Exhibit 4.1
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC.
as Issuer
THE GUARANTORS NAMED HEREIN,
as Subsidiary Guarantors
ENVIROSYSTEMS CORP.
as Holdco
and
UNITED STATES TRUST COMPANY OF TEXAS, N.A.
as Trustee
---------
INDENTURE
Dated as of October 16, 1998
---------
13% Senior Subordinated Notes due 2008
TABLE OF CONTENTS
Page
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ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
SECTION 1.1. Definitions.....................................................1
SECTION 1.2. Incorporation by Reference of TIA..............................25
SECTION 1.3. Rules of Construction..........................................25
SECTION 1.4. One Class of Securities........................................26
ARTICLE TWO THE NOTES.........................................................26
SECTION 2.1. Form and Dating................................................26
SECTION 2.2. Execution and Authentication; Aggregate Principal Amount.......26
SECTION 2.3. Registrar and Paying Agent.....................................27
SECTION 2.4. Paying Agent To Hold Assets in Trust...........................28
SECTION 2.5. Noteholder Lists...............................................28
SECTION 2.6. [Intentionally Omitted]........................................28
SECTION 2.7. Replacement Notes..............................................28
SECTION 2.8. Outstanding Notes..............................................29
SECTION 2.9. Treasury Notes.................................................29
SECTION 2.10. Temporary Notes...............................................29
SECTION 2.11. Cancellation..................................................30
SECTION 2.12. Defaulted Interest............................................30
SECTION 2.13. CUSIP Number..................................................30
SECTION 2.14. Deposit of Moneys.............................................30
ARTICLE THREE REDEMPTION......................................................31
SECTION 3.1. Notices to Trustee.............................................31
SECTION 3.2. Selection of Notes To Be Redeemed..............................31
SECTION 3.3. Notice of Redemption...........................................31
SECTION 3.4. Effect of Notice of Redemption.................................32
SECTION 3.5. Deposit of Redemption Price....................................33
SECTION 3.6. Notes Redeemed in Part.........................................33
SECTION 3.7. Optional Redemption............................................33
ARTICLE FOUR COVENANTS........................................................34
SECTION 4.1. Payment of Notes...............................................34
SECTION 4.2. Maintenance of Office or Agency................................34
SECTION 4.3. Corporate Existence............................................35
SECTION 4.4. Payment of Taxes and Other Claims..............................35
SECTION 4.5. Maintenance of Properties and Insurance........................36
SECTION 4.6. Compliance Certificate; Notice of Default......................36
SECTION 4.7. Compliance with Laws...........................................37
SECTION 4.8. SEC Reports....................................................37
SECTION 4.9. Waiver of Stay, Extension or Usury Laws........................38
SECTION 4.10. Limitation on Restricted Payments.............................38
SECTION 4.11. Limitation on Restrictions on Distributions from Restricted
Subsidiaries..................................................40
SECTION 4.12. Limitation on Affiliate Transactions..........................41
SECTION 4.13. Limitation on Indebtedness....................................42
SECTION 4.14. [INTENTIONALLY OMITTED].......................................45
SECTION 4.15. Limitation on Other Senior Subordinated Indebtedness..........45
SECTION 4.16. Change of Control.............................................45
SECTION 4.17. Limitation on Sales of Assets and Subsidiary Stock............46
SECTION 4.18. Limitation on Liens Securing Subordinated Indebtedness........49
SECTION 4.19. Future Subsidiary Guarantors..................................50
SECTION 4.20. Limitation on Designations of Unrestricted Subsidiaries.......50
i
SECTION 4.21. Limitation on Lines of Business...............................51
SECTION 4.22. Limitation on Holdco and the Holding Companies................51
ARTICLE FIVE SUCCESSOR CORPORATION ...........................................52
SECTION 5.1. Merger, Consolidation and Sale of Assets of the Company........52
SECTION 5.2. Successor Corporation Substituted for the Company..............53
SECTION 5.3. Merger, Consolidation and Sale of Assets of Any Subsidiary
Guarantor......................................................53
SECTION 5.4. Successor Corporation Substituted for Subsidiary Guarantor.....54
ARTICLE SIX DEFAULT AND REMEDIES .............................................54
SECTION 6.1. Events of Default..............................................54
SECTION 6.2. Acceleration...................................................56
SECTION 6.3. Other Remedies.................................................56
SECTION 6.4. Waiver of Past Defaults........................................57
SECTION 6.5. Control by Majority............................................57
SECTION 6.6. Limitation on Suits............................................57
SECTION 6.7. Rights of Holders To Receive Payment...........................58
SECTION 6.8. Collection Suit by Trustee.....................................58
SECTION 6.9. Trustee May File Proofs of Claim...............................58
SECTION 6.10. Priorities....................................................58
SECTION 6.11. Undertaking for Costs.........................................59
ARTICLE SEVEN TRUSTEE ........................................................59
SECTION 7.1. Duties of Trustee..............................................59
SECTION 7.2. Rights of Trustee..............................................60
SECTION 7.3. Individual Rights of Trustee...................................62
SECTION 7.4. Trustee's Disclaimer...........................................62
SECTION 7.5. Notice of Default..............................................62
SECTION 7.6. Reports by Trustee to Holders..................................62
SECTION 7.7. Compensation and Indemnity.....................................63
SECTION 7.8. Replacement of Trustee.........................................64
SECTION 7.9. Successor Trustee by Merger, Etc...............................65
SECTION 7.10. Eligibility; Disqualification.................................65
SECTION 7.11. Preferential Collection of Claims Against Company.............65
ARTICLE EIGHT DISCHARGE OF INDENTURE; DEFEASANCE .............................66
SECTION 8.1. Discharge of Liability on Notes; Defeasance....................66
SECTION 8.2. Conditions to Defeasance.......................................67
SECTION 8.3. Application of Trust Money.....................................68
SECTION 8.4. Repayment to Company...........................................68
SECTION 8.5. Indemnity for Government Obligations...........................69
SECTION 8.6. Reinstatement..................................................69
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS .............................69
SECTION 9.1. Without Consent of Holders.....................................69
SECTION 9.2. With Consent of Holders........................................70
SECTION 9.3. Effect on Senior Indebtedness..................................71
SECTION 9.4. Compliance with TIA........................................,...72
SECTION 9.5. Revocation and Effect of Consents..............................72
SECTION 9.6. Notation on or Exchange of Notes...............................72
SECTION 9.7. Trustee To Sign Amendments, Etc................................73
SECTION 9.8. Payment for Consent............................................73
ARTICLE TEN SUBORDINATION ....................................................73
SECTION 10.1. Notes Subordinated to Senior Indebtedness.....................73
SECTION 10.2. No Payment on Notes in Certain Circumstances..................74
SECTION 10.3. Payment Over of Proceeds upon Dissolution, Etc................75
SECTION 10.4. Payments May Be Paid Prior to Dissolution.....................76
SECTION 10.5. Subrogation...................................................77
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SECTION 10.6. Obligations of the Company Unconditional......................77
SECTION 10.7. Notice to Trustee.............................................78
SECTION 10.8. Reliance on Judicial Order or Certificate of Liquidating
Agent.........................................................78
SECTION 10.9. Trustee's Relation to Senior Indebtedness.....................79
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness................79
SECTION 10.11. Noteholders Authorize Trustee To Effectuate Subordination
of Notes.....................................................80
SECTION 10.12. This Article Ten Not To Prevent Events of Default............80
SECTION 10.13. Trustee's Compensation Not Prejudiced........................80
SECTION 10.14. Acceleration of Payment of Notes.............................81
ARTICLE ELEVEN SUBSIDIARY GUARANTEES .........................................81
SECTION 11.1. Unconditional Subsidiary Guarantee............................81
SECTION 11.2. Subordination of Subsidiary Guarantee.........................82
SECTION 11.3. Severability..................................................82
SECTION 11.4. Release of Subsidiary Guarantor from the Subsidiary
Guarantee.....................................................82
SECTION 11.5. Limitation on Amount Guaranteed; Contribution by Subsidiary
Guarantors....................................................83
SECTION 11.6. Waiver of Subrogation.........................................84
SECTION 11.7. Execution of Subsidiary Guarantee.............................85
SECTION 11.8. Waiver of Stay, Extension or Usury Laws.......................85
SECTION 11.9. Effectiveness of Subsidiary Guarantee.........................85
ARTICLE TWELVE SUBORDINATION OF GUARANTEE OBLIGATIONS ........................86
SECTION 12.1. Guarantee Obligations Subordinated to Senior Indebtedness
of Subsidiary Guarantors.....................................86
SECTION 12.2. No Payment on Notes in Certain Circumstances.................86
SECTION 12.3. Payment Over of Proceeds upon Dissolution, Etc...............88
SECTION 12.4. Payments May Be Paid Prior to Dissolution.....................90
SECTION 12.5. Subrogation...................................................90
SECTION 12.6. Obligations of Subsidiary Guarantor Unconditional.............91
SECTION 12.7. Notice to Trustee.............................................91
SECTION 12.8. Reliance on Judicial Order or Certificate of Liquidating
Agent ........................................................91
SECTION 12.9. Trustee's Relation to Subsidiary Guarantor's Senior
Indebtedness.................................................92
SECTION 12.10. Subordination Rights Not Impaired by Acts or Omissions of
Subsidiary Guarantors or Holders of Subsidiary Guarantors'
Senior Indebtedness..........................................92
SECTION 12.11. Noteholders Authorize Trustee To Effectuate Subordination
of Notes.....................................................93
SECTION 12.12. This Article Twelve Not To Prevent Events of Default.........94
ARTICLE THIRTEEN MISCELLANEOUS ...............................................94
SECTION 13.1. TIA Controls..................................................94
SECTION 13.2. Notices.......................................................94
SECTION 13.3. Communications by Holders with Other Holders..................95
SECTION 13.4. Certificate and Opinion as to Conditions Precedent............96
SECTION 13.5. Statements Required in Certificate or Opinion.................96
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar.....................96
SECTION 13.7. Legal Holidays................................................97
SECTION 13.8. Governing Law.................................................97
SECTION 13.9. No Adverse Interpretation of Other Agreements.................97
SECTION 13.10. No Recourse Against Others...................................97
SECTION 13.11. Successors...................................................97
SECTION 13.12. Duplicate Originals..........................................97
SECTION 13.13. Severability.................................................98
Appendix .................................................................... I
Exhibit A - Form of Initial Note and Subsidiary Guarantee....................A-1
iii
Exhibit B - Form of Exchange Note and Private Exchange Note and Subsidiary
Guarantee........................................................B-1
Exhibit C - Subsidiary Guarantors ...........................................C-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
this Indenture.
iv
INDENTURE, dated as of October 16, 1998, among ENVIRONMENTAL SYSTEMS
PRODUCTS HOLDINGS INC., a Delaware corporation (the "Company"), the guarantors
named on Exhibit C hereto (the "Subsidiary Guarantors"), EnviroSystems Corp., a
Delaware corporation ("Holdco") and United States Trust Company of Texas, N.A.,
as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 13%
Senior Subordinated Notes due 2008 (the "Initial Notes") and, if and when issued
pursuant to a registered exchange for the Initial Notes, 13% Senior Subordinated
Exchange Notes due 2008 (the "Exchange Notes") and, if and when issued pursuant
to a private exchange for the Initial Notes, 13% Senior Subordinated Private
Exchange Notes due 2008 (the "Private Exchange Notes," and together with the
Initial Notes and the Exchange Notes, the "Notes") to provide therefor, the
Company and each of the Subsidiary Guarantors has duly authorized the execution
and delivery of this Indenture. The Subsidiary Guarantors have agreed to
Guarantee the Notes on a senior subordinated basis.
All things necessary to make the Notes, when duly issued and
executed by the Company, and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid and binding
agreement of the Company, have been done. All things necessary to make the
Subsidiary Guarantees (as defined herein), when duly issued and executed by each
Guarantor and endorsed on the Notes, and authenticated and delivered hereunder,
the valid obligations of the Subsidiary Guarantors have been done.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries (the "Acquired Person") (i) existing at the time such Person
becomes a Restricted Subsidiary of the Company or at the time it merges or
consolidates with the Company or any of its Restricted Subsidiaries, including,
without limitation, Indebtedness Incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person or (ii) assumed in connection
with the acquisition of assets from such Person.
"Adjusted Maximum Amount" has the meaning provided in Section 11.05.
"Affiliate" of any specified Person means (i) any other Person
which, directly or indirectly, is in control of, is controlled by or is under
common control with such specified
Person or (ii) any other Person who is a director or officer (A) of such
specified Person, (B) of any subsidiary of such specified Person or (C) any
Person described in clause (i) above. For purposes of this definition, control
of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether 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 in Sections 4.10 and 4.12 only, "Affiliate"
shall also mean any beneficial owner of Capital Stock representing 5% or more of
the total voting power of the Voting Stock (on a fully diluted basis) of the
Company or of rights or warrants to purchase such Capital Stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Aggregate Payments" has the meaning provided in Section 11.05.
"Alchemy" means Alchemy Investment Plan, a group of funds advised by
Alchemy Partners, or its Affiliates.
"Alchemy Partners" means Alchemy Partners, an English partnership.
"Asset Disposition" means any sale, lease, transfer, conveyance,
issuance or other disposition (or series of related sales, leases, transfers,
conveyances, issuances or dispositions) by the Company or any Restricted
Subsidiary, including any disposition by means of a merger or consolidation
(each referred to for the purposes of this definition as a "disposition")
(including by way of a sale-and-leaseback), of (i) any shares of Capital Stock
of a Restricted Subsidiary (other than directors' qualifying shares or shares
required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary), (ii) all or substantially all the assets of any division
or line of business of the Company or any Restricted Subsidiary or (iii) any
other assets of the Company or any Restricted Subsidiary outside of the ordinary
course of business of the Company or such Restricted Subsidiary (including as a
result of a termination of an Emissions Contract), other than, in the case of
(i), (ii) and (iii) above, (a) a disposition by (1) the Company to a Wholly
Owned Subsidiary that is a Subsidiary Guarantor, (2) a Restricted Subsidiary
that is a Subsidiary Guarantor to the Company or a Wholly Owned Subsidiary that
is a Subsidiary Guarantor or (3) a Restricted Subsidiary that is not a
Subsidiary Guarantor to (x) the Company or (y) any Restricted Subsidiary, (b) a
disposition of obsolete equipment or equipment that is no longer useful in the
conduct of the business of the Company and any Restricted Subsidiary and that is
disposed of in each case in the ordinary course of business, (c) the sale of
other assets so long as the fair market value of the assets disposed of pursuant
to this clause (c) does not exceed $3.0 million in the aggregate in any fiscal
year, (d) for the purposes of Section 4.17 only, a disposition subject to
Section 4.10 and (e) the disposition of all or substantially all of the assets
of the Company in the manner permitted pursuant to the provisions described in
Section 5.01 where such disposition constitutes a Change of Control under
Section 4.16. For the purposes of this Indenture, the term "Asset Disposition"
shall include the receipt by the Company or any Restricted Subsidiary of any
termination payments, settlement or judgment awards or similar
2
payments in connection with, or as a result of, the termination or cancellation
of any Emissions Contract.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, (a) if such Sale/Leaseback transaction
in a Capital Lease Obligation, the amount of Indebtedness represented thereby
according to the definition of "Capital Lease Obligations" and (b) in other
instances, 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 renewed or
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 the 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.
"Bank Indebtedness" means (i) the Indebtedness outstanding or
arising under the Credit Facility, (ii) all obligations incurred by or owing to
the holders of such Indebtedness or any agent or representative thereof
outstanding or arising under the Credit Facility (including, but not limited to,
all interest (including, but not limited to, interest accruing pursuant to the
terms of the Credit Facility on or after the filing of any petition in any
bankruptcy, reorganization or similar proceeding relating to the Company or any
Restricted Subsidiary, whether or not a claim for such is allowed in such
proceeding), all fees and expenses of counsel, reimbursement obligations,
indemnities and all other charges, fees, expenses and other claims), and (iii)
all interest rate agreement obligations arising in connection thereafter with
any party to the Credit Facility.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"Blockage Notice" has the meaning provided in Section 10.02.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each day which is not a Legal Holiday.
"Capital Contribution" means the contribution to capital received by
the
3
Company from any holder of the Company's Capital Stock whereby the Company
receives cash solely in exchange for either no consideration or Capital Stock of
the Company other than Disqualified Stock.
"Capital Lease Obligations" of a Person means any obligation which
is required to be classified and accounted for as a capital lease on the face of
a balance sheet of such Person prepared in accordance with GAAP; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
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 or exchangeable for
such equity.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally Guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or ▇▇▇▇▇'▇ Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Rating Services or at least P-1 from ▇▇▇▇▇'▇
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by (x) any
(A) bank organized under the laws of the United States of America or any state
thereof or the District of Columbia or (B) commercial banking institution
organized and located in a country recognized by the United States of America,
in each case having at the date of acquisition thereof combined capital and
surplus of not less than $200 million (or the foreign currency equivalent
thereof) or (y) any lender under the Credit Facility; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; (vi) investments in money market
funds which invest substantially all their assets in securities of the types
described in clauses (i) through (v) above; and (vii) other short-term
investments utilized by foreign Restricted Subsidiaries in accordance with
normal investment practices for cash management not exceeding $1.0 million in
aggregate principal amount outstanding at any time.
"Cash Flow" for any period means the Consolidated Net Income for
such period, plus the following (but without duplication) to the extent deducted
in calculating such Consolidated Net Income for such period: (i) income tax
expense, (ii) Consolidated Interest Expense, (iii) depreciation expense and
amortization expense, provided that consolidated depreciation and amortization
expense of a Subsidiary that is not a Wholly Owned Subsidiary
4
shall only be added to the extent of the equity interest of the Company in such
Subsidiary and (iv) all other non-cash charges (other than any non-cash charges
to the extent such charges represent an accrual of or reserve for cash
expenditures in any future period). Notwithstanding clause (iv) above, there
shall be deducted from Cash Flow in any period any cash expended in such period
that funds a non-recurring, non-cash charge accrued or reserved in a prior
period which was added back to Cash Flow pursuant to clause (iv) in such prior
period.
"Change of Control" means the occurrence of any of the following
events:
(i) Prior to the consummation of an Initial Equity Offering, Alchemy
ceases to be the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of at least 40% in the
aggregate of the total voting power of the Voting Stock of the Company or
Holdco, in each case whether as a result of issuance of securities of the
Company or Holdco, any merger, consolidation, liquidation or dissolution
of the Company or Holdco, any direct or indirect transfer of securities by
the Company or otherwise (for purposes of this clause (i) and clause (ii)
below, Alchemy shall be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other corporation
(the "parent corporation") so long as Alchemy beneficially owns (as so
defined), directly or indirectly, in the aggregate a majority of the
voting power of the Voting Stock of the parent corporation);
(ii) Following the first Initial Equity Offering, any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act), other
than Alchemy, is or becomes the beneficial owner (as defined in clause (i)
above, except that for purposes of this clause (ii) such person shall be
deemed to have "beneficial ownership" of all shares that any such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 35%
of the total voting power of the Voting Stock of the Company or Holdco
(whichever entity has consummated such public offering); provided,
however, that Alchemy beneficially owns (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of the Company or Holdco than such other
person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors (for the purposes of this clause (ii), such other person shall
be deemed to beneficially own any Voting Stock of a specified corporation
held by a parent corporation, if such other person 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
Alchemy beneficially owns (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
5
beginning of such period constituted the Board of Directors or the board
of directors of Holdco, as the case may be, (together with any new
directors whose election or appointment by the Board of Directors or the
board of directors of Holdco, as the case may be, or whose nomination for
election by the shareholders of the Company or Holdco, as the case may be,
was approved by a vote of 60% of the directors of the Company or ESPH, as
the case may be, then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors or the board of directors of Holdco, as the case
may be, then in office; or
(iv) the merger or consolidation of the Company or Holdco, with or
into another Person or the merger of another Person with or into the
Company or Holdco or the sale of all or substantially all the assets of
the Company or Holdco to another Person (other than a Person that is
controlled by Alchemy), and, in the case of any such merger or
consolidation, the securities of the Company or Holdco that are
outstanding immediately prior to such transaction and which represent 100%
of the aggregate voting power of the Voting Stock of the Company or Holdco
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.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated Cash Flow Coverage Ratio" as of any date of
determination means the ratio of (i) the aggregate amount of Cash Flow for the
period of the most recent four consecutive fiscal quarters to (ii) Consolidated
Interest Expense for such four fiscal quarters; provided, however, to the extent
relevant to the calculation for any period, Cash Flow and Consolidated Interest
Expense shall be calculated using the pro forma consolidated statements of
operations of the Company included in the Offering Circular, which pro forma
statements of operations shall give effect to the Transactions (as defined
therein) as if they occurred at the beginning of the relevant period; provided,
further, however, that (1) if the Company or any Restricted Subsidiary has
issued any Indebtedness since the beginning of such period and on or prior to
the relevant date of determination that remains outstanding or if the
transaction giving rise to the need to calculate the Consolidated Cash Flow
Coverage Ratio is an issuance of Indebtedness, or both, Cash Flow and
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such Indebtedness as if such Indebtedness had
been issued on the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the first
day of such period, (2) if since the beginning of such period and on or prior to
the relevant date of determination the Company or any Restricted Subsidiary
shall have made any Asset Disposition, the Cash Flow
6
for such period shall be reduced by an amount equal to the Cash Flow (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 Cash
Flow (if negative), directly attributable thereto for such period, and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Dispositions for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (3) to the extent not duplicative with (2) above, if since the
beginning of such period and on or prior to the relevant date of determination
any Emissions Contract ceased or ceases to be in effect, the Cash Flow for such
period shall be reduced by an amount equal to the cash Flow (if positive)
directly attributable thereto for such period, or increased by an amount equal
to the Cash Flow (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its Restricted
Subsidiaries with the proceeds of any termination fee or similar payment
received by the Company or a Restricted Subsidiary as a result of the cessation
of such Emissions Contract, (4) if since the beginning of such period and on or
prior to the relevant date of determination the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or
an acquisition of assets (including Capital Stock of a Subsidiary), including
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, Cash Flow and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect thereto
(including the issuance of any Indebtedness and including pro forma cost
reductions, in each case as calculated in accordance with the applicable
accounting requirements of Rule 11-02 of Regulation S-X under the Securities Act
or any successor provision relating to the preparation of pro forma financial
statements (it being understood that all cost reductions set forth in Note (3)
to the unaudited pro forma consolidated statements included in the Offering
Circular shall be deemed to be calculated on a basis consistent with such
requirements)) as if such Investment or acquisition occurred on the first day of
such period, and (5) if since the beginning of such period and on or prior to
the relevant date of determination any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Asset
Disposition or any Investment, or any Emissions Contract entered into by such
Person shall cease to be in effect, that would have required an adjustment
pursuant to clause (2), (3) or (4) above if made by, or if in respect of, the
Company or a Restricted Subsidiary during such period, Cash Flow and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto (including pro forma cost reductions, in each case as
calculated in accordance with the applicable accounting requirements of Rule
11-02 of Regulation S-X under the Securities Act or any successor provision
relating to the preparation of pro forma financial statements (it being
understood that all cost reductions set forth in Note (3) to the unaudited pro
forma consolidated statements
7
included in the Offering Circular shall be deemed to be calculated on a basis
consistent with such requirements)) as if such Asset Disposition, Investment or
cessation of such Emissions Contract occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto, and
the amount of Consolidated Interest Expense associated with any Indebtedness
issued in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest of such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months). For purposes of this definition,
whenever pro forma effect is to be given to any Indebtedness Incurred pursuant
to a revolving credit facility the amount outstanding under such Indebtedness
shall be equal to the average of the amount outstanding during the period
commencing on the first day of the first of the four most recent fiscal quarters
for which financial statements are available and ending on the date of
determination.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries
determined in accordance with GAAP, plus, to the extent not included in such
interest expense but Incurred by the Company or its Restricted Subsidiaries, (i)
interest expense attributable to capital leases, (ii) amortization of debt
discount and debt issuance cost (other than those debt discounts and debt
issuance costs incurred on the Issue Date), (iii) capitalized interest, (iv)
original issue discount and non-cash interest payments or accruals, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs under Hedging
Obligations (including amortization of fees), (vii) dividends in respect of all
Disqualified Stock or Preferred Stock held by Persons other than the Company, a
Subsidiary Guarantor or a Wholly Owned Subsidiary, (viii) interest Incurred in
connection with investments in discontinued operations, (ix) the interest
portion of any deferred payment obligations, (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 and
(xi) imputed interest expense associated with any Attributable Debt. For
purposes of this definition, interest expense attributable to any Indebtedness
represented by the Guarantee by such Person or a Subsidiary of such Person of an
obligation of another Person shall be deemed to be the interest expense
attributable to the Indebtedness Guaranteed.
"Consolidated Net Income" means, for any period, the net income or
loss of the Company and its consolidated Subsidiaries determined in accordance
with GAAP; provided, however, that there shall not be included in such
Consolidated Net Income:
(i) any net income of any Person if such Person is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting,
except that (A) the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash actually
8
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution to a Restricted Subsidiary, to
the limitations contained in clause (iii) below) and (B) the Company's
equity in a net loss of any such Person for such period shall be included
in determining such Consolidated Net Income;
(ii) any net income of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(iii) any net income of any Restricted Subsidiary (other than
Envirotest Systems Corp. and Environmental Systems Products, Inc., in each
case, solely for the period prior to the Issue Date) if such Restricted
Subsidiary is subject to restrictions (other than restrictions under the
Credit Facility, this Indenture or the indenture governing the Senior
Discount Notes), directly or indirectly, on the payment of dividends or
the making of distributions by such Subsidiary, directly or indirectly, to
the Company, except that (A) the Company's equity in the net income of any
such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to
another Restricted Subsidiary, to the limitation contained in this clause)
and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its
consolidated subsidiaries (including pursuant to any sale and leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary
course of business and any gain (but not loss) realized upon the sale or
other disposition of any Capital Stock of any Person;
(v) all extraordinary, unusual or non-recurring gains but not
losses; and
(vi) the cumulative effect of a change in accounting principles.
"covenant defeasance option" has the meaning provided in Section
8.01.
"Credit Facility" means the credit agreement dated as of October 16,
1998, by and among the Company, certain banks, financial institutions and other
entities, and Credit Suisse First Boston, as Administrative Agent, Collateral
Agent and Arranger, and DLJ Capital Funding, Inc., as Syndication Agent and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Securities Corporation, as an Arranger, initially
providing for an aggregate $435 million of term loan and revolving credit
facilities, including any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, as such credit
facilities and/or related documents may be further amended, restated,
supplemented, renewed, refinanced, replaced or otherwise modified from time to
time whether or not with the same agent, trustee, representative lenders or
holders, and irrespective of any changes in the terms and conditions
9
thereof. Without limiting the generality of the foregoing, the term "Credit
Facility" shall include agreements in respect of reimbursement of letters of
credit issued pursuant to the Credit Facility and agreements in respect of
Hedging Obligations with lenders party to the Credit Facility and their
affiliates and shall also include any amendment, amendment and restatement,
renewal, extension, restructuring, supplement or modification to any Credit
Facility and all refunding, refinancings (in whole or in part) and replacements
of any Credit Facility, including any agreement (i) extending the maturity of,
or increasing the amount of, any Indebtedness incurred thereunder or
contemplated thereby, or (ii) adding or deleting borrowers or guarantors
thereunder, so long as borrowers and issuers include one or more of the Company
and its Restricted Subsidiaries and their respective successors and assigns.
"Currency Agreement Obligations" means the obligations of any person
under a foreign exchange contract, currency swap agreement or other similar
agreement or arrangement to protect such person against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Designated Senior Indebtedness" means (i) so long as any Bank
Indebtedness is outstanding, such Bank Indebtedness and (ii) provided no Bank
Indebtedness is outstanding, any other Senior Indebtedness of the Company
permitted to be incurred under the Indenture which, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof are committed to lend up to,
at least $25.0 million and is specifically designated by the Company in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of the Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to 123 days after the Stated
Maturity of the Notes; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to 123
days after the Stated Maturity of the Notes shall not constitute Disqualified
Stock if the "asset sale" or "change of control" provisions applicable to such
Capital Stock are not more favorable to the holders of such Capital Stock than
the provisions described in Sections 4.16 and 4.17.
10
"Emissions Contract" means a contract with a governmental authority
to provide motor vehicle emissions testing, motor vehicle emissions testing
equipment testing, or calibration, data collection and reporting (auditing
emissions testing equipment and data) relating to motor vehicle emissions
testing, provided, however, that such contract may also relate to the provision
of motor vehicle safety inspection or motor vehicle registration but only if it
primarily relates to the provisions of the services enumerated above.
"ESPH" means Environmental Systems Holdings Inc., a Delaware
corporation.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"Fair Share" has the meaning provided in Section 11.05.
"Fair Share Shortfall" has the meaning provided in Section 11.05.
"Fraudulent Transfer Laws" has the meaning provided in Section
11.05.
"Funding Guarantor" has the meaning provided in Section 11.05.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing in any manner any Indebtedness or
other obligation of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such other Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, however, that the term "Guarantee" shall not include
endorsements of negotiable instruments for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guarantee Obligations" has the meaning provided in Section 12.01.
11
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person against changes
in interest rates or foreign exchange rates.
"Holdco" means EnviroSystems Corp., a Delaware corporation.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Holding Company" means each of Newmall Ltd., a private limited
company incorporated in England and Wales, ▇▇▇▇▇▇▇ Overseas Ltd., a private
limited company incorporated in England and Wales, and ▇▇▇▇▇▇▇ North America,
Inc., a private limited company incorporated in England and Wales, and each of
their successors and assigns, if any.
"Incur" means create, issue, assume, Guarantee, incur or otherwise
become liable for, directly or indirectly, or otherwise become responsible for,
contingently or otherwise, Indebtedness, Disqualified Stock or Preferred Stock;
provided, however, that any Indebtedness, Disqualified Stock or Preferred Stock
of a Person existing at the time such Person merges with the Company or becomes
a Subsidiary (whether by merger, consolidation, acquisition or otherwise),
including, without limitation, Indebtedness Incurred and Disqualified Stock and
Preferred Stock issued in connection with, or in contemplation of, such other
Person merging with or into the Company or a Subsidiary or becoming a Subsidiary
shall be deemed to be Incurred by the Company or such Subsidiary at the time it
merges with the Company or becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning.
"Indebtedness" of any Person means, without duplication, and whether
or not contingent,
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds (other than performance bonds) or
other similar instruments for the payment of which such Person is
responsible or liable, if and to the extent any of the foregoing
indebtedness would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP;
(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions to which such
Person is a party;
(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
12
any letter of credit, banker's acceptance or similar credit transaction;
(v) Disqualified Stock (measured by the amount of all obligations of
such Person with respect to the redemption, repayment or other repurchase
of such Disqualified Stock of such Person and measured at the greater of
its voluntary or involuntary maximum fixed repurchase price plus accrued
and unpaid dividends) or, with respect to any Subsidiary of such Person,
any Preferred Stock (measured by its liquidation preference);
(vi) all Hedging Obligations;
(vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including by means of
any Guarantee (other than in each case by reason of activities described
in the proviso to the definition of "Guarantee"); and
(viii) all obligations of the type referred to in clauses (i)
through (vii) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets or the amount of the obligation so
secured.
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock was purchased on any date on which Indebtedness shall be
required to be determined pursuant to the Indenture, and if such price is based
upon, or measured by, the fair market value of such Disqualified Stock, such
fair market value to be determined in good faith by the Board of Directors. For
purposes hereof, the amount of any Indebtedness issued with original issue
discount shall be the original purchase price plus accrued interest, provided,
however, that such accretion shall not be deemed an incurrence of Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Notes" has the meaning provided in the preamble to this
Indenture.
"Initial Public Offering" means an underwritten primary or combined
primary and secondary public offering of common stock of the Company or Holdco,
pursuant to an effective registration statement under the Securities Act.
"Initial Purchasers" means Credit Suisse First Boston (Europe)
Limited and one or more of its affiliates (the "CSFBC Buyers"), DLJ Merchant
Banking Partners II, L.P. and one or more of its affiliates (the "DLJMB Buyers")
and Chase Equity Associates L.P. and one or more of its affiliates or other
third parties that the CSFBC Buyers and the DLJMB Buyers
13
consent to.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Notes.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the Person making
the advance or loan, in each case in accordance with GAAP) 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 and shall include the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary. For purposes of the
definition of "Unrestricted Subsidiary," the definition of "Restricted Payment"
and Section 4.10, (i) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent investment in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation, and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
The Company and any Restricted Subsidiary shall be deemed to have made an
Investment in a Person that is or was required to be a Subsidiary Guarantor if,
upon the issuance, sale or other disposition of any portion of the Company's or
such Restricted Subsidiary's ownership in the Capital Stock of such Person, such
Person ceases to be a Subsidiary Guarantor. For purposes of the immediately
preceding sentence, the amount of the Investment by the Company or such
Restricted Subsidiary shall be the portion (proportionate to the Company's or
such Restricted Subsidiary's equity interest in such Person after the issuance,
sale or disposition) of the fair market value of such Person at the time of the
issuance, sale or disposition, as determined by the issue, sale or other
disposition price of the Capital Stock with respect to which the measurement of
the Investment is required.
"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 merges with the Company or becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be issued by the Company such Subsidiary at the time it merges with
the Company or becomes a Subsidiary; and the term "issuance" has a corresponding
meaning.
14
"Issue Date" means the date of original issuance of the Notes.
"Joint Ventures" means joint ventures entered into by the Company or
any of its Subsidiaries for the primary purpose of operating a Related Business
where such joint venture is not a Subsidiary.
"Legal Defeasance Option" has the meaning provided in Section 8.01.
"Legal Holiday" has the meaning provided in Section 13.07.
"Lien" means any mortgage, pledge, security interest, privilege,
conditional sale or other title retention agreement or other similar lien
(statutory or otherwise), or encumbrance upon or with respect to any property of
any kind, real or personal, moveable or immovable, now owned or hereafter
acquired.
"Maturity Date" means October 31, 2008.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to such properties or assets or received in any other non-cash form) therefrom,
in each case net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses Incurred, and all Federal, state, provincial,
foreign and local taxes required to be paid or accrued as a liability under
GAAP, as a consequence of such Asset Disposition, (ii) all payments made on any
Indebtedness which (A) is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any lien upon or other security
agreement of any kind with respect to such assets, or (B) must by its terms, or
in order to obtain a necessary consent to such Asset Disposition, or by
applicable law be repaid out of the proceeds from such Asset Disposition, (iii)
all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition
and (iv) reasonable amounts provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or other assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Disposition. Further, with respect to an
Asset Disposition by a Subsidiary which is not a Wholly Owned Subsidiary, Net
Available Cash shall be reduced pro rata for the portion of the equity of such
Subsidiary which is not owned by the Company.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock or any Capital Contribution, means the cash proceeds of such issuance,
sale or Capital Contribution plus, in the case of an issuance of Capital Stock
upon any exercise, exchange or conversion of securities (including options,
warrants, rights and convertible or exchangeable
15
debt), of the Company that were issued for cash on or after the Issue Date, the
amount of cash originally received by the Company upon the issuance of such
securities (including options, warrants, rights and convertible or exchangeable
debt), net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
and expenses actually incurred or required to be Incurred in connection with
such issuance, sale or Capital Contribution and also net of taxes paid or
payable as a result thereof.
"Notes" means the Initial Notes, the Private Exchange Notes and the
Exchange Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means with respect to any Indebtedness, all
obligations for principal, premium, interest (including, without limitation,
interest after the commencement of any bankruptcy, reorganization, insolvency or
similar proceeding against the Company or any of its Subsidiaries, whether or
not allowed in any such proceeding), penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offer" has the meaning provided in Section 4.17.
"Offer Amount" has the meaning provided in Section 4.17.
"Offer Period" has the meaning provided in Section 4.17.
"Offering Circular" means the Offering Circular dated October 15,
1998, pursuant to which the 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 an Assistant Treasurer
or an Assistant Secretary of such Person and otherwise complying with the
requirements of Sections 13.04 and 13.05, 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,
but who is not an employee of the Company or any of its Affiliates or
Subsidiaries, complying with the requirements of Sections 13.04 and 13.05, as
they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
16
"Payment Blockage Period" has the meanings provided in Sections
10.02 and 12.02.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company, a Subsidiary Guarantor or a Person
that shall, upon the making of such Investment, become a Subsidiary Guarantor;
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 Subsidiary Guarantor;
provided, however, that such Person's primary business is a Related Business;
(iii) Investments in Cash Equivalents; (iv) receivables owing to the Company or
any Restricted Subsidiary if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
(v) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary;
(vi) stock, obligations or securities received in settlement of debts created in
the ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; (vii) Investments in connection with
pledges, deposits, payments or performance bonds made or given in the ordinary
course of business in connection with or to secure statutory, regulatory or
similar obligations, including obligations under health, safety or environmental
obligations; (vii) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Disposition as
permitted in Section 4.17; (ix) Joint Ventures and other Persons that are not
Subsidiary Guarantors that do not exceed an aggregate of $20.0 million at any
time outstanding under and pursuant to this clause (x) without giving effect to
changes in the value of such Investment occurring after the date of such
Investment, but giving effect (by increasing such amount) to all liquidation
distributions or other returns of capital received in respect of such Investment
in cash or Cash Equivalents; and (xi) ESP Financing LLC or such other Joint
Venture, in each case which entity is primarily engaged in the financing of
purchases of the Company's or its Subsidiaries' equipment by independent third
parties, that do not exceed $3.0 million at any time outstanding under and
pursuant to this clause (xi) without giving effect to changes in the value of
such Investment occurring after the date of such Investment, but giving effect
(by increasing such amount) to all liquidation distributions or other returns of
capital received in respect of such Investment in cash or Cash Equivalents; (xi)
loans permitted by the provisions of clause (b)(x) of Section 4.12; and (xii)
100% of the issued and outstanding Capital stock of Transervice; provided, that
(a) the aggregate purchase price of such Capital Stock shall not exceed $18.0
million and (b) no Indebtedness shall be assumed by the Company or any of its
Subsidiaries in connection therewith and any Indebtedness of Transervice, if not
paid in full, shall be non-recourse to the Company and any Subsidiary of the
Company other than Transervice or any of their respective assets.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security
17
for contested taxes or import duties or for the payment of rent, in each case
Incurred in the ordinary course of business; (b) Liens imposed by law, including
carriers', warehousemen's and mechanics' Liens, in each case for sums not yet
due or being contested in good faith by appropriate proceedings; or other Liens
arising out of judgments or awards against such Person with respect to which
such Person shall then be proceeding with an appeal or other proceedings for
review; (c) Liens for taxes, assessments or other governmental charges not yet
subject to penalties for non-payment or which are being contested in good faith
by appropriate proceedings provided appropriate reserves have been taken on the
books of the Company; (d) Liens to secure the performance of statutory
obligations or in favor of issuers of surety bonds, performance bonds, appeal
bonds or letters of credit or other obligations of a like nature issued pursuant
to the request of and for the account of such Person in the ordinary course of
its business; provided, however, that such letters of credit do not constitute
Indebtedness; (e) Liens securing a Hedging Obligation so long as the related
Indebtedness is, and is permitted to be under the Indenture, secured by a Lien
on the same property securing the Hedging Obligation; (f) Liens for the purpose
of securing the payment (or the refinancing of the payment) of all or a part of
any Purchase Money Indebtedness or Capital Lease Obligations relating to assets
or property acquired, constructed or leased in the ordinary course of business
provided that (x) the aggregate principal amount of Indebtedness secured by such
Liens shall not exceed the cost of the assets or property so acquired or
constructed and (y) such Liens shall not encumber any other assets or property
of the Company or any Restricted Subsidiary other than such Assets or property
and assets affixed or appurtenant thereto; (g) Liens arising from precautionary
Uniform Commercial Code financing statement filings regarding operating leases
entered into by the Company and its Subsidiaries in the ordinary course of
business; (h) Liens in favor of the Company and/or any of its Restricted
Subsidiaries, other than such a Lien with respect to intercompany indebtedness
if the Company or a Subsidiary Guarantor is not the beneficiary of such a Lien;
(i) Liens existing on the date of the Indenture; (j) encumbrances consisting of
zoning restrictions, surety exceptions, utility easements, licenses, rights of
way, easements of ingress or egress over property of the Company or any
Restricted Subsidiary, rights or restrictions of record on the use of real
property, minor defects in title, landlords' and lessors' liens under leases on
property located on the rented premises, in each case not interfering in any
material respect with the ordinary conduct of the business of the Company and
the Restricted Subsidiaries; and (k) any extension, renewal, refinancing,
refunding or replacement of any Permitted Lien, provided that such new Lien is
limited to the property or assets that secured (or under the arrangement under
which the original Permitted Lien, could secure) the obligations to which such
Liens relate.
"Permitted Testing Center Assets" means vehicles emission test site
equipment and the related test site or sites located in the United States of
America (or, solely with respect to Restricted Subsidiaries domiciled outside of
the United States, in any foreign jurisdiction) used or to be used by the
Company or any of its Subsidiaries in connection with a centralized emission
testing program pursuant to a contract with a governmental authority.
"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.
18
"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 any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Exchange Notes" has the meaning provided in the preamble to
this Indenture.
"Pro Forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company.
"Public Debt" means any Indebtedness represented by debt securities
issued by the Company or any Restricted Subsidiary in connection with a public
offering or a sale exempt from registration under the Securities Act (provided
such debt securities are intended to be distributed by a resale pursuant to Rule
144A, Regulation S or otherwise under the Securities Act or sold on an agency
basis by a broker-dealer or one of its affiliates); it being understood that the
term "Public Debt" shall not include any commercial bank borrowings or similar
borrowings, any receivables financing, recourse transfers of financial assets,
capital leases or other types of borrowings Incurred in a manner not customarily
viewed as a "securities offering".
"Public Equity Offering" means an underwritten primary or combined
primary and secondary public offering of Capital Stock (other than Disqualified
Stock) of the Company or Holdco, all or a portion of the net proceeds of which,
if issued by Holdco, are contributed to the Company as a Capital Contribution,
pursuant to an effective registration statement under the Securities Act.
"Purchase Date" has the meaning provided in Section 4.17.
"Purchase Money Indebtedness" means any Indebtedness of a Person to
any seller or other Person incurred to finance the acquisition (including in the
case of a Capital Lease Obligation, the lease) of any after acquired real or
personal tangible property which, in the reasonable good faith judgment of the
Board of Directors, is directly related to the Related Business of the Company
and which is incurred substantially concurrently with such acquisition and is
secured only by the assets so financed.
"Record Date" means each Record Date specified in the Notes, whether
or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Notes.
19
"Redemption Price," when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Notes.
"Refinance" means, in respect of any Indebtedness, to extend,
refinance, renew, replace, defease or refund, or to issue other Indebtedness in
exchange or replacement for, such indebtedness. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Indebtedness of the Company or
any of its Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund other Indebtedness
of the Company or any of its Subsidiaries; provided that: (a) the principal
amount of such Refinancing Indebtedness does not exceed (after deduction of
reasonable and customary fees and expenses incurred in connection with such
refinancing and the amount of any premium or prepayment penalty paid in
connection with such Refinancing to the extent in accordance with the terms of
the document governing such Indebtedness (except for any modification to any
such document made in connection with or in contemplation of such refinancing))
the lesser of (i) the principal amount of the Indebtedness so extended,
refinanced renewed, replaced, defeased or refunded; and (ii) if such
Indebtedness being Refinanced was issued with an original issue discount, the
accreted value thereof (as determined in accordance with GAAP) at the time of
such Refinancing, plus, in each case accrued interest on such Indebtedness being
Refinanced; (b) such Refinancing Indebtedness has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (c) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes
or the Subsidiary Guarantees, as the case may be, such Refinancing Indebtedness
has a final maturity date later than the final maturity date of the Notes and is
subordinated in right of payment to the Notes or the relevant Subsidiary
Guarantee on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; provided, however, that
Refinancing Indebtedness shall not include (1) Indebtedness of a Subsidiary that
is not a Subsidiary Guarantor that Refinances Indebtedness of the Company, (2)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary or (3) Indebtedness of the Company or
a Subsidiary Guarantor that Refinances Indebtedness of a Restricted Subsidiary
which is not a Subsidiary Guarantor.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated October 16, 1998 among the Company, the Subsidiary Guarantors
and the Initial Purchasers for the benefit of themselves and the Holders, as the
same may be amended or modified from time to time in accordance with the terms
thereof.
"Regulation S" means Regulation S under the Securities Act.
"Related Business" means any business reasonably related, ancillary
or
20
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Indebtedness; provided
that if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times be the holders of a majority in outstanding principal amount
of such Designated Senior Indebtedness in respect of any Designated Senior
Indebtedness.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning provided in Section 4.10.
"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 agreement relating to property
now owned or hereafter acquired whereby the Company or any Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person, other than leases required to be classified as
capitalized leases for financial reporting purposes in accordance with GAAP.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of a Person secured by
a Lien.
"Securities Act" means, the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.
"Senior Discount Notes" means the 15% Senior Discount Notes due 2009
of Holdco issued pursuant to an Indenture, dated as of October 16, 1998, between
Holdco and United States Trust Company of New York, as trustee.
"Senior Indebtedness" means with respect to the Company or any
Subsidiary Guarantor (x) Bank Indebtedness and (y) all other Indebtedness (and
interest thereon (including, but not limited to, interest accruing pursuant to
the terms of such Indebtedness on or after the filing of any petition in any
bankruptcy, reorganization or similar proceeding relating to the Company or such
Subsidiary Guarantor, whether or not a claim for such is allowed in such
proceeding)), whether outstanding on the Issue Date or thereafter, unless, by
the terms of the instrument creating or evidencing such Indebtedness, such
Indebtedness is made not senior in right of payment to the Notes or the
applicable Subsidiary Guarantee, other than (1) any obligation of such Person to
any subsidiary of such Person or to any officer, director or employee of such
Person or any such subsidiary, (2) any liability of such Person
21
for federal, state, local or other taxes owed or owing by such Person, (3) any
accounts payable or other liability of such Person to trade creditors arising in
the ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness, Guarantee or obligation of
such Person which is, expressly by its terms, subordinate or junior in any
respect to any other Indebtedness, Guarantee or obligation of such Person, (5)
that portion of any Indebtedness of such Person which at the time of issuance is
issued in violation of the Indenture, (6) Indebtedness of such Person
represented by Disqualified Stock or Preferred Stock or (7) Capitalized Lease
Obligations.
"Senior Subordinated Indebtedness" means the Notes and any other
Indebtedness of the Company which ranks pari passu with the Notes in right of
payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"Significant Subsidiary" means any 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.
"SPC" means any special purpose Restricted Subsidiary of the Company
(i) created for the purpose of incurring, directly or indirectly, Indebtedness
permitted under paragraph (b)(xi) of Section 4.13, (ii) whose Indebtedness and
other obligations are without recourse to the Company or any of its other
Subsidiaries or any of their respective assets and (iii) that does not and shall
not at any time, (a) engage in any business or activity other than operating,
owning and/or financing the acquisition or build-out of Permitted Testing Center
Assets and any activities incidental thereto or (b) Incur any Indebtedness other
than the Indebtedness described in clause (i) above.
"Stated Maturity" means, with respect to any security, the final
date specified in such security as the fixed date on which all outstanding
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company or
any Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Notes or the
relevant Subsidiary Guarantee, as applicable, pursuant to the terms thereof or
any written agreement to that effect.
"Subsidiary" means (a) any corporation, association, partnership,
limited liability company or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) the Company,
(ii) the Company and one or more Subsidiaries or (iii) one or more Subsidiaries
or (b) any limited partnership of which the Company or any Subsidiary is a
general partner, or (c) any other Person (other than a corporation or limited
partnership) in which the Company, or one or
22
more other Subsidiaries or the Company and one or more other Subsidiaries,
directly or indirectly, has more than 50% of the outstanding partnership or
similar interests or has the power, by contract or otherwise, to direct or cause
the direction of the policies, management and affairs thereof. Unless the
context otherwise requires, Subsidiary means each direct and indirect Subsidiary
of the Company. Unrestricted Subsidiaries shall not be included in the
definition of Subsidiary for any purposes of this Indenture, except, as the
context may otherwise require, for purposes of the definitions of "Significant
Subsidiary" and "Unrestricted Subsidiary" and Section 4.20.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor
of the Company's Obligations with respect to the Notes.
"Subsidiary Guarantor" means any Subsidiary of the Company that
Guarantees the Company's Obligations with respect to the Notes.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb), as in effect on the date of this Indenture.
"Transervice" means Transervice Limited, all of the Capital Stock of
which will be owned by the Company or a Restricted Subsidiary, conducting
emissions testing activities in the United Kingdom.
"Trust Officer" means any authorized officer of the Trustee assigned
by the Trustee to administer this Indenture, 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 Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means any Subsidiary of the Company (other
than a Subsidiary Guarantor) designated as such pursuant to and in compliance
with Section 4.21. Any such designation may be revoked by a resolution of the
Board of Directors of the Company delivered to the Trustee, subject to the
provisions of such covenant.
"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 Capital Stock of such Person of the
class or
23
classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each of the remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twentieth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares and shares held
by other Persons to the extent such Shares are required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary, which shares
in each such case shall not exceed more than 5% of the Capital Stock of such
Restricted Subsidiary) is owned by the Company or one or more Wholly Owned
Subsidiaries.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
24
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(6) reference to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
SECTION 1.04. One Class of Securities.
The Initial Notes, the Private Exchange Notes and the Exchange Notes
shall be considered one class of securities and the Initial Notes, the Private
Exchange Notes and the Exchange Notes shall vote and consent together on all
matters as one class.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
(a) Provisions relating to the Initial Notes, the Private Exchange
Notes and the Exchange 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 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 as required by
law, stock exchange rule, agreements to which the Company is subject, if any, or
depository rule or usage. The Company and the Trustee shall approve the 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.
The Initial Notes are being offered and sold by the Company pursuant
to a Subscription Agreement, dated October 15, 1998 between the Company, the
Subsidiary Guarantors and the Initial Purchasers named therein.
(b) The terms and provisions contained in the Appendix and in the
forms of
25
the Notes, annexed hereto as Exhibits A and B, shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount.
Two Officers shall sign, or one Officer shall sign and one Officer
or an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to, the Notes for
the Company by manual or facsimile signature. The Company's seal shall also be
reproduced on the Notes.
If an Officer or Assistant Secretary whose signature is on a Note
was an Officer or Assistant Secretary at the time of such execution but no
longer holds that office or position at the time the Trustee authenticates the
Note, the Note shall nevertheless be valid.
The Trustee shall authenticate (i) Initial Notes for original issue
in the aggregate principal amount not to exceed $100,000,000 and (ii) Exchange
Notes and Private Exchange Notes from time to time for issue only 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. The Officers'
Certificate shall specify the amount of Notes to be authenticated, whether the
Notes are to be Initial Notes, Exchange Notes or Private Exchange Notes and
whether the Notes are to be issued as certificated Securities or Global
Securities, or such other information as the Trustee may reasonably request. The
aggregate principal amount of Notes outstanding at any time may not exceed
$100,000,000, except as provided in Sections 2.07 and 2.08 hereof. Capitalized
terms used in this paragraph that are not otherwise defined in this Indenture
shall have the meanings ascribed to them in the Appendix.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain or designate an office or agency (which
shall be
26
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
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 4.16 and 4.17, neither the Company nor any of its Subsidiaries or
Affiliates shall act as Paying Agent. The Company may change any Paying Agent or
Registrar without notice to any Holder.
The Paying Agent shall comply with all withholding tax, information
reporting and backup withholding tax requirements under the Code and the
Treasury Regulations issued thereunder in respect of any payment on, or in
respect of, a Note (including, without limitation, the collection of Internal
Revenue Service ("IRS") forms 1001, 4224, W-8 or W-9 (or any successor form), as
the case may be, and the filing of IRS Forms 1042 and 1042-S with respect
thereto).
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or
fails to give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of demands and notices in connection with the Notes,
until such time as the Trustee has resigned or a successor has been appointed.
The Paying Agent or Registrar may resign upon 30 days notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Notes (whether such assets have
been distributed to it by the Company or any other obligor on the Notes), and
the Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may, and
upon direction of a majority of the Holders shall, at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company or any other obligor on the
Notes to the Paying Agent, the Paying Agent shall have no further liability for
such assets.
27
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 Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee before each Record Date and at such other
times as the Trustee may request in writing a list as of such date and in
such form as the Trustee may reasonably require of the names and addresses of
the Holders, which list may be conclusively relied upon by the Trustee and
the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. [Intentionally Omitted]
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 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 Eight of this Indenture, if
on a Redemption Date or the Maturity Date the Paying Agent holds U.S. Legal
Tender or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes cease to be
28
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.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate upon receipt of a written order of the Company pursuant to Section
2.02 definitive Notes in exchange for, and upon surrender of, temporary Notes.
Until so exchanged, the temporary Notes shall in all respects be entitled to the
same benefits under this Indenture as definitive Notes authenticated and
delivered hereunder.
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
29
Company shall mail to each Holder, as of a recent date selected by the Company,
with a copy to the Trustee, a notice that states the subsequent special record
date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Notes may use "CUSIP" numbers, and if so,
the Trustee shall use such CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of such CUSIP numbers
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in a CUSIP number.
SECTION 2.14. Deposit of Moneys.
Prior to 9:00 a.m. New York City time on each Interest Payment Date
and on the Maturity Date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Section 3.07 of
this Indenture and Paragraph 6 of the Notes, it shall notify the Trustee and the
Paying Agent in writing of the Redemption Date and the principal amount of the
Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01
at least 60 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.02. Selection of Notes To Be Redeemed.
If fewer than all of the Notes are to be redeemed, selection of the
Notes to be redeemed shall 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 by the Trustee, on a pro rata basis, by lot or in such other fair and
reasonable manner chosen at the discretion of the Trustee; provided, however,
30
that if a partial redemption is made with the proceeds of a Public Equity
Offering, selection of the Notes or portion thereof for redemption shall be made
by the Trustee only on a pro rata basis, unless such method is otherwise
prohibited. The Company shall promptly notify the Trustee and the Paying Agent
in writing of the date of listing and the name of the securities exchange if and
when the Notes are listed on a principal national securities exchange. The
Trustee shall make the selection from the Notes outstanding and not previously
called for redemption and shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes in denominations
of $1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Notes that have denominations larger than $1,000. Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes called
for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail, postage prepaid, to each Holder whose Notes are to be redeemed, with
a copy to the Trustee and any Paying Agent. At the Company's written request no
less than 35 days prior to the Redemption Date (or such shorter period as may be
acceptable to the Trustee), the Trustee shall mail or cause to be mailed 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 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;
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(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
shall be issued; and
(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 of
this Indenture, 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 redeemed shall 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.
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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 clause (b) below, the Notes shall not
be redeemable at the option of the Company prior to October 31, 2003.
Thereafter, the Notes shall be redeemable, at the Company's option, in whole or
in part, at any time or from time to time, upon not less than 30 nor more than
60 days' prior notice mailed by first class mail to each Holder's registered
address at the following redemption prices (expressed in percentages of
principal amount), plus accrued 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 commencing on October 31 of the years set forth below:
Redemption
Period Price
------ -----
2003 ............................................... 106.500%
2004 ............................................... 104.333%
2005 ............................................... 102.167%
2006 and thereafter................................. 100.000%
(b) In addition, at any time and from time to time prior to October
31, 2001, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Notes with the Net Cash Proceeds of one or more Public
Equity Offerings, at a redemption price (expressed as a percentage of principal
amount) of 113% plus accrued interest to the Redemption Date (subject to the
right of Holders of record on the relevant Record Date to receive interest due
on the relevant Interest Payment Date); provided, however, that at least 65% of
the aggregate principal amount of the Notes originally outstanding must remain
outstanding after each such redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
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
33
Notes on the dates and in the manner provided in the Notes and in this
Indenture. An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or an Affiliate of the Company) holds on that date U.S. Legal Tender
designated for and sufficient to pay the installment in full and is not
prohibited from paying such money to the Holders pursuant to the terms of this
Indenture.
Notwithstanding anything to the contrary contained in this
Indenture, the Company or Paying Agent may, to the extent it is required to do
so by law, deduct or withhold income or other similar taxes imposed by the
United States of America from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.02.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five and Section 4.16, the
Company shall do or cause to be done, at its own cost and expense, all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of each of them (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 if the Board of Directors of the
Company or the Restricted Subsidiary, as the case may be, shall reasonably
determine that the preservation thereof is no longer desirable in the conduct of
the business of such entity; provided further that no Restricted Subsidiary
shall be required to maintain its corporate existence if the Board of Directors
and the board of directors of such Restricted Subsidiary both reasonably
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries, taken as a whole,
and cessation of such corporate existence is not disadvantageous in any material
respect to the Holders.
SECTION 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any of
its Restricted Subsidiaries or properties of it or any of its Restricted
Subsidiaries (other than those taxes, assessments and governmental charges the
nonpayment of
34
which would not have a material adverse effect upon the business, financial
condition or results of operations of the Company and its Restricted
Subsidiaries, taken as a whole) and (ii) all lawful claims for labor, materials
and supplies which are for an amount in excess of $1,000,000 and remain unpaid
for at least 90 days after the due date thereof and which if unpaid, might by
law become a Lien other than a Permitted Lien upon the property of it or any of
its Subsidiaries; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted for which adequate reserves, to the extent required under 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 Board of Directors of the Company or the Restricted Subsidiary, as the case
may be, desirable in the conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole, and is not disadvantageous in any
material respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself
and each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Board of Directors of the Company, are adequate and appropriate
for the conduct of the business of the Company and such Restricted Subsidiaries
in a prudent manner, with reputable insurers or with the government of the
United States of America or an agency or instrumentality thereof, in such
amounts, with such deductibles, and by such methods as shall be customary, in
the reasonable good faith judgment of the Board of Directors of the Company, for
companies similarly situated in the industry.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of the Company's fiscal year, an Officers' Certificate stating that a
review of its activities and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers, one of whom must be the Company's chief executive or chief financial
officer with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
such Officer's knowledge, based on such review, the Company during such
preceding fiscal year has kept, observed, performed and fulfilled each and every
such covenant contained in this Indenture and no Default or Event of Default
occurred during such year and at the date of such certificate there is no
Default or
35
Event of Default that has occurred and is continuing or, if such signers do know
of such Default or Event of Default, the certificate shall describe the Default
or Event of Default and its status with particularity. The Officers' Certificate
shall also notify the Trustee should the Company elect to change the manner in
which it fixes its fiscal year end.
(b) So long as not contrary to the then-current recommendations of
the American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of such
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four or Five of
this Indenture or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 13.02 hereof,
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action within five Business Days' of its
becoming aware of such occurrence.
SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Restricted Subsidiaries, taken
as a whole.
SECTION 4.08. SEC Reports.
(a) So long as the Notes are outstanding, whether or not required by
the rules and regulations of the SEC, beginning with the year ended December 31,
1998, the Company (at its own expense) shall furnish to the Trustee and all
Holders of Notes (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K, as
applicable, if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants and (ii) all current reports
that would be required to be filed with the SEC on Form 8-K if the Company were
required to file such reports, in each case within the time periods specified in
the SEC's rules and regulations;
36
provided that the foregoing shall not require the Company to furnish separate
financial results of its Subsidiaries. The Company shall make such information
available to securities analysts and prospective investors upon request, and,
for so long as any Notes remain outstanding, shall furnish to the Trustee,
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
(b) The Company shall provide to any Holder any information
reasonably requested by such Holder concerning the Company (including financial
statements) necessary in order to permit such Holder to sell or transfer Notes
in compliance with Rule 144A under the Securities Act.
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 4.10. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on or in respect of, or to the direct or indirect holders, of
the Capital Stock of Holdco, the Company, any Restricted Subsidiary or any other
Affiliate of the Company in their capacities as such (except dividends or
distributions payable solely in its respective Capital Stock (other than
Disqualified Stock, or except in the case of the Company, Preferred Stock) or in
options, warrants or other rights to purchase its respective Capital Stock
(other than Disqualified Stock, or except in the case of the Company, Preferred
Stock) and except dividends or distributions payable to the Company or a
Restricted Subsidiary, (ii) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of Holdco, the Company, any Restricted Subsidiary or any
other Affiliate of the Company to the extent such Capital Stock is held by
Persons other than the Company or any Wholly Owned Subsidiary that is a
Subsidiary Guarantor, (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Obligations or (iv) make any
Restricted Investment (any such dividend, distribution, purchase, redemption,
repurchase, defeasance, other acquisition, retirement or Investment being herein
referred to as a "Restricted Payment"), if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have
occurred and be continuing (or would result therefrom); or (2) the Company would
not be permitted to
37
Incur an additional $1.00 of Indebtedness pursuant to clause (a) of Section 4.13
after giving pro forma effect to such Restricted Payment; or (3) the aggregate
amount of such Restricted Payment (other than Restricted Payments made on or
about the Issue Date in connection with the acquisition by the Company of
Envirotest Systems Corp. and the transactions related thereto) and all other
Restricted Payments since the beginning of the fiscal quarter during which the
Notes were originally issued would exceed the sum of: (A) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the beginning of the fiscal quarter during which the Notes were
originally issued to the end of the most recent fiscal quarter for which
financial statements are available (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit) and (B) the aggregate Net Cash
Proceeds received by the Company from the issue or sale of its Capital Stock
(other than Disqualified Stock) or from Capital Contributions subsequent to the
Issue Date (other than an issuance or sale (q) to a Restricted Subsidiary to an
employee stock ownership plan or similar trust for the benefit of employees or
(r) with respect to which the purchase price thereof is financed directly or
indirectly using funds (x) borrowed from the Company or a Restricted Subsidiary
unless and until such borrowing is repaid in full or (y) contributed, extended,
Guaranteed or advanced by the Company or a Restricted Subsidiary) to the extent
such proceeds or Capital Contributions are not used to redeem, repurchase,
retire, defease or otherwise acquire Capital Stock or any Indebtedness of the
Company or such Restricted Subsidiary.
(b) The provisions of clauses (a)(2) and (3) of this Section 4.10
shall not prohibit the following Restricted Payments: (1) any purchase or
redemption of Capital Stock of the Company or any Restricted Subsidiary or
Subordinated Obligations of the Company or any Subsidiary Guarantor made by
exchange for, or out of the proceeds of the substantially concurrent sale or
issuance of, Capital Stock of the Company (other than Disqualified Stock and
other than Capital Stock issued or sold to a Subsidiary or an employee stock
ownership plan or similar trust for the benefit of employees); provided,
however, that the Net Cash Proceeds from such sale and such purchases shall be
excluded from the calculation in clause (a)(3) of this Section 4.10; (2)
dividends paid within 60 days after the date of declaration if at such date of
declaration such dividend would have complied with the provisions of this
Indenture; provided, however, that such dividend shall be deducted in the
calculation of the amount of Restricted Payments available to be made referred
to in clause (a)(3) of this Section 4.10; (3) dividends and distributions made
by a Restricted Subsidiary to stockholders other than the Company or another
Restricted Subsidiary on no more than a pro rata basis, measured by value; (4)
any purchase or redemption of Subordinated Obligations of the Company or any
Subsidiary Guarantor made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Refinancing Indebtedness of the Company or any
Subsidiary Guarantor that is permitted to be incurred pursuant to clause (b) of
Section 4.13; (5) the repurchase of shares of, or options to purchase shares of,
Capital Stock of Holdco or the Company or any of its Subsidiaries from
employees, former employees, directors or former directors of Holdco or the
Company or any of their respective Subsidiaries (or permitted transferees of
such employees, former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements) or plans (or
amendments thereto) approved by the board of directors of Holdco or Board of
Directors, as the case may be, under which such individuals purchase or sell or
are granted the option to purchase or sell,
38
shares of such Capital Stock; provided, however, that the aggregate amount of
such repurchases shall not exceed $1.5 million per year or $5.0 million in the
aggregate on or after the Issue Date; provided, further, that such repurchases
shall be deducted in the calculation of the amount of Restricted Payments
available to be made referred to in clause (a)(3) of this Section 4.10; (6)
payments to Holdco (x) in an amount sufficient to enable Holdco to pay necessary
operating expenses and other reasonable administrative expenses and (y) to
enable Holdco to pay foreign, federal, state or local tax liabilities, not to
exceed the amount of any tax liabilities that would otherwise be payable by the
Company and its Subsidiaries to the appropriate taxing authorities if they filed
separate tax returns to the extent that Holdco has an obligation to pay such tax
liabilities relating to the operations, assets or capital of the Company and its
Subsidiaries, provided that any such payment shall either be used by Holdco to
pay such tax liabilities within 30 days of receipt of such payment or refunded
to the payee; provided, further, that such payments shall be excluded from the
calculation of the amount of Restricted Payments available to be made referred
to in clause (a)(3) of this Section 4.10; and (7) payments to Holdco (i) to
enable Holdco to make purchases of Senior Discount Notes with the Net Cash
Proceeds of an Asset Disposition required to be made pursuant to the indenture
governing the Senior Discount Notes and permitted under Section 4.17 or (ii)
from and after April 30, 2004, to enable Holdco to make required interest
payments on the Senior Discount Notes; provided, in each case that at the time
and immediately following such payment, no Default or Event of Default shall
have occurred and be continuing; provided, further, that such payments shall be
deducted in the calculation of the amount of Restricted Payments available to be
made referred to in clause (a)(3) of this Section 4.10.
SECTION 4.11. Limitation on Restrictions on Distributions from
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or permit to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits to the Company or a Restricted Subsidiary or pay any Indebtedness or
other obligation owed to the Company or a Restricted Subsidiary, (ii) make any
loans or advances to the Company or any other Restricted Subsidiary or (iii)
transfer any of its property or assets to the Company or any other Restricted
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (a) (x) this Indenture, the Credit Facility or the indenture governing
the Senior Discount Notes, in each case as in effect on the Issue Date, and any
amendments, restatements, renewals, replacements or refinancings thereof;
provided, however, that any such amendments, restatements, renewals,
replacements or refinancings to or under the Credit Facility or the indenture
governing the Senior Discount Notes are not materially more restrictive, when
taken as a whole, with respect to such dividend and other payment restrictions,
to the Company or any Restricted Subsidiary than those contained in the Credit
Facility or such indenture, as the case may be, (or, if more restrictive, than
those contained in this Indenture) immediately prior to any such amendment,
restatement, renewal, replacement or refinancing, or (y) the indenture relating
to any Public Debt issued after the date hereof, which encumbrances or
restrictions are not materially more restrictive, when taken as a whole, with
respect to such dividend and other payment restrictions, to the
39
Company or any Restricted Subsidiary than those contained in this Indenture, (b)
applicable law, (c) any instrument governing Indebtedness or Capital Stock of an
Acquired Person acquired by the Company or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition or in violation of Section 4.13; provided, however, that (1) such
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Acquired Person, and (2) the consolidated net income of
such Acquired Person for any period prior to such acquisition shall not be taken
into account in determining whether such acquisition was permitted by the terms
of this Indenture, (d) customary non-assignment provisions in leases or other
agreements entered into the ordinary course of business, (e) Purchase Money
Indebtedness for property acquired in the ordinary course of business that only
impose restrictions on the property so acquired, (f) an agreement for the sale
or disposition of the Capital Stock or assets of such Restricted Subsidiary;
provided, however, that such restriction is only applicable to such Restricted
Subsidiary or assets, as applicable, and such sale or disposition otherwise is
permitted under Section 4.17; provided, further, however, that such restriction
or encumbrance shall be effective only for a period from the execution and
delivery of such agreement through a termination date not later than 180 days
after such execution and delivery, or (g) Refinancing Indebtedness permitted
under this Indenture; provided, however, that the restrictions contained in the
agreements governing such Refinancing Indebtedness are no more restrictive in
the aggregate than those contained in the agreements governing the Indebtedness
being refinanced immediately prior to such refinancing. Notwithstanding the
foregoing, neither (a) customary provisions restricting subletting or assignment
of any lease entered into in the ordinary course of business, nor (b) Liens
permitted under this Indenture, shall in and of themselves be considered a
restriction on the ability of the applicable Restricted Subsidiary to transfer
such agreements or assets, as the case may be.
SECTION 4.12. Limitation on Affiliate Transactions.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into any
transaction or series of similar transactions (including the purchase, sale,
lease, transfer or other disposition or exchange of any asset or property or the
rendering of any service) with any Affiliate of the Company (other than the
Company or any Wholly Owned Subsidiary of the Company or any employee stock
ownership plan or similar trust for the benefit of the Company's or a Restricted
Subsidiary's employees) unless the terms of such business, transaction or series
of transactions are (i) no less favorable to the Company or such Restricted
Subsidiary as terms that would be obtainable at the time for a comparable
transaction or series of similar transactions in arms' length dealings with an
unrelated third Person and (ii) in the event that such transaction involves an
aggregate amount in excess of $5.0 million, a majority of the disinterested
members of the Board of Directors have, by resolution, determined in good faith
that such business or transaction or series of transactions meets the criteria
set forth in (i) above and have approved the transaction; provided, however,
that if such transaction involves an amount in excess of $10.0 million, the
Company shall also obtain from a nationally recognized independent investment
banking firm, accounting firm or appraisal firm with experience in evaluating
the terms and conditions of the type of business or transaction an opinion that
such transaction is
40
fair from a financial point of view to the Company or its Restricted Subsidiary,
as the case may be.
(b) The provisions of clause (a) of this Section 4.12 shall not
prohibit (i) any Restricted Payment permitted to be made pursuant to Section
4.10 or any payment or transaction specifically excepted from the definition of
Restricted Payment, (ii) any issuance of securities, or other payments, awards
or grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans entered into in
the ordinary course of business and approved by a majority of the entire Board
of Directors or by a majority of the disinterested members of the Board of
Directors or a majority of the entire board of directors or by a majority of the
disinterested members of the board of directors of the relevant Restricted
Subsidiary, (iii) the grant of stock options or similar rights to employees and
directors pursuant to plans approved by a majority of the entire Board of
Directors or by a majority of the disinterested members of the Board of
Directors or a majority of the entire board of directors or by a majority of the
disinterested members of the board of directors of the relevant Restricted
Subsidiary, (iv) loans or advances to officers, directors or employees in the
ordinary course of business which, except with respect to ordinary travel
expenses and advances, have been approved by the Board of Directors, (v) the
payment of reasonable fees to directors of Holdco, the Company and the
Subsidiaries who are not employees of Holdco, the Company or the Subsidiaries
for rendering of services (including attending meetings of the board of
directors) as a director, (vi) any Affiliate transaction between the Company and
a Subsidiary Guarantor, between Subsidiary Guarantors, or between Restricted
Subsidiaries which are each not Subsidiary Guarantors, (vii) indemnification or
insurance provided to officers or directors of Holdco, the Company or any
Subsidiary of the Company approved in good faith by the Board of Directors;
(viii) payment of compensation and benefits to directors, officers and employees
of the Company and Subsidiaries of the Company approved in good faith by the
Board of Directors; (ix) payment of a management or similar fee by Holdco, the
Company or any Restricted Subsidiary to Alchemy Partners (or a Person designated
by Alchemy Partners) in an amount, together with all other such payments made by
the Company and Restricted Subsidiaries, not to exceed $1.0 million per year (or
the equivalent thereof in another currency) plus reasonable out
of-pocket-expenses; (x) loans made to officers of the Company or its
Subsidiaries in an aggregate amount not to exceed $4.5 million outstanding at
any time solely for the purpose of reimbursing such officers for the amount of
income taxes payable by such officers in connection with shares of Capital Stock
of Holdco issued to such officers, which shares are pledged to the Company or
the Subsidiary making such loans, and (xi) the Permitted Investment contemplated
by clause (xii) of the definition of Permitted Investment.
SECTION 4.13. Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness (including
Acquired Indebtedness); provided, however, that the Company or any Subsidiary
Guarantor shall be permitted to Incur such Indebtedness if, on the date of such
Incurrence, and after giving pro forma effect thereto, (i) no Default or Event
of Default shall have occurred and be continuing or would occur and (ii) the
Consolidated Cash Flow Coverage Ratio at the date of such Incurrence exceeds
2.10 to 1.0
41
if such Indebtedness is Incurred prior to October 31, 1999, and 2.35 to 1 if
such Indebtedness is Incurred thereafter.
(b) Notwithstanding clause (a) of this Section 4.13, the Company and
any Restricted Subsidiary (other than a Restricted Subsidiary that is not a
Subsidiary Guarantor in the cases of clauses (i) and (xiii) below) may Incur the
following Indebtedness: (i) Indebtedness Incurred pursuant to the Credit
Facility not to exceed $435 million in aggregate principal amount outstanding at
any time, less the aggregate amount of all mandatory payments applied to
permanently reduce the commitments with respect to such Indebtedness, including
but not limited to reductions pursuant to clause (a) of Section 4.17; (ii)
Indebtedness of the Company to a Restricted Subsidiary; provided that any such
Indebtedness is subordinated in right of payment to the Notes; provided,
further, that any subsequent issuance, sale, transfer or other disposition of
any Capital Stock (including by consolidation or merger) or other event
(including the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary under Section 4.20) which results in such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer or other
disposition of any such Indebtedness (except to the Company or another
Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of
such Indebtedness by the issuer thereof at the time of any such issuance, sale,
transfer or other disposition, as the case may be; (iii) Indebtedness of a
Restricted Subsidiary to the Company or another Restricted Subsidiary; provided
that (x) if a Subsidiary Guarantor Incurs such Indebtedness to a Restricted
Subsidiary that is not a Subsidiary Guarantor, such Indebtedness is subordinated
in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor;
and (y) if a Restricted Subsidiary that is not a Subsidiary Guarantor Incurs
such Indebtedness to the Company or a Restricted Subsidiary that is a Subsidiary
Guarantor, the Incurrence of such Indebtedness constitutes a Restricted
Investment for the purposes of Section 4.10; provided, further, that any
subsequent issuance, sale, transfer or other disposition of any Capital Stock
(including by consolidation or merger) of any Restricted Subsidiary to which
such Indebtedness is owed or any other event (including the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary under Section 4.20) which
results in such Restricted Subsidiary ceasing to be a Restricted Subsidiary or
any subsequent transfer or other disposition of any such Indebtedness (except to
the Company or another Restricted Subsidiary that is a Subsidiary Guarantor)
shall be deemed, in each case, to be an Incurrence of such Indebtedness by the
issuer thereof at the time of any such issuance, sale, transfer or other
disposition, as the case may be; (iv) the Notes and the Subsidiary Guarantees;
(v) Indebtedness (other than Indebtedness described in clause (i), (ii), (iii)
or (iv) above) outstanding on the Issue Date; (vi) any Refinancing Indebtedness
in respect of Indebtedness Incurred pursuant to paragraph (a) of this Section
4.13 or pursuant to clause (iv) or (v) of this clause (b) or this clause (vi);
(vii) obligations of the Company or such Restricted Subsidiary pursuant to (A)
Interest Rate Protection Agreements designed to protect the Company or such
Restricted Subsidiary against fluctuations in interest rates in respect of
Indebtedness of the Company or such Restricted Subsidiary that is permitted by
the terms of the Indenture to be outstanding to the extent the notional
principal amount of such obligation does not exceed the aggregate principal
amount of the Indebtedness to which such Interest Rate Protection Agreements
relate, (B) Currency Agreement Obligations in respect of foreign exchange
exposures Incurred by the Company or any Restricted Subsidiary in the ordinary
course of its business and (C) commodity agreements of the Company or such
Restricted Subsidiary to the extent entered into
42
in the ordinary course of business to protect the Company or any Restricted
Subsidiary from fluctuations in the prices of raw materials used in its
business; (viii) Indebtedness of the Company or any Restricted Subsidiary
consisting of obligations in respect of purchase price adjustments in connection
with the acquisition or disposition of assets by the Company or any Restricted
Subsidiary permitted under this Indenture; (ix) Capital Lease Obligations,
Purchase Money Indebtedness and Acquired Indebtedness (to the extent not
Incurred in connection with, or in anticipation or contemplation of, the
relevant transaction), in each case Incurred in connection with a Related
Business and any Refinancing Indebtedness in respect thereof in an aggregate
principal amount not exceeding $10.0 million at any time outstanding; (x)
Attributable Debt in connection with Sale/Leaseback Transactions in an aggregate
principal amount not exceeding $10.0 million at any time outstanding; (xi)
provided that the Company would be able to Incur $1.00 of Indebtedness pursuant
to Section 4.13(a), Indebtedness Incurred by one or more SPCs in aggregate
principal amount not exceeding $30.0 million at any one time outstanding; (xii)
Indebtedness in an amount not to exceed $4.5 million issued in connection with
the Investment permitted pursuant to clause (xii) of the definition of
"Permitted Investment"; and (xii) Indebtedness in an aggregate principal amount
which, together with all other Indebtedness of the Company and its Restricted
Subsidiaries then outstanding (other than Indebtedness Incurred pursuant to
clauses (i) through (xii) of this clause or clause (a) of this Section) does not
exceed $10.0 million.
(c) Notwithstanding that such Indebtedness is permitted to be
incurred pursuant to clauses (a) and (b) of this Section 4.13, the Company shall
not, and shall not permit any Restricted Subsidiary to, Incur any Indebtedness
if the proceeds thereof are used, directly or indirectly, to repay, prepay,
redeem, defease, retire, refund or refinance any Subordinated Obligations unless
such Indebtedness shall be subordinated to the Notes or the relevant Subsidiary
Guarantee, as applicable, to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section 4.13,
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described in clauses (a) or (b) of this Section 4.13,
the Company, in its sole discretion, at the time of the Incurrence of such
Indebtedness shall classify such item of Indebtedness, and, except as
specifically stated otherwise, only be required to include the amount of such
Indebtedness, in one of the above clauses, and such item of Indebtedness may be
divided and classified among more than one of such types.
(e) For purposes of determining amounts of Indebtedness outstanding
under this Section 4.13 and for the purpose of avoiding duplication only,
Indebtedness resulting from security interests granted with respect to
Indebtedness otherwise included in the determination of Indebtedness, and
Guarantees (and security interests with respect thereof) of, or obligations with
respect to letters of credit supporting, Indebtedness otherwise included in the
determination of Indebtedness shall not be included in the determination of
Indebtedness.
(f) Indebtedness of any Person which is outstanding at the time such
Person becomes a Restricted Subsidiary of the Company (including upon
designation of any subsidiary or other person as a Restricted Subsidiary) or is
merged with or into or consolidated with the
43
Company or a Restricted Subsidiary of the Company shall be deemed to have been
Incurred at the time such Person becomes a Restricted Subsidiary of the Company
or merged with or into or consolidated with the Company or a Restricted
Subsidiary of the Company, as applicable.
SECTION 4.14.
[INTENTIONALLY OMITTED]
SECTION 4.15. Limitation on Other Senior Subordinated Indebtedness.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create, Incur, assume, Guarantee or in any other manner become
liable with respect to any Indebtedness that is subordinate in right of payment
to any other Indebtedness of the Company or any such Restricted Subsidiary,
unless such Indebtedness is also pari passu with, or subordinate in right of
payment to, the Notes, or the relevant Subsidiary Guarantee, as the case may be.
SECTION 4.16. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Company repurchase all or, at each Holder's
option, any part of 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).
(b) Within 20 days following any Change of Control, the Company
shall mail a notice to the Trustee and to each Holder stating: (i) that a Change
of Control has occurred and that such Holder has the right to require the
Company to purchase all or a portion of 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 and financial
information regarding such Change of Control (including, to the extent
available, 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 shall 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 this Section 4.16, that a Holder must follow in
order to have its Notes purchased; provided, however, that notwithstanding the
occurrence of a Change of Control, the Company shall not be obligated to
repurchase the Notes pursuant to this Section 4.16 if the Company has exercised
its right to redeem all the Notes under the terms of clause 6 of the Notes.
(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
44
York City time two Business Days prior to the purchase date. Holders will be
entitled to withdrawal 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 shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.16. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.16, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.16 by virtue
thereof.
SECTION 4.17. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Disposition unless (i) (x) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value, as determined in good faith
by the Board of Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset Disposition and
(y) at least 80% of the consideration thereof received by the Company or such
Restricted Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents provided, however, that the requirement set forth in (i) (x) above
shall not apply to any Asset Disposition to any governmental authority as may be
required, from time to time, by governmental authority, and (ii) an amount equal
to 100% of the Net Available Cash from such Asset Disposition is applied by the
Company (or such Restricted Subsidiary, as the case may be) (A) first, to the
extent the Company elects (or is required by the terms of any Senior
Indebtedness), to prepay, repay or purchase Senior Indebtedness of the Company
or any Subsidiary Guarantor or any Indebtedness or other Obligations under the
Credit Facility or, if the Asset Disposition was made by a Restricted Subsidiary
that is not a Subsidiary Guarantor, of any Restricted Subsidiary, within 360
days of the Company's or such Restricted Subsidiary's receipt of Net Available
Cash from such Asset Disposition; (B) second, to the extent of the balance of
such Net Available Cash after application in accordance with clause (A), at the
Company's election, to the investment by the Company or any Subsidiary Guarantor
or, if the Asset Disposition
45
was made by a Restricted Subsidiary that is not a Subsidiary Guarantor, any
Restricted Subsidiary, in (1) assets of the Company, such Subsidiary Guarantor
or, if the Asset Disposition was made by a Restricted Subsidiary that is not a
Subsidiary Guarantor, such Restricted Subsidiary to replace the assets (other
than Indebtedness or Capital Stock) that were the subject of such Asset
Disposition or (2) assets (other than (q) inventory or other current assets or
(r) Indebtedness or Capital Stock) of the Company, any Subsidiary Guarantor or
if the Asset Disposition was made by a Restricted Subsidiary that is not a
Subsidiary Guarantor, any Restricted Subsidiary that (as determined in good
faith by the Board of Directors) are related to the business of the Company and
the Wholly Owned Subsidiaries existing on the Issue Date or which are used in a
Related Business, in each case within 360 days from the date of the Company's or
such Restricted Subsidiary's receipt of Net Available Cash from such Asset
Disposition; (C) third, to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and (B), to make a pro rata
offer to purchase Notes at par (and, to the extent required by the instrument
governing such Indebtedness, any other Senior Subordinated Indebtedness
designated by the Company, at a price no greater than par or accreted value,
whichever is less) plus accrued and unpaid interest; and (D) fourth, to the
extent of the balance of such Net Available Cash after application in accordance
with clauses (A), (B) and (C), in any manner that does not violate this
Indenture; provided, however, that in connection with any prepayment, repayment
or purchase of Indebtedness pursuant to clause (A) or (C) above, the Company or
such Subsidiary shall permanently retire such Indebtedness and cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions of this clause (a), the Company and its Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accordance with clause
(a)(ii)(C) of this Section 4.17 except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in accordance
with clauses (a)(ii)(A) and (B) of this Section 4.17 exceeds $10.0 million.
Pending application of Net Available Cash pursuant to this clause (a), such Net
Available Cash shall be used to temporarily reduce Senior Indebtedness or
invested in Cash Equivalents.
For the purposes of this Section 4.17, the following is deemed to be
cash or Cash Equivalents: the express assumption of Indebtedness (other than any
Indebtedness that is by its terms subordinated to the Notes) of the Company or
any Restricted Subsidiary, but only to the extent that such assumption is
effected on a basis under which there is no further recourse to the Company or
any of the Restricted Subsidiaries with respect to such liabilities.
(b) In the event of an Asset Disposition that requires the purchase
of the Notes (and other Senior Subordinated Indebtedness) pursuant to clause
(a)(ii)(C) of this Section 4.17, the Company shall be required to purchase Notes
tendered pursuant to an offer by the Company for the Notes (and, to the extent
required, other Senior Subordinated Indebtedness) (the "Offer) at a purchase
price of 100% of their principal amount or the accreted value thereof, whichever
is less, (without premium) plus accrued but unpaid interest (or, in respect of
such other Senior Subordinated Indebtedness such lesser price, if any, as may be
provided for by the terms of such other Senior Subordinated Indebtedness) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in this Indenture. If the aggregate purchase price
of Notes (and, to the extent required, any other Senior
46
Subordinated Indebtedness) tendered pursuant to such offer is less than the Net
Available Cash allotted to the purchase thereof, the Company shall be required
to apply the remaining Net Available Cash in accordance with clause (a)(ii)(D)
of this Section 4.17.
(c) (1) Promptly, and in any event within 30 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect 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.
47
(4) At the time the Company delivers Notes to the Trustee which are
to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Note shall
be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.17. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.17, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.17 by virtue
thereof.
SECTION 4.18. Limitation on Liens Securing Subordinated
Indebtedness.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, Incur, assume or suffer to exist
any Liens of any kind (other than Permitted Liens) upon any of their respective
assets or properties now owned or acquired after the date of this Indenture or
any income or profits therefrom securing (i) any Indebtedness of the Company or
a Restricted Subsidiary which is expressly by its terms subordinate or junior in
right of payment to any other Indebtedness of the Company or such Restricted
Subsidiary, as the case may be, unless the Notes or the relevant Subsidiary
Guarantee, as the case may be, are equally and ratably secured for so long as
such Indebtedness is so secured; provided that, if such Indebtedness which is
expressly by its terms subordinate or junior in right of payment to any other
Indebtedness of the Company or a Restricted Subsidiary is expressly subordinate
or junior to the Notes or the relevant Subsidiary Guarantee, as the case may be,
then the Lien securing such subordinated or junior Indebtedness shall be
subordinate and junior to the Lien securing the Notes or the relevant Subsidiary
Guarantee, as the case may be, with the same relative priority as such
subordinated or junior Indebtedness shall have with respect to the Notes or the
relevant Subsidiary Guarantee, as the case may be or (ii) any assumption,
Guarantee or other liability of the Company or such Restricted Subsidiary in
respect of any Indebtedness of the Company or a Restricted Subsidiary which is
expressly by its terms subordinate or junior in right of payment to any other
Indebtedness of the Company or such Restricted Subsidiary, unless the Notes or
the relevant Subsidiary Guarantee, as the case may be, are equally and ratably
secured for so long as such assumption, guaranty or other liability is so
secured; provided that, if such subordinated Indebtedness which is expressly by
its terms subordinate or junior in right of payment to any other Indebtedness of
the Company or a Restricted Subsidiary is expressly by its terms subordinate or
junior to the Notes or the relevant Subsidiary Guarantee, as the case may be,
then the Lien securing the assumption, Guarantee or other liability of such
Subsidiary shall be subordinate and junior to the Lien securing the Notes or the
relevant Subsidiary Guarantee, as the case may be, with the same relative
priority as such subordinated or junior Indebtedness shall have with respect to
the Notes or the relevant Subsidiary Guarantee, as the case may be.
SECTION 4.19. Future Subsidiary Guarantors.
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The Company shall cause each Restricted Subsidiary of the Company,
and each Subsidiary Guarantor shall cause each Restricted Subsidiary which is a
subsidiary of such Subsidiary Guarantor, (other than SPCs) (a) that is organized
or existing under the laws of the United States, any state thereof or the
District of Columbia, (b) more than 65% of the Capital Stock of which is pledged
to a United States lender or (c) that Guarantees any Indebtedness owed to a
United States lender, on and after the date of this Indenture (if not then a
Subsidiary Guarantor), that becomes a Restricted Subsidiary to execute and
deliver an indenture supplemental to this Indenture and thereby become a
Subsidiary Guarantor which shall be bound by the Subsidiary Guarantee of the
Notes in the form set forth in this Indenture (without such future Subsidiary
Guarantor being required to execute and deliver the Subsidiary Guarantee
endorsed on the Notes). The Company shall not permit any Restricted Subsidiary
that is not a Subsidiary Guarantor to (i) Guarantee any other Indebtedness of
the Company or any Subsidiary Guarantor or (ii) otherwise become obligated with
respect to Indebtedness of the Company or any Subsidiary Guarantor, including
but not limited to, Indebtedness Incurred by the Company or a Subsidiary
Guarantor under the Credit Facility, unless such Restricted Subsidiary
simultaneously executes a supplemental indenture to this Indenture providing for
the Guarantee of the payment of the Notes by such Restricted Subsidiary, which
Guarantee of the payment of the Notes shall be subordinated to the Guarantee of
such other Indebtedness to the same extent as the Notes or the Subsidiary
Guarantees, as applicable, are subordinated to such other Indebtedness;
provided, however, that such Restricted Subsidiary shall not be required to so
Guarantee the payment of the Notes to the extent that such other Indebtedness
does not exceed $1 million individually or, together with any other Indebtedness
of the Company or any Subsidiary Guarantor Guaranteed by such Restricted
Subsidiary, $3 million in the aggregate. Such Restricted Subsidiary shall be
deemed released from its obligations under the Guarantee of the payment of the
Notes at any such time that such Restricted Subsidiary is released from all of
its obligations under its Guarantee of such other Indebtedness unless such
release results from the payment under such Guarantee of other Indebtedness.
SECTION 4.20. Limitation on Designations of Unrestricted
Subsidiaries.
(a) The Company may designate any Subsidiary of the Company (other
than a Subsidiary Guarantor) as an "Unrestricted Subsidiary"(a "Designation")
only if:
(i) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation; and
(ii) either (x) the assets of such Subsidiary do not exceed $1,000
or (y) the Company would be permitted under this Indenture to make an
Investment at the time of Designation (assuming the effectiveness of such
Designation) in an amount (the "Designation Amount") equal to the fair
market value of the Company's Investment in such Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
4.10 for all purposes of this Indenture in the Designation Amount. The Company
shall not, and shall not permit
49
any Restricted Subsidiary to, at any time (a) provide credit support for, or a
Guarantee of, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) or (b) be
directly or indirectly liable for any Indebtedness of any Unrestricted
Subsidiary.
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Indenture and for all purposes of this Indenture shall be deemed to have
been Incurred at such time.
All Designations and Revocations must be evidenced by resolutions of
the Board of Directors delivered to the Trustee certifying compliance with the
foregoing provisions.
Notwithstanding the foregoing, no Subsidiary that is a Subsidiary
Guarantor as of the Issue Date shall be permitted to become an Unrestricted
Subsidiary.
SECTION 4.21. Limitation on Lines of Business.
Neither the Company nor any of its Subsidiaries shall directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than that which, in the reasonable good faith judgment of the
Board of Directors, is a Related Business.
SECTION 4.22. Limitation on Holdco and the Holding Companies.
Holdco and the Holding Companies shall not, and the Company shall
not permit the Holding Companies to, engage in any business other than holding
the securities of their respective direct subsidiaries.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the
Company.
The Company shall not, in a single transaction or a series of
related transactions, consolidate with or merge with or into, or sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all its
assets (computed on a consolidated basis) to, any Person or group of affiliated
Persons, unless: (i) the resulting, surviving or transferee Person
50
shall be the Company or, if not the Company, shall be a corporation organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia (the "Successor Company"), and such Successor
Company shall expressly assume, by an indenture supplemental to this Indenture
in a form reasonably satisfactory to the Trustee, executed and delivered to the
Trustee, all the obligations of the Company under the Notes and this Indenture
(and the Guarantees shall be confirmed as applying to such Person's
obligations); (ii) at the time of and immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Indebtedness
which becomes an obligation of the resulting, surviving or transferee Person or
any Subsidiary as a result of such transaction as having been Incurred by such
Person or such Subsidiary at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction (and treating any Indebtedness which becomes an
obligation of the resulting, surviving or transferee Person or any Subsidiary as
a result of such transaction as having been Incurred by such Person or such
Subsidiary at the time of such transaction) the resulting, surviving or
transferee Person would be able to Incur at least $1.00 of Indebtedness pursuant
to clause (a) of Section 4.13; and (iv) the Company shall have delivered to the
Trustee an Officers' Certificate and if a supplemental indenture is required, an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with this Indenture.
Notwithstanding the foregoing, (i) the consolidation or merger of
the Company with, or (ii) the sale, assignment, conveyance, transfer, lease or
other disposition by the Company of all or substantially all of its property or
assets to, one or more Subsidiaries of the Company shall not relieve the Company
from its obligations under the Notes and this Indenture.
For purposes of the foregoing, the transfer (by sale, assignment,
conveyance, transfer, lease or otherwise) of all or substantially all of the
properties and assets of one or more Subsidiaries, the Company's interest in
which constitutes all or substantially all of the properties and assets of the
Company shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
SECTION 5.02. Successor Corporation Substituted for the Company.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the Successor
Company formed by such consolidation or into which the Company is merged or to
which such sale, assignment, conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture and the Notes with the same effect as if such
surviving entity had been named as such, and the predecessor company, in the
case of a sale, assignment, conveyance, transfer or other disposition (but not
in the case of a lease), shall be released from the obligation to pay the
principal of and interest on the Notes.
SECTION 5.03. Merger, Consolidation and Sale of Assets of Any
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Subsidiary Guarantor.
The Company shall not permit any Subsidiary Guarantor to consolidate
with or merge with or into, or sell, assign, convey, transfer, lease or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its assets to, any Person unless: (i) the resulting,
surviving or transferee Person shall be the Company or a Subsidiary Guarantor
or, if not the Company or such a Subsidiary Guarantor, shall be a corporation
organized and existing under the laws of the jurisdiction under which such
Subsidiary was organized or under the laws of the United States of America, or
any State thereof or the District of Columbia, and such Person shall expressly
assume, by executing a Subsidiary Guarantee, all the obligations of such
Subsidiary, if any, under its Subsidiary Guarantee; (ii) immediately after
giving effect to such transaction or transactions on a pro forma basis (and
treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such transaction as having been
issued by such Person at the time of such transaction), no Default or Event of
Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction, the Company would be able to Incur at least $1.00 of
Indebtedness pursuant to Section 4.13(a); and (iv) the Company delivers to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such Subsidiary Guarantee, if any,
complies with this Indenture. The provisions of clauses (i), (ii) and (iii)
above shall not apply to any one or more transactions which constitute an (a)
Asset Disposition subject to the applicable provisions of the covenant described
under Section 4.17 or (b) the grant of any Lien on the assets of a Restricted
Subsidiary to secure outstanding Indebtedness under the Credit Facility, which
Lien is permitted by the terms of this Indenture, or any conveyance or transfer
of such assets resulting from an exercise of remedies in respect of any such
Lien.
Notwithstanding the foregoing, but subject to the terms of the first
paragraph of Section 5.01 and this Section 5.03, the Company may merge with or
into, or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to, any Subsidiary Guarantor, and a Subsidiary
Guarantor may merge with or into, or sell, assign, convey, transfer or lease all
or substantially all of its assets to, any other Subsidiary Guarantor.
SECTION 5.04. Successor Corporation Substituted for Subsidiary
Guarantor.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of any Subsidiary Guarantor in accordance
with the foregoing, in which such Subsidiary Guarantor is not the continuing
corporation, the successor Person formed by such consolidation or into which
such Subsidiary Guarantor is merged or to which such conveyance, lease or
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, such Subsidiary Guarantor under this Indenture with
the same effect as if such surviving entity had been named as such, and the
predecessor company, in the case of a conveyance, transfer or lease, shall be
released from the obligation to pay the principal of and interest on the Notes.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Notes
when the same becomes due and payable (whether or not such payment shall
be prohibited by Article Ten of this Indenture) and the Default continues
for a period of 30 days; or
(2) the Company defaults in the payment of the principal on any
Notes when such principal becomes due and payable (whether or not such
payment shall be prohibited by Article Ten or Article Twelve), at
maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise; or
(3) the failure by the Company to comply with its obligations under
Sections 4.16, 4.17 or Article Five 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,
4.15, 4.18, 4.19, 4.20, 4.21, and 4.22; or
(5) the Company defaults in the observance or performance of any
other covenant, obligation, warranty or agreement contained in this
Indenture and which default continues for a period of 60 days after
notice; or
(6) Indebtedness of Holdco, the Company or any Subsidiary 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 Indebtedness unpaid or accelerated together with the principal
amount of any other such Indebtedness which is unpaid or which has been
accelerated, exceeds $10.0 million at any time and such default shall not
have been cured or such acceleration rescinded; 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
53
involuntary case or proceeding under any Bankruptcy Law, which shall (A)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any such
Significant Subsidiary, (B) appoint a Custodian of the Company or any such
Significant Subsidiary or for substantially all of its property or (C)
order the winding-up or liquidation of its affairs; and such judgment,
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(9) any judgment or decree for the payment of money the portion of
which is not covered by insurance is in an aggregate amount in excess of
$10.0 million shall have been rendered against the Company or any of its
Subsidiaries and is not discharged and either (A) an enforcement
proceeding has been commenced by any creditor upon such judgment or decree
or (B) there is a period of 60 days following such judgment during which
such judgment or decree is not discharged, waived or the execution thereof
stayed (including pending appeal); or
(10) any Subsidiary Guarantee of a Significant Subsidiary ceases to
be in full force and effect or becomes unenforceable or invalid or is
declared null and void (other than in accordance with the terms of the
Subsidiary Guarantee or this Indenture) or any Subsidiary Guarantor that
is a Significant Subsidiary denies or disaffirms its obligations under its
Subsidiary Guarantee.
However, a default under clause (4) or (5) shall 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 may declare the principal of and accrued but unpaid interest
on all the Notes to be due and payable by notice in writing to the Company and
the Trustee specifying the respective Event of Default and that it is a "notice
of acceleration". Upon any such declaration, such amount shall be immediately
due and payable provided, however, that for so long as the Credit Facility
remains in effect, such declaration shall not become effective until the earlier
of (i) five Business Days following delivery of notice to the Representative of
such creditors of the intention to accelerate the Notes or (ii) the acceleration
of any Indebtedness under the Credit Facility.
54
(b) If an Event of Default specified in Section 6.01(7) or (8)
relating to the Company or any Significant Subsidiary occurs and is continuing,
the principal of and interest on all the Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.
(c) The Holders of a majority in principal amount of the Notes may,
on behalf of the Holders of all of the Notes, rescind and cancel an acceleration
and its consequences (i) if the rescission would not conflict with any judgment
or decree, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely because of
the acceleration, (iii) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances and (iv) in the event of the cure or waiver of an Event of Default of
the type described in Section 6.01(7) or 6.01(8), the Trustee shall have
received an Officers' Certificate and an Opinion of Counsel that such Event of
Default has been cured or waived. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority
in principal amount of the then outstanding Notes by notice to the Trustee may,
on behalf of the Holders of all of the Notes, waive an existing Default or Event
of Default and its consequences, except a Default in the payment of principal of
or interest on any Note as specified in clauses (1) and (2) of Section 6.01.
When a Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the 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
55
Section 7.01, however, the Trustee may refuse to follow any direction that the
Trustee reasonably believes conflicts with any law or this Indenture, that the
Trustee reasonably 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 Sections 6.06, 7.01(d)
and 7.02(f).
SECTION 6.06. Limitation on Suits.
Subject to Article Seven, if an Event of Default occurs and is
continuing, the Trustee shall be under no obligation to exercise any of the
rights or powers under this Indenture at the request or direction of any of the
Holders unless such Holders have offered to the Trustee indemnity or security
against any loss, liability or expense reasonably satisfactory to the Trustee.
Except to enforce the right to receive payment of principal, premium (if any) or
interest when due, no Holder of a Note may pursue any remedy with respect to
this Indenture or the Notes unless (i) such Holder has previously given the
Trustee notice that an Event of Default is continuing, (ii) Holders of at least
25% in principal amount of the outstanding Notes have requested the Trustee to
pursue the remedy, (iii) such Holders have offered the Trustee security or
indemnity against any loss, liability or expense reasonably satisfactory to the
Trustee, (iv) the Trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity and (v) the
Holders of a majority in principal amount of the outstanding Notes have not
given the Trustee a direction inconsistent with such request within such 60-day
period.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest at the rate set forth on the face of the Note 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.
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The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, if
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agents, consultants and counsel, and any other amounts due the Trustee under
Section 7.07. The Company's payment obligations under this Section 6.09 shall be
secured in accordance with the provisions of Section 7.07 hereunder. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits
57
and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own wilful 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 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
58
hereunder or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it.
(e) Whether or not herein expressly provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document 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 13.04 and 13.05. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys and the Trustee shall not be responsible for the misconduct
or negligence of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers; provided, however that the Trustee's conduct does
not constitute wilful misconduct, negligence or bad faith.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice to the Company, to
examine the books, records, and premises of the Company, personally or by agent
or attorney and to consult with the officers and representatives of the Company,
including the Company's accountants and attorneys.
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(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the loss, expenses and liabilities which may
be incurred by it in compliance with such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) The Trustee may determine (i) the execution by any Holder of any
instrument in writing, (ii) the date of such execution or (iii) the authority of
any Person executing the same, in any manner the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(i) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
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 Indenture or the Notes, and it shall not be
accountable for the Company's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Company in this Indenture or the
Notes other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder notice of the Default within 90
days after such Default occurs. Except in the case of a Default in payment of
principal of, or interest on, any Note, including an accelerated payment and the
failure to make payment on the purchase date
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pursuant to a Change in Control under Section 4.16 and, except in the case of a
failure to comply with Article Five hereof, the Trustee may withhold the notice
if and so long as its board of directors, the executive committee of its board
of directors or a committee of its Trust Officers in good faith reasonably
determines that withholding the notice is in the best interest of the Holders.
In addition, the Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, a certificate regarding knowledge of the Company's
compliance with all covenants and conditions under this 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 Indenture, the Trustee shall, to the extent that
any of the events described in TIA Section 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 Section 313(a). The Trustee
also shall comply with TIA Section Section 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 Section 313(d).
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable fees and
expenses, including out-of-pocket expenses incurred or made by it in
connection with the performance of its duties under this Indenture. Such
expenses shall include the reasonable fees and expenses of the Trustee's
agents, consultants, experts and counsel.
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 wilful misconduct, negligence or bad faith.
The Trustee shall notify the Company promptly of any claim asserted against
the Trustee for which it may seek indemnity. At the Trustee's sole
discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; provided that any settlement of
a claim shall be approved in writing by the Trustee. Alternatively, the
Trustee may at its option have separate counsel of its own choosing and the
Company shall pay the reasonable fees and expenses of such counsel; provided
that the Company shall not be required to pay such fees and expenses if it
assumes the Trustee's
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defense and there is no conflict of interest between the Company and the
Trustee in connection with such defense as reasonably determined by the
Trustee. The Company need not pay for any settlement made without its written
consent. The Company need not reimburse any expense or indemnify against any
loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or wilful 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.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the 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 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 Indenture provided that the certificate
of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 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
63
system, the Trustee, independently of such bank holding company, shall meet
the capital requirements of TIA Section 310(a)(2). The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 310(b)(1) any indenture or indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. The provisions of TIA
Section 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 Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding
Notes (other than Notes replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Notes have become due and payable at maturity or shall 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 Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel as to the satisfaction of all conditions to such
satisfaction and discharge of this Indenture and at the cost and expense of the
Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (i) all its obligations under the Notes and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections 4.8 and 4.10 through
4.23 and the operation of Section 6.01(4) and the limitations contained in
clause (iii) of the first paragraph of each Section 5.01 and Section 5.03
("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 clause (iii) of the first
paragraph of each Section 5.01 and Section 5.03. If the Company
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exercises its legal defeasance option or its covenant defeasance option, each
Subsidiary Guarantor, if any, shall be released from all its obligations under
its Subsidiary Guarantee.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.07, 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 shall provide cash at such times and in
such amounts as shall 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) shall
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,
65
delaying or defrauding any other creditors of the Company and the deposit
is not prohibited under any Designated Senior Indebtedness;
(5) neither the deposit nor the defeasance shall result in a default
or event of default under any other material agreement to which the
Company is a party or by which the Company is bound and neither the
deposit nor the defeasance shall be prohibited by Article Ten;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(7) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Noteholders shall not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and shall 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 shall not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and shall 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 Indenture to the payment of principal of and
interest on the Notes. Money and securities so held in trust are not subject to
Article Ten.
SECTION 8.04. Repayment to Company.
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The Trustee and the Paying Agent shall promptly turn over to the
Company, upon delivery of an Officers' Certificate stating that such payment
does not violate the terms of this Indenture, any excess money or securities
held by them at any time, subject to Section 7.07.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon its written request any money
held by them for the payment of principal or interest that remains unclaimed for
two years, and, thereafter, Noteholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations.
The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations.
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 and
the Subsidiary Guarantors under the Indenture shall be revived and no such
defeasance shall 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 and the Subsidiary Guarantors' obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Eight until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with this Article 8; provided, however,
that, if the Company has made any payment of interest on or principal of any
Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the U.S. Legal Tender or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Holder:
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(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 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 Subsidiary Guarantees with respect to the Notes;
(7) to secure the Notes;
(8) to make any other change that does not, in the reasonable
opinion of the Trustee, adversely affect in any material respect the
rights of any Holders hereunder; or
(9) alter the provisions with respect to the mandatory redemption of
the Notes or the redemption of the Notes at the option of the Company in a
manner adverse to the Holders;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
After an amendment, supplement or waiver under this Section 9.01
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, may amend or supplement this Indenture or the Notes, without
notice to any other Holders. Subject to Section 6.07, the Holder or Holders of
at least a majority in aggregate principal amount of the
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then outstanding Notes may waive compliance by the Company with any provision of
this Indenture or the Notes without notice to any other Holder. No amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, shall,
without the consent of each Holder of each Note affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement 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 alter the provisions with respect to
the mandatory redemption of the Notes or the redemption of the Notes at
the option of the Company in a manner adverse to the Holders;
(4) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest on, the Notes;
(5) waive a mandatory redemption payment with respect to any Note;
(6) make any Notes payable in money or payable in a place other than
that stated in the Notes;
(7) make any change in Section 6.04 or Section 6.07 or the second
sentence of this Section;
(8) amend, modify, change or waive any provision of this Section
9.02;
(9) modify Articles Ten or Twelve or the definitions used in
Articles Ten or Twelve to adversely affect the Holders of the Notes; or
(10) make any change in any Subsidiary Guarantee that would
adversely affect the Holders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 9.03. Effect on Senior Indebtedness.
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No amendment of this Indenture shall adversely affect the rights of
any holder of Senior Indebtedness of the Company or any Restricted Subsidiary
under Article Ten or Twelve of this Indenture, without the consent of such
holder (or its Representative).
SECTION 9.04. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 9.05. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date the amendment,
supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (10) 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 any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
SECTION 9.06. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee may require the Holder of such Note to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Note about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
70
Any such notation or exchange shall be made at the sole cost and expense of the
Company. Failure to make the appropriate notation or to issue a new Note shall
not affect the validity of such amendment, supplement or waiver.
SECTION 9.07. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
SECTION 9.08. Payment for Consent.
Neither the Company nor any Affiliate of the Company shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes, unless such consideration is offered to be paid to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of the Notes, by
its acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article Ten; and each Person holding
any Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all Obligations on the Notes by
the Company shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
of all Senior Indebtedness of the Company; that the subordination is for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness of the Company, and that each holder of Senior Indebtedness of the
Company whether now outstanding or hereafter created, incurred, assumed or
Guaranteed shall be deemed to have acquired Senior Indebtedness of the Company
in reliance upon the covenants and provisions contained in this Indenture and
the Notes. Only Indebtedness of the Company that is Senior Indebtedness of the
Company shall rank senior to the Notes in accordance with the provisions of the
Indenture. The Notes shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company. Unsecured Indebtedness is not deemed
to be subordinated or junior to secured Indebtedness
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merely because it is unsecured. The terms of the subordination provisions
described in this Article Ten shall not apply to payments from money or the
proceeds of U.S. Government Obligations in trust by the Trustee for the payment
of principal and interest on the Notes pursuant to the provisions described in
Article Eight unless such payments were in violation of Designated Senior
Indebtedness.
SECTION 10.02. No Payment on Notes in Certain Circumstances.
(a) The Company may not, and no other Person on behalf of the
Company may pay principal of, premium (if any) or interest on the Notes or make
any other payments with respect to the Notes or make any deposit pursuant to the
provisions described under Article Eight above and may not repurchase, redeem or
otherwise retire any Notes (collectively, "pay the Notes") if (i) any amount of
principal, interest or other payments due under any Senior Indebtedness of the
Company has not been paid when due and remains outstanding or (ii) any other
default on Senior Indebtedness of the Company occurs and the maturity of such
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, the default has been cured or waived in writing and any such
acceleration has been rescinded or such Designated Senior Indebtedness has been
paid in full in cash, after which the Company shall resume making any and all
required payments in respect of the Notes, including any missed payments.
However, the Company may pay the Notes without regard to the foregoing if the
Company and the Trustee receive written notice approving such payment from the
Representative of the Senior Indebtedness of the Company with respect to which
either of the events set forth in clause (i) or (ii) of the immediately
preceding sentence has occurred and is continuing, after which the Company shall
resume making any and all required payments in respect of the Notes, including
any missed payments. During the continuance of any default (other than a default
described in clause (i) or (ii) of the second preceding sentence) with respect
to any Designated Senior Indebtedness of the Company pursuant to which the
maturity thereof may be accelerated either immediately without further notice
(except such notice as may be required to effect such acceleration) or upon the
expiration of any applicable grace periods, the Company may not pay the Notes
for a period (a "Payment Blockage Period") commencing upon the receipt by the
Trustee (with a copy to the Company) of written notice (a "Blockage Notice") of
such default from the Representative of the holders of such Designated Senior
Indebtedness of the Company specifying an election to effect a Payment Blockage
Period and ending 179 days thereafter (or earlier if such Payment Blockage
Period is terminated (A) by written notice to the Trustee and the Company from
the Person or Persons who gave such Blockage Notice, (B) because the default
giving rise to such Blockage Notice is no longer continuing (solely as evidenced
by written notice to the Trustee by the Representative of such Designated Senior
Indebtedness which notice shall be promptly delivered) or (C) because such
Designated Senior Indebtedness of the Company has been repaid in full in cash).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the first sentence of this
paragraph), unless the holders of such Designated Senior Indebtedness of the
Company or the Representative of such holders has accelerated the maturity of
such Designated Senior Indebtedness of the Company, the Company may resume
payments on the Notes after the end of such Payment Blockage Period, including
any missed payments. No more than one Payment Blockage Period may be commenced
in any consecutive 360-day period, irrespective of the number of
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defaults with respect to Designated Senior Indebtedness of the Company during
such period.
(b) If, notwithstanding the foregoing, any payment shall be received
by the Trustee or any Holder when such payment is prohibited by Section
10.02(a), such payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of such Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amount of such
Senior Indebtedness of the Company held by such holders) or their respective
Representatives, as their respective interests may appear. The Trustee shall be
entitled to rely on information regarding amounts then due and owing on the
Senior Indebtedness of the Company, if any, received from the holders of such
Senior Indebtedness of the Company (or their Representatives) or, if such
information is not received from such holders or their Representatives, from the
Company and only amounts included in the information provided to the Trustee
shall be paid to the holders of Senior Indebtedness of the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 10.03 would be applicable.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Senior Indebtedness of the Company thereafter due
or declared to be due shall first be paid in full in cash before the Holders are
entitled to receive any payment of any kind or character with respect to
Obligations on the Notes.
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc.
(a) Upon any payment or distribution of assets of the Company or any
of its Subsidiaries of any kind or character, whether in cash, property or
securities, to creditors upon any total or partial liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors or
marshaling of assets of the Company or any of its Subsidiaries or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to the Company or any of its Subsidiaries or any of their property,
whether voluntary or involuntary, all Obligations due or to become due upon all
Senior Indebtedness of the Company shall first be paid in full in cash, or such
payment duly provided for to the satisfaction of the holders of Senior
Indebtedness of the Company, before any payment or distribution of any kind or
character is made on account of any Obligations on the Notes, or for the
acquisition of any of the Notes for cash or property or otherwise. Upon any
total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding, any payment or distribution of assets of the Company or any of its
Subsidiaries of any kind or character, whether in cash, property or securities,
to which the Holders of the Notes or the Trustee under this Indenture would be
entitled, except for the provisions hereof, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them, directly to the holders of Senior
Indebtedness
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of the Company (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness of the Company held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness of the Company may have been issued, as
their respective interests may appear, for application to the payment of Senior
Indebtedness of the Company remaining unpaid until all such Senior Indebtedness
of the Company has been paid in full in cash after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
Senior Indebtedness of the Company.
(b) To the extent any payment of Senior Indebtedness of the Company
(whether by or on behalf of the Company, as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness of the Company or part thereof originally intended to be satisfied
shall be deemed to be reinstated and outstanding as if such payment had not
occurred.
(c) If, notwithstanding the foregoing, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, shall be received by any Holder or the Trustee when such payment or
distribution is prohibited by this Section 10.03, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness of the Company (pro rata to such holders
on the basis of the respective amount of Senior Indebtedness of the Company held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
of the Company may have been issued, as their respective interests may appear,
for application to the payment of Senior Indebtedness of the Company remaining
unpaid until all such Senior Indebtedness of the Company has been paid in full
in cash, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness of the
Company.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Senior
Indebtedness of the Company shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, assume the Company's obligations hereunder in accordance with Article
Five hereof.
SECTION 10.04. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
10.02 and 10.03,
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from making payments at any time for the purpose of making payments of principal
of and interest on the Notes, or from depositing with the Trustee any moneys for
such payments, or (ii) in the absence of actual knowledge by the Trustee that a
given payment would be prohibited by Section 10.02 or 10.03, the application by
the Trustee of any moneys deposited with it for the purpose of making such
payments of principal of, and interest on, the Notes to the Holders entitled
thereto unless at least two Business Days prior to the date upon which such
payment would otherwise become due and payable the written notice provided for
in the third sentence of Section 10.02(a) or in Section 10.07 has been received
by the Trustee (provided that, notwithstanding the foregoing, such application
shall otherwise be subject to the provisions of the first sentence of Section
10.02(a), 10.02(b) and Section 10.03). The Company shall give prompt written
notice to the Trustee of any dissolution, winding-up, liquidation or
reorganization of the Company.
SECTION 10.05. Subrogation.
Subject to, and only after, the payment in full in cash of all
Senior Indebtedness of the Company, the Holders of the Notes shall be subrogated
to the rights of the holders of Senior Indebtedness of the Company to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness of the Company until the Notes shall be
paid in full; and, for the purposes of such subrogation, no such payments or
distributions to the holders of the Senior Indebtedness of the Company by or on
behalf of the Company or by or on behalf of the Holders by virtue of this
Article Ten which otherwise would have been made to the Holders shall, as
between the Company and the Holders of the Notes, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness of the Company, it being
understood that the provisions of this Article Ten are and are intended solely
for the purpose of defining the relative rights of the Holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness of the Company, on the
other hand. If any payment or distribution to which the Holders would otherwise
have been entitled but for the application of the provisions of this Article
Ten, shall have been applied, pursuant to the provisions of this Article Ten, to
the payment of amounts payable under Senior Indebtedness of the Company, then
the Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay all amounts payable under
or in respect of such Senior Indebtedness in full in cash.
SECTION 10.06. Obligations of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Notes or the Subsidiary Guarantees is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior Indebtedness
of the Company, and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and any interest on the Notes as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders and creditors of the Company other than the
holders of the Senior Indebtedness of the Company, nor shall anything herein or
therein prevent the Holder of any Note or the Trustee on its behalf from
exercising all remedies otherwise permitted by
75
applicable law upon default under this Indenture, subject to the rights, if any,
in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article Ten. Regardless of anything to the contrary contained in this Article
Ten or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Indebtedness of the Company or of any other facts which would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing from the Company, or from a holder
of Senior Indebtedness of the Company or a Representative therefor and, prior to
the receipt of any such written notice, the Trustee shall be entitled to assume
(in the absence of actual knowledge to the contrary) that no such facts exist.
If the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article Ten, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amounts of
Senior Indebtedness of the Company held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Ten, and if such
evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
or similar case or proceeding is pending so long as such order gives effect to
the provisions of this Article Ten, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, receiver, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Ten.
SECTION 10.09. Trustee's Relation to Senior Indebtedness.
The Trustee and any agent of the Company or the Trustee shall be
entitled to all
76
the rights set forth in this Article Ten with respect to any Senior Indebtedness
of the Company which may at any time be held by it in its individual or any
other capacity to the same extent as any other holder of Senior Indebtedness of
the Company and nothing in this Indenture shall deprive the Trustee or any such
agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness of
the Company shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Company.
Whenever a distribution is to be made or a notice given to holders
or owners of Senior Indebtedness of the Company, the distribution may be made
and the notice may be given to their Representative, if any. The Company shall
provide the Trustee with the name and address of any Representative.
SECTION 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Indebtedness.
No right of any present or future holders of any Senior Indebtedness
of the Company to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee, without
incurring responsibility to the Trustee or the Holders of the Notes and without
impairing or releasing the subordination provided in this Article Ten or the
obligations hereunder of the Holders of the Notes to the holders of the Senior
Indebtedness of the Company, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness of the Company, or otherwise amend or supplement in
any manner Senior Indebtedness of the Company, or any instrument evidencing the
same or any agreement under which Senior Indebtedness of the Company is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness of the Company;
(iii) release any Person liable in any manner for the payment or collection of
Senior Indebtedness of the Company; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs
77
the Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate, as between the holders of Senior Indebtedness of the Company and
the Holders of Notes, the subordination provided in this Article Ten, and
appoints the Trustee its attorney-in-fact for such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Company, the filing of a claim for the unpaid balance of its Notes and accrued
interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Indebtedness
of the Company or their Representatives are or is hereby authorized to have the
right to file and are or is hereby authorized to file an appropriate claim for
and on behalf of the Holders of said Notes, and the Trustee shall supply such
Holders and Representatives all information and documents they reasonably
request in order to file such claims. Nothing herein contained shall be deemed
to authorize the Trustee or the holders of Senior Indebtedness of the Company or
their Representative to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Indebtedness of the Company or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 10.12. This Article Ten Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Ten shall not be
construed as preventing the occurrence of an Event of Default.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders to take any action or accelerate the maturity of the
Notes pursuant to Article Six or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article Ten of
the holders from time to time, of Senior Indebtedness of the Company.
SECTION 10.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Ten shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture
SECTION 10.14. Acceleration of Payment of Notes.
If payment of the Notes is accelerated because of an Event of
Default, the Company or the Trustee shall promptly notify the holders of
Designated Senior Indebtedness of the Company or the Representative of
such holders of the acceleration (in the case of the Trustee, only to the extent
of its actual knowledge of such holders or the Representative of
78
such holders). Such notice is in addition to, and not in lieu of, any notice
that may be required to be delivered under Section 6.02 prior to the
effectiveness of any such acceleration.
ARTICLE ELEVEN
SUBSIDIARY GUARANTEES
SECTION 11.01. Unconditional Subsidiary Guarantee.
Each of the Subsidiary Guarantors hereby unconditionally jointly and
severally Guarantees (such Guarantee to be referred to herein as the "Subsidiary
Guarantee") to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, the Notes or the Obligations
of the Company hereunder or thereunder, that: (i) the principal of and interest
on the Notes shall be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise and interest on
the overdue principal, if any, and interest on any interest, to the extent
lawful, of the Notes and all other Obligations of the Company to the Holders or
the Trustee hereunder or thereunder shall 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 shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise.
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor on one hand, and the Holders and the Trustee on the other
hand, (x) the maturity of the Obligations Guaranteed hereby may be accelerated
as provided in Article Six for the purposes of the Subsidiary Guarantee,
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
Guarantee.
Each of the Subsidiary Guarantors hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each of the Subsidiary Guarantors hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that the
Subsidiary Guarantee shall not be discharged except by complete performance of
the Obligations contained in the Notes, this Indenture and in the Subsidiary
Guarantee. If any Noteholder or the Trustee is required by any court or
otherwise to return to the Company, any Subsidiary Guarantor, or any custodian,
trustee, liquidator or
79
other similar official acting in relation to the Company or any Subsidiary
Guarantor, any amount paid by the Company or such Subsidiary Guarantor to the
Trustee or such Noteholder, the Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each of the Subsidiary
Guarantors hereby agrees that, in the event of default in the payment of
principal (or premium, if any) or interest on such Notes, whether at their
Stated Maturity, by acceleration, called for redemption, purchase or otherwise,
legal proceedings may be instituted by the Trustee on behalf of, or by, the
Holder of such Notes, subject to the terms and conditions set forth in this
Indenture, directly against each of the Subsidiary Guarantors to enforce the
Subsidiary Guarantee without first proceeding against the Company. Each
Subsidiary Guarantor agrees that if, after the occurrence and during the
continuance of an Event of Default, the Trustee or any Holders are prevented by
applicable law from exercising their respective rights to accelerate the
maturity of the Notes, to collect interest on the Notes, or to enforce any other
right or remedy with respect to the Notes, the Subsidiary Guarantors agree to
pay to the Trustee for the account of the Holders, upon demand therefor, the
amount that would otherwise have been due and payable had such rights and
remedies been permitted to be exercised by the Trustee or any of the Holders.
SECTION 11.02. Subordination of Subsidiary Guarantee.
The obligations of each Subsidiary Guarantor to the Holders of the
Notes and to the Trustee pursuant to the Subsidiary Guarantee and this Indenture
are expressly subordinate and subject in right of payment to the prior payment
in full in cash of all Senior Indebtedness of such Subsidiary Guarantor, to the
extent and in the manner provided in Article Twelve.
SECTION 11.03. Severability.
In case any provision of the Subsidiary Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.04. Release of Subsidiary Guarantor from the Subsidiary
Guarantee.
Upon the sale or disposition (whether by merger, stock purchase,
asset sale or otherwise) of a Subsidiary Guarantor (or all or substantially all
of its assets) to an entity which is not the Company or a Subsidiary or
Affiliate of the Company and which sale or disposition is otherwise in
compliance with the terms of this Indenture, including but not limited to the
provisions of Section 5.03, or pursuant to a foreclosure of a Lien that secures
outstanding Bank Indebtedness on the capital stock of such Subsidiary Guarantor
in accordance with the Credit Facility, such Subsidiary Guarantor shall be
deemed released from all obligations under this Article Eleven without any
further action required on the part of the Trustee or any Holder.
The Trustee shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate and Opinion of Counsel certifying as to the compliance with this
Section 11.04.
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SECTION 11.05. Limitation on Amount Guaranteed; Contribution by
Subsidiary Guarantors.
(a) Anything contained in this Indenture or the Subsidiary Guarantee
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 Guarantee and (y) under any Subsidiary
Guarantee of Subordinated Indebtedness which Subsidiary Guarantee contains a
limitation as to maximum amount similar to that set forth in this clause (a) of
Section 11.05, pursuant to which the liability of such Subsidiary Guarantor
under the Subsidiary Guarantee is included in the liabilities taken into account
in determining such maximum amount) and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, reimbursement, indemnification or
contribution of such Subsidiary Guarantor pursuant to applicable law or pursuant
to the terms of any agreement (including without limitation any such right of
contribution under clause (b) of Section 11.05).
(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
Guarantor") that exceeds its Fair Share (as defined below) as of such date, that
Funding 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 shall 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 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
81
of such Subsidiary Guarantor under the Subsidiary Guarantee, determined as of
such date in accordance with clause (a) of Section 11.05; provided that, solely
for purposes of calculating the Adjusted Maximum Amount with respect to any
Subsidiary Guarantor for purposes of this clause (b) of Section 11.05, 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 clause (b) of
Section 11.05 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 clause (b) of Section 11.05). 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 Guarantor.
The allocation among Subsidiary Guarantors of their obligations as set forth in
this clause (b) of Section 11.05 shall not be construed in any way to limit the
liability of any Subsidiary Guarantor under this Indenture or under the
Subsidiary Guarantee.
SECTION 11.06. Waiver of Subrogation.
Until payment in full is made of the Notes and all other obligations
of the Company to the Holders or the Trustee hereunder and under the Notes, each
Subsidiary Guarantor hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Subsidiary Guarantor's
obligations under the Subsidiary Guarantee and this Indenture, including without
limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or any other manner, payment
or security on account of such claim or other rights. If any amount shall be
paid to any Subsidiary Guarantor in violation of the preceding sentence and the
Notes shall not have been paid in full, such amount shall have been deemed to
have been paid to such Subsidiary Guarantor for the benefit of, and held in
trust for the benefit of, the Holders of the Notes, and shall forthwith be paid
to the Trustee for the benefit of such Holders to be credited and applied upon
the Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Subsidiary Guarantor acknowledges that it shall receive direct
and indirect benefits from the financing arrangements contemplated by this
Indenture and that the waiver set forth in this Section 11.06 is knowingly made
in contemplation of such benefits.
SECTION 11.07. Execution of Subsidiary Guarantee.
To evidence its Guarantee to the Noteholders set forth in this
Article Eleven, each Subsidiary Guarantor hereby agrees to execute the
Subsidiary Guarantee in substantially the form included in Exhibit A, which
shall be endorsed on such Note ordered to be
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authenticated and delivered by the Trustee. Each Subsidiary Guarantor hereby
agrees that the Subsidiary Guarantee set forth in this Article Eleven shall
remain in full force and effect notwithstanding any failure to endorse on each
Note a notation of the Subsidiary Guarantee. The Subsidiary Guarantee shall be
signed on behalf of each Subsidiary Guarantor by one Officer (who shall 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 11.08. Waiver of Stay, Extension or Usury Laws.
Each Subsidiary Guarantor jointly and severally covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive such Subsidiary Guarantor from performing the Subsidiary Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each Subsidiary Guarantor hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 11.09. Effectiveness of Subsidiary Guarantee.
The Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such a payment
or performance had not been made. If any payments, or any part thereof, is
rescinded, reduced, restored or returned, the Notes shall, to the fullest extent
permitted by law, be reinstituted and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
ARTICLE TWELVE
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SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01. Guarantee Obligations Subordinated to Senior
Indebtedness of Subsidiary Guarantors.
Each Subsidiary Guarantor covenants and agrees, and each Holder of
the Notes, by its acceptance thereof, likewise covenants and agrees, that any
payment of obligations by each Subsidiary Guarantor in respect of the Subsidiary
Guarantee (its "Guarantee Obligations") shall be made subject to the provisions
of this Article Twelve, and each Person holding any Note, whether upon original
issue or upon transfer, assignment or exchange thereof, accepts and agrees that
the payment of all such Subsidiary Guarantor's Guarantee Obligations shall, to
the extent and in the manner herein set forth, be subordinated and junior in
right of payment to the prior payment in full in cash of all Obligations in
respect of such Subsidiary Guarantor's Senior Indebtedness, including principal,
premium (if any) or interest (including post-petition interest) thereon, that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of such Subsidiary Guarantor's Senior Indebtedness, and that each
holder of any Subsidiary Guarantor's Senior Indebtedness whether now outstanding
or hereafter created, incurred, assumed or Guaranteed shall be deemed to have
acquired such Subsidiary Guarantor's Senior Indebtedness in reliance upon the
covenants and provisions contained in this Indenture and the Notes. Only
Indebtedness of a Subsidiary Guarantor that is Senior Indebtedness of such
Subsidiary Guarantor shall rank senior to the Subsidiary Guarantee of such
Subsidiary Guarantor in accordance with the provisions of this Indenture. A
Subsidiary Guarantee shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Subsidiary Guarantor to which it relates.
Unsecured Indebtedness is not deemed to be subordinated or junior to secured
Indebtedness merely because it is unsecured.
SECTION 12.02. No Payment on Notes in Certain Circumstances.
(a) No Subsidiary Guarantor may, and no other Person on behalf of
such Subsidiary Guarantor may, make any payment with respect to the Subsidiary
Guarantee or make any deposit pursuant to Article Eight above (collectively,
"pay the Subsidiary Guarantee") if (i) any amount of principal, interest or
other payments due under any Senior Indebtedness of such Subsidiary Guarantor or
the Company has not been paid when due whether at maturity, upon redemption, by
declaration or otherwise or (ii) any other default on Senior Indebtedness of
such Subsidiary Guarantor or the Company occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in either case,
the default has been cured or waived in writing and any such acceleration has
been rescinded or such Senior Indebtedness has been paid in full in cash, after
which such Subsidiary Guarantor shall resume making any and all required
payments in respect of the Subsidiary Guarantee, including any missed payments.
However, a Subsidiary Guarantor may pay the Subsidiary Guarantee without regard
to the foregoing if such Subsidiary Guarantor and the Trustee receive written
notice approving such payment from the Representative of the Senior Indebtedness
Guaranteed by such Subsidiary Guarantor with respect to which either of the
events set forth in clause (i) or (ii) of the immediately preceding sentence has
occurred and is continuing, after which such Subsidiary Guarantor shall resume
making any and all required payments in
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respect of the Subsidiary Guarantee, including any missed payments. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the second preceding sentence) with respect to any Designated Senior
Indebtedness of a Subsidiary Guarantor or the Company pursuant to which the
maturity thereof may be accelerated either immediately without further notice
(except such notice as may be required to effect such acceleration) or upon the
expiration of any applicable grace periods, such Subsidiary Guarantor may not
pay the Subsidiary Guarantee for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to such Subsidiary
Guarantor) of written notice (a "Blockage Notice") of such default from the
Representative of the holders of such Designated Senior Indebtedness of such
Subsidiary Guarantor or the Company specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (A) by written notice to the Trustee and such
Subsidiary Guarantor from the Person or Persons who gave such Blockage Notice,
(B) because the default giving rise to such Blockage Notice is no longer
continuing (solely as evidenced by written notice to the Trustee by the
Representative of such Designated Senior Indebtedness which notice shall be
promptly delivered) or (C) because such Designated Senior Indebtedness of such
Subsidiary Guarantor and the related Designated Senior Indebtedness of the
Company has been repaid in full in cash). Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this paragraph), unless the holders of such
Designated Senior Indebtedness of such Subsidiary Guarantor or the Company or
the Representative of such holders has accelerated the maturity of such
Designated Senior Indebtedness of such Subsidiary Guarantor or the Company, such
Subsidiary Guarantor may resume payments on the Subsidiary Guarantee after the
end of such Payment Blockage Period including any missed payments. No more than
one Payment Blockage Period may be commenced in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness Guaranteed by such Subsidiary Guarantor during such period.
(b) If, notwithstanding the foregoing, any payment shall be received
by the Trustee or any Holder when such payment is prohibited by Section
12.02(a), such payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of such Guarantor's Senior Indebtedness
(pro rata to such holders on the basis of the respective amount of such
Subsidiary Guarantor's Senior Indebtedness held by such holders) or their
respective Representatives, as their respective interests may appear. The
Trustee shall be entitled to rely on information regarding amounts then due and
owing on such Subsidiary Guarantor's Senior Indebtedness, if any, received from
the holders of such Subsidiary Guarantor's Senior Indebtedness (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from such Subsidiary Guarantor and only amounts included
in the information provided to the Trustee shall be paid to the holders of such
Subsidiary Guarantor's Senior Indebtedness.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.03 would be applicable.
Nothing contained in this Article Twelve shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to
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Section 6.02 or to pursue any rights or remedies hereunder; provided that all
Senior Indebtedness of the Company thereafter due or declared to be due shall
first be paid in full in cash or before the Holders are entitled to receive any
payment of any kind or character with respect to Obligations on the Notes.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, Etc.
(a) Upon any payment or distribution of assets of any Subsidiary
Guarantor or any of its Subsidiaries of any kind or character, whether in cash,
property or securities, to creditors upon any total or partial liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of such Subsidiary Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
such Subsidiary Guarantor or any of its Subsidiaries or any of their property,
whether voluntary or involuntary, all Obligations due or to become due upon all
of such Subsidiary Guarantor's Senior Indebtedness shall first be paid in full
in cash, or such payment duly provided for to the satisfaction of the holders of
such Subsidiary Guarantor's Senior Indebtedness, before any payment or
distribution of any kind or character is made on account of any Obligations with
respect to the Subsidiary Guarantee of such Subsidiary Guarantor, or for the
acquisition of such Subsidiary Guarantee for cash or property or otherwise. Upon
any such total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding, any payment or distribution of assets
of such Subsidiary Guarantor or any of its Subsidiaries of any kind or
character, whether in cash, property or securities, to which the Holders of the
Notes or the Trustee under this Indenture would be entitled, except for the
provisions hereof, shall be paid by such Subsidiary Guarantor or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them, directly to the holders of such Subsidiary
Guarantor's Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of such Subsidiary Guarantor's Senior Indebtedness held by
such holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Subsidiary Guarantor's Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of such Subsidiary Guarantor's Senior Indebtedness
remaining unpaid until all such Subsidiary Guarantor's Senior Indebtedness has
been paid in full in cash after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Subsidiary
Guarantor's Senior Indebtedness.
(b) To the extent any payment of any Subsidiary Guarantor's Senior
Indebtedness (whether by or on behalf of such Subsidiary Guarantor, as proceeds
of security or enforcement of any right of setoff or otherwise) is declared to
be fraudulent or preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person under
any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, such
Subsidiary Guarantor's Senior Indebtedness or part thereof originally intended
to be satisfied shall be deemed to be
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reinstated and outstanding as if such payment had not occurred.
(c) If, notwithstanding the foregoing, any payment or distribution
of assets of any Subsidiary Guarantor of any kind or character, whether in cash,
property or securities, shall be received by any Holder or the Trustee when such
payment or distribution is prohibited by this Section 12.03, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of such Subsidiary Guarantor's Senior Indebtedness
(pro rata to such holders on the basis of the respective amount of such
Subsidiary Guarantor's Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Subsidiary Guarantor's Senior Indebtedness may
have been issued, as their respective interests may appear, for application to
the payment of such Subsidiary Guarantor's Senior Indebtedness remaining unpaid
until all such Subsidiary Guarantor's Senior Indebtedness has been paid in full
in cash, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Subsidiary Guarantor's Senior
Indebtedness.
(d) The consolidation of any Subsidiary Guarantor with, or the
merger of any Subsidiary Guarantor with or into, another corporation or the
liquidation or dissolution of any Subsidiary Guarantor following the conveyance
or transfer of all or substantially all of its assets, to another corporation
upon the terms and conditions provided in Article Five hereof and as long as
permitted under the terms of such Subsidiary Guarantor's Senior Indebtedness
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume such Subsidiary
Guarantor's obligations hereunder in accordance with Article Five hereof.
SECTION 12.04. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) any Subsidiary Guarantor, except under the
conditions described in Sections 12.02 and 12.03, from making payments at any
time for the purpose of making payments in respect of this Subsidiary Guarantee,
or from depositing with the Trustee any moneys for such payments, or (ii) in the
absence of actual knowledge by the Trustee that a given payment would be
prohibited by Section 12.02 or 12.03, the application by the Trustee of any
moneys deposited with it for the purpose of making such payments to the Holders
entitled thereto unless at least two Business Days prior to the date upon which
such payment would otherwise become due and payable the written notice provided
for in the third sentence of Section 12.02(a) or in Section 12.07 has been
received by the Trustee (provided that, notwithstanding the foregoing, such
application shall otherwise be subject to the provisions of the first sentence
of Section 12.02(a), 12.02(b) and Section 12.03). Each Subsidiary Guarantor
shall give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of such Subsidiary Guarantor.
SECTION 12.05. Subrogation.
Subject to, and only after, the payment in full in cash of all
Subsidiary
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Guarantor Senior Indebtedness, the Holders of the Obligations of any Subsidiary
Guarantor shall be subrogated to the rights of the holders of such Subsidiary
Guarantor's Senior Indebtedness to receive payments or distributions of cash,
property or securities of such Subsidiary Guarantor applicable to such
Subsidiary Guarantor's Senior Indebtedness until the Obligations of such
Subsidiary Guarantor under the Subsidiary Guarantee shall be paid in full; and,
for the purposes of such subrogation, no such payments or distributions to the
holders of such Subsidiary Guarantor's Senior Indebtedness by or on behalf of
such Subsidiary Guarantor or by or on behalf of the Holders by virtue of this
Article Twelve which otherwise would have been made to the Holders shall, as
between such Subsidiary Guarantor and the Holders of such Subsidiary Guarantor's
Obligations, be deemed to be a payment by such Subsidiary Guarantor to or on
account of such Subsidiary Guarantor's Senior Indebtedness, it being understood
that the provisions of this Article Twelve are and are intended solely for the
purpose of defining the relative rights of the Holders of such Subsidiary
Guarantor's Obligations, on the one hand, and the holders of such Subsidiary
Guarantor's Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the application of the provisions of this Article
Twelve shall have been applied, pursuant to the provisions of this Article
Twelve, to the payment of amounts payable under Senior Indebtedness of any
Subsidiary Guarantor, then the Holders shall be entitled to receive from the
holders of such Senior Indebtedness any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount sufficient to pay
all amounts payable under or in respect of such Senior Indebtedness in full in
cash.
SECTION 12.06. Obligations of Subsidiary Guarantor Unconditional.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as among the
Subsidiary Guarantors, their respective creditors other than the holders of such
Subsidiary Guarantor's Senior Indebtedness, and the Holders, the obligation of
such Subsidiary Guarantor, which is absolute and unconditional, to pay to the
Holders the Guarantee Obligations as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders and creditors of such Subsidiary Guarantor other
than the holders of such Subsidiary Guarantor's Senior Indebtedness, nor shall
anything herein or therein prevent the Holder of any Note or the Trustee on its
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, in respect of cash,
property or securities of such Subsidiary Guarantor received upon the exercise
of any such remedy.
SECTION 12.07. Notice to Trustee.
Each Subsidiary Guarantor shall give prompt written notice to the
Trustee of any fact known to such Subsidiary Guarantor which would prohibit the
making of any payment to or by the Trustee in respect of the Subsidiary
Guarantee or the Notes pursuant to the provisions of this Article Twelve.
Regardless of anything to the contrary contained in this Article Twelve or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Subsidiary
Guarantor's
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Senior Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from such Subsidiary Guarantor or from a holder of such
Subsidiary Guarantor's Senior Indebtedness or a Representative therefor, and,
prior to the receipt of any such written notice, the Trustee shall be entitled
to assume (in the absence of actual knowledge to the contrary) that no such
facts exist.
If the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of such Subsidiary
Guarantor's Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amounts of such
Subsidiary Guarantor's Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article
Twelve, and if such evidence is not furnished the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 12.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of any Subsidiary
Guarantor referred to in this Article Twelve, the Trustee, subject to the
provisions of Article Seven hereof, and the Holders of the Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which any insolvency, bankruptcy, receivership, dissolution,
winding-up, liquidation, reorganization or similar case or proceeding is pending
so long as such order gives effect to the provisions of this Article Twelve, or
upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or the Holders of the
Notes, for the purpose of ascertaining the persons entitled to participate in
such payment or distribution, the holders of each Subsidiary Guarantor's Senior
Indebtedness and other Indebtedness of any Subsidiary Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Twelve.
SECTION 12.09. Trustee's Relation to Subsidiary Guarantor's Senior
Indebtedness.
The Trustee, any agent of the Trustee and any agent of any
Subsidiary Guarantor shall be entitled to all the rights set forth in this
Article Twelve with respect to the respective Subsidiary Guarantor's Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of the respective Subsidiary
Guarantor's Senior Indebtedness and nothing in this Indenture shall deprive the
Trustee or any such agent of any of its rights as such holder.
With respect to the holders of the respective Subsidiary Guarantor's
Senior Indebtedness, the Trustee undertakes to perform or to observe only such
of its covenants and
89
obligations as are specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of the respective
Subsidiary Guarantor's Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of any Subsidiary Guarantor's Senior Indebtedness.
Whenever a distribution is to be made or a notice given to holders
or owners of any Subsidiary Guarantor's Senior Indebtedness, the distribution
may be made and the notice may be given to their Representative, if any.
SECTION 12.10. Subordination Rights Not Impaired by Acts or
Omissions of Subsidiary Guarantors or Holders of
Subsidiary Guarantors' Senior Indebtedness.
No right of any present or future holders of any Subsidiary
Guarantor's Senior Indebtedness to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of such Subsidiary Guarantor or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by such Subsidiary
Guarantor with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of any Subsidiary Guarantor's Senior Indebtedness may, at
any time and from time to time, without the consent of or notice to the Trustee,
without incurring responsibility to the Trustee or the Holders of the Notes and
without impairing or releasing the subordination provided in this Article Twelve
or the obligations hereunder of the Holders of the Notes to the holders of such
Subsidiary Guarantor's Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, such Subsidiary Guarantor's Senior Indebtedness, or
otherwise amend or supplement in any manner such Subsidiary Guarantor's Senior
Indebtedness, or any instrument evidencing the same or any agreement under which
such Subsidiary Guarantor's Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Subsidiary Guarantor's Senior Indebtedness; (iii)
release any Person liable in any manner for the payment or collection of such
Subsidiary Guarantor's Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against such Subsidiary Guarantor and any other Person.
SECTION 12.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of each
Subsidiary Guarantor's Senior Indebtedness and the Holders of Notes, the
subordination provided in this Article Twelve, and appoints the Trustee its
attorney-in-fact for such purposes, including, in the event of any dissolution,
winding-up, liquidation or reorganization of such Subsidiary Guarantor (whether
in bankruptcy, insolvency,
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receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Subsidiary Guarantor, the filing of a claim for the
unpaid balance of its Notes and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of each Subsidiary
Guarantor's Senior Indebtedness or their Representative are or is hereby
authorized to have the right to file and are or is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Notes, and the
Trustee shall supply such Holders and Representatives all information and
documents they reasonably request in order to file such claims. Nothing herein
contained shall be deemed to authorize the Trustee or the holders of any
Subsidiary Guarantor's Senior Indebtedness or their respective Representatives
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
any Subsidiary Guarantor's Senior Indebtedness or their Representatives to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 12.12. This Article Twelve Not To Prevent Events of Default.
The failure to make a payment on account of Obligations of any
Subsidiary Guarantor by reason of any provision of this Article Twelve shall not
be construed as preventing the occurrence of an Event of Default. Nothing
contained in this Article Twelve shall limit the right of the Trustee or the
Holders to take any action or accelerate the maturity of the Notes pursuant to
Article Six or to pursue any rights or remedies hereunder or under applicable
law, subject to the rights, if any, under this Article Twelve of the holders
from time to time, of Senior Indebtedness of any Subsidiary Guarantor.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 13.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by commercial courier service, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
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if to the Company or any Subsidiary Guarantor:
Environmental Systems Products Holdings Inc.
c/o Environmental Systems Products, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
White & Case, Limited Liability Partnership
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
if to the Trustee:
United States Trust Company of Texas, N.A.
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Corporate Trust Department
Each of the Company, the Subsidiary Guarantors and the Trustee by
written notice to each other such Person may designate additional or different
addresses for notices to such Person. Any notice or communication to the
Company, the Subsidiary Guarantors 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 and notice to the Trustee shall not be deemed to have been given until
actually received by a Trust Officer).
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 to a Holder in the manner provided above, it
is duly given, whether or not the addressee
92
receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to the TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Subsidiary Guarantors, the Trustee, the Registrar and any
other Person shall have the protection of the TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
93
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 13.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 13.08. Governing Law.
THIS INDENTURE AND THE NOTES (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
INDENTURE.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any of its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 13.10. No Recourse Against Others.
No past, present or future director, officer, employee, stockholder
or incorporator, as such, of the Company, any Subsidiary Guarantor or of the
Trustee shall have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
SECTION 13.11. Successors.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successors.
94
SECTION 13.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 13.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms of provisions hereof.
95
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
Issuer:
ENVIRONMENTAL SYSTEMS
PRODUCTS HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO
Subsidiary Guarantors:
ENVIRONMENTAL SYSTEMS PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CEO
ENVIROTEST SYSTEMS CORP. (DELAWARE)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ENVIROTEST HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ENVIROTEST TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ENVIROTEST PARTNERS (PENNSYLVANIA)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
REMOTE SENSING TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ENVIROTEST WISCONSIN, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ES FUNDING CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ENVIROTEST ACQUISITIONS CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ENVIROTEST SYSTEMS CORP.
(WASHINGTON)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
ENVIROTEST ILLINOIS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
▇▇▇▇▇▇▇ NORTH AMERICA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: EVP & CFO
▇▇▇▇▇▇▇ OVERSEAS LIMITED
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
NEWMALL LIMITED
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Holdco:
ENVIROSYSTEMS CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO
Trustee:
UNITED STATES TRUST COMPANY OF
TEXAS, N.A., as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
APPENDIX
RULE 144A/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:
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns.
"Exchange Notes" means the 13% Senior Subordinated Exchange Notes
Due 2008 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to the Registration Rights Agreement.
"Initial Notes" means the 13% Senior Subordinated Notes Due 2008,
issued under this Indenture on or about the date hereof.
"Initial Purchasers" means Credit Suisse First Boston (Europe)
Limited and one or more of its affiliates, DLJ Merchant Banking Partners II,
L.P. and one or more of its affiliates and Chase Equity Associates L.P. and one
or more of its affiliates.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers 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 13% Senior Subordinated Private
Exchange Notes Due 2008, if any, to be issued pursuant to this Indenture to the
Initial Purchasers in a Private Exchange.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Notes, to
issue and deliver to such Holders, in exchange for the Initial Notes, a like
aggregate principal amount of Exchange Notes registered under the Securities
Act.
I
"Registration Rights Agreement" means the Registration Rights
Agreement dated October 16, 1998 among the Company, the Subsidiary Guarantors
and the Initial Purchasers.
"Registration Statement" means the registration statement issued by
the Company, in connection with the offer and sale of Initial Notes, pursuant to
the Registration Rights Agreement.
"Securities" means the Initial Notes, the Private Exchange Notes and
the Exchange Notes.
"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 United States Trust Company of New York.
"Shelf Registration Statement" means the shelf registration
statement issued by the Company, in connection with the offer and sale of
Initial Notes or Private Exchange Notes, pursuant to the Registration Rights
Agreement.
"Subscription Agreement" means the Subscription Agreement dated
October 15, 1998, among the Company, the Subsidiary Guarantors and the Initial
Purchasers.
"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.
II
The Initial Notes are being offered and sold by the Company pursuant
to the Subscription Agreement.
(a) Global Securities. Initial Notes offered and sold to the Initial
Purchasers in reliance on an exemption from the registration requirements under
the Securities Act, in each case as provided in the Subscription Agreement,
shall be issued initially in the form of one 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
(a "Global Security"), which shall be deposited on behalf of the purchasers of
the Initial Notes 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 this 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 2.5 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: (i)
Initial Notes for original issue in an aggregate principal amount of $100
million and (2) Exchange Notes or
III
Private Exchange Notes for issue only in a Registered Exchange Offer or a
Private Exchange, respectively, pursuant to the Registration Rights Agreement,
for a like principal amount of Initial Notes, in each case upon a written order
of the Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and whether the Securities are to be
Initial Notes, Exchange Notes or Private Exchange Notes. The aggregate principal
amount of Securities outstanding at any time may not exceed $100 million except
as provided in Section 2.07 and 2.08 of this 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 this 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 2.5 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 2.5 of this
Appendix or Section 2.10 of this Indenture, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a 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.
IV
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Initial Notes or
the Private Exchange Notes (and all Securities issued in exchange therefor
or in substitution thereof) 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 such Security without the restricted securities
legend set forth on Exhibit 1 hereto that does not bear the legend set
forth above and rescind any restriction on the transfer of such Transfer
Restricted Security, if
V
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 Registration
Statement or a Shelf Registration Statement with respect to 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 shall
cease to apply so long as such Initial Notes or such Private Exchange
Notes were transferred pursuant to such Registration Statement, 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.
VI
(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 authenticate certificated
Securities at the Registrar's or any co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.16, 4.17 and Section 9.06 of
this 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
this 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 this Indenture shall evidence the same debt and
shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(e) No Obligation of the Trustee.
(i) 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.
(ii) The Trustee shall have no responsibility or obligations
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,
VII
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.
(iii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this 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 this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Original Issue Discount Legend.
The Company will cause each physical Note to contain on its face a
legend that satisfies the requirements of U.S. Treasury Regulations Section
1.1275-3.
2.5 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 this 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
VIII
aggregate principal amount of certificated Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenti cated 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 2.5(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 this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events specified
in Section 2.5(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.
IX
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
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
X
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.
XI
[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:
------------------ ----------------------- ----------------------- -------------------- ---------------------------
Date of Exchange Amount of decrease in Amount of increase in Principal Amount of Signature of authorized
Principal Amount of Principal Amount of this Global Security officer of Trustee or
this Global Security this Global Security following such Securities Custodian
decrease or increase
XII
EXHIBIT A
FORM OF INITIAL NOTE
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC.
13% SENIOR SUBORDINATED NOTE DUE 2008
CUSIP No. 29408Q AA7
No. $
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., a Delaware corporation
(the "Company," which term includes any successor entity), for value received
promises to pay to _______ or registered assigns, the principal sum of _________
Dollars, on _______, 2008.
Interest Payment Dates: April 30 and October 31
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note contained
herein, which shall for all purposes have the same effect as if set forth at
this place.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES. FOR FURTHER INFORMATION, PLEASE CONTACT
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER,
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., C/O ENVIRONMENTAL SYSTEMS
PRODUCTS, INC., ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
ENVIRONMENTAL SYSTEMS PRODUCTS
HOLDINGS INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Dated: ____________ Title:
A-2
Certificate of Authentication
This is one of the 13% Senior Subordinated Notes due 2008 referred
to in the within-mentioned Indenture.
_________________________________
UNITED STATES TRUST COMPANY
OF TEXAS, N.A.
as Trustee
Dated: ____________ By:___________________________________
Authorized Signatory
A-3
(REVERSE OF SECURITY)
13% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., a
Delaware corporation (the "Company"), promises to pay to the registered holder
of this Note interest on the principal amount of this Note at the rate per annum
shown above. Interest on the Notes shall accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from October 16,
1998. The Company shall pay interest semi-annually in arrears on each Interest
Payment Date, commencing April 30, 1999. For U.S. federal income tax purposes,
the "issue price" of the Notes shall be less than the aggregate principal amount
to the extent of the fair market value of the common stock of Holdco acquired in
connection with the purchase of the Notes. To the extent of such difference,
"original issue discount" ("OID") shall be recognized by a Holder during such
Holder's ownership of the Notes. Interest shall 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, the Trustee (as defined
below) shall act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.
4. Indenture and Subsidiary Guarantee. The Company issued the Notes
under an Indenture, dated as of October 16, 1998 (the "Indenture"), among the
Company, the Subsidiary Guarantors named therein, Holdco and United States Trust
Company of Texas, N.A., as trustee (the "Trustee"). This Note is one of a duly
authorized issue of Initial Notes of the Company designated as its 13% Senior
Subordinated Notes due 2008 (the "Initial Notes"). The Notes are limited in
aggregate principal amount to $100,000,000. The Notes include the Initial Notes,
the Private Exchange Notes and the Exchange Notes issued in
A-4
exchange for the Initial Notes pursuant to the Indenture. The Initial Notes, the
Private Exchange Notes and the Exchange Notes are treated as a single class of
securities under the Indenture. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA Act for a statement of them. The
Notes are unsecured senior subordinated obligations of the Company. Payment on
each Note is Guaranteed on a senior subordinated basis by the Subsidiary
Guarantors pursuant to Article Eleven of the Indenture. To the extent of any
conflict between the terms of the Notes and the Indenture, the applicable terms
of the Indenture shall govern.
5. Subordination. The Notes are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full in cash of all Senior Indebtedness of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
Guaranteed. The obligations of each Subsidiary Guarantor pursuant to its
Subsidiary Guarantee and the terms of the Indenture are subordinated in right of
payment to the prior payment in full in cash of all Senior Indebtedness of such
Subsidiary Guarantor to the extent set forth in the Indenture. Each Holder by
his acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Redemption.
(a) Optional Redemption. Except as set forth in the following
paragraph, the Notes shall not be redeemable at the option of the Company prior
to October 31, 2003. Thereafter, the Notes shall be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued 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 commencing on October 31 of the years set
forth below:
Period Price
------ -----
2003 ............................................... 106.500%
2004 ............................................... 104.333%
2005 ............................................... 102.167%
2006 and thereafter................................. 100.000%
A-5
(b) Optional Redemption Upon Public Equity Offerings. In addition,
at any time and from time to time prior to October 31, 2001, the Company may
redeem in the aggregate up to 35% of the original principal amount of the Notes
with the Net Cash Proceeds of one or more Public Equity Offerings, at a
redemption price (expressed as a percentage of principal amount) of 113% plus
accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the aggregate
principal amount of the Notes originally outstanding must remain outstanding
after each such redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption shall 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 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 shall cease to bear interest from and after
such Redemption Date and the only right of the Holders of such Notes shall be to
receive payment of the Redemption Price plus accrued and unpaid interest, if
any.
8. Offers to Purchase. Sections 4.16 and 4.17 of the Indenture
provide that, in the event of certain Asset Dispositions (as defined in the
Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to further limitations contained therein, the Company
shall make an offer to purchase certain amounts of the Notes in accordance with
the procedures set forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights
Agreement (as defined in the Indenture), under certain circumstances, (i) the
Company shall 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
13% Senior Subordinated Exchange Notes due 2008 (the "Exchange Notes") which
shall have been registered under the Securities Act or the Company's 13% Senior
Subordinated Private Exchange Notes due 2008 (the "Private Exchange Notes"), in
each case in like principal amount and having terms identical in all material
respects to the Initial Notes and (ii) the Company shall be required to cause to
become effective a resale shelf registration statement with respect to this
Note.
10. Denominations; Transfer; Exchange. The Notes are in registered
form,
A-6
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of or exchange of Notes in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption (except, in
the case of Notes to be redeemed in part, the portion of such Notes not to be
redeemed) or any Note for a period 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.
11. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent shall
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.
13. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company shall be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, omission, defect or inconsistency, provide for uncertificated Notes
in addition to or in place of certificated Notes, or comply with Article Five of
the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
A-7
16. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor shall be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Certain events of bankruptcy and insolvency are Events of Default which shall
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No stockholder, director, officer,
em ployee or incorporator, as such, of the Company or any Subsidiary Guarantor
shall have any liability for any obligation of the Company under the Notes or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. The Laws of the State of New York shall govern
this Note and the Indenture (and the Guarantees relating thereto), without
regard to principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
A-8
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
25. Holders' Compliance with Registration Rights Agreement. Each
Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
The Company shall furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., c/o Environmental Systems
Products, Inc., ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇.
A-9
SUBSIDIARY GUARANTEE
Environmental Systems Products, Inc., Envirotest Systems Corp.
(Delaware), Envirotest Holdings, Inc., Envirotest Technologies, Inc., Envirotest
Partners (Pennsylvania), Remote Sensing Technologies, Inc., Envirotest
Wisconsin, Inc., ES Funding Corporation, Envirotest Acquisitions Co., Envirotest
Systems Corp. (Washington), Envirotest Illinois, Inc., ▇▇▇▇▇▇▇ North America,
Inc., ▇▇▇▇▇▇▇ Overseas Limited and Newmall Limited (collectively, the
"Subsidiary Guarantors"), have each jointly and severally unconditionally
Guaranteed on a senior subordinated basis (such Guarantee by each Subsidiary
Guarantor being referred to herein as the "Subsidiary Guarantee") (i) the due
and punctual payment of the principal of and interest on the Notes, subject to
any applicable grace period, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Notes, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article Eleven of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth and are senior subordinated obligations of each Subsidiary
Guarantor, to the extent and in the manner provided, in Articles Eleven and
Twelve of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Subsidiary Guarantee therein made.
No stockholder, officer, director, employee or incorporator, as
such, past, present or future, of any Subsidiary Guarantor shall have any
liability under the Subsidiary Guarantee by reason of his or its status as such
stockholder, officer, director, employee or incorporator.
The Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Notes upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
ENVIRONMENTAL SYSTEMS PRODUCTS, INC.
By:______________________________________
Name:
Title:
ENVIROTEST SYSTEMS CORP. (DELAWARE)
By:______________________________________
Name:
Title:
ENVIROTEST HOLDINGS, INC.
By:______________________________________
Name:
Title:
ENVIROTEST TECHNOLOGIES, INC.
By:______________________________________
Name:
Title:
ENVIROTEST PARTNERS (PENNSYLVANIA)
By:______________________________________
Name:
Title:
A-11
REMOTE SENSING TECHNOLOGIES, INC.
By:______________________________________
Name:
Title:
ENVIROTEST WISCONSIN, INC.
By:______________________________________
Name:
Title:
ES FUNDING CORPORATION
By:______________________________________
Name:
Title:
ENVIROTEST ACQUISITIONS CO.
By:______________________________________
Name:
Title:
ENVIROTEST SYSTEMS CORP. (WASHINGTON)
By:______________________________________
Name:
Title:
ENVIROTEST ILLINOIS, INC.
By:______________________________________
Name:
Title:
▇▇▇▇▇▇▇ NORTH AMERICA, INC.
By:______________________________________
Name:
Title:
▇▇▇▇▇▇▇ OVERSEAS LIMITED
By:______________________________________
Name:
Title:
NEWMALL LIMITED
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) October 16, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
A-14
[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 shall 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.
A-15
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 Indenture shall have been satisfied.
Dated: _______________ Signed: _______________________________________________
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee: ___________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: _______________ ______________________________________________________
NOTICE: To be executed by
an executive officer
A-16
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ]
Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount you elect to have purchased:
$________________________
Dated: __________________ __________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be Guaranteed by the
endorser's bank or broker.
Signature Guarantee: _____________________
(Signature must be Guaranteed by an "eligible guarantor
institution," that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature Guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended).
A-17
EXHIBIT B
FORM OF EXCHANGE NOTE AND PRIVATE EXCHANGE NOTE
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC.
13% SENIOR SUBORDINATED NOTE DUE 2008
CUSIP NO.29408Q AA7
No. $
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., a Delaware corporation
(the "Company," which term includes any successor entity), for value received
promises to pay to _______ or registered assigns, the principal sum of _________
Dollars, on _______, 2008.
Interest Payment Dates: April 30 and October 31
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note contained
herein, which shall for all purposes have the same effect as if set forth at
this place.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES. FOR FURTHER INFORMATION, PLEASE CONTACT
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER,
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., C/O ENVIRONMENTAL SYSTEMS
PRODUCTS, INC., ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇.
B-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
ENVIRONMENTAL SYSTEMS PRODUCTS
HOLDINGS INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Dated: ____________ Title:
Certificate of Authentication
This is one of the 13% Senior Subordinated Notes due 2008 referred
to in the within-mentioned Indenture.
_________________________________
UNITED STATES TRUST COMPANY
OF TEXAS, N.A.
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.]
B-2
(REVERSE OF SECURITY)
13% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC., a
Delaware corporation (the "Company"), promises to pay to the registered holder
of this Note interest on the principal amount of this Note at the rate per annum
shown above. 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 October 16,
1998. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing April 30, 1999. For U.S. federal income tax purposes,
the "issue price" of the Notes shall be less than the aggregate principal amount
to the extent of the fair market value of the common stock of Holdco acquired in
connection with the purchase of the Notes. To the extent of such difference,
"original issue discount" ("OID") shall be recognized by a Holder during such
Holder's ownership of the 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 Texas, N.A., as trustee (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders.
4. Indenture and Guarantee. The Company issued the Notes under an
Indenture, dated as of October 16, 1998 (the "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 13%
Senior Subordinated Exchange Notes due 2008 (the "Exchange Notes").] [This Note
is one of a duly authorized issue of Private Exchange Notes of the Company
designated as its 13% Senior Subordinated Private Exchange Notes due 2008 (the
"Private Exchange Notes").] The Notes are limited in aggregate principal amount
to $100,000,000. The Notes include the Initial Notes (the 13% Senior
Subordinated Notes due
B-3
2008) and the Private Exchange Notes and the Exchange Notes issued in
exchange for the Initial Notes pursuant to the Indenture. The Initial Notes,
the Private Exchange Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Notes include those stated in the Indenture and those made part of the
Indenture by reference to the TIA of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA
for a statement of them. The Notes are general unsecured obligations of the
Company. Payment on each Note is guaranteed on a senior subordinated basis by
the Subsidiary Guarantors pursuant to Article Eleven of the Indenture. To the
extent of any conflict between the terms of the Notes and the Indenture, the
applicable terms of the Indenture shall govern.
5. Subordination. The Notes are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full in cash of all Senior Indebtedness of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. The obligations of each Subsidiary Guarantor pursuant to its
Subsidiary Guarantee and the terms of the Indenture are subordinated in right of
payment to the prior payment in full in cash of all Senior Indebtedness of such
Subsidiary Guarantor to the extent set forth in the Indenture. Each Holder by
his acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Redemption.
(a) Optional Redemption. Except as set forth in the following
paragraph, the Notes shall not be redeemable at the option of the Company prior
to October 31, 2003. Thereafter, the Notes shall be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on October 31 of the years set forth below:
Redemption
Period Price
------ ----------
2003 ....................................... 106.500%
2004 ....................................... 104.333%
2005 ....................................... 102.167%
2006 and thereafter......................... 100.000%
B-4
(b) Optional Redemption Upon Public Equity Offerings. In addition,
at any time and from time to time prior to October 31, 2001, the Company may
redeem in the aggregate up to 35% of the original principal amount of the Notes
with the Net Cash Proceeds of one or more Public Equity Offerings, at a
redemption price (expressed as a percentage of principal amount) of 113.000%
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the aggregate
principal amount of the Notes originally outstanding must remain outstanding
after each such redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption shall 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 Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such Redemption Date, then, unless the Company defaults
in the payment of such Redemption Price plus accrued and unpaid interest, if
any, the Notes called for redemption will cease to bear interest from and after
such Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued and unpaid interest, if
any.
8. Offers to Purchase. Sections 4.16 and 4.17 of the Indenture
provide that, in the event of certain Asset Dispositions (as defined in the
Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to further limitations contained therein, the Company
will make an offer to purchase certain amounts of the Notes in accordance with
the procedures set forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for redemption
(except, in the case of Notes to be redeemed in part, the portion of such Notes
not to be redeemed) or any Note for a period 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
B-5
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 Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, omission, defect or inconsistency, provide for uncertificated Notes
in addition to or in place of certificated Notes, or comply with Article Five of
the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as
B-6
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may 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 Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of a
Note by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The Laws of the State of New York shall govern
this Note and the Indenture (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. Indenture. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
24. [Registration Rights. Pursuant to the Registration Rights
Agreement (as defined in the Indenture), the Company will have certain
obligations to the Holders of the Private Exchange Notes.]
B-7
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note in larger type. Requests may be made to: ENVIRONMENTAL SYSTEMS PRODUCTS
HOLDINGS INC., c/o Environmental Systems Products, Inc., ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
B-8
SUBSIDIARY GUARANTEE
Environmental Systems Products, Inc., Envirotest Systems Corp.
(Delaware), Envirotest Holdings, Inc., Envirotest Technologies, Inc., Envirotest
Partners (Pennsylvania), Remote Sensing Technologies, Inc., Envirotest
Wisconsin, Inc., ES Funding Corporation, Envirotest Acquisitions Co., Envirotest
Systems Corp. (Washington), Envirotest Illinois, Inc., ▇▇▇▇▇▇▇ North American,
Inc., ▇▇▇▇▇▇▇ Overseas Limited and Newmall Limited (collectively, the
"Subsidiary Guarantors"), have each unconditionally guaranteed on a senior
subordinated basis (such Guarantee by the Subsidiary Guarantors being referred
to herein as the "Subsidiary Guarantee") (i) the due and punctual payment of the
principal of and interest on the Notes, subject to any applicable grace period,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal and interest, if any, on the Notes, to the
extent lawful, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms set
forth in Article Eleven of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth and are senior subordinated obligations of each Subsidiary
Guarantor, to the extent and in the manner provided, in Articles Eleven and
Twelve of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Subsidiary Guarantee therein made.
No stockholder, officer, director, employee or incorporator, as
such, past, present or future, of each Subsidiary Guarantor shall have any
liability under the Subsidiary Guarantee by reason of his or its status as such
stockholder, officer, director, employee or incorporator.
The Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Notes upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
B-9
ENVIRONMENTAL SYSTEMS PRODUCTS, INC.
By: _______________________________________
Name:
Title:
ENVIROTEST SYSTEMS CORP. (DELAWARE)
By: _______________________________________
Name:
Title:
ENVIROTEST HOLDINGS, INC.
By: _______________________________________
Name:
Title:
ENVIROTEST TECHNOLOGIES, INC.
By: _______________________________________
Name:
Title:
ENVIROTEST PARTNERS (PENNSYLVANIA)
By: _______________________________________
Name:
Title:
B-10
REMOTE SENSING TECHNOLOGIES, INC.
By: _______________________________________
Name:
Title:
ENVIROTEST WISCONSIN, INC.
By: _______________________________________
Name:
Title:
ES FUNDING CORPORATION
By: _______________________________________
Name:
Title:
ENVIROTEST ACQUISITIONS CO.
By: _______________________________________
Name:
Title:
ENVIROTEST SYSTEMS CORP. (WASHINGTON)
By: _______________________________________
Name:
Title:
B-11
ENVIROTEST ILLINOIS, INC.
By: _______________________________________
Name:
Title:
▇▇▇▇▇▇▇ NORTH AMERICA, INC.
By: _______________________________________
Name:
Title:
▇▇▇▇▇▇▇ OVERSEAS LIMITED
By: _______________________________________
Name:
Title:
NEWMALL LIMITED
By: _______________________________________
Name:
Title:
B-12
ASSIGNMENT FORM(1)
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).
----------
(1) If the Note is a Private Exchange Note, replace the Assignment Form with
that included in Exhibit A to the Indenture.
B-13
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ]
Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount you elect to have purchased:
$_____________________
Dated: __________________ ___________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: ________________________
(Signature must be guaranteed by an "eligible guarantor
institution," that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended).
B-14
EXHIBIT C
Subsidiary Guarantors
Environmental Systems Products, Inc.
Envirotest Systems Corp. (Washington)
Envirotest Holdings, Inc.
Envirotest Technologies, Inc.
Envirotest Partners
Remote Sensing Technologies, Inc.
Envirotest Wisconsin, Inc.
ES Funding Corporation
Envirotest Acquisitions Co.
Envirotest Systems Corp. (Delaware)
Envirotest Illinois, Inc.
▇▇▇▇▇▇▇ North America, Inc.
▇▇▇▇▇▇▇ Overseas Limited
Newmall Limited
C-1
CROSS-REFERENCE TABLE
TIA Section Indenture 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) ................................. 7.03; 7.08; 7.10; 13.02
(c) ................................. N.A.
311(a) ................................. 7.11
(b) ................................. 7.11
(c) ................................. N.A.
312(a) ................................. 2.05
(b) ................................. 13.03
(c) ................................. 13.03
313(a) ................................. 7.06
(b)(1) ................................. N.A.
(b)(2) ................................. 7.06
(c) ................................. 7.06; 13.02
(d) ................................. 7.06
314(a) ................................. 4.07; 4.08; 13.02
(b) ................................. N.A.
(c)(1) ................................. 13.04
(c)(2) ................................. 13.04
(c)(3) ................................. N.A.
(d) ................................. N.A.
(e) ................................. 13.05
(f) ................................. N.A.
315(a) ................................. 7.01(b)
(b) ................................. 7.05; 13.02
(c) ................................. 7.01(a)
(d) ................................. 7.01(c)
(e) ................................. 6.11
316(a)(last sentence) ................................. 2.09
(a)(1)(A) ................................. 6.05
(a)(1)(B) ................................. 6.04
(a)(2) ................................. N.A.
(b) ................................. 6.07
(c) ................................. 9.05
317(a)(1) ................................. 6.08
(a)(2) ................................. 6.09
(b) ................................. 2.04
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318(a) ................................. 13.01
(c) ................................. 13.01
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N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
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