Interest Payment Date, then any accrued and unpaid
interest shall be paid to the Holder of record at the close of business on such
Record Date. Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder.
Except in connection with a defeasance pursuant to Section 8.02, at any
time prior to the mailing of a notice of redemption to the Holders pursuant to
Section 3.03, the Company may withdraw, revoke or rescind any notice of
redemption delivered to the Trustee without any continuing obligation to redeem
the Notes.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
On or before 9:00 a.m. New York City time on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Notes to be redeemed
on that date (other than Notes or portions of Notes called for redemption which
have been delivered by the Company to the Trustee for cancellation). The Paying
Agent shall promptly return to the Company any U.S. Legal Tender so deposited
which is not required for that purpose, except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be
34
redeemed will cease to accrue on and after the applicable Redemption Date,
whether or not such Notes are presented for payment.
SECTION 3.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.07. Optional Redemption.
-------------------
(a) Except as set forth in the subsection (b) below, the Notes will
be redeemable at the Company's option, in whole or in part, at any time on or
after July 15, 2004, at the respective redemption price (expressed as a
percentage of principal amount) set forth below, plus accrued and unpaid
interest to the redemption date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant Interest
Payment Date), if redeemed during the 12-month period beginning on July 15 of
the year indicated below:
Redemption
Period Price
------ ----------
2004 .......................... 106.000%
2005 .......................... 104.000%
2006 .......................... 102.000%
2007 and thereafter ........... 100.000%
(b) Notwithstanding the foregoing, before July 15, 2002, the
Company may at its option on one or more occasions redeem up to 35% of the
original principal amount of the Notes (including the original principal amount
of any Additional Notes) with the proceeds of (i) one or more Public Equity
Offerings or (ii) any other Equity Offering so long as the gross proceeds to the
Company or Parent from such offering exceeds $50 million, at a redemption price
(expressed as a percentage of principal amount) of 112% plus accrued interest to
the redemption date (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date);
provided that at least 65% of the aggregate principal amount of the Notes
(including the original principal amount of any Additional Notes) initially
issued must remain outstanding after each such redemption; provided, further,
that such redemption must occur within 120 days of the Public Equity Offering or
Equity Offering, as the case may be.
35
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
----------------
The Company shall pay or cause to be paid the principal of and interest
on the Notes on the dates and in the manner provided in the Notes and in this
Notes Indenture. An installment of principal of or interest on the Notes shall
be considered paid on the date it is due if the Trustee or Paying Agent (other
than the Company or an Affiliate of the Company) holds on that date U.S. Legal
Tender designated for and sufficient to pay the installment in full and is not
prohibited from paying such money to the Holders pursuant to the terms of this
Notes Indenture.
Notwithstanding anything to the contrary contained in this Notes
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
SECTION 4.03. Corporate Existence.
-------------------
Except as otherwise permitted by Article Five, the Company shall do or
cause to be done, at its own cost and expense, all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of its Restricted Subsidiaries in accordance with the
respective organizational documents of each of them (as the same may be amended
from time to time) and the material rights (charter and statutory) and
franchises of the Company and each such Restricted Subsidiary; provided,
however, that neither the Company nor any Restricted Subsidiary shall be
required to preserve any right or franchise, or the corporate, partnership or
other existence of any Restricted Subsidiary, if the Board of Directors of the
Company shall reasonably determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole.
SECTION 4.04. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges
36
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Subsidiaries or properties of it or any
of its Subsidiaries and (ii) all lawful claims for labor, materials and supplies
that, if unpaid, might by law become a Lien upon the property of it or any of
its Subsidiaries; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted for which reserves, to the extent required under and in accordance
with GAAP, have been taken.
SECTION 4.05. Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its material properties in good working order and
condition (subject to ordinary wear and tear) and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto and
actively conduct and carry on its business; provided, however, that nothing in
this Section 4.05 shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the operation and maintenance of any of its
properties, if such discontinuance is, in the reasonable good faith judgment of
the Company or the Restricted Subsidiary, as the case may be, desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken as
a whole.
(b) The Company shall provide or cause to be provided, for itself and
each of its Restricted Subsidiaries, insurance (including reasonably appropriate
self-insurance consistent with past practice) against loss or damage of the
kinds that, in the good faith judgment of the Board of Directors of the Company,
are adequate and appropriate for the conduct of the business of the Company and
such Restricted Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable good faith judgment of the
Board of Directors of the Company, for companies similarly situated in the
industry.
37
SECTION 4.06. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee, within 120 days after
the end of the Company's fiscal year, an Officers' Certificate stating that a
review of its activities and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Notes Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
such Officer's knowledge, based on such review, the Company during such
preceding fiscal year has kept, observed, performed and fulfilled each and every
such covenant contained in the Notes Indenture and no Default or Event of
Default occurred during such year and at the date of such certificate there is
no Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end. Such Officer's
Certificate shall comply with TIA Section 314(a)(4).
(b) So long as not contrary to the then-current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of such
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four or Five of
this Notes Indenture or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Notes Indenture or the Notes, the
Company shall deliver to the Trustee, at its address set forth in Section 11.02,
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
becoming aware of such occurrence.
SECTION 4.07. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Restricted Subsidiaries, taken
as a whole.
38
SECTION 4.08. SEC Reports.
-----------
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15 (d) of the Exchange Act, the Company will file
with the SEC (to the extent the SEC will accept such filings) and provide the
Trustee and Noteholders with such annual reports and such information, documents
and other reports as are specified in Sections 13 and 15(d) of the Exchange Act
and applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections.
The requirement under this paragraph will be satisfied by filings made by Parent
pursuant to the Exchange Act containing the required information relating to the
Company to the extent permitted by SAB 53.
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Notes Indenture; and (to the
extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.10. Limitation on Restricted Payments.
---------------------------------
(a) the Company will not, and will not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:
(i) a Default will have occurred and be continuing (or would result
therefrom);
(ii) the Company is not able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of the covenant described under Section
4.13; or
(iii) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from July 3, 1999 to the end of
the most recent fiscal quarter ending at least 45 days prior to the
date of such Restricted Payment (or, in case such Consolidated Net
Income will be a deficit, minus 100% of such deficit);
39
(B) 100% of the aggregate Net Cash Proceeds received by the Company
from the issuance or sale of the Company's Capital Stock (other than
Disqualified Stock) or an equity contribution from a holder of the
Company's Capital Stock subsequent to the Issue Date (other than an
issuance or sale to any of the Company's Subsidiaries and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit of
their employees) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of the
Company that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to Parent or a Subsidiary of Parent or the Company),
together with the net proceeds received by the Company upon such conversion
or exchange, if any, plus;
(C) an amount equal to the aggregate net proceeds (including the fair
market value (as determined in good faith by a Board Resolution of the
Company) of property other than cash that would constitute Marketable
Securities or a Related Business so long as there is no restriction on the
sale of such property) of any
(i) sale or other disposition of Investments made by the Company and
its Restricted Subsidiaries, or
(ii) dividend from, or the sale of the stock of, an Unrestricted
Subsidiary;
provided, however, that the foregoing amount shall not exceed the amount of such
Investment previously made (and treated as a Restricted Payment) by the Company
or any Restricted Subsidiary, and, in the case of any such clause (ii), the
amount of Investments previously made (and treated as a Restricted Payment) by
the Company or any Restricted Subsidiary in such Unrestricted Subsidiary.
(b) The provisions of the foregoing paragraph (a) will not
prohibit:
(i) any acquisition of any Capital Stock of the Company made out of
the proceeds of the substantially concurrent sale of, or made by exchange
for, the Company's Capital Stock (other than Disqualified Stock and other
than Capital Stock issued or sold to any of the Company's Subsidiaries or
an employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of the Company or their
employees); provided, however, that (A) such acquisition of Capital Stock
will be excluded in the calculation of the amount of Restricted Payments
and (B) the Net Cash Proceeds from such sale will be excluded from the
calculation of amounts under clause (iii)(B) of paragraph (a) above;
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company which is permitted to be Incurred pursuant
to the covenant described under Section 4.13; provided, however, that such
40
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value will be excluded in the calculation of the amount of
Restricted Payments;
(iii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Disqualified Stock made by exchange
for, or out of the proceeds of the substantially concurrent sale of,
Disqualified Stock of the Company which is permitted to be issued pursuant
to the Notes Indenture; provided, however, that such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value will be
excluded in the calculation of the amount of Restricted Payments;
(iv) dividends paid or the consummation at any irrevocable
redemption within 60 days after the date of declaration or notice of
redemption thereof if at such date of declaration or notice such dividend
or redemption would have complied with this covenant; provided, however,
that such dividend will be included in the calculation of the amount of
Restricted Payments;
(v) so long as no Default has occurred or will occur as a result of
such payment, the repurchase or other acquisition of shares of, or options
to purchase shares of, Parent's common stock or the common stock of any of
Parent's Subsidiaries from employees, former employees, consultants,
directors or former directors of Parent's or any of Parent's Subsidiaries
(or permitted transferees of such employees, former employees, directors or
former directors), pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved by the
Company's Board of Directors under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such common stock;
provided, however, that the aggregate amount of such repurchases and other
acquisitions will not exceed $2 million in any calendar year; provided
further, however, that such repurchases and other acquisitions will be
deducted in the calculation of the amount of Restricted Payments;
(vi) repurchase of Equity Interests of the Company deemed to occur
upon the exercise of stock options to the extent Equity Interests represent
a portion of the Exercise Price of such options; or
(vii) cash payments, advances, loans or expense reimbursements made
to Parent to permit Parent to pay its general operating expenses, franchise
tax obligations, accounting, legal, corporate reporting and administrative
expenses incurred in the ordinary course of its business in an amount not
to exceed $250,000 in the aggregate in any fiscal year;
(viii) prepayments, repayments or purchases of Indebtedness pursuant
to Section 4.16(ii)(D); provided, however, that such prepayment, repayment
or purchase will be included in the calculation of the amount of Restricted
Payments;
(ix) cash payments to Parent from and after October 15, 2004, to
enable Parent to make required interest payments on the Debentures
provided, in each case, such cash payments are
41
used for interest payments, as applicable, within 30 days of such payment;
provided, further, that (i) no Default or Event of Default shall have
occurred and be continuing; (ii) that such payment will be included in the
calculation of the amount of Restricted Payments; and (iii) that the
Consolidated Coverage Ratio after giving effect to such payments exceeds
2.5 to 1;
(x) so long as no Default has occurred and is continuing or would be
caused thereby, other Restricted Payments in an aggregate amount not to
exceed $3 million since the date of this Notes Indenture.
(c) The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this covenant shall be determined in good faith by the Board of Directors
whose resolution with respect thereto shall be conclusive. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million.
(d) The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under clause (a) of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
fair market value of such Investments as the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
SECTION 4.11. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company will not, and will not permit any of the Company's
Restricted Subsidiaries to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries or pay any
Indebtedness owed to the Company,
(ii) make any loans or advances to the Company or
(iii) transfer any of its property or assets to the Company,
except:
42
(i) any encumbrance or restriction pursuant to an agreement in effect at
or entered into on the Issue Date (including restrictions under the Notes
Indenture, the Notes, the Debenture Indenture, the Discount Notes and the
Guarantees of the Notes);
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by
such Restricted Subsidiary on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding on such date;
(iii) any such encumbrance or restriction consisting of customary non-
assignment provisions in leases governing leasehold interests to the extent such
provisions restrict the transfer of the lease or the property leased thereunder;
(iv) in the case of clause (c) above, restrictions contained in security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject to such
security agreements or mortgages; provided that such security agreements or
mortgages constitute Permitted Liens and such Indebtedness is permitted to be
Incurred under this Notes Indenture;
(v) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition;
(vi) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business; (vii)
restrictions on the transfer of assets subject to any Lien permitted under this
Notes Indenture imposed by the holder of such Lien;
(viii) encumbrances or restrictions existing under or arising pursuant to
Credit Facilities entered into in accordance with this Notes Indenture; that the
encumbrances or restrictions in such Credit Facilities are not materially more
restrictive than those contained in the Senior Credit Agreement as in effect on
the date hereof;
(ix) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so acquired of the
nature described in clause (iii) of the first paragraph of this covenant;
(x) provisions with respect to the disposition or distribution of assets
or property in joint venture agreements and other similar agreements entered
into in the ordinary course of business;
43
(xi) any agreement or instrument governing Capital Stock (other than
Disqualified Stock) of any Person that is in effect on the date such Person
is acquired by the Company or a Restricted Subsidiary; and
(xii) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (i) through (xi) above; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of
the Board of Directors of the Company, not materially more restrictive with
respect to such dividend and other payment restrictions than those
contained in the dividends or other payment restrictions prior to such
amendment, modification, restatement, renewal, increase, supplement,
refunding, replacement or refinancing.
SECTION 4.12. Limitation on Affiliate Transactions.
------------------------------------
(a) the Company will not, and will not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property, employee compensation
arrangements or the rendering of any service) with any of the Company's
Affiliates (an "Affiliate Transaction") unless the terms thereof:
(i) are no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not such an
Affiliate,
(ii) if such Affiliate Transaction involves an amount in excess of $1
million, (A) are set forth in writing and (B) have been approved by a
majority of the members of the Company's Board of Directors having no
personal stake in such Affiliate Transaction;
(iii) if such Affiliate Transaction involves as amount in excess of
$10 million, have been determined by nationally recognized investment
banking or accounting firm to be fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries; and
(iv) with respect to any transaction, management, consulting and
advisory fees and related expenses to Madison Dearborn Partners, LLC and
its Affiliates, WEC would be able to incur $1.00 of Indebtedness pursuant
to Section 4.13(a); provided, however, for the purposes of this clause (iv)
only, the Consolidated Coverage Ratio shall not exceed 1.75 to 1 prior to
July 31, 2001 or 2.25 to 1 thereafter.
(b) The provisions of the foregoing paragraph (a) will not
prohibit:
(i) any Restricted Payment permitted to be paid pursuant to the
covenant described under Section 4.10,
44
(ii) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Company's
Board of Directors,
(iii) the grant of stock options or similar rights to the Company's
employees and directors pursuant to plans approved by the Company's Board of
Directors,
(iv) loans or advances to employees in the ordinary course of business in
accordance with the Company's past practices or past practices of the Company's
Restricted Subsidiaries, but in any event not to exceed $1 million in the
aggregate outstanding at any one time,
(v) the payment of reasonable fees to the Company's or Parent's
directors and directors of Restricted Subsidiaries who are not the Company's or
Parent's employees or employees of Restricted Subsidiaries,
(vi) any Affiliate Transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries,
(vii) the issuance or sale of any Capital Stock of the Company (other
than Disqualified Stock),
(viii) any employment agreement with reasonable terms entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary,
(ix) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in such Person, so long as no
other Affiliate of the Company owns an interest in such Person,
(x) the payment of transaction, management, consulting and advisory fees
and related expenses to Madison Dearborn Partners, LLC and its Affiliates;
provided that such fees shall not, in the aggregate, exceed:
(A) in the case of a management fee, $600,000 in any twelve-month
period, and
(B) in the case of a transaction fee, 1.0% of the total equity
value of, plus the Indebtedness assumed from, the business acquired
in such transaction or series of related transactions.
(xi) reasonable fees and expenses and compensation paid to, and indemnity
provided on behalf of, officers, directors or employees of the Company, Parent
or any Subsidiary as determined in good faith by the Board of Directors of the
Company or senior management,
45
(xii) any agreement as in effect as of the Issue Date or any
amendment thereto so long as such amendment is not more disadvantageous to
the Holders in any material respect, and
(xiii) payments made to Parent for the purpose of allowing to pay its
general operating expenses, franchise tax obligations, accounting, legal
corporate reporting and administrative expenses incurred in the ordinary
course of its business in an amount not to exceed $250,000 in the aggregate
in any fiscal year.
SECTION 4.13. Limitation on Indebtedness.
--------------------------
(a) the Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur, directly or indirectly, any Indebtedness; provided,
however, that the Company may Incur Indebtedness if, on the date of such
Incurrence and after giving effect thereto, the Consolidated Coverage Ratio
exceeds 2 to 1 if such Indebtedness is Incurred prior to July 31, 2001 or 2.25
to 1 if such Indebtedness in Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur any or all of the following Indebtedness:
(i) Indebtedness Incurred pursuant to the Senior Credit Facility;
provided, however, that, after giving effect to any such Incurrence, the
aggregate principal amount of such Indebtedness then outstanding does not
exceed $40 million less the sum of all principal payments with respect to
such Indebtedness pursuant to Section 4.16(a)(ii)(A);
(ii) Indebtedness owed to and held by the Company or any of its
Restricted Subsidiaries; provided, however, that (x) any subsequent
issuance or transfer of any Capital Stock which results in any such
Restricted Subsidiary ceasing to be a Subsidiary or any subsequent transfer
of such Indebtedness (other than to the Company or any of its Restricted
Subsidiaries) will be deemed, in each case, to constitute the Incurrence of
such Indebtedness by the obligor thereon that is not permitted to be
Incurred under this clause (ii) and (y) if the Company and/or a Subsidiary
Guarantor is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
obligations with respect to the Note and/or the Subsidiary Guaranty of such
Subsidiary Guarantor, as the case may be;
(iii) the Notes (other than Additional Notes) and the Exchange Notes;
(iv) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (i), (ii) or (iii) of this covenant);
(v) Indebtedness of a Subsidiary Incurred and outstanding on or
prior to the date on which such Subsidiary was acquired by the Company
(other than Indebtedness Incurred in connection with, or to provide all or
any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary became a Subsidiary or was acquired by the Company); provided,
however, that on the date of such
46
acquisition and after giving effect thereto, the Company would have been able to
Incur at least $1.00 of additional Indebtedness pursuant to clause (a) above;
(vi) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to paragraph (a) above or pursuant to clause (iii), (iv) or (v) above
or this clause (vi); provided, however, that to the extent such Refinancing
Indebtedness directly or indirectly Refinances Indebtedness of a Subsidiary
Incurred pursuant to clause (v), such Refinancing Indebtedness will be Incurred
only by such Subsidiary;
(vii) Hedging Obligations or Commodity Agreements not entered into for
speculative purposes and directly related to Indebtedness permitted to be
Incurred by the Company or any of its Restricted Subsidiaries pursuant to this
Notes Indenture;
(viii) the Subsidiary Guaranties of the Subsidiary Guarantors with respect
to the Notes and the Debentures;
(ix) the incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of financing
all or any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Restricted Subsidiaries, in an aggregate principal amount to not exceed the
greater of 5% of Total Assets as of the date of incurrence and $2.5 million at
any time outstanding;
(x) the guarantee by the Company or any of the Subsidiary Guarantors of
the Company's Indebtedness or Indebtedness of a Restricted Subsidiary that was
permitted to be incurred by another provision of this covenant;
(xi) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this covenant; provided, in each
case, that the amount thereof is included in Consolidated Interest Expense of
the Company as accrued;
(xii) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Subsidiary, other than guarantees of
Indebtedness incurred by any person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition;
provided, however, that (a) such Indebtedness is not reflected on the balance
sheet of the Company or any Restricted Subsidiary (contingent obligations
referred to in a footnote to financial statements and not otherwise reflected on
the balance sheet will not be deemed to be reflected on such balance sheet for
purposes of this clause (a)) and (b) the maximum assumable
47
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds including noncash proceeds (the fair market value of such
noncash proceeds being measured at the time received and without giving
effect to any subsequent changes in value) actually received by the Company
and its Restricted Subsidiaries in connection with such disposition;
(xiii) the incurrence of obligations in respect of performance and
surety bonds provided by the Company or any of its Restricted Subsidiaries
in the ordinary course of business;
(xiv) the incurrence of Indebtedness consisting of guarantees of
loans made to management for the purpose of permitting management to
purchase Equity Interests of Parent, in an amount not to exceed $1.0
million at any one time outstanding;
(xv) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary
course of business, provided that such Indebtedness is satisfied within
five business days of Incurrence;
(xvi) Indebtedness of the Company issued to directors, employees,
officers or consultants of the Company or a Restricted Subsidiary in
connection with the redemption or purchase of Capital Stock of the Company
or Parent that, by its terms, is subordinated to the Notes, is not secured
by any assets of the the Company or its Restricted Subsidiaries and does
not require cash payments prior to the Stated Maturity of the Notes and
Refinancing Indebtedness in respect thereof, in an aggregate principal
amount which, when added together with the amount of Indebtedness Incurred
pursuant to this clause (16) and then outstanding, does not exceed $1.0
million; and
(xvii) Indebtedness in an aggregate principal amount which, together
with the Company's other Indebtedness outstanding on the date of such
Incurrence (other than Indebtedness permitted by clauses (i) through (xvi)
above or paragraph (a)) does not exceed $10 million at any one time
outstanding.
(c) Notwithstanding the foregoing, neither the Company nor any of its
Restricted Subsidiaries will Incur any Indebtedness pursuant to the foregoing
paragraph (b) if the proceeds thereof are used, directly or indirectly, to
Refinance any of the Company's Subordinated Obligations unless such Indebtedness
will be subordinated to the Notes to at least the same extent as such
Subordinated Obligations. No Subsidiary Guarantor will Incur any Indebtedness
pursuant to the foregoing paragraph (b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subsidiary Guarantor Subordinated
Obligation of such Subsidiary Guarantor unless such Indebtedness will be
subordinated to the obligations of such Subsidiary Guarantor under the
applicable Subsidiary Guaranty to at least the same extent as such Subsidiary
Guarantor Subordinated Obligation.
48
(d) For purposes of determining compliance with the foregoing covenant,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses and
(ii) an item of Indebtedness may be divided and classified in more than one of
the types of Indebtedness described above.
(e) the Company will not permit any Unrestricted Subsidiary to incur any
Indebtedness other than Non-Recourse Debt; provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt, such event will be deemed to
constitute an Incurrence of Indebtedness by the Company or any of its Restricted
Subsidiaries.
SECTION 4.14. Limitation on the Sale or Issuance of Preferred Stock of
--------------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company will not sell or otherwise dispose of any Preferred Stock of a
Restricted Subsidiary, and will not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell or otherwise dispose of any of its Preferred
Stock except to the Company or any of its Wholly Owned Subsidiaries.
SECTION 4.15. Change of Control.
-----------------
(a) Upon the occurrence of any of the following events (each a "Change
of Control"), each Holder will have the right to require the Company to
repurchase such Holder's Notes at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant Record
Date to receive interest due on the relevant Interest Payment Date):
(i) prior to the earlier to occur of (A) the first public offering of
common stock of Parent or (B) the first public offering of the Company's
common stock, the Permitted Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of at least 35% of the aggregate of the total voting power of
the Company's Voting Stock or that of Parent, whether as a result of
issuance of the Company's securities or that of Parent, the Company's
merger, consolidation, liquidation or dissolution or that of Parent, any
direct or indirect transfer of securities by Parent or otherwise (for
purposes of this clause (i) and clause (ii) below, the Permitted Holders
will be deemed to beneficially own any Voting Stock of a corporation (the
"specified corporation") held by any other corporation (the "parent
corporation") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the voting
power of the Voting Stock of the parent corporation);
(ii) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in clause (i) above, except that for
purposes of this clause (ii) such person will be deemed to have
49
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of the total
voting power of the Company's Voting Stock or that of Parent; provided,
however, that the Permitted Holders beneficially own (as defined in clause
(i) above), directly or indirectly, in the aggregate a lesser percentage of
the total voting power of the Company's Voting Stock or that of Parent than
such other person and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
Company's Board of Directors or that of Parent (for the purposes of this
clause (ii), such other person will be deemed to beneficially own any
Voting Stock of a specified corporation held by a parent corporation, if
such other person is the beneficial owner (as defined in this clause (ii)),
directly or indirectly, of more than 35% of the voting power of the Voting
Stock of such parent corporation and the Permitted Holders beneficially own
(as defined in clause (i) above), directly or indirectly, in the aggregate
a lesser percentage of the voting power of the Voting Stock of such parent
corporation and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the board of
directors of such parent corporation);
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Company's Board of Directors
or that of Parent (together with any new directors whose election by the
Company's Board of Directors or that of Parent or whose nomination for
election by the Company's shareholders or that of Parent, as applicable,
was approved by a vote of a majority of the Company's directors or that of
Parent, as applicable, then still in office who were either directors at
the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority
of the Company's Board of Directors or that of Parent, as applicable, then
in office;
(iv) the adoption of a plan relating to the Company's liquidation or
dissolution or that of Parent; or
(v) the merger or consolidation of the Company or Parent with or
into another Person or the merger of another Person with or into the
Company or Parent, or the sale of all or substantially all of the Company's
assets or that of Parent to another Person (other than a Person that is
controlled by the Permitted Holders), and, in the case of any such merger
or consolidation, the Company's securities or that of Parent that are
outstanding immediately prior to such transaction and which represent 100%
of the aggregate voting power of the Company's Voting Stock or that of
Parent are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such transaction, at
least a majority of the aggregate voting power of the Voting Stock of the
surviving corporation.
(b) Within 30 days following any Change of Control, the Company will
mail a notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:
50
(i) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to
the right of holders of record on the relevant Record Date to receive
interest on the relevant Interest Payment Date);
(ii) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization after giving effect to such Change of
Control);
(iii) the repurchase date (which will be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(iv) the instructions determined by the Company, consistent with the
covenant described hereunder, that a Holder must follow in order to have
its Notes purchased.
(c) Holders electing to have a Note purchased will be required to
surrender the Note, with an appropriate form (as provided for in Exhibit A or B,
as appropriate) duly completed, to the Company at the address specified in the
notice not later than 3 p.m., New York City time, two Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than 3 p.m., New York City time, two
Business Days prior to the purchase date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Note
purchased.
(d) On the purchase date, all Notes purchased by the Company under
this Section shall be delivered to the Trustee for cancellation, and the Company
shall pay or cause to be paid the purchase price plus accrued and unpaid
interest, if any, to the Holders entitled thereto.
(e) At the time the Company delivers Notes to the Trustee which are
to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company pursuant
to and in accordance with the terms of this Section. A Note shall be deemed to
have been accepted for purchase at the time the Trustee, directly or through an
agent, mails or delivers payment therefor to the surrendering Holder.
(f) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
covenant described hereunder. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the covenant
described hereunder, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached the Company's
obligations under the covenant described hereunder by virtue thereof.
SECTION 4.16. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
51
(a) the Company will not, and will not permit any of the Company's
Restricted Subsidiaries to, directly or indirectly, consummate any Asset
Disposition unless:
(i) the Company or such Restricted Subsidiary receives consideration
at the time of such Asset Disposition at least equal to the fair market
value (including as to the value of all non-cash consideration), as
determined in good faith by the Company's Board of Directors, of the shares
and assets subject to such Asset Disposition and at least 75% of the
consideration thereof received by the Company or such Restricted Subsidiary
is in the form of cash or cash equivalents or Marketable Securities and
(ii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted Subsidiary,
as the case may be);
(A) first, to the extent the Company elects (or is required by
-----
the terms of any Indebtedness), to prepay, repay, redeem or purchase
Indebtedness under the Senior Credit Facility or Indebtedness (other
than any Disqualified Stock) of a Restricted Subsidiary required to be
repaid upon such Asset Sale (in each case other than Indebtedness owed
to the Company or any of its Affiliates) within one year from the
later of the date of such Asset Disposition or the receipt of such Net
Available Cash;
(B) second, to the extent of the balance of such Net Available
------
Cash after application in accordance with clause (A), to the extent
the Company elects, to acquire Additional Assets within one year from
the later of the date of such Asset Disposition or the receipt of such
Net Available Cash;
(C) third, to the extent of the balance of such Net Available
-----
Cash after application in accordance with clauses (A) and (B), to make
an offer (the "Offer") to the holders of the Notes (and to holders of
other Indebtedness that is pari passu with the Notes designated by the
Company) to purchase Notes (and such other pari passu Indebtedness)
pursuant to and subject to the conditions contained in this Notes
Indenture; and
(D) fourth, to the extent of the balance of such Net Available
------
Cash after application in accordance with clauses (A), (B) and (C) to
(x) the acquisition by the Company or any of its Restricted
Subsidiaries of Additional Assets or (y) the prepayment, repayment or
purchase of the Company's Indebtedness (other than any Disqualified
Stock and other than Indebtedness owed to any of the Company's
Affiliates) or Indebtedness of any Subsidiary (other than Indebtedness
owed to the Company or any of its Affiliates), in each case within one
year from the later of the receipt of such Net Available Cash and the
date the offer described in clause (b) below is consummated;
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A), (C) or (D) above, the Company or any
such Restricted Subsidiary will permanently retire such Indebtedness and will
cause the related loan commitment
52
(if any) to be permanently reduced in an amount equal to the principal amount so
prepaid, repaid or purchased. Notwithstanding the foregoing provisions of this
paragraph, the Company and its Restricted Subsidiaries will not be required to
apply any Net Available Cash in accordance with this paragraph except to the
extent that the aggregate Net Available Cash from all Asset Dispositions which
are not applied in accordance with this paragraph exceeds $1.0 million. Pending
application of Net Available Cash pursuant to this covenant, such Net Available
Cash will be invested in Permitted Investments.
For the purposes of this covenant, the following are deemed to be cash or
cash equivalents: any liabilities (as shown on the Company or such Restricted
Subsidiary's most recent balance sheet), of the Company's or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by
the transferee of any such assets; and any securities, notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are converted, sold or exchanged by the Company or such
Restricted Subsidiary into cash within 30 days of the related Asset Sale (to the
extent of the cash received in that conversation).
(b) In the event of an Asset Disposition that requires the purchase
of the Notes (and other pari passu Indebtedness) pursuant to clause (a)(ii)(C)
above, the Company will be required to purchase Notes tendered pursuant to an
offer by the Company for the Notes (and other pari passu Indebtedness) at a
purchase price of 100% of their principal amount (without premium) plus accrued
but unpaid interest (or, in respect of such other pari passu Indebtedness, such
lesser price, if any, as may be provided for by the terms of such pari passu
Indebtedness) in accordance with the procedures (including prorating in the
event of oversubscription) set forth in this Notes Indenture. If the aggregate
purchase price of Notes (and any other pari passu Indebtedness) tendered
pursuant to such offer is less than the Net Available Cash allotted to the
purchase thereof, the Company will be required to apply the remaining Net
Available Cash in accordance with clause (a)(ii)(D) above. The Company will not
be required to make such an offer to purchase Notes (and other pari passu
Indebtedness) pursuant to this covenant if the Net Available Cash available
therefor is less than $5.0 million (which lesser amount will be carried forward
for purposes of determining whether such an offer is required with respect to
the Net Available Cash from any subsequent Asset Disposition).
(c) Notwithstanding paragraphs (a) and (b) above, the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Disposition
with respect to assets in any transaction or series of related transactions with
a fair market value of $2.0 million or less without complying with such
paragraphs to the extent (i) at least 75% of the consideration for such Asset
Sale constitutes cash, cash equivalents, Marketable Securities or Productive
Assets and (ii) such Asset Disposition is for fair market value (as determined
in good faith by the Company's Board of Directors); provided that any
consideration not constituting Productive Assets received by the Company or any
Restricted Subsidiary in connection with an Asset Disposition permitted to be
consummated under this paragraph shall be subject to the provisions of
paragraphs (a) and (b) above and included in Net Available Cash.
53
(d) (1) Promptly, and in any event within 30 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Notes purchased by the Company
either in whole or in part (subject to prorating as hereinafter described in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain such information which the Company in
good faith believes will enable such Holders to make an informed decision.
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to
the Trustee an Officers' Certificate as to (i) the amount of the Offer (the
"Offer Amount"), (ii) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 4.17(a). Upon
the expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Notes or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee shall, on the Purchase Date, mail
or deliver payment to each tendering Holder in the amount of the purchase
price. In the event that the aggregate purchase price of the Notes
delivered by the Company to the Trustee is less than the Offer Amount, the
Trustee shall deliver the excess to the Company immediately after the
expiration of the Offer Period for application in accordance with this
Section.
(3) Holders electing to have a Note purchased shall be required to
surrender the Note, with an appropriate form duly completed, to the Company
at the address specified in the notice not later than 3:00 p.m., New York
City time, two Business Days prior to the Purchase Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company receives
not later than 3:00 p.m., New York City time, two Business Days prior to
the Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note
which was delivered for purchase by the Holder and a statement that such
Holder is withdrawing his election to have such Note purchased. If at the
expiration of the Offer Period the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall select
the Notes to be purchased on a pro rata basis taking into account any other
tendered Senior Subordinated Indebtedness which is the subject of such
offer (with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples thereof,
shall be purchased). Holders whose Notes are purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
(4) At the time the Company delivers Notes to the Trustee which are
to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company
pursuant to and in accordance with the terms of this Section.
54
A Note shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor
to the surrendering Holder.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached the Company's obligations under this clause by virtue thereof.
SECTION 4.17. Limitation on Liens.
-------------------
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create or permit to exist any Lien on any of its
property or assets (including Capital Stock), whether owned on the Issue Date or
thereafter acquired, securing any obligation, other than Permitted Liens, unless
contemporaneously therewith effective provision is made to secure the Notes or
such Subsidiary Guarantor's Subsidiary Guarantee, as applicable, equally and
ratably with (or on a senior basis to, in the case of Subordinated Obligations
or Subsidiary Guarantor Subordinated Obligations, as applicable) such obligation
for so long as such obligation is so secured.
SECTION 4.18. Future Guarantors.
-----------------
The Company will cause each domestic Restricted Subsidiary (including
each domestic Restricted Subsidiary created or acquired following the Issue
Date) to Guarantee the Notes pursuant to a Subsidiary Guaranty on the terms and
conditions set forth in Article Ten of this Notes Indenture.
SECTION 4.19. Limitation on Issuances of Guarantees of and Pledges
----------------------------------------------------
for Debt: Subsidiary Guarantors.
-------------------------------
The Company will not permit any Subsidiary that is not a Subsidiary
Guarantor, directly or indirectly, to secure the payment of, guarantee, assume
or in any manner become liable with respect to any Indebtedness of the Company,
Parent or any other Subsidiary of the Company ("Subsidiary Guaranteed Debt") or
pledge any intercompany note representing obligations of any Subsidiary that is
not a Subsidiary Guarantor to secure the payment of any Subsidiary Guaranteed
Debt unless such Subsidiary simultaneously executes and delivers a supplemental
indenture to this Notes Indenture providing for a Guarantee of payment of the
Notes by such Subsidiary, and, if the Subsidiary Guaranteed Debt is by its terms
expressly subordinated to the Notes, the Parent Guaranty or any Subsidiary
Guaranty, as applicable, any such assumption, Guarantee or other liability of
such Subsidiary with respect to such Subsidiary Guaranteed Debt will be
subordinated to such Subsidiary's assumption, Guarantee or other liability with
respect to the Subsidiary Guaranty to the same extent as such Subsidiary
Guaranteed Debt is subordinated to the Notes, the Parent Guaranty or any
Subsidiary Guaranty, as applicable.
55
SECTION 4.20. Limitation on Sale/Leaseback Transactions.
-----------------------------------------
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction with respect to any property unless
(1) the Company or such Restricted Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable Debt with respect
to such Sale/Leaseback Transaction pursuant to the covenant described under
Section 4.13 and (B) create a Lien on such property securing such
Attributable Indebtedness without equally and ratably securing the Notes
pursuant to the covenant described under Section 4.17, and
(2) the transfer of such property is permitted by, and the Company or
such Restricted Subsidiary applies the proceeds of such transaction in
compliance with, the covenant described under Section 4.16.
SECTION 4.21. Limitations on Status as Investment Company.
-------------------------------------------
The Company shall not and shall not permit its Subsidiaries from
becoming "investment companies" (as that term is defined in the Investment
Company Act of 1940, as amended), or from otherwise becoming subject to
regulation under the Investment Company Act.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the
-----------------------------------------------
Company.
-------
(a) The Company will not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all the Company's assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") will be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) will expressly assume, by an
indenture supplemental thereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the Company's obligations under the
Notes and this Notes Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary as a result of such
56
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default will have occurred
and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of the covenant described under
Section 4.13;
(iv) immediately after giving effect to such transaction, the
Successor Company will have Consolidated Net Worth in an amount that is not
less than the Consolidated Net Worth of the Company immediately prior to
such transaction; and
(v) the Company will have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Notes Indenture.
(b) The Company will not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person (other than in a transaction or transactions resulting in a
release of such Subsidiary Guarantor as described under Section 10.03 provided
that the Company certifies to the Trustee that the Company will comply with the
covenant described under Section 4.16) unless:
(i) the resulting, surviving or transferee Person (if not such
Subsidiary) (the "Successor Guarantor") will be a Person organized and
existing under the laws of the United States of America, or any State
thereof or the District of Columbia, and such Person will expressly assume,
by a Guaranty Agreement, in form satisfactory to the Trustee, all the
obligations of such Subsidiary, if any, under its Subsidiary Guaranty;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such transaction as having
been Incurred by such Person at the time of such transaction), no Default
will have occurred and be continuing; and
(iii) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel addressed to the Trustee with respect to the
foregoing matters.
(c) The Successor Company will be the Company's successor and will
succeed to, and be substituted for, and may exercise every right and power the
Company has under this Notes Indenture, but the Company's predecessor in the
case of a conveyance, transfer or lease will not be released from the obligation
to pay the principal of and interest on the Notes. The Successor Guarantor will
be the successor to such Subsidiary Guarantor and will succeed to, and be
substituted for, and may exercise every right and power of, such Subsidiary
Guarantor under this Notes Indenture, but such predecessor Subsidiary Guarantor
in the case of a conveyance, transfer or lease will not be released from the
obligation to pay the principal of and interest on the Notes.
57
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Notes when
the same becomes due and payable (whether or not such payment shall be
prohibited by Article Ten of this Notes Indenture) and the Default
continues for a period of 30 days; or
(2) the Company defaults in the payment of the principal on any Notes
when such principal becomes due and payable (whether or not such payment
shall be prohibited by Article Ten), at maturity, upon optional redemption,
upon required repurchase, upon declaration or otherwise (including the
failure to make a payment to purchase Notes tendered pursuant to a Change
of Control under Section 4.15 or an Offer under Section 4.16); or
(3) the failure by the Company to comply with its obligations under
Section 5.01 above; or
(4) the failure by the Company to comply for 30 days after notice
with any of its obligations under Sections 4.08, 4.10, 4.11, 4.12, 4.13,
4.14, 4.15 (other than a failure to purchase the Notes) and 4.16 (other
than a failure to purchase the Notes); or
(5) the Company's failure to comply for 60 days after notice with its
other agreements contained in this Notes Indenture; or
(6) Indebtedness of the Company or any of its Significant
Subsidiaries is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and
the total amount of such Indebtedness unpaid or accelerated exceeds $5
million; or
(7) the Company or any Significant Subsidiary of the Company (A)
commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or order
for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (C) consents to the appointment of a Custodian of it or for
substantially all of its property, (D) consents to or acquiesces in the
institution of a bankruptcy or an insolvency proceeding against it, (E)
makes a general assignment for the benefit of its creditors, or (F) takes
any corporate action to authorize or effect any of the foregoing; or
(8) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary of
the Company in an involuntary case
59
or proceeding under any Bankruptcy Law, which shall (A) approve as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition in respect of the Company or any such Significant Subsidiary,
(B) appoint a Custodian of the Company or any such Significant Subsidiary
or for substantially all of its property or (C) order the winding-up or
liquidation of its affairs; and such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(9) any judgment or decree for the payment of money in excess of $5
million is entered against the Company or any of its Significant
Subsidiaries, remains outstanding for a period of 90 days following such
judgment and is not discharged, waived or stayed within 10 days after
notice; or
(10) any Subsidiary Guaranty of a Significant Subsidiary ceases to be
in full force and effect (except as contemplated by the terms of this Notes
Indenture) or any Subsidiary Guarantor denies or disaffirms its obligations
under this Notes Indenture or its Subsidiary Guaranty and such Default
continues for 10 days. However, a default under clauses (4), (5) and (9)
will not constitute an Event of Default until the Trustee or the holders of
25% in principal amount of the outstanding Notes notify the Company of the
default and the Company does not cure such default within the time
specified after receipt of such notice.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified
in Section 6.01(7) or (8) with respect to the Company) occurs and is continuing,
and has not been waived pursuant to Section 6.04, then the Trustee, by written
notice to the Company, or the Holders of at least 25% in principal amount of
outstanding Notes by notice in writing to the Company and the Trustee may
declare the principal of and accrued but unpaid interest on all the Notes to be
due and payable specifying the respective Event of Default and that it is a
"notice of acceleration."
(b) If an Event of Default specified in Section 6.01(7) or (8)
relating to the Company occurs and is continuing with respect to the Company,
the principal of and interest on all the Notes will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.
(c) The Holders of a majority in principal amount of the Notes may,
on behalf of the Holders of all of the Notes, rescind and cancel an acceleration
and its consequences (i) if the rescission would not conflict with any judgment
or decree, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely
60
because of the acceleration, (iii) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (iv) in the event of the cure or waiver of an
Event of Default of the type described in Section 6.01(7) or 6.01(8), the
Trustee shall have received an Officers' Certificate and an Opinion of Counsel
that such Event of Default has been cured or waived. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Notes Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Notes by written 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, except a Default in the payment of
principal of or interest on any Note as specified in clauses (1) and (2) of
Section 6.01. When a Default or Event of Default is waived, it is cured and
ceases to exist for every purpose of this Notes Indenture.
SECTION 6.05. Control by Majority.
-------------------
Subject to Section 2.09, the Holders of a majority in principal amount
of the then outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it, including, without limitation, any remedies
provided for in Section 6.03. Subject to Section 7.01, however, the Trustee may
refuse to follow any direction that the Trustee believes conflicts with any law
or this Notes Indenture, that the Trustee determines may be unduly prejudicial
to the rights of another Holder, or that may involve the Trustee in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction; and provided further,
that this provision shall not affect the rights of the Trustee set forth in
Section 7.01(d).
SECTION 6.06. Limitation on Suits.
-------------------
61
Subject to Article Seven, if an Event of Default occurs and is
continuing, the Trustee will be under no obligation to exercise any of the
rights or powers under this Notes Indenture at the request or direction of any
of the Holders unless such Holders have offered to the Trustee indemnity or
security against any loss, liability or expense reasonably satisfactory to the
Trustee. Except to enforce the right to receive payment of principal, premium
(if any) or interest when due, no Holder of a Note may pursue any remedy with
respect to this Notes Indenture or the Notes unless (i) such Holder has
previously given the Trustee notice that an Event of Default is continuing, (ii)
Holders of at least 25% in principal amount of the outstanding Notes have
requested the Trustee to pursue the remedy, (iii) such Holders have offered the
Trustee security or indemnity against any loss, liability or expense reasonably
satisfactory to the Trustee, (iv) the Trustee has not complied with such request
within 60 days after the receipt thereof and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding Notes
have not given the Trustee a direction inconsistent with such request within
such 60-day period.
SECTION 6.07. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Notes Indenture, the right
of any Holder to receive payment of principal of and interest on a Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal, preimum or interest
specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Notes for the whole amount of
principal, premium, if any, and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest at the rate set forth in
Section 4.01 and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, consultants and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such
62
judicial proceedings is hereby authorized by each Holder to make such payments
to the Trustee and, if the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, taxes, disbursements and advances of the
Trustee, its agents, consultants and counsel, and any other amounts due the
Trustee under Section 7.07. The Company's payment obligations under this Section
6.09 shall be secured in accordance with the provisions of Section 7.07
hereunder. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
-----
Second: if the Holders are forced to proceed against the Company
------
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
-----
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
------
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a Record Date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Notes
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
63
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Notes
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Notes Indenture and no covenants or obligations shall be
implied in this Notes Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Notes Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Notes
Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Notes Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it.
64
(e) Whether or not herein expressly provided, every provision of this
Notes Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate, an Opinion of Counsel or
both, which shall conform to Sections 11.04 and 11.05. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys and the Trustee shall not be responsible for the misconduct
or negligence of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers conferred upon it by this Notes Indenture.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney and to
consult with the officers and representatives of the Company, including the
Company's accountants and attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Notes Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Notes
Indenture, unless such Holders shall have offered to the
65
Trustee security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with such
request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) The Trustee may determine (i) the execution by any Holder of any
instrument in writing, (ii) the date of such execution or (iii) the authority of
any Person executing the same, in any manner the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(i) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Notes Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it were not Trustee. However, if the Trustee acquires any
conflicting interest within the meaning of Section 3.10(b) of the TIA, it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
--------------------
The Offering Circular and the recitals contained herein and in the
Notes shall be taken as statements of the Company and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or adequacy of this Notes Indenture or the Notes, and it shall not
be accountable for the Company's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Company in this Notes
Indenture or the Notes other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
-----------------
If a Default occurs and is continuing and if it is actually known by
the Trustee, the Trustee shall mail to each Holder notice of the Default within
90 days after such Default occurs. Except in the case of a Default in payment of
principal of, premium, if any, or interest on, any Note, including an
accelerated payment and the failure to make payment on the purchase date
pursuant to a Change in Control under Section 4.15 or on the Purchase Date
pursuant to an Offer under Section 4.16 and, except in the case of a failure to
comply with Article Five hereof, the Trustee may withhold the notice if and so
long as its board of directors, the executive committee of its
66
board of directors or a committee of its Trust Officers in good faith reasonably
determines that withholding the notice is in the best interest of the Holders.
In addition, the Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, a certificate complying with Section 4.06 regarding
knowledge of the Company's compliance with all covenants and conditions under
this Notes Indenture. The Company also shall deliver to the Trustee pursuant to
Section 6.01, within 30 days after the occurrence thereof, written notice of any
event which would constitute certain Defaults, their status and what action the
Company is taking or proposes to take in respect thereof.
SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15, beginning with the May 15 following
the date of this Notes Indenture, the Trustee shall, to the extent that any of
the events described in TIA (S) 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Holder a brief report dated as of such
date that complies with TIA (S) 313(a). The Trustee also shall comply with TIA
(S)(S) 313(b) and (c).
The Company shall promptly notify the Trustee if the Notes become
listed on, or delisted from, any stock exchange and the Trustee shall comply
with TIA (S) 313(d).
SECTION 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable fees and
expenses, including out-of-pocket expenses incurred or made by it in connection
with the performance of its duties under this Notes Indenture. Such expenses
shall include the reasonable fees and expenses of the Trustee's agents,
consultants, experts and counsel, except such disbursements, advances and
expenses as may be attributable to its gross negligence.
The Company shall indemnify the Trustee and its agents, employees,
stockholders and directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them, arising out of or in connection
with the administration of this trust including the reasonable costs and
expenses of defending themselves against any claim or liability in connection
with the exercise or performance of any of their rights, powers or duties
hereunder. The Company need not reimburse any expense or indemnify against any
loss, liability or expense Incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity. At the Trustee's sole discretion, the Company shall defend the claim
and the Trustee shall cooperate and may participate in the defense; provided
that any settlement of a claim shall be approved in writing by the Trustee.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
67
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes. The Trustee's
right to receive payment of any amounts due under this Section 7.07 shall not be
subordinate to any other liability or indebtedness of the Company (even though
the Notes may be subordinate to such other liability or indebtedness).
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law; provided, however, that this shall not
affect the Trustee's rights as set forth in the preceding paragraph or Section
6.10.
SECTION 7.08. Replacement of Trustee.
----------------------
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Company and the Trustee and may appoint a
successor Trustee. The Company may remove the Trustee if:
(A) the Trustee fails to comply with Section 7.10;
(B) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(C) a receiver or other public officer takes charge of the Trustee or
its property; or
(D) the Trustee becomes incapable of acting.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
If the Trustee resigns or is removed as Trustee or if a vacancy exists
in the office of Trustee for any reason, the Company shall notify each Holder of
such event and shall promptly appoint a successor Trustee. Within one year after
the successor Trustee takes office, the Holders of a majority in principal
amount of the Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all
68
property held by it as Trustee to the successor Trustee, subject to the lien
provided in Section 7.07, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Notes Indenture. A successor Trustee
shall mail notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided that such
corporation shall be otherwise qualified and eligible under this Article Seven.
If at the time such successor or successors by merger, conversion,
consolidation or transfer of assets to the Trustee shall succeed to the trust
created by this Notes Indenture any of the Notes shall have been authenticated
but not delivered, any successor to the Trustee may adopt a certificate of
authentication of any predecessor Trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Notes Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
This Notes Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition. In
addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA (S) 310(a)(2). The Trustee shall comply with TIA (S)
310(b); provided, however, that there shall be excluded from the operation of
TIA (S) 310(b)(1) any Notes Indenture or Notes Indentures under
69
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA (S) 310(b)(1) are met. The provisions of TIA (S) 310
shall apply to the Company, as obligor of the Notes.
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE EIGHT
DISCHARGE OF NOTES INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance.
-------------------------------------------
(a) When (i) the Company delivers to the Trustee all outstanding
Notes (other than Notes replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Notes have become due and payable at maturity or will be
due and payable within 60 days as a result of the mailing of a notice of
redemption pursuant to Article Three hereof, in each case, and the Company
irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Notes, including interest thereon to maturity or
such redemption date (other than Notes replaced pursuant to Section 2.07), and
if in either case the Company pays all other sums payable hereunder by the
Company, then this Notes Indenture shall, subject to Section 8.01(c), cease to
be of further effect. The Trustee shall acknowledge satisfaction and discharge
of this Notes Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel as to the satisfaction of all conditions
to such satisfaction and discharge of this Notes Indenture and at the cost and
expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Notes and this Notes Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.10 through
4.18 and the operation of Section 6.01(4) and the limitations contained in
Section 5.01("covenant defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Section 6.01(4) or
because of the failure of the Company to comply with Section 5.01. If the
Company exercises its legal defeasance option or its covenant defeasance option,
each Subsidiary Guarantor, if any, shall be released from all its obligations
under its Subsidiary Guarantee.
70
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.07, 2.08, 7.07, 7.08, 8.05, 8.06 and
the Appendix shall survive until the Notes have been paid in full. Thereafter,
the Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive.
SECTION 8.02. Conditions to Defeasance.
------------------------
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of, interest
and premium, if any, on the Notes to maturity or redemption (including, in
the case of payment of principal, interest and premium, if any, to
redemption, under arrangements reasonably satisfactory to the Trustee
providing for redemption pursuant to irrevocable instructions delivered to
the Trustee prior to 60 days before a Redemption Date), as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent public accountants or a
nationally recognized investment banking firm expressing their opinion that
the payments of principal and interest when due and without reinvestment on
the deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal, premium, if any, and interest when due on all
outstanding Notes to maturity or redemption, as the case may be;
(3) (x) no Default or Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit and (y)
no Event of Default under Section 6.01(7) or (8) shall occur at any time in
the period ending on the 123rd day after the date of such deposit (it being
understood that the condition set forth in the preceding clause (y) is a
condition subsequent which shall not be deemed satisfied until the
expiration of such 123-day period, but in the case of the covenant
defeasance, the covenants which are defeased under Section 8.01(b) will
cease to be in effect unless an Event of Default under Section 6.01(7) or
(8) occurs during such period);
(4) the Company delivers to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors
of the Company;
71
(5) neither the deposit nor the defeasance shall result in a default
or Event of Default under any other material agreement to which the Company
is a party or by which the Company is bound;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(7) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Notes 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 Noteholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(8) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Noteholders will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes as contemplated by this Article Eight
have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article Three.
SECTION 8.03. Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article Eight. It shall apply the deposited
money and the money from U.S. Government Obligations through the Paying Agent
and in accordance with this Notes Indenture to the payment of principal of and
interest on the Notes. Money and securities so held in trust are not subject to
Article 10.
SECTION 8.04. Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly turn over to the
Company, upon delivery of an Officers' Certificate stating that such payment
does not violate the terms of this Notes Indenture, any excess money or
securities held by them at any time, subject to Section 7.07.
72
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon its written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Noteholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations.
------------------------------------
The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. Reinstatement.
-------------
If the funds deposited with the Trustee to effect legal defeasance or
covenant defeasance are insufficient to pay the principal of, premium, if any,
and interest on the Notes when due, then the obligations of the Company under
this Notes Indenture will be revived and no such defeasance will be deemed to
have occurred.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender
or U.S. Government Obligations in accordance with this Article Eight by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Notes Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Eight until such time as the Trustee or Paying Agent is permitted
to apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with this Article Eight; provided, however, that, if the Company has made any
payment of interest on or principal of any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
73
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
--------------------------
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Notes Indenture or the Notes without
notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
provided that such amendment or supplement does not, in the reasonable
opinion of the Trustee, adversely affect the rights of any Holder in any
material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code);
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Notes Indenture under the TIA;
(5) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder; or to surrender any right or power conferred upon the Company;
(6) to add Guarantees with respect to the Notes;
(7) to secure the Notes; or
(8) to make any other change that does not adversely affect in any
material respect the rights of any Holders hereunder;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
After an amendment, supplement or waiver under this Section 9.01
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
74
SECTION 9.02. With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, may amend or supplement this Notes Indenture or the Notes,
without notice to any other Holders. Subject to Section 6.07, the Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes may waive compliance by the Company with any provision of this
Notes Indenture or the Notes without notice to any other Holder. No amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, shall,
without the consent of each Holder of each Note affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Notes;
(3) reduce the principal of or change or have the effect of changing
the Stated Maturity of any Note, or change the date on which any Notes may
be subject to repurchase, or reduce the premium payable upon the redemption
of any Note or change the time at which any Note may be redeemed in
accordance with Article Three, or alter the provisions (including
definitions) set forth in Section 4.15 in a manner adverse to the Holders;
(4) make any Notes payable in money or payable in a place other than
that stated in the Notes;
(5) make any change in Section 6.04 or Section 6.07 or the second
sentence of this Section;
(6) amend, modify, change or waive any provision of this
Section 9.02; or
(7) make any change in any Subsidiary Guarantee that would adversely
affect the Holders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
75
SECTION 9.03. Compliance with TIA.
-------------------
If at the time of an amendment to this Notes Indenture or the Notes,
this Notes Indenture shall be qualified under the TIA, every amendment, waiver
or supplement of this Notes Indenture or the Notes shall comply with the TIA as
then in effect.
SECTION 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date the amendment,
supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which Record Date shall be (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.05 above or (ii) such other date as the Company may designate. If a Record
Date is fixed, then notwithstanding the last sentence of the immediately
preceding paragraph, those Persons who were Holders at such Record Date (or
their duly designated proxies), and only those Persons, shall be entitled to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such Record Date. No such consent shall be valid or effective for
more than 180 days after such Record Date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that, without the consent of a Holder,
any such waiver shall not impair or affect the right of such Holder to receive
payment of principal of and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates.
SECTION 9.05. Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such notation
or exchange shall be made at the sole cost and expense of the Company. Failure
to make the
76
appropriate notation or to issue a new Note shall not affect the validity of
such amendment, supplement or waiver.
SECTION 9.06. Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this Notes
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Notes Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
SECTION 9.07. Payment for Consent.
-------------------
Neither the Company nor any Affiliate of the Company shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Notes
Indenture or the Notes, unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE TEN
GUARANTEES
SECTION 10.01. Unconditional Guarantee.
-----------------------
Each of the Subsidiary Guarantors hereby unconditionally jointly and
severally guarantees (such guarantee to be referred to herein as the "Subsidiary
Guarantee") to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, that: (i) the principal of
and interest on the Notes will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise and
interest on the overdue principal, if any, and interest on any interest, to the
extent lawful, of the Notes and all other obligations of the Company to the
Holders or the Trustee under this Notes Indenture or the Notes will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of any Notes or
of any such other obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, subject
to any applicable grace period, whether at stated maturity, by acceleration or
otherwise.
77
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor on one hand, and the Holders and the Trustee on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Six for the purposes of the Subsidiary Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purposes of the Subsidiary
Guaranty.
Each of the Subsidiary Guarantors hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Notes Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
Each of the Subsidiary Guarantors hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that the
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes, this Notes Indenture and in the
Subsidiary Guarantee. If any Noteholder or the Trustee is required by any court
or otherwise to return to the Company, any Subsidiary Guarantor, or any
Custodian acting in relation to the Company or any Subsidiary Guarantor, any
amount paid by the Company or such Subsidiary Guarantor to the Trustee or such
Noteholder, the Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
Each of the Subsidiary Guarantors hereby agrees that, in the Event of
Default in the payment of principal (or premium, if any) or interest on such
Notes, whether at their Stated Maturity, by acceleration, called for redemption,
purchase or otherwise, legal proceedings may be instituted by the Trustee on
behalf of, or by, the Holder of such Notes, subject to the terms and conditions
set forth in this Notes Indenture, directly against each of the Subsidiary
Guarantors to enforce the Subsidiary Guarantee without first proceeding against
the Company. Each Subsidiary Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any Holders are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce any other right or remedy with respect to the Notes, the Subsidiary
Guarantors agree to pay to the Trustee for the account of the Holders, upon
demand therefor, the amount that would otherwise have been due and payable had
such rights and remedies been permitted to be exercised by the Trustee or any of
the Holders.
78
SECTION 10.02. Severability.
------------
In case any provision of the Subsidiary Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.03. Release of Subsidiary Guarantor from the
----------------------------------------
Subsidiary Guarantee.
--------------------
Each Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Subsidiary Guarantor without limitation.
Upon the sale or disposition (by merger or otherwise) of a Subsidiary Guarantor
(or all or substantially all of its assets) to a Person (whether or not an
Affiliate of the Subsidiary Guarantor) which is not a Subsidiary of the Company,
which sale or disposition is otherwise in compliance with this Notes Indenture
(including the covenant described under Section 4.16), such Subsidiary Guarantor
will be deemed released from all its obligations under this Notes Indenture and
its Subsidiary Guaranty and such Subsidiary Guaranty will terminate; provided,
however, that any such termination will occur only to the extent that all
obligations of such Subsidiary Guarantor under the Senior Credit Facility and
all of its Guarantees of, and under all of its pledges of assets or other
security interests which secure, any other Indebtedness of the Company's or any
of its Restricted Subsidiaries will also terminate upon such release, sale or
transfer.
The Trustee shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate certifying as to the compliance with this Section 10.03.
SECTION 10.04. Limitation on Amount Guaranteed; Contribution by
------------------------------------------------
Subsidiary Guarantors.
---------------------
(a) Anything contained in this Notes Indenture or the Subsidiary
Guaranty to the contrary notwithstanding, if any Fraudulent Transfer Law (as
hereinafter defined) is determined by a court of competent jurisdiction to be
applicable to the obligations of any Subsidiary Guarantor under the Subsidiary
Guarantee, such obligations of such Subsidiary Guarantor under the Subsidiary
Guarantee shall be limited to a maximum aggregate amount equal to the largest
amount that would not render its obligations under the Subsidiary Guarantee
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any applicable provisions of comparable
state law (collectively, the "Fraudulent Transfer Laws"), in each case after
giving effect to all other liabilities of such Subsidiary Guarantor, contingent
or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Subsidiary Guarantor (x) in respect
of intercompany Indebtedness to Company or other Affiliates of Company to the
extent that such Indebtedness would be discharged in an amount equal to the
amount paid by such Subsidiary Guarantor under the Subsidiary Guaranty and (y)
under any Guarantee of Subordinated Obligations which Guarantee contains a
limitation as to maximum amount similar to that set forth in this subsection
10.04(a), pursuant to which the liability of such Subsidiary Guarantor under the
Subsidiary Guarantee is included in the
79
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Subsidiary Guarantor
pursuant to applicable law or pursuant to the terms of any agreement (including
without limitation any such right of contribution under subsection 10.04(b)).
(b) The Subsidiary Guarantors together desire to allocate among
themselves in a fair and equitable manner, their obligations arising under the
Subsidiary Guarantee. Accordingly, if any payment or distribution is made on any
date by any Subsidiary Guarantor under the Subsidiary Guarantee (a "Funding
Subsidiary Guarantor") that exceeds its Fair Share (as defined below) as of such
date, that Funding Subsidiary Guarantor shall be entitled to a contribution from
each of the other Subsidiary Guarantors in the amount of such other Subsidiary
Guarantor's Fair Share Shortfall (as defined below) as of such date, with the
result that all such contributions will cause each Subsidiary Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"Fair Share" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Subsidiary Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all Subsidiary
Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or
before such date by all Funding Subsidiary Guarantors under the Subsidiary
Guarantee in respect of the obligations guarantied. "Fair Share Shortfall"
means, with respect to a Subsidiary Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Subsidiary Guarantor over the
Aggregate Payments of such Subsidiary Guarantor. "Adjusted Maximum Amount"
means, with respect to a Subsidiary Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Subsidiary Guarantor
under the Subsidiary Guarantee, determined as of such date in accordance with
subsection 10.04(a); provided that, solely for purposes of calculating the
Adjusted Maximum Amount with respect to any Subsidiary Guarantor for purposes of
this subsection 10.04(b), any assets or liabilities of such Subsidiary Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Subsidiary Guarantor. "Aggregate
Payments" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the aggregate amount of all payments and
distributions made on or before such date by such Subsidiary Guarantor in
respect of the Subsidiary Guarantee (including, without limitation, in respect
of this subsection 10.04(b) minus (ii) the aggregate amount of all payments
received on or before such date by such Subsidiary Guarantor from the other
Subsidiary Guarantors as contributions under this subsection 10.04(b)). The
amounts payable as contributions hereunder shall be determined as of the date on
which the related payment or distribution is made by the applicable Funding
Subsidiary Guarantor. The allocation among Subsidiary Guarantors of their
obligations as set forth in this subsection 10.04(b) shall not be construed in
any way to limit the liability of any Subsidiary Guarantor under this Notes
Indenture or under the Subsidiary Guaranty.
SECTION 10.05. Waiver of Subrogation.
---------------------
80
Until payment in full is made of the Notes and all other obligations of
the Company to the Holders or the Trustee hereunder and under the Notes, each
Subsidiary Guarantor hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Subsidiary Guarantor's
obligations under the Subsidiary Guarantee and this Notes Indenture, including
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or any other manner, payment
or security on account of such claim or other rights. If any amount shall be
paid to any Subsidiary Guarantor in violation of the preceding sentence and the
Notes shall not have been paid in full, such amount shall have been deemed to
have been paid to such Subsidiary Guarantor for the benefit of, and held in
trust for the benefit of, the Holders of the Notes, and shall forthwith be paid
to the Trustee for the benefit of such Holders to be credited and applied upon
the Notes, whether matured or unmatured, in accordance with the terms of this
Notes Indenture. Each Subsidiary Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Notes Indenture and that the waiver set forth in this Section 10.05 is
knowingly made in contemplation of such benefits.
SECTION 10.06. Execution of Subsidiary Guarantee.
---------------------------------
To evidence its guarantee to the Noteholders set forth in this Article
Ten, each Subsidiary Guarantor hereby agrees to execute the Subsidiary Guarantee
in substantially the form included in Exhibits A and Exhibit B, which shall be
endorsed on such Note ordered to be authenticated and delivered by the Trustee.
Each Subsidiary Guarantor hereby agrees that the Subsidiary Guarantee set forth
in this Article Ten shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of the Subsidiary Guarantee. The
Subsidiary Guarantee shall be signed on behalf of each Subsidiary Guarantor by
one Officer of such Subsidiary Guarantor (each of whom shall, in each case, have
been duly authorized by all requisite corporate actions) prior to the
authentication of the Note on which it is endorsed, and the delivery of such
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Subsidiary Guarantee on behalf of such Subsidiary
Guarantor. Such signatures upon the Subsidiary Guarantee may be by manual or
facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Subsidiary Guarantee, and in case any such Officer who shall
have signed the Subsidiary Guarantee shall cease to be such officer before the
Note on which the Subsidiary Guarantee is endorsed shall have been authenticated
and delivered by the Trustee or disposed of by the Company, such Note
nevertheless may be authenticated and delivered or disposed of as though the
person who signed the Subsidiary Guarantee had not ceased to be such Officer of
such Subsidiary Guarantor.
SECTION 10.07. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
81
Each Subsidiary Guarantor jointly and severally covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive such Subsidiary Guarantor from performing the Subsidiary Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Notes Indenture; and
(to the extent that it may lawfully do so) each Subsidiary Guarantor hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 10.08. Effectiveness of Subsidiary Guarantee.
-------------------------------------
The Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such a payment
or performance had not been made. If any payments, or any part thereof, is
rescinded, reduced, restored or returned, the Notes shall, to the fullest extent
permitted by law, be reinstituted and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
------------
If any provision of this Notes Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this Notes
Indenture by the TIA, the required provision shall control.
82
SECTION 11.02. Notices.
-------
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by commercial courier service, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company Guarantor:
▇▇▇▇▇ Equipment Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
if to the Trustee:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Corporate Trust Administration
Each of the Company, the Guarantors and the Trustee by written
notice to each other such Person may designate additional or different addresses
for notices to such Person. Any notice or communication to the Company, the
Guarantors and the Trustee shall be deemed to have been given or made as of the
date so delivered if personally delivered; when receipt is confirmed if
delivered by commercial courier service; when receipt is acknowledged, if faxed;
and five (5) calendar days after mailing if sent by registered or certified
mail, postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
83
Any notice or communication mailed to a Holder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other
------------------------------------
Holders.
-------
Holders may communicate pursuant to the TIA (S) 312(b) with
other Holders with respect to their rights under this Notes Indenture or the
Notes. The Company, the Subsidiary Guarantors, the Trustee, the Registrar and
any other Person shall have the protection of the TIA (S) 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions
----------------------------------------
Precedent.
---------
Upon any request or application by the Company to the Trustee
to take or refrain from taking any action under this Notes Indenture, the
Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion of the
signers, all conditions precedent to be performed by the Company, if
any, provided for in this Notes Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent to be performed by the
Company, if any, provided for in this Notes Indenture relating to the
proposed action have been complied with.
SECTION 11.05. Statements Required in Certificate or
-------------------------------------
Opinion.
-------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Notes Indenture, shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition and the definitions
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is reasonably necessary to
enable him to express an
84
informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been complied with;
provided, that with respect to matters of fact, an Opinion of
Counsel may rely on an Officers' Certificate or a certificate of an appropriate
public official.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
--------------
A "Legal Holiday" used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking institutions in New
York, New York or at such place of payment are not required to be open. If a
payment date is a Legal Holiday at such place, payment may be made at such place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
SECTION 11.08. Governing Law.
-------------
THIS NOTES INDENTURE AND THE NOTES (AND THE SUBSIDIARY
GUARANTEES RELATING THERETO) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTES INDENTURE.
SECTION 11.09. No Adverse Interpretation of Other
----------------------------------
Agreements.
----------
This Notes Indenture may not be used to interpret another
Notes Indenture, loan or debt agreement of the Company or any of its
Subsidiaries or of any other Person. Any such Notes Indenture, loan or debt
agreement may not be used to interpret this Notes Indenture.
SECTION 11.10. No Recourse Against Others.
--------------------------
No past, present or future director, officer, employee,
stockholder or incorporator, as such, of the Company, any Subsidiary Guarantor
or of the Trustee shall have any liability for
85
any obligations of the Company under the Notes or this Notes Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
SECTION 11.11. Successors.
----------
All agreements of the Company and the Subsidiary Guarantors in
this Notes Indenture and the Notes shall bind their respective successors. All
agreements of the Trustee in this Notes Indenture shall bind its successors.
SECTION 11.12. Duplicate Originals.
-------------------
All parties may sign any number of copies of this Notes
Indenture. Each signed copy shall be an original, but all of them together shall
represent the same agreement.
SECTION 11.13. Severability.
------------
In case any one or more of the provisions in this Notes
Indenture or in the Notes shall be held invalid, illegal or unenforceable, in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Notes Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Notes
Indenture and shall in no way modify or restrict any of the terms of provisions
hereof.
86
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Notes
Indenture to be duly executed, all as of the date first written above.
Issuer:
WEC COMPANY
By: /s/ D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VP & CFO
Parent Guarantor:
▇▇▇▇▇ EQUIPMENT COMPANY
By: /s/ D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VP & CFO
Trustee:
UNITED STATES TRUST COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT
TO RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE
TRANSACTIONS IN RELIANCE ON REGULATION S
PROVISIONS RELATING TO INITIAL NOTES,
------------------------------------
PRIVATE EXCHANGE NOTES
----------------------
AND EXCHANGE NOTES
------------------
1. Definitions.
-----------
1.1 Definitions.
-----------
For the purposes of this Appendix the following terms shall
have the meanings indicated below, provided that all capitalized terms used but
not defined shall have the meanings given such terms in the Notes Indenture:
"Depositary" means The Depository Trust Company, its nominees
and their respective successors and assigns.
"Exchange Notes" means (i) the 12% Senior Notes due July 15,
2009 to be issued pursuant to the Notes Indenture in connection with a
Registered Exchange Offer pursuant to a Registration Rights Agreement and (ii)
Additional Notes, if any, issued in the form of 12% Senior Notes due July 15,
2009 pursuant to a registration statement filed with the SEC under the
Securities Act.
"Initial Purchaser" means (i) with respect to the Initial
Notes issued on July 28, 1999, Credit Suisse First Boston Corporation and (ii)
with respect to each issuance of Additional Notes, the Persons purchasing such
Additional Notes under the related Purchase Agreement.
"Initial Notes" means (i) $130,000,000 principal amount of 12%
Senior Notes due July 15, 2009, issued on July 28, 1999 and (ii) Additional
Notes, if any, issued in the form of 12% Senior Notes due July 15, 2009 in a
transaction exempt from the registration requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to
a Registration Rights Agreement, to the Initial Purchaser to issue and deliver
to each Initial Purchaser, in exchange for the Initial Notes held by the Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
of Private Exchange Notes.
"Private Exchange Notes" means the 12% Senior Private Exchange
Notes due July 15, 2009, if any, to be issued pursuant to the Notes Indenture to
the Initial Purchaser in a Private Exchange.
"Purchase Agreement" means (i) with respect to the Initial
Notes issued on July 28, 1999, the Purchase Agreement dated July 23, 1999, among
the Company, the Subsidiary Guarantors and the Initial Purchaser named therein
and (ii) with respect to each issuance of Additional Notes, the purchase
agreement or underwriting agreement among the Company, the Subsidiary Guarantors
and the Persons purchasing such Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Notes, to issue and deliver to such Holders, in exchange for such Initial Notes,
a like aggregate principal amount of Exchange Notes registered under the
Securities Act.
"Registration Rights Agreement" means (i) with respect to the
Initial Notes issued on July 28, 1999, the Registration Rights Agreement dated
July 28, 1999 among the Company, the Parent Guarantor and the Initial Purchaser
named therein, and (ii) with respect to each issuance of Additional Notes issued
in a transaction exempt from the registration requirements of the Securities
Act, the registration rights agreement, if any, among the Company, the
guarantors thereunder and the Persons purchasing such Additional Notes under the
related Purchase Agreement.
"Securities" means the Initial Notes, the Exchange Notes and
the Private Exchange Notes, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depositary), or any successor person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the shelf registration
statement issued by the Company, in connection with the offer and sale of
Initial Notes, Exchange Notes or Private Exchange Notes, pursuant to a
Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions
-----------------
Term Defined in Section:
---- ------------------
"Agent Members"................................. 2.1(b)
"Global Security"............................... 2.1(a)
"Regulation S".................................. 2.1(a)
"Rule 144A"..................................... 2.1(a)
2. The Securities.
--------------
2.1 Form and Dating.
---------------
On July 28, 1999, $130,000,000 of the Initial Notes are being
offered and sold by the Company pursuant to the Purchase Agreement.
(a) Global Securities. Initial Notes offered and sold to
-----------------
a QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each case
as provided in the Purchase Agreement, and Additional Notes, if any, issued in
the form of Exchange Notes, shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Global Security"), which shall be
deposited on behalf of the purchasers of the Initial Notes or Additional Notes,
as applicable, represented thereby with the Trustee as custodian for the
Depositary (or with such other custodian as the Depositary may direct), and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
---------------------
only to a Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under the Notes Indenture with respect to any
Global Security held on their behalf by the Depositary or by the Trustee as the
custodian of the Depositary or under such Global Security, and the Depositary
may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this
Section 2.1 or Section 2.3 or 2.4 of this Appendix, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery
of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver:
--------------
(1) On July 28, 1999, $130.0 million 12% Senior Notes due July 15, 2009, (2) any
Additional Notes for original issue in an aggregate principal amount specified
in the written order of the Company pursuant to Section 2.2 of the Notes
Indenture and (3) Exchange Notes or Private Exchange Notes for issue in a
Registered Exchange Offer or a Private Exchange, respectively, in exchange for a
like principal amount of Initial Notes, in each case upon a written order of the
Company in the form of an Officers' Certificate. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Notes is to be authenticated and whether the Securities are to be
Initial Notes, Exchange Notes or Private Exchange Notes and in the case of an
issuance of Additional Notes pursuant to Section 2.15 of the Notes Indenture,
shall certify, among other things that such issuance will not be prohibited by
Section 4.13 of the Notes Indenture.
2.3 Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Global Securities.
------------------------------------------
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depositary,
in accordance with the Notes Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor. A transferor of a beneficial interest in a
Global Security shall deliver to the Registrar a written order given in
accordance with the Depositary's procedures containing information
regarding the participant account of the Depositary to be credited with
a beneficial interest in the Global Security. The Registrar shall, in
accordance with such instructions instruct the Depositary to credit to
the account of the Person specified in such instructions a beneficial
interest in the Global Security and to debit the account of the Person
making the transfer the beneficial interest in the Global Security
being transferred.
(ii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4 of this Appendix),
a Global Security may not be transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or
by the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 of
this Appendix or Section 2.10 of the Notes Indenture, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Notes intended to ensure that such transfers comply with
Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(b) Legend.
------
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing Initial Notes and
Private Exchange Notes (and all Securities issued in exchange therefor
or in substitution thereof, other than Exchange Notes) shall bear a
legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER
THAT (A) THIS NOTE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii)
OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the Holder certifies in writing
to the Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
(iii) After a transfer of any Initial Notes or Private
Exchange Notes during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Notes or Private
Exchange Notes, as the case may be, all requirements pertaining to
legends on such Initial Notes or such Private Exchange Notes will cease
to apply, but the requirements requiring such Initial Notes or such
Private Exchange Notes issued to certain Holders be issued in global
form will continue to apply, and Initial Notes or Private Exchange
Notes in global form without legends will be available to the
transferee of the Holder of such Initial Notes or Private Exchange
Notes upon exchange of such transferring Holder's Initial Notes or
Private Exchange Notes or directions to transfer such Holder's interest
in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Notes pursuant to which Holders of such
Initial Notes are offered Exchange Notes in exchange for their Initial
Notes, all requirements pertaining to such Initial Notes that Initial
Notes issued to certain Holders be issued in global form will continue
to apply and Initial Notes in global form with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Notes that do not exchange their Initial Notes,
and Exchange Notes in global form without the restricted securities
legend set forth in Exhibit 1 hereto will be available to Holders that
exchange such Initial Notes in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with
respect to the Initial Notes pursuant to which Holders of such Initial
Notes are offered Private Exchange Notes in exchange for their Initial
Notes, all requirements pertaining to such Initial Notes that Initial
Notes issued to certain Holders be issued in global form will still
apply, and Private Exchange Notes in global form with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Notes in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such
---------------------------------------------
time as all beneficial interests in a Global Security have either been exchanged
for certificated Securities,
redeemed, repurchased or canceled, such Global Security shall be returned to the
Depositary for cancellation or retained and canceled by the Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Security is
exchanged for certificated Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global Security shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Securities Custodian for such Global Security) with respect
to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
----------
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall, upon receipt of a written
order complying with Section 2.2 of the Notes Indenture, authenticate
certificated Securities and Global Securities at the Registrar's or any
co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.6, 4.15 and
Section 9.6 of the Notes Indenture).
(iii) The Registrar or any co-registrar shall not be required
to register the transfer of or exchange of (a) any certificated
Security selected for redemption in whole or in part pursuant to
Article Three of the Notes Indenture, except the unredeemed portion of
any certificated Security being redeemed in part, or (b) any Security
for a period beginning 15 Business Days before the mailing of a notice
of an offer to repurchase or redeem Securities or 15 Business Days
before an Interest Payment Date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of the Notes Indenture shall evidence the same
debt and shall be entitled to the same benefits under the Notes
Indenture as the Securities surrendered upon such transfer or exchange.
(e) No Obligation of the Trustee.
----------------------------
(i) The Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Security, a member of, or a
participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depositary) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depositary or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under the Notes Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among Depositary participants, members or
beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly required
by, the terms of the Notes Indenture, and to examine the same to
determine substantial compliance as to form with the express
requirements hereof.
2.4 Certificated Securities,
-----------------------
(a) A Global Security deposited with the Depositary or with
the Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under the Notes Indenture.
(b) Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depositary to the Trustee, to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Securities of authorized denominations. Any
portion
of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depositary shall
direct. Any certificated Initial Note delivered in exchange for an interest in
the Global Security shall, except as otherwise provided by Section 2.3(b), bear
the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under the
Notes Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a) above, the Company will promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
EXHIBIT 1
TO RULE 144A/REGULATION S
APPENDIX
[GLOBAL SECURITIES LEGEND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THIS NOTES INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[RESTRICTED SECURITIES LEGEND]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER
THAT (A) THIS NOTE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(i) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE.
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
Amount of decrease in Amount of increase in Principal Amount of this Global Signature of authorized
Principal Amount of this Principal Amount of this Security following such decrease officer of Trustee or
Date of Exchange Global Security Global Security or increase Securities Custodian
EXHIBIT A
---------
FORM OF INITIAL NOTE
--------------------
CUSIP No.:
WEC COMPANY
12% SENIOR NOTE DUE JULY 15, 2009
No. $
WEC COMPANY, a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to _______ or
registered assigns, the principal sum of ______ Dollars, on _____ __, 2009.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, WEC COMPANY has caused this Note to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
WEC COMPANY
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Dated: ____________ Title:
Certificate of Authentication
This is one of the 12% Senior Notes due July 15, 2009 referred
to in the within-mentioned Notes Indenture.
_________________________,
as Trustee
Dated: ____________ By:___________________________________
Authorized Signatory
(REVERSE OF SECURITY)
12% SENIOR NOTE DUE JULY 15, 2009
1. Interest. WEC COMPANY, a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above; [provided, however, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, additional interest
will accrue on this Note at a rate of 0.50% per annum, from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured, calculated on the
principal amount of this Note as of the date on which such interest is payable.
Such interest is payable in addition to any other interest payable from time to
time with respect to this Note. The Trustee will not be deemed to have notice of
a Registration Default until it shall have received actual notice of such
Registration Default.]/1/ Interest on the Notes will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from
[______ __, 1999] [date of issuance of Additional Notes]. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing
[_____ __, 1999] [first Interest Payment Date after issuance of Additional
Notes]. Interest will be computed on the basis of a 360-day year of twelve 30-
day months.
The Company shall pay interest on overdue principal at the rate
borne by the Notes plus 1% per annum and on overdue installments of interest
(without regard to any applicable grace periods) at such higher rate to the
extent lawful.
2. Method of Payment. The Company shall pay interest on the
-----------------
Notes (except defaulted interest) to the Persons who are the registered Holders
at the close of business on the Record Date immediately preceding the Interest
Payment Date even if the Notes are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must surrender Notes to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, United States Trust
--------------------------
Company of New York, a New York banking corporation (the "Trustee"), will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders.
___________________
/1/ To be included in the Initial Notes issued on the Issue Date and, to the
extent applicable, any Additional Notes issued in the form of Initial
Notes.
4. Notes Indenture and Guarantee. The Company issued the Notes
-----------------------------
under an Indenture, dated as of July 28, 1999 (the "Notes Indenture"), among the
Company, the Guarantor named therein and the Trustee. This Note is one of a duly
authorized issue of Initial Notes of the Company designated as its 12% Senior
Notes due July 15, 2009. The Company shall be entitled to issue Additional Notes
pursuant to Section 2.15 of the Notes Indenture; provided, that such issuance is
not prohibited by Section 4.13 of the Notes Indenture. The Initial Notes issued
on July 28, 1999, any Additional Notes, and any Private Exchange Notes and
Exchange Notes issued pursuant to the Notes Indenture are treated as a single
class of securities under the Notes Indenture. Capitalized terms herein are used
as defined in the Notes Indenture unless otherwise defined herein. The terms of
the Notes include those stated in the Notes Indenture and those made part of the
Notes Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
▇▇.▇▇. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Notes
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Notes
Indenture and the TIA Act for a statement of them. The Notes are general
unsecured obligations of the Company. Payment on each Note is guaranteed on a
senior basis by the Subsidiary Guarantors pursuant to Article Ten of the Notes
Indenture. To the extent of any conflict between the terms of the Notes and the
Notes Indenture, the applicable terms of the Notes Indenture shall govern.
5. Redemption.
----------
(a) Except as set forth in the subsection (b) below, the Notes will
be redeemable at the Company's option, in whole or in part, at any time on or
after July 15, 2004, at the respective redemption price (expressed as a
percentage of principal amount) set forth below, plus accrued and unpaid
interest to the redemption date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant Interest
Payment Date), if redeemed during the 12-month period beginning on July 15 of
the year indicated below:
Redemption
Period Price
------ ----------
2004 ......................... 106.000%
2005 ......................... 104.000%
2006 ......................... 102.000%
2007 and thereafter .......... 100.000%
(b) Notwithstanding the foregoing, before July 15, 2002, the Company
may at its option on one or more occasions redeem up to 35% of the original
principal amount of the Notes (including the original principal amount of any
Additional Notes) with the proceeds of (i) one or more Public Equity Offerings
or (ii) any other Equity Offering so long as the gross proceeds to the Company
or Parent from such offering exceeds $50 million, at a redemption price
(expressed as a percentage of principal amount) of 112% plus accrued interest to
the redemption date (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date);
provided that at least 65% of the
aggregate principal amount of the Notes (including the original principal amount
of any Additional Notes) initially issued must remain outstanding after each
such redemption; provided, further, that such redemption must occur within 120
days of the Public Equity Offering or Equity Offering, as the case may be.
6. Notice of Redemption. Notice of redemption will be mailed
--------------------
at least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations of $1,000 may be redeemed only in whole. Notes in denominations
larger than $1,000 may be redeemed in part but only in multiples of $1,000.
Except as set forth in the Notes Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Notes called for redemption will cease to bear interest
from and after such Redemption Date and the only right of the Holders of such
Notes will be to receive payment of the Redemption Price plus accrued and unpaid
interest, if any.
7. Offers to Purchase. Section 4.15 of the Notes Indenture
------------------
provides that, in the event of the occurrence of a Change of Control (as defined
in the Notes Indenture), and subject to further limitations contained therein,
the Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Notes Indenture.
8. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement (as defined in the Notes Indenture), the Company will be obligated to
consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Note for the Company's 12% Senior Notes due July
15, 2009 in the form of Exchange Notes, which shall have been registered under
the Securities Act, or the Company's 12% Senior Private Exchange Notes due July
15, 2009 (the "Private Exchange Notes"), in each case in like principal amount
and having terms identical in all material respects to the Initial Notes. The
Holders of the Initial Notes shall be entitled to receive certain additional
interest payments if such exchange offer is not consummated and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement. The Company shall notify the Trustee of the
amount of any such payments./2/
9. Denominations; Transfer; Exchange. The Notes are in
---------------------------------
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange of
Notes in accordance with the Notes Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
__________________
/2/ To be included in the Initial Notes issued on the Issue Date and, to the
extent applicable, any Additional Notes issued in the form of Initial
Notes.
transfer documents and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the Notes Indenture. The
Registrar need not register the transfer of or exchange of any Notes or portions
thereof selected for redemption (except, in the case of Notes to be redeemed in
part, the portion of such Notes not to be redeemed) or any Note for a period
beginning 15 Business Days before the mailing of a notice of an offer to
repurchase or a notice of redemption or 15 Business Days before any Interest
Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note shall
---------------------
be treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company
-----------------------------------------
at any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Notes
Indenture relating thereto, the Company will be discharged from certain
provisions of the Notes Indenture and the Notes (including certain covenants,
but excluding its obligation to pay the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain
-----------------------------
exceptions, the Notes Indenture or the Notes may be amended or supplemented with
the written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Notes Indenture or the Notes to, among other
things, cure any ambiguity, omission, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Notes Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Notes Indenture imposes certain
---------------------
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject to a number
of important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with
----------
the Notes Indenture, all the obligations of its predecessor under the Notes and
the Notes Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and
---------------------
is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Notes Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Notes Indenture or
the Notes except as provided in the Notes Indenture. The Trustee is not
obligated to enforce the Notes Indenture or the Notes unless it has received
indemnity reasonably satisfactory to it. The Notes Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Notes then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default in
payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Notes
-----------------------------
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or
their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No past, present or future
--------------------------
stockholder, director, officer, employee or incorporator, as such, of the
Company or any Subsidiary Guarantor shall have any liability for any obligation
of the Company under the Notes or the Notes Indenture or for any claim based on,
in respect of or by reason of, such obligations or their creation. Each Holder
of a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the
--------------
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Note.
20. Governing Law. The Laws of the State of New York shall
-------------
govern this Note and the Notes Indenture (and the Subsidiary Guarantees relating
thereto), without regard to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations
-------------------------------
may be used in the name of a Holder of a Note or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by
-------------
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the Holders
of the Notes. No representation is made as to the accuracy of such numbers as
printed on the Notes and reliance may be placed only on the other identification
numbers printed hereon.
23. Notes Indenture. Each Holder, by accepting a Note, agrees to
---------------
be bound by all of the terms and provisions of the Notes Indenture, as the same
may be amended from time to time.
24. Holders' Compliance with Registration Rights Agreement.
------------------------------------------------------
Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein./3/
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Notes Indenture. Requests may be made
to: ▇▇▇▇▇ Equipment Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
_____________
/3/ To be included in the Initial Notes issued on the Issue Date and, to the
extent applicable, any Additional Notes issued in the form of Initial
Notes.
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE]
GUARANTEE
▇▇▇▇▇ Equipment Company (the "Guarantor"), has unconditionally
guaranteed on a senior basis (such guarantee by the Guarantor being referred to
herein as the "Guarantee") (i) the due and punctual payment of the principal of
and interest on the Notes, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal and interest, if any, on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set forth
in Article Ten of the Notes Indenture and (ii) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, subject to any
applicable grace period, by acceleration or otherwise.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Notes Indenture are expressly set
forth and are senior obligations of each Guarantor, to the extent and in the
manner provided, in Article Ten of the Notes Indenture, and reference is hereby
made to such Notes Indenture for the precise terms of the Guarantee therein
made.
No stockholder, officer, director, employee or incorporator, as such,
past, present or future, of the Guarantor shall have any liability under the
Guarantee by reason of his or its status as such stockholder, officer, director,
employee or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Notes Indenture by the manual
signature of one of its authorized officers.
▇▇▇▇▇ EQUIPMENT COMPANY
By:________________________________
Name:
Title:
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________, agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
Date:___________________ Signed:_______________________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:_________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended).
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) [two years from date of original issuance], the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Note is being
transferred:
[Check One]
-----------
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) __ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(4) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(5) __ pursuant to an effective registration statement under the Securities
Act; or
(6) __ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4) or (6) is checked, the
Company or the Trustee may require, prior to registering any such transfer of
the Notes, in its sole discretion, such legal opinions, certifications and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in the Appendix to the Notes Indenture shall have been
satisfied.
Dated:______________ Signed:___________________________________________________
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:____________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:__________________________ _____________________________________________
NOTICE: To be executed by
an executive officer
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Notes Indenture, check the
appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Notes Indenture, state
the amount you elect to have purchased:
$__________________
Dated: __________________ ________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:_____________________
(Signature must be guaranteed by an "eligible guarantor
institution," that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended).
EXHIBIT B
---------
FORM OF EXCHANGE NOTE AND PRIVATE EXCHANGE NOTE
-----------------------------------------------
CUSIP No.:__________
WEC COMPANY
12% SENIOR [PRIVATE EXCHANGE] NOTE DUE JULY 15, 2009
No. $
WEC COMPANY, a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to or
registered assigns, the principal sum of ______ Dollars, on _____ __, 2009.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, WEC COMPANY has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
WEC COMPANY
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Dated: ________________ Title:
Certificate of Authentication
This is one of the 12% Senior [Private Exchange] Notes due July 15,
2009 referred to in the within-mentioned Notes Indenture.
_______________________________,
as Trustee
Dated:______________________ By:__________________________________
Authorized Signatory
[If the Note is to be issued in global form add the Global Securities Legend
from Exhibit 1 to the Appendix and the attachment from such Exhibit 1 captioned
"[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL SECURITY".]
[If the Note is a Private Exchange Note issued in a Private Exchange to an
Initial Purchaser holding an unsold portion of its initial allotment, add the
restricted securities legend from Exhibit 1 to Appendix A and replace the
Assignment Form with that included in Exhibit A.]
(REVERSE OF SECURITY)
12% SENIOR [PRIVATE EXCHANGE] NOTE DUE JULY 15, 2009
1. Interest. WEC COMPANY, a Delaware corporation (the "Company"),
--------
promises to pay interest on the principal amount of this Note at the rate per
annum shown above; [provided, however, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs, additional interest will
accrue on this Note at a rate of 0.50% per annum from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured, calculated on the principal
amount of this Note as of the date on which such interest is payable. Such
interest is payable in addition to any other interest payable from time to time
with respect to this Note. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default]./4/ Interest on the Notes will accrue from [the most
recent date on which interest has been paid on the Initial Note in exchange for
which this [Exchange Note] [Private Exchange Note] was issued] [date of issuance
of Additional Notes]. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing [______ __, 1999] [first Interest Payment
Date after issuance of Additional Notes]. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal at the rate borne
by the Notes plus 1% per annum and on overdue installments of interest (without
regard to any applicable grace periods) at such higher rate to the extent
lawful.
2. Method of Payment. The Company shall pay interest on the
-----------------
Notes (except defaulted interest) to the Persons who are the registered Holders
at the close of business on the Record Date immediately preceding the Interest
Payment Date even if the Notes are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must surrender Notes to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, United States Trust
--------------------------
Company of New York, a New York banking corporation (the "Trustee"), will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders.
____________________
/4/ Insert if at the time of issuance of the Exchange Note or Private Exchange
Note (as the case may be) neither the Registered Exchange Offer has been
consummated nor a Shelf Registration Statement has been declared effective
in accordance with a Registration Rights Agreement.
4. Notes Indenture and Guarantee. The Company issued the Notes
-----------------------------
under an Indenture, dated as of July 28, 1999 (the "Notes Indenture"), among the
Company, the Subsidiary Guarantors named therein and the Trustee. [This Note is
one of a duly authorized issue of Exchange Notes of the Company designated as
its 12% Senior Notes due July 15, 2009.] [This Note is one of a duly authorized
issue of Private Exchange Notes of the Company designated as its 12% Senior
Private Exchange Notes due July 15, 2009.] The Company shall be entitled to
issue Additional Notes pursuant to Section 2.15 of the Notes Indenture;
provided, that such issuance is not prohibited by Section 4.13 of the Notes
Indenture. The Initial Notes issued on July 28, 1999, any Additional Notes, and
any Private Exchange Notes and Exchange Notes issued pursuant to the Notes
Indenture are treated as a single class of securities under the Notes Indenture.
Capitalized terms herein are used as defined in the Notes Indenture unless
otherwise defined herein. The terms of the Notes include those stated in the
Notes Indenture and those made part of the Notes Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Notes Indenture. Notwithstanding anything to the
contrary herein, the Notes are subject to all such terms, and Holders of Notes
are referred to the Notes Indenture and the TIA for a statement of them. The
Notes are general unsecured obligations of the Company. Payment on each Note is
guaranteed on a senior basis by the Subsidiary Guarantors pursuant to Article
Eleven of the Notes Indenture. To the extent of any conflict between the terms
of the Notes and the Notes Indenture, the applicable terms of the Notes
Indenture shall govern.
5. Redemption.
----------
(a) Except as set forth in the subsection (b) below, the Notes will be
redeemable at the Company's option, in whole or in part, at any time on or after
July 15, 2004, at the respective redemption price (expressed as a percentage of
principal amount) set forth below, plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date), if
redeemed during the 12-month period beginning on July 15 of the year indicated
below:
Redemption
Period Price
------ ----------
2004 .......................... 106.000%
2005 .......................... 104.000%
2006 .......................... 102.000%
2007 and thereafter ........... 100.000%
(b) Notwithstanding the foregoing, before July 15, 2002, the Company may
at its option on one or more occasions redeem up to 35% of the original
principal amount of the Notes (including the original principal amount of any
Additional Notes) with the proceeds of (i) one or more Public Equity Offerings
or (ii) any other Equity Offering so long as the gross proceeds to the Company
or Parent from such offering exceeds $50 million, at a redemption price
(expressed as a percentage of principal amount) of 112% plus accrued interest to
the redemption date (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date);
provided that at least 65% of the aggregate principal amount of the Notes
(including the original principal amount of any Additional Notes) initially
issued must remain outstanding after each such redemption; provided, further,
that such redemption must occur within 120 days of the Public Equity Offering or
Equity Offering, as the case may be.
6. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations of $1,000 may be redeemed only in whole. Notes in denominations
larger than $1,000 may be redeemed in part but only in multiples of $1,000.
Except as set forth in the Notes Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Notes called for redemption will cease to bear interest
from and after such Redemption Date and the only right of the Holders of such
Notes will be to receive payment of the Redemption Price plus accrued and unpaid
interest, if any.
7. Offers to Purchase. Section 4.15 of the Notes Indenture
------------------
provides that, in the event of the occurrence of a Change of Control (as defined
in the Notes Indenture), and subject to further limitations contained therein,
the Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Notes Indenture.
8. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the Notes Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Notes Indenture. The Registrar need not register
the transfer of or exchange of any Notes or portions thereof selected for
redemption (except, in the case of Notes to be redeemed in part, the portion of
such Notes not to be redeemed) or any Note for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or a notice of
redemption or 15 Business Days before any Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
10. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Notes Indenture relating
thereto, the Company will be discharged from certain
provisions of the Notes Indenture and the Notes (including certain covenants,
but excluding its obligation to pay the principal of and interest on the Notes).
12. Amendment; Supplement; Waiver. Subject to certain exceptions, the
-----------------------------
Notes Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Notes Indenture or the Notes to, among other things,
cure any ambiguity, omission, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Notes Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
13. Restrictive Covenants. The Notes Indenture imposes certain
---------------------
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject to a number
of important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.
14. Successors. When a successor assumes, in accordance with the
----------
Notes Indenture, all the obligations of its predecessor under the Notes and the
Notes Indenture, the predecessor will be released from those obligations.
15. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Notes Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Notes Indenture or
the Notes except as provided in the Notes Indenture. The Trustee is not
obligated to enforce the Notes Indenture or the Notes unless it has received
indemnity reasonably satisfactory to it. The Notes Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Notes then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default in
payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest.
16. Trustee Dealings with Company. The Trustee under the Notes
-----------------------------
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or
their respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others. No past, present or future
--------------------------
stockholder, director, officer, employee or incorporator, as such, of the
Company or any Subsidiary Guarantor shall have any liability for any obligation
of the Company under the Notes or the Notes Indenture or for any claim based on,
in respect of or by reason of, such obligations or their creation. Each Holder
of a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
18. Authentication. This Note shall not be valid until the Trustee or
--------------
Authenticating Agent manually signs the certificate of authentication on this
Note.
19. Governing Law. The Laws of the State of New York shall govern
-------------
this Note and the Notes Indenture (and the Subsidiary Guarantees relating
thereto), without regard to principles of conflict of laws.
20. Abbreviations and Defined Terms. Customary abbreviations
-------------------------------
may be used in the name of a Holder of a Note or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
22. Notes Indenture. Each Holder, by accepting a Note, agrees to be
---------------
bound by all of the terms and provisions of the Notes Indenture, as the same may
be amended from time to time.
[23. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement (as defined in the Notes Indenture), the Company will have certain
obligations to the Holders of the Exchange Notes and the Private Exchange Notes.
The Holders of the Exchange Notes and the Private Exchange Notes shall be
entitled to receive certain additional interest payments upon certain
conditions, all pursuant to and in accordance with the terms of the Registration
Rights Agreement. The Company shall notify the Trustee of the amount of any such
payments.]/5/
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Notes Indenture. Requests may be made to: ▇▇▇▇▇
Equipment Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: D. ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
_______________
/5/ To be included if applicable.
FORM OF NOTATION ON NOTE RELATING TO GUARANTEE
GUARANTEE
▇▇▇▇▇ Equipment Company (the "Guarantor"), has unconditionally
guaranteed on a senior basis (such guarantee by the Guarantor being referred to
herein as the "Guarantee") (i) the due and punctual payment of the principal of
and interest on the Notes, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal and interest, if any, on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set forth
in Article Ten of the Notes Indenture and (ii) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, subject to any
applicable grace period, by acceleration or otherwise.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Notes Indenture are expressly set
forth and are senior obligations of each Guarantor, to the extent and in the
manner provided, in Article Ten of the Notes Indenture, and reference is hereby
made to such Notes Indenture for the precise terms of the Guarantee therein
made.
No stockholder, officer, director, employee or incorporator, as such,
past, present or future, of the Guarantor shall have any liability under the
Guarantee by reason of his or its status as such stockholder, officer, director,
employee or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Notes Indenture by the manual
signature of one of its authorized officers.
▇▇▇▇▇ EQUIPMENT COMPANY
By:___________________________
Name:
Title:
ASSIGNMENT FORM /6/
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint __________________, agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
Date:_________________ Signed:__________________________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:__________________
(Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended).
____________________
/6/ If the Note is a Private Exchange Note, replace the Assignment Form with
that included in Exhibit A to this Notes Indenture.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Notes Indenture, check the
appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Notes Indenture, state
the amount you elect to have purchased:
$___________________
Dated: __________________ _________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:________________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended).
CROSS-REFERENCE TABLE
TIA Notes Indenture
Section Section
------- -------
310(a)(1) ....................................................... 7.10
(a)(2) ....................................................... 7.10
(a)(3) .......................................................
N.A.
(a)(4) ....................................................... N.A.
(a)(5) ....................................................... 7.08; 7.10
(b) ....................................................... 7.08; 7.10; 11.02
(c) ....................................................... N.A.
311(a) ....................................................... 7.11
(b) ....................................................... 7.11
(c) ....................................................... N.A.
312(a) ....................................................... 2.05
(b) ....................................................... 11.03
(c) ....................................................... 11.03
313(a) ....................................................... 7.06
(b)(1) ....................................................... N.A.
(b)(2) ....................................................... 7.06
(c) ....................................................... 7.06; 11.02
(d) ....................................................... 7.06
314(a) ....................................................... 4.07; 4.08; 11.02
(b) ....................................................... N.A.
(c)(1) ....................................................... 11.04
(c)(2) ....................................................... 11.04
(c)(3) ....................................................... N.A.
(d) ....................................................... N.A.
(e) ....................................................... 11.05
(f) ....................................................... N.A.
315(a) ....................................................... 7.01(b)
(b) ....................................................... 7.05; 11.02
(c) ....................................................... 7.01(a)
(d) ....................................................... 7.01(c)
(e) ....................................................... 6.11
316(a)(last sentence) ....................................................... 2.09
(a)(1)(A) ....................................................... 6.05
(a)(1)(B) ....................................................... 6.04
(a)(2) ....................................................... N.A.
(b) ....................................................... 6.07
(c) ....................................................... 9.04
317(a)(1) ....................................................... 6.08
(a)(2) ....................................................... 6.09
(b) ....................................................... 2.04
318(a) ....................................................... 11.01
(c) ....................................................... 11.01
__________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of this Notes Indenture.