Exhibit 10.2
JUNIOR NOTE INDENTURE
between
LASON, INC.,
as Issuer,
AND
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee,
Dated as of June 30, 2002
Non-negotiable 0% Contingent Payment Junior Notes Due December, 2006
ARTICLE 1. DEFINITIONS AND RULES OF CONSTRUCTION;
APPLICABILITY OF THE TRUST INDENTURE ACT .................. 1
Section 1.01. Definitions .......................................... 1
Section 1.02. Other Definitions .................................... 6
Section 1.03. Rules of Construction ................................ 6
Section 1.04. Trust Indenture Act .................................. 6
ARTICLE 2. THE SECURITIES ............................................ 7
Section 2.01. Form and Dating ...................................... 7
Section 2.02. Execution and Authentication ......................... 7
Section 2.03. Agents ............................................... 7
Section 2.04. Paying Agent To Hold Money in Trust .................. 8
Section 2.05. Transfer and Exchange ................................ 8
Section 2.06. Replacement Securities ............................... 9
Section 2.07. Outstanding Securities ............................... 9
Section 2.08. Treasury Securities Disregarded for Certain
Purposes ............................................. 9
Section 2.09. Cancellation ......................................... 9
ARTICLE 3. COVENANTS ................................................. 10
Section 3.01. Payment of Securities ................................ 10
Section 3.02. SEC Reports .......................................... 10
Section 3.03. Compliance Certificate ............................... 10
Section 3.04. Notice of Certain Events ............................. 11
ARTICLE 4. SUCCESSORS ................................................ 11
Section 4.01. When Company May Merge, etc. ......................... 11
Section 4.02. Successor Corporation Substituted .................... 11
ARTICLE 5. REMEDIES .................................................. 11
Section 5.01. Payment Default ...................................... 11
Section 5.02. Remedies ............................................. 12
Section 5.03. Waiver of Past Defaults .............................. 12
Section 5.04. Control by Majority .................................. 12
Section 5.05. Limitation on Suits .................................. 12
Section 5.06. Rights of Holders To Receive Payment ................. 13
Section 5.07. Priorities ........................................... 13
Section 5.08. Undertaking for Costs ................................ 13
- i -
Section 5.09. Proof of Claim ....................................... 14
Section 5.10. Actions of Holder .................................... 14
ARTICLE 6. TRUSTEE ................................................... 14
Section 6.01. Duties of Trustee .................................... 14
Section 6.02. Rights of Trustee .................................... 15
Section 6.03. Individual Rights of Trustee; Disqualification ....... 16
Section 6.04. Trustee's Disclaimer ................................. 16
Section 6.05. Notice of Defaults ................................... 16
Section 6.06. Compensation and Indemnity ........................... 16
Section 6.07. Replacement of Trustee ............................... 17
Section 6.08. Successor Trustee by Merger, etc. .................... 17
Section 6.09. Eligibility .......................................... 18
Section 6.10. Preferential Collection of Claims against Company .... 18
ARTICLE 7. SATISFACTION AND DISCHARGE ................................ 18
Section 7.01. Satisfaction and Discharge of Indenture .............. 18
Section 7.02. Application of Trust Funds ........................... 19
Section 7.03. Reinstatement ........................................ 19
Section 7.04. Repayment to Company ................................. 19
ARTICLE 8. AMENDMENTS ................................................ 20
Section 8.01. Without Consent of Holders ........................... 20
Section 8.02. With Consent of Holders .............................. 20
Section 8.03. Compliance with Section 10.03 ........................ 20
Section 8.04. Revocation and Effect of Consents and Waivers ........ 21
Section 8.05. Notice of Amendment .................................. 21
Section 8.06. Notation on or Exchange of Securities ................ 21
Section 8.07. Trustee To Sign Amendments ........................... 21
ARTICLE 9. SUBORDINATION ............................................. 21
Section 9.01. Securities Subordinated to Senior Debt ............... 21
Section 9.02. Securities Subordinated in Any Proceeding ............ 22
Section 9.03. No Payment on Securities in Certain Circumstances .... 22
Section 9.04. Subrogation .......................................... 22
Section 9.05. Effect on Obligations of the Company ................. 23
- ii -
Section 9.06. Trustee and Paying Agents Entitled To Assume Payments
Not Prohibited in Absence of Notice .................. 23
Section 9.07. Satisfaction and Discharge ........................... 23
Section 9.08. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Debt ............. 24
Section 9.09. Right To Hold Senior Debt ............................ 24
Section 9.10. No Fiduciary Duty of Trustee or Securityholders to
Holders of Senior Debt ............................... 24
Section 9.11. Distribution to Holders of Senior Debt ............... 24
Section 9.12. Trustee's Rights to Compensation, Reimbursement of
Expenses and Indemnification ......................... 24
Section 9.13. Exception for Certain Distributions .................. 24
Section 9.14. Certain Definitions .................................. 24
ARTICLE 10. MISCELLANEOUS ............................................. 25
Section 10.01. Notices .............................................. 25
Section 10.02. Communication by Holders with Other Holders .......... 26
Section 10.03. Certificate and Opinion as to Conditions Precedent ... 26
Section 10.04. Statements Required in Certificate or Opinion ........ 26
Section 10.05. Rules by Trustee and Agents .......................... 26
Section 10.06. Legal Holidays ....................................... 26
Section 10.07. No Recourse against Others ........................... 27
Section 10.08. Duplicate Originals .................................. 27
Section 10.09. Contract Information ................................. 27
Section 10.10. Governing Law ........................................ 27
Section 10.11. Successors ........................................... 27
Section 10.12. Table of Contents; Headings .......................... 27
Section 10.13. Severability Clause .................................. 28
Section 10.14. Forum Selection and Consent to Jurisdiction .......... 28
Section 10.15. Waiver of Jury Trial ................................. 28
EXHIBIT A (Form of Security)
- iii -
INDENTURE dated as of June 30, 2002 between LASON, INC, a Delaware
corporation, as Issuer (the "Issuer" or the "Company"), and STATE STREET BANK
AND TRUST COMPANY, a Massachusetts trust company, as Indenture Trustee (the
"Trustee").
Each of the undersigned parties agrees as follows for the benefit of
the other party and for the equal and ratable benefit of the Holders of the
Company's Non-negotiable 0% Contingent Payment Junior Notes Due December, 2006
(the "Securities"):
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION; APPLICABILITY OF THE TRUST
INDENTURE ACT
SECTION 1.01. DEFINITIONS.
"Affiliate." Any Person controlling, controlled by or under common
control with the referenced Person. "Control," for the purposes of this
definition means the power to direct the management and policies of a Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise. The terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent." Any Registrar or Paying Agent.
"Board." The Board of Directors of the Person or any officer or
committee thereof authorized to act for such Board.
"Business Day." A day that is not a Legal Holiday.
"Business Unit." An operating business unit or division of the Company
and its Subsidiaries.
"Capital Lease." Means, with respect to any Person, any lease of (or
other agreement conveying the right to use) any real or personal property by
such Person that, in conformity with GAAP, is accounted for as a capital lease
on the balance sheet of such Person.
"Company." The party named as such above until a successor that duly
assumes the obligations upon the Securities and under the Indenture replaces it
and thereafter means such successor.
"Consolidated Net Income." Means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any gains from asset sales, any
extraordinary gains and any gains from discounted operations.
"Debt." Means, with respect to any Person, (i) any obligation of such
Person to pay the principal of, premium of, if any, interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company, whether or not a claim for such
post-petition interest is allowed in such proceeding), penalties, reimbursement
or indemnification amounts, fees, expenses or other amounts relating to any
indebtedness, and any
other liability, contingent or otherwise, of such Person (A) for borrowed money
(including instances where the recourse of the lender is to the whole of the
assets of such Person or to a portion thereof), (B) evidenced by a note,
debenture or similar instrument (including a purchase money obligation),
including securities, (C) for any letter of credit or performance bond in favor
of such Person, (D) for the payment of money relating to a Capital Lease or (E)
to pay the deferred and unpaid purchase price of property or services (except
trade accounts payable arising in the ordinary course of business and accrued
expenses); (ii) any liability of others of the kind described in the preceding
clause (i), that the Person has guaranteed or that is otherwise its legal
liability; (iii) any obligation of the type described in clauses (i) and (ii)
secured by a lien to which the property or assets of such Person are subject,
whether or not the obligations secured thereby shall have been assumed by or
shall otherwise be such Person's legal liability; and (iv) any and all
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any liability of the kind described in any of the preceding
clauses (i), (ii) and (iii).
"Default." Any event that is, or after notice or passage of time would
be, an Event of Default.
"EBITDA." Means, with respect to any Business Unit for any period,
Consolidated Net Income for such period attributable to such Business Unit plus,
to the extent deducted in determining such Consolidated Net Income and to the
extent attributable to such Business Unit, Interest Expense, income tax expense,
depreciation and amortization for such period. Determinations as to EBITDA
attributable to any Business Unit shall be made by the Company and shall be
conclusive.
"EBITDA Target." Shall mean, as to any Holder set forth below, that the
Business Unit such Holder manages shall have achieved EBITDA at least equal to
the respective EBITDA Targets set forth below across from such Holder's name for
the following respective periods:
EBITDA Target EBITDA Target 2002-2003
Name for 2002 for 2003 Cumulative Test
---- ------------- ------------- ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $2,058,500 $2,058,500 $4,117,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ $2,058,500 $2,058,500 $4,117,000
▇▇▇▇▇ ▇▇▇▇▇ $2,058,500 $2,058,500 $4,117,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $1,865,000 $2,051,595 $3,916,595
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ $ 625,000 $ 687,500 $1,312,500
"Event of Default." Means (i) a Payment Default or (ii) any other
uncured and unwaived material act of noncompliance with a material provision of
this Indenture or any Security, provided, that an act of noncompliance under
this clause (ii) is not an Event of Default until the Trustee or the Holders of
at least 60% in Principal amount of the Securities notify the Company and the
Trustee (which notice must specify the Default, demand that it be remedied to
the extent consistent with law and state that the notice is a "Notice of
Default") of the act of noncompliance and the Company does not cure such act of
noncompliance, or it is not waived, within 60 days after receipt of the notice.
- 2 -
"Exchange Act." The Securities Exchange Act of 1934, as amended.
"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 procession. All computations based on GAAP contained in this
Indenture shall be computed in conformity with GAAP.
"Holder" or "Securityholder." A Person in whose name a Security is
registered.
"Indenture." This Indenture as amended from time to time, including the
terms of the Securities and any amendments.
"Interest Expense." Means, for any period, the consolidated interest
expense of the Company and its Subsidiaries for such period (including all
imputed interest on Capital Leases).
"Non-Compete Agreement." As to any Holder, that certain Lason Retention
Agreement entered into by such Holder and the Company pursuant to which such
Holder covenants, among other things, not to compete against the Company for the
term set forth in such agreement, in exchange for, among other things, one of
the Securities issued hereunder.
"Officer." Means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, the Treasurer, any Vice
President (or any such other officer that performs similar duties) or the
Secretary of the Company.
"Officers' Certificate." A certificate signed by two Officers, one of
whom must be the President, the Treasurer or a Vice-President of the Company.
See Sections 10.03 and 10.04.
"Opinion of Counsel." Written opinion from legal counsel who is
reasonably acceptable to the Trustee. See Sections 10.03 and 10.04. The counsel
may be an employee of or counsel to the Company or the Trustee. Opinions of
Counsel required to be delivered under this Indenture may have qualifications
customary for opinions of the type required, and counsel delivering such
Opinions of Counsel may rely on certificates of the Company or government or
other officials customary for opinions of the type required, including
certificates certifying as to matters of fact.
"Payment Amount(s)." The amounts of Principal listed in Section 1 of
the Securities, which amounts shall be paid in respective Payment Dates,
provided that the Performance Tests for the corresponding Testing Periods (each
a calendar year) have been satisfied.
"Payment Dates." The dates listed in Section 1 of the Securities on
which payments of Principal shall be made, provided that the relevant
Performance Test has been satisfied by the Holder as of such date.
"Performance Test." The test that must be satisfied by a Holder or the
Business Unit that such Holder manages as of a Payment Date as a condition
precedent to such Holder receiving payment of Principal under the relevant
Security on such date. Specifically, the Performance
- 3 -
Test as to any Holder shall be deemed satisfied with regard to the following
testing periods (each, a "Testing Period") if (a) with respect to any Holder
other than ▇▇▇▇▇▇ ▇▇▇▇▇, the Business Unit managed by such Holder shall generate
a minimum of (i) 85% of its EBITDA Target for the Testing Period of January 1,
2002 through December 31, 2002 (with respect to any such Holder, the "2002
Test"), (ii) 85% of its EBITDA Target for the Testing Period of January 1, 2003
through December 31, 2003 (with respect to any such Holder, the "2003 Test") or
(ii) an absolute and cumulative EBITDA dollar amount for the combined two-year
Testing Period starting January 1, 2002 and ending December 31, 2003 (with
respect to any such Holder, the "2002-2003 Cumulative Test") set forth in the
definition of "EBITDA Target" and (b) with respect to ▇▇▇▇▇▇ ▇▇▇▇▇, the Business
Unit managed by such Holder shall generate a minimum of (i) 85% of its Revenue
Target for the Testing Period of January 1, 2002 through December 31, 2002 (such
Holder's "2002 Test"), (ii) 85% of its Revenue Target for the Testing Period of
January 1, 2003 through December 31, 2003 (such Holder's "2003 Test") or (ii) an
absolute and cumulative Revenue dollar amount for the combined two-year Testing
Period starting January 1, 2002 and ending December 31, 2003 (such Holder's
"2002-2003 Cumulative Test") set forth in the definition of "Revenue Target."
The immediately preceding sentence notwithstanding, the Performance Test for any
period shall be deemed unsatisfied as to any Holder if such Holder has breached
its Non-Compete Agreement at any time during or prior to such year. For the
Testing Periods corresponding to calendar years 2004 and 2005 (the "2004 Test"
and the "2005 Test," respectively), no EBITDA Target or Revenue Target need be
satisfied, and such Performance Tests for any Holder for such Testing Periods
shall be deemed satisfied if such Holder does not breach such Holder's
Non-Compete Agreement.
"Person." Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Principal" of a Security means the principal of the Security that
shall be payable on a straight-line amortized basis pursuant to Section 1 of the
Securities.
"Proceeding." A liquidation, dissolution, bankruptcy, insolvency,
reorganization, receivership or similar proceeding, an assignment for the
benefit of creditors, any marshalling of assets or liabilities, or winding up or
dissolution, but shall not include any transaction permitted by and made in
compliance with Article 4.
"Representative." The indenture trustee or other trustee, agent or
representative for an issue of Senior Debt.
"Revenue Target." Shall mean, as to ▇▇▇▇▇▇ ▇▇▇▇▇, that the Business
Unit such Holder manages shall have achieved gross revenues as follows: (i)
Revenue Target for 2002, $3,361,201; (ii) Revenue Target for 2003, $2,151,227;
and (iii) 2002-2003 Cumulative Test $5,512,428.
"SEC." The U.S. Securities and Exchange Commission.
"Securities." The Securities described above issued under this
Indenture.
- 4 -
"Senior Debt." Debt of the Company whenever incurred, outstanding at
any time except (i) Debt that by its terms is not senior in right of payment to
the Securities, (ii) Debt held by the Company or any Affiliate of the Company
and (iii) to the extent it might constitute Debt, amounts owing (except to
banks and other financial institutions) for goods, materials or services
purchased in the ordinary course of business and trade accounts payable only in
the ordinary course of business. "Senior Debt" shall specifically include the
$90,000,000 of Senior Notes issued to the prepetition lenders pursuant to the
Company's Chapter 11 Plan of Reorganization confirmed by the Delaware
Bankruptcy Court on May 17, 2002.
"Subsidiary." Means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which such Person
and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares or other ownership interests as have more than 50% of the
ordinary voting power for the election of directors or other managers of such
corporation, partnership, limited liability company or other entity. Unless the
context otherwise requires, each reference to Subsidiaries herein shall be a
reference to Subsidiaries of the Company.
"2002 Test." See the definition of "Performance Test"
"2002-2003 Cumulative Test." See the definition of "Performance Test."
"2003 Test." See the definition of "Performance Test."
"2004 Test." See the definition of "Performance Test."
"2005 Test." See the definition of "Performance Test."
"Testing Period." See the definition of "Performance Test."
"TIA." The Trust Indenture Act of 1939 (15 U.S.C. ss. 77aaa-77bbbb),
as amended, as in effect on the date of this Indenture, except as provided in
Sections 1.04 and 8.03.
"Trust Officer." Any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters or to whom a matter concerning the
Indenture may be referred.
"Trustee." The party named as such above until a successor replaces it
and thereafter means the successor. See also Section 9.14.
"Uniform Commercial Code." The Uniform Commercial Code as in effect in
the State of Michigan from time to time.
"U.S. Government Obligations." Securities that are direct,
noncallable, nonredeemable obligations of, or noncallable, nonredeemable
obligations guaranteed by, the United States for the timely payment of which
obligation or guarantee the full faith and credit of the United States is
pledged, or funds consisting solely of such securities, including funds managed
by the Trustee or one of its Affiliates (including such funds for which it or
its Affiliates receives fees in connection with such management).
- 5 -
SECTION 1.02. OTHER DEFINITIONS.
TERM DEFINED IN SECTION
---- ------------------
"Distribution" ...........................................9.14
"Junior Securities" ......................................9.13
"Legal Holiday" .........................................10.06
"notice" ................................................10.01
"Paying Agent" ...........................................2.03
"Payment Blockage Period" ................................9.14
"Payment Default" ........................................5.01
"Proceeding" .............................................1.01
"Registrar" ..............................................2.03
"Security Register" ......................................2.03
"Senior Debt Default Notice" .............................9.14
"Senior Debt Payment Default" ............................9.14
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term defined in Section 1.01 or 1.02 has the meaning assigned to
it therein;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "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
(7) "including" means "including, without limitation."
SECTION 1.04. TRUST INDENTURE ACT.
This Indenture and the Securities are exempt from the TIA pursuant to
Section 304(a)(9) thereof. Nonetheless, the Company and the Trustee have agreed
to have certain provisions of the
- 6 -
TIA expressly enumerated in the Indenture and the Securities (and only those
provisions) govern the rights and duties of the parties.
ARTICLE 2.
THE SECURITIES.
SECTION 2.01. FORM AND DATING.
The Securities and the certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, agreements to which the Company is
subject or usage. Each Security shall be dated the date of its authentication.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security is still valid.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
amount stated in paragraph 3 of Exhibit A in accordance with an Officers'
Certificate of the Company. The aggregate principal amount of Securities
outstanding at any time may not exceed that amount except as provided in
Section 2.06.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate.
SECTION 2.03. AGENTS.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or exchange ("Registrar") and where
Securities may be presented for payment ("Paying Agent"). Whenever the Company
must issue or deliver Securities pursuant to this Indenture, the Trustee shall
authenticate the Securities at the Company's request. The Registrar shall keep
a register (the "Security Register") of the Securities and of their transfer
and exchange.
The Company may appoint more than one Registrar or Paying Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. If the Company does not appoint another Registrar or
Paying Agent, the Trustee shall act as such.
- 7 -
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to each Payment Date on a Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such Principal as is
becoming due. On or before each Payment Date, the Company shall deliver to the
Trustee an Officers' Certificate setting forth (i) the amount of Principal,
allocated among the various Holders, that is due and payable on such Payment
Date, (ii) the details of each Holder's compliance (or non-compliance) with the
Performance Test that applies to such Holder for the relevant Testing Period(s)
that ended prior to such Payment Date, (iii) whether, to the best knowledge of
the Officers who executed such Officers' Certificate (after having made due
inquiry), there exists any Default or Event of Default and (iv) whether or not,
to the best knowledge of such Officers (after having made due inquiry), the
payment of such Principal is permitted pursuant to Article 9. If the Trustee
does not receive such an Officers' Certificate on or before a Payment Date, then
the Trustee may assume without inquiry that no amount of Principal is due on
such date and that no Default or Event of Default exists. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that the
Paying Agent will hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of the Principal on
the Securities, will notify the Trustee of any default by the Company in making
any such payment and will comply with Article 9. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee. If the Company or any
Affiliate acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund.
SECTION 2.05. TRANSFER AND EXCHANGE.
The Securities shall be issued in registered form. The Securities may
not be sold, assigned, transferred, pledged, hypothecated, devised, exchanged
or otherwise disposed of except for in the case of the death of any Holder in
which case a Security held by such Holder may be transferred to such Holder's
legal heirs or estates.
When a Security is presented to the Registrar or a co-registrar with a
request to register a transfer, the Registrar and the Trustee may required a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Registrar shall record in the Securities Register the
transfer as requested if the requirements of Section 8-401(a) of the Uniform
Commercial Code are met, and thereupon one or more new Securities in the same
aggregate Principal amount shall be issued to the designated assignee or
transferee and the old Security will be returned to the Company. When
Securities are presented to the Registrar or a co-registrar with a request to
exchange them for an equal Principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested, in the same
manner, if the same requirements are met. The Company may require payment of a
sum sufficient to pay all taxes, assessments or other governmental charges in
connections with any transfer or exchange pursuant to this Section.
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
- 8 -
whose name a Security is registered as the absolute owner of such Security for
the purpose of receiving a 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.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.06. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or the Registrar
or if the Holder of a Security claims that the Security has been lost, destroyed
or wrongfully taken, then, in the absence of notice to the Company that the
Security has been acquired by a protected purchaser, the Company shall issue a
replacement Security if the Trustee's requirements and the requirements of
Section 8-405 of the Uniform Commercial Code are met. If required by the Trustee
or the Company, an indemnity bond must be provided that is sufficient in the
judgment of both to protect the Company, the Trustee and the Agents from any
loss that any of them may suffer if a Security is replaced. The Company or the
Trustee may charge the Holder for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.07. OUTSTANDING SECURITIES.
Securities outstanding at any time are all Securities authenticated
by the Trustee except for those canceled by the Registrar, those delivered to
it for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Company or an Affiliate
holds the Security.
If a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
SECTION 2.08. TREASURY SECURITIES DISREGARDED FOR CERTAIN
PURPOSES.
In determining whether the Holders of the required Principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or an Affiliate shall be disregarded and deemed not to be
outstanding, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that the Trustee knows are so owned shall be so disregarded.
SECTION 2.09. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Paying Agent, if not the Trustee, shall forward to the
Trustee any Securities surrendered to it for
- 9 -
payment. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment or cancellation and shall dispose of canceled
Securities according to its standard procedures or as the Company otherwise
directs. The Company may not issue new Securities to replace Securities that it
has paid or which have been delivered to the Trustee for cancellation.
ARTICLE 3.
COVENANTS.
SECTION 3.01. PAYMENT OF SECURITIES.
Provided that the conditions to payment of any installment of
Principal of a Security of a Holder have been satisfied on or prior to the
relevant Payment Date, the Company shall pay on such Payment Date the Principal
on the Security held by such Holder in the manner provided in Section 1 of such
Security and in this Indenture and subject to all other terms and conditions
set forth in such Security. Principal shall be considered paid with respect to
any Security on each Payment Date if the Paying Agent holds in accordance with
this Indenture on that date money sufficient to pay all Principal then due with
respect to such Security, and the Paying Agent is not prohibited from paying
such money to the Holders on such date pursuant to the terms of this Indenture.
Notwithstanding anything to the contrary herein or in any Security, no Payment
Amount shall be due or owed to any Holder if the Business Unit managed by such
Holder has not satisfied the Performance Test for the Testing Period related to
such Payment Amount, as set forth in a certificate delivered to the Trustee
pursuant to Section 2.04. No interest is payable with respect to any Security.
SECTION 3.02. SEC REPORTS.
The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of the annual reports and of the information,
documents and other reports which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. The Company will cause any
quarterly and annual reports that it makes available to its stockholders to be
mailed to the Holders. Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute notice or constructive notice of any information
contained therein or determinable from information contained therein,
including the Company's compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 3.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 105 days after the
end of each fiscal year of the Company, a brief certificate signed by the
principal executive officer, principal financial officer or principal
accounting officer of the Company as to the signer's knowledge (after due
inquiry) of the Company's compliance with all conditions and covenants
contained in this Indenture (determined without regard to any period of grace
or requirement of notice provided herein).
- 10 -
SECTION 3.04. NOTICE OF CERTAIN EVENTS.
The Company shall give prompt written notice to the Trustee and any
Paying Agent of (i) any Proceeding, (ii) any Default or Event of Default, (iii)
any cure or waiver of any Default or Event of Default, (iv) any Senior Debt
Payment Default or Senior Debt Default Notice and (v) if and when the
Securities are listed on any stock exchange.
ARTICLE 4.
SUCCESSORS.
SECTION 4.01. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate or merge with or into, or transfer
all or substantially all of its assets to, any Person, unless:
(1) either the Company shall be the resulting or surviving entity or
such Person is a corporation organized and existing under the laws of the
United States, a state thereof or the District of Columbia;
(2) if the Company is not the resulting or surviving entity, such
Person assumes by supplemental indenture all the obligations of the Company
under the Securities and this Indenture; and
(3) immediately before and immediately after the transaction no
Default exists.
Prior to the proposed transaction, the Company shall deliver to the
Trustee an Officers' Certificate and an Opinion of Counsel, each of which shall
state that such consolidation, merger or transfer and such supplemental
indenture comply with this Article 4 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 4.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 4.01,
the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Securities with the same effect as if such successor
corporation had been named as the Company herein and in the Securities.
Thereafter, the obligations of the Company under the Securities and this
Indenture shall terminate.
ARTICLE 5.
REMEDIES.
SECTION 5.01. PAYMENT DEFAULT.
As to any Holder, a "Payment Default" shall be deemed to have occurred
if the Company fails to pay any Payment Amount owing under such Holder's
Security when such amount becomes absolute, earned, due and payable pursuant to
Section 1 of such Security and Section 3.01 of this Indenture, and such failure
continues for a period of 45 days. For purposes of (i) this Section 5 and (ii)
the definition of Payment Default, no Payment Amount associated in
- 11 -
Section 1 of the Securities with an incomplete Testing Period, a future Testing
Period or a failed Performance Test shall be considered absolute, earned, due,
outstanding or payable. In determining whether any Payment Default exists, the
Trustee may rely without inquiry on the Officers' Certificate delivered
pursuant to Section 2.04. If the Trustee does not receive such an Officers'
Certificate, it may assume that no Payment Default exists.
SECTION 5.02. REMEDIES.
If a Payment Default occurs and is continuing with respect to any
Security, the Holder of such Security may pursue any remedy available at law to
collect Payment Amounts that are then absolute, earned, due and payable. If an
Event of Default (other than a Payment Default) occurs and is continuing, the
Trustee may pursue any available remedy to enforce the performance of any
provision of such Security or this Indenture that is subject of the
noncompliance giving rise to such Event of Default.
The Trustee may maintain a proceeding, even if it does not possess any
of the securities or does not product any of them in the proceeding. A delay or
omission by any affected Holder or the Trustee in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
The above provisions of this Section 5.02 notwithstanding, each Holder,
by its acceptance of any Security, agrees that, until the date that is one year
plus one day following the date on which all obligations owed on the Securities
have been paid in full in cash, such Holder will not, directly or indirectly,
institute or cause to be instituted against the Company any bankruptcy or
insolvency proceeding.
SECTION 5.03. WAIVER OF PAST DEFAULTS.
The Holders of a majority in outstanding Principal amount of the
Securities, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences except (i) a Payment Default on a Security may
only be waived with the consent of the Holder of such Security (and no consent
of any other Holder shall be required for such waiver) and (ii) a Default or
Event of Default with respect to a provision under Section 8.02 that cannot be
amended without the consent of each Securityholder affected may not be waived
without the consent of each such Securityholder. When a Default or Event of
Default is waived, it is deemed cured.
SECTION 5.04. CONTROL BY MAJORITY.
The Holders of a majority in outstanding Principal amount of the
Securities 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 the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Securityholders, or would involve the Trustee in personal
liability or expense for which the Trustee has not received a satisfactory
indemnity.
SECTION 5.05. LIMITATION ON SUITS.
Unless a Payment Default has occurred with respect to its Security, a
Securityholder may pursue a remedy with respect to this Indenture or the
Securities only if:
- 12 -
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
(2) the Holders of at least 60% in Principal amount of the Securities
then outstanding make a request to the Trustee to pursue the remedy;
(3) the Trustee either (i) gives to such Holders notice it will not
comply with the request, or (ii) does not comply with the request within 30
days after receipt of the request; and
(4) the Holders of a majority in Principal amount of the Securities
then outstanding do not give the Trustee a direction inconsistent with the
request made under Section 5.05(2).
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 5.06. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of a Payment Amount on the
Security, on or after the respective Payment Dates expressed in the Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected with the consent of the
Holder.
SECTION 5.07. PRIORITIES.
After an Event of Default, any money or other property distributable
in respect of the Company's obligations under this Indenture shall be paid in
the following order:
First: to the Trustee (including any predecessor Trustee) for amounts
due under Section 6.06;
Second: to holders of Senior Debt to the extent required by Article 9;
Third: to Securityholders for amounts due and unpaid on the Securities
for Principal, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Securities for Principal; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
SECTION 5.08. 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 and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 5.02 or 5.06 or a suit by Holders of more than 50%
in outstanding Principal amount of the Securities.
- 13 -
SECTION 5.09. PROOF OF CLAIM.
In the event of any Proceeding, the Trustee may (and, if applicable,
the Representative for or holders of Senior Debt may) file a claim for the
unpaid balance of the Securities in the form required in the Proceeding and
cause the claim to be approved or allowed. Nothing herein contained shall be
deemed to authorize the Trustee of the holders of Senior Debt to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee or the holders
of Senior Debt to vote in respect of the claim of any Securityholders in any
Proceeding.
SECTION 5.10. ACTIONS OF HOLDER.
For the purposes of providing any consent, waiver, or instruction to
the Company or the Trustee, a "Holder" or "Securityholder" shall include a
Person who provides to the Company or the Trustee, as the case may be, an
affidavit of beneficial ownership of a Security together with a satisfactory
indemnity against any loss, liability or expense to such party to the extent
that it acts upon such affidavit of beneficial ownership (including any
consent, waiver or instructions given by a Person providing such affidavit and
indemnity).
ARTICLE 6.
TRUSTEE.
SECTION 6.01. DUTIES OF TRUSTEE.
(a) Subject to the provisions of Section 5.04, 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 as a prudent person would exercise or use under the
circumstances in the conduct of its own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraphs (b) and
(f) of this Section;
(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;
- 14 -
(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 5.04; and
(4) the Trustee may refuse to perform any duty or exercise any
right or power that would require it to expend its own funds or risk any
liability if it shall reasonably believe that repayment of such funds or
adequate indemnity against such risk is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (e) and (f) of this Section.
(c) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(f) The Trustee may rely without inquiry on each Officers' Certificate
delivered to it pursuant to Section 2.04 and, in particular, notwithstanding
any other provision of this Indenture or the Securities, may assume that not
Default or Event of Default exists and shall not be charged with knowledge or
deemed knowledge of a Default or Event of Default unless (i) such Default or
Event of Default is described in such Officers' Certificate or (ii) it is
described in a written notice from the affected Holders, which written notice
sets forth in such detail as the Trustee may reasonably require the particulars
of such Default or Event of Default. Unless and until the Trustee receives such
Officers' Certificate or written notice from the affected Holders describing
the particulars of a Default or Event of Default, the Trustee may assume
without inquiry that none exists.
SECTION 6.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or an Opinion of Counsel. The Trustee may also consult
with counsel on any matter relating to the Indenture or the Securities and the
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the advice of counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) Except in connection with compliance with TIA Section 310 or 311,
the Trustee shall only be charged with knowledge of Trust Officers.
- 15 -
SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE; DISQUALIFICATION.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to TIA
Sections 310(b) and 311.
SECTION 6.04 TRUSTEE'S DISCLAIMER.
The Trustee shall have no responsibility for the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.
SECTION 6.05. NOTICE OF DEFAULTS.
If a continuing Default is known to a Trust Officer of the Trustee
shall mail to Securityholders a notice of the Default within 90 days after it
occurs. Except in the case of a Payment Default on any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of
Securityholders.
SECTION 6.06. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its services as the Company and the Trustee may from time to
time agree in writing. 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 out-of-pocket expenses
incurred by it, except any such expense as may arise from its negligence,
willful misconduct or bad faith. Such expenses shall include the reasonable
compensation and out-of-pocket expenses of the Trustee's agents and counsel. The
Trustee shall provide the Company reasonable notice of any expenditure not in
the ordinary course of business; provided that prior approval by the Company of
any such expenditure shall not be a requirement for the making of such
expenditure nor for reimbursement by the Company thereof.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it, including in any Agent capacity in which it acts (other
than taxes applicable to the Trustee's compensation hereunder). The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim, and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel, which counsel must be reasonably
acceptable to the Company, and the Company shall pay the reasonable fees and
expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not unreasonably be withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence, willful misconduct
or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay particular
Securities.
- 16 -
Without prejudice to its rights hereunder, when the Trustee incurs
expenses or renders services after an Event of Default, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 6.07. REPLACEMENT OF TRUSTEE.
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.
The Trustee may resign by so notifying the Company. The Holders of a
majority in outstanding Principal amount of the Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 6.09;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee is not appointed and does not take office within
30 days after the retiring Trustee resigns, the retiring Trustee may appoint a
successor Trustee at any time prior to the date on which a successor Trustee
takes office. If a successor Trustee does not take office within 45 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
any Securityholder may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.09, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee. Within one year after a successor
Trustee appointed by the Company or a court pursuant to this Section 6.07 takes
office, the Holders of a majority in outstanding Principal amount of the
Securities may appoint a successor Trustee to replace such successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon 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. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 6.06.
SECTION 6.08. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business or assets (including the
administration of its trust created by this Indenture) to another corporation,
the successor corporation, without any further act, shall be the successor
Trustee, if such successor corporation is eligible and qualified under Section
6.09.
- 17 -
SECTION 6.09. ELIGIBILITY.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Sections 310(a)(1) and 310(a)(2).
SECTION 6.10. 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 that has resigned or been
removed is subject to TIA Section 311(a) to the extent indicated.
ARTICLE 7.
SATISFACTION AND DISCHARGE.
SECTION 7.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities expressly
provided for herein), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.07 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 7.04) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore authenticated and delivered
to the Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their stated maturity
within one year,
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name and at the expense of the Company,
(iv) the Company, in the case of clauses (i), (ii) and (iii)
above, has deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose of an amount of money or U.S. Government Obligations
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for Principal to the date
of such deposit (in the case of Securities that have become due and payable) or
to the stated maturity or redemption date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
- 18 -
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Holders under Section 3.01, to the Trustee
under Section 6.06, and, if money or U.S. Government Obligations shall have
been deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Trustee under Section 7.02 shall survive.
SECTION 7.02. APPLICATION OF TRUST FUNDS.
The Trustee or Paying Agent shall hold in trust, for the benefit of the
Holders, all money and U.S. Government Obligations deposited with it (or into
which such money and U.S. Government Obligations are reinvested) pursuant to
Section 7.01. It shall apply such deposited money and money from the U.S.
Government Obligations in accordance with this Indenture to the payment of the
Principal of the Securities. Money and U.S. Government Obligations so held in
trust (i) are not subject to Article 9 and (ii) are subject to the Trustee's
rights under Section 6.06.
SECTION 7.03. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 7.01 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 7, until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 7.01; provided, however, that (a) if the
Company makes any payment of Principal of any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent after payment
in full to the Holders and (b) unless otherwise required by any legal
proceeding or any order or judgment of any court or government authority, the
Trustee or Paying Agent shall return all such money and U.S. Government
Obligations to the Company promptly after receiving a written request therefor
at any time, if such reinstatement of the Company's obligations has occurred
and continue to be in effect.
SECTION 7.04. REPAYMENT TO COMPANY.
The Trustee and Paying Agent shall promptly turn over to the Company upon
request any excess money or U.S. Government Obligations held by them at any
time. All money or U.S. Government Obligations deposited with the Trustee
pursuant to Section 7.01 (and held by it or a Paying Agent) shall be returned
to the Company upon request.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
payment of Principal that remains unclaimed for two years after the right to
such money has become absolute and due. After payment to the Company,
Securityholders entitled to the money shall look to the Company for
-19-
payment as unsecured general creditors unless an applicable abandoned property
law designates another Person.
ARTICLE 8.
AMENDMENTS.
SECTION 8.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder:
(1) to cure any ambiguity, defect of inconsistency;
(2) to comply with Article 4, or
(3) to make any change that does not adversely affect the rights of any
Securityholder.
SECTION 8.02. WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Securities with
the written consent of the Holders of at least a majority in Principal amount of
the Securities then outstanding. However, without the consent of each
Securityholder directly affected thereby, an amendment under this Section may
not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the Principal of or change the fixed maturity or Payment Date or
Payment Amount of any Security;
(3) make any Security payable in money other than that stated in the
Security;
(4) make any change in Section 5.03 or 5.06 or the second sentence of this
Section;
(5) make any change in Article 9 that adversely affects the rights of any
Securityholder;
or
(6) make any change to any Performance Test, Revenue Target or EBITDA
Target.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
An amendment under this Section may not effect any change that adversely
affects the rights under Article 9 of any Senior Debt unless all holders of such
Senior Debt consent to the change.
SECTION 8.03. COMPLIANCE WITH SECTION 10.03.
The Trustee is entitled to, and the Company shall provide, an Opinion of
Counsel and Officers' Certificate that the Trustee's execution of any amendment
is permitted under this Article 8.
-20-
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS.
A consent to an amendment or a waiver by a Holder of a Security shall bind
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent or waiver is not made on the Security. After an
amendment or waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or take
any such action, whether or not such Persons continue to be Holders after such
record date.
SECTION 8.05. NOTICE OF AMENDMENT.
After any amendment under this Article becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Article.
SECTION 8.06. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determine,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 8.07. TRUSTEE TO SIGN AMENDMENTS.
The Trustee shall sign any amendment authorized pursuant to this Article 8
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it. In
signing any amendment authorized pursuant to this Article 8, the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it and to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment
complies with the provisions of this Article 8.
ARTICLE 9.
SUBORDINATION.
SECTION 9.01. SECURITIES SUBORDINATED TO SENIOR DEBT.
The rights of Holders to payment of the Principal on the Securities is
subordinated to the rights of holders of Senior Debt, to the extent and in the
manner provided in this Article 9.
-21-
SECTION 9.02. SECURITIES SUBORDINATED IN ANY PROCEEDING.
Upon any Distribution in any Proceeding,
(1) any Distribution to which the Holders are entitled shall be paid
directly to the holders of Senior Debt to the extent necessary to make payment
in full in cash of all Senior Debt remaining unpaid after giving effect to all
other Distributions to or for the benefit of the holders of Senior Debt; and
(2) in the event that any Distribution is received by the Trustee
before all Senior Debt is paid in full in cash, such Distribution shall be
applied by the Trustee in accordance with this Article 9.
SECTION 9.03. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
The Company shall not, directly or indirectly (other than in capital
stock of the Company) pay any Principal of, redeem, defease or repurchase any
of the Securities (i) after any Senior Debt becomes due and payable, unless and
until all such Senior Debt shall first be paid in full in cash or (ii) after a
Senior Debt Payment Default, unless and until such Senior Debt Payment Default
has been cured, waived or otherwise has ceased to exist.
During a Payment Blockage Period, no payment of any Principal on the
Securities may be made, directly or indirectly, by the Company. Unless the
Senior Debt in respect of which the Senior Debt Default Notice has been given
has been declared due and payable in its entirety within the Payment Blockage
Period, at the end of the Payment Blockage Period, the Company shall pay all
sums not paid to the Holders during the Payment Blockage Period and resume all
other payments on the Securities as and when due. Any number of Senior Debt
Default Notices may be given; provided, however, that, as to any issue of Senior
Debt, (i) not more than one Senior Debt Default Notice shall be given within a
period of any 366 consecutive days, and (ii) no specific act, omission or
condition that gave rise to a default that existed upon the date of such Senior
Debt Default Notice (whether or not such default applies to the same issue of
Senior Debt) shall be made the basis for the commencement of any other Payment
Blockage Period.
If any Distribution, payment or deposit to redeem, defease or acquire
any of the Securities shall have been received by the Trustee at a time when
such Distribution was prohibited by the provisions of this Section 9.03, then,
unless such Distribution is no longer prohibited by this Section 9.03, such
Distribution shall be received and applied by the Trustee for the benefit of the
holders of Senior Debt and shall be paid or delivered by the Trustee to the
holders of Senior Debt for application to the payment of all Senior Debt.
SECTION 9.04. SUBROGATION.
The Holders shall not have any subrogation or other rights of recourse
to any security in respect of any Senior Debt until such time as all Senior
Debt shall have been paid in full in cash. Upon the payment in full in cash of
all Senior Debt, the Holders shall be subrogated to the rights of the holders
of Senior Debt to receive Distributions applicable to Senior Debt until all
amounts owing in respect of the Securities shall be so paid. No Distributions
to the holders of Senior Debt that otherwise would have been made to the
Holders shall, as between the Company and the Holders, be deemed to be payment
by the Company to or on account of Senior Debt.
- 22 -
If any Distribution to which the Holders would otherwise have been
entitled shall have been applied pursuant to the provisions of this Article to
the payment of Senior Debt, then the Holders shall be entitled to receive from
the holders of such Senior Debt any Distributions received by such holders of
Senior Debt in excess of the amount sufficient to pay all amounts payable on
such Senior Debt to the extent provided herein.
SECTION 9.05. EFFECT ON OBLIGATIONS OF THE COMPANY.
This Article defines the relative rights of the Holders and holders of
Senior Debt. Nothing in this Indenture is intended to or shall impair, as
between the Company and the Holders, the obligation of the Company, subject to
the conditions set forth in the Securities, to pay to the Holders the Principal
of the Securities 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
Senior Debt, nor shall anything herein or in the Securities prevent the Trustee
or any Holder from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article 9, of the holders of Senior Debt in respect of any Distribution
received upon the exercise of any such remedy. If the Company fails because of
this Article to pay Principal of a Security on the due date (subject to the
satisfaction of the conditions of such payment set forth in the Securities),
the failure is still a Default. Upon any Distribution, the Trustee and the
Holders shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which the Proceeding is pending, or a certificate of
the liquidating trustee or agent or other Person making any Distribution for
the purpose of ascertaining the Persons entitled to participate in such
Distribution, the holders of Senior Debt and other Debt 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 9.
SECTION 9.06. TRUSTEE AND PAYING AGENTS ENTITLED TO ASSUME
PAYMENTS NOT PROHIBITED IN ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee, unless and until a Trust Officer shall have received, no later
than one Business Day prior to the scheduled date of such payment, written
notice thereof from the Company or from one or more holders of Senior Debt and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects conclusively to presume that no such facts exist. Unless the
Trustee shall have received the notice provided for in the preceding sentence,
the Trustee shall have full power and authority to receive such payment and to
apply the same to the purpose for which it was received and shall not be
affected by any notice to the contrary that may be received by it on or after
such date. The foregoing shall not apply to any Affiliate of the Company acting
as Paying Agent.
SECTION 9.07. SATISFACTION AND DISCHARGE.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article 7 and not prohibited to be deposited under Section 9.03
when deposited shall not be subject to this Article 9.
- 23 -
SECTION 9.08. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
THE COMPANY OR HOLDERS OF SENIOR DEBT.
No right or any holder of any Senior Debt established in this Article 9
shall at any time or 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 failure by the Company to comply with the
terms of this Indenture.
SECTION 9.09. RIGHT TO HOLD SENIOR DEBT.
The Trustee is entitled to all of the rights set forth in this Article 9 in
respect of any Senior Debt at any time held by it to the same extent as any
other holder of Senior Debt.
SECTION 9.10. NO FIDUCIARY DUTY OF TRUSTEE OR SECURITYHOLDERS TO HOLDERS
OF SENIOR DEBT.
Neither the Trustee nor the Holders owe any fiduciary duty to the holders
of Senior Debt. Neither the Trustee nor the Holders shall be liable to any
holder of Senior Debt in the event that the Trustee, acting in good faith, shall
pay over or distribute to the Holders, the Company or any other Person any
property to which any holders of Senior Debt are entitled by virtue of this
Article or otherwise. Nothing contained in this Section 9.10 shall affect the
obligation of any other such Person to hold such payment for the benefit of, and
to pay such payment over to, the holders of Senior Debt.
SECTION 9.11. DISTRIBUTION TO HOLDERS OF SENIOR DEBT.
Any Distribution otherwise payable to the holders of the Securities made to
holders of Senior Debt pursuant to this Article shall be made to such holders of
Senior Debt ratably according to the respective amount of Senior Debt held by
each.
SECTION 9.12. TRUSTEE'S RIGHTS TO COMPENSATION, REIMBURSEMENT OF EXPENSES
AND INDEMNIFICATION.
The Trustee's rights to compensation, reimbursement of expenses and
indemnification under Sections 5.07 and 6.06 are not subordinated.
SECTION 9.13. EXCEPTION FOR CERTAIN DISTRIBUTIONS.
The rights of holders of Senior Debt under this Article do not extend (a)
to any Distribution to the extent applied to the Trustee's rights to
compensation, reimbursement of expenses or indemnification or (b) to (i)
securities that are subordinated to the securities distributed to the holders of
Senior Debt on terms no less favorable to the holders of Senior Debt than the
provisions of this Article ("Junior Securities") or (ii) Distributions under any
plan approved by the court in any Proceeding.
SECTION 9.14. CERTAIN DEFINITIONS.
As used in this Article 9,
- 24 -
"Distribution" in any Proceeding means any payment or distribution of
assets or securities of the Company of any kind or character from any source,
whether in cash, securities or other property made by the Company or any
custodian, liquidating trustee or agent or any other Person, whether pursuant
to a plan or otherwise.
"Payment Blockage Period" means the period beginning when a Senior
Debt Default Notice is given to the Company and the Trustee by the holders of
any Senior Debt (or their Representative) and ending (a) when the default
identified in the Senior Debt Default Notice is cured, waived or otherwise
ceases to exist or (b) after 179 days, whichever occurs first.
"Senior Debt Default Notice" means any notice of a default (other than
a Senior Debt Payment Default) that permits the holders of any Senior Debt to
declare such Senior Debt due and payable.
"Senior Debt Payment Default" means a default in the payment of any
principal or premium of or interest on any Senior Debt.
"Trustee," for purposes of this Article 9, includes any Paying Agent.
ARTICLE 10.
MISCELLANEOUS.
SECTION 10.01. NOTICES.
Any notice by one party to the other shall be in writing and sent to
the other's address as provided in Section 10.09. The notice is duly given if
it is delivered in Person or sent by a national courier service which provides
next Business Day delivery or by first-class mail.
A party by notice to the other party may designate additional or
different addresses for subsequent notices.
Any notice sent to a Securityholder shall be mailed by first-class
letter mailed to its address shown on the register kept by the Registrar.
Failure to mail a notice to a Securityholder or any defect in a notice mailed
to a Securityholder shall not affect the sufficiency of the notice mailed to
other Securityholders.
If a notice is delivered or mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice to Securityholders, it shall deliver or
mail a copy to the Trustee at the same time.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice.
A "notice" includes any communication required by this Indenture.
- 25 -
Notwithstanding the foregoing, notices to the Trustee shall be
effective only upon receipt by a Trust Officer.
SECTION 10.02. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 10.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, 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 have been complied with.
SECTION 10.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, the Person has
made such examination or investigation as is necessary to enable such person 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 such Person,
such condition or covenant has been complied with.
SECTION 10.05. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or for a meeting of
Securityholders. Any Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 10.06. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the States of Michigan or
Connecticut. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
- 26 -
SECTION 10.07. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release are part of
the consideration for the issue of the Securities.
SECTION 10.08. DUPLICATE ORIGINALS.
The parties may sign any number of copies, and may execute such in
counterparts, of this Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 10.09. CONTACT INFORMATION.
The Company's address for purposes of notice provisions hereunder is:
Lason, Inc.
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CFO
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Trustee's address for purposes of notice provisions hereunder is:
State Street Bank and Trust Company
▇▇▇▇▇▇▇ Square
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
(Lason, Inc. Contingent Payment Junior Notes due 2006)
SECTION 10.10. GOVERNING LAW.
The internal laws of the State of
New York shall govern this Indenture and
the Securities.
SECTION 10.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities shall
bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 10.12. TABLE OF CONTENTS; HEADINGS.
The table of contents and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
- 27 -
SECTION 10.13. SEVERABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.14. FORUM SELECTION AND CONSENT TO JURISDICTION.
EACH OF THE COMPANY, THE TRUSTEE, EACH AGENT AND, BY ACCEPTING ANY
SECURITY, EACH HOLDER AGREES THAT ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH THIS INDENTURE OR ANY SECURITY, SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF MICHIGAN OR IN
THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN. EACH OF
THE COMPANY, THE TRUSTEE, EACH AGENT AND, BY ACCEPTING ANY SECURITY, EACH
HOLDER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF MICHIGAN AND OF THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF MICHIGAN FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. EACH OF THE COMPANY, THE TRUSTEE, EACH AGENT AND, BY ACCEPTING ANY
SECURITY, EACH HOLDER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 10.15. WAIVER OF JURY TRIAL.
EACH OF THE COMPANY, THE TRUSTEE, EACH AGENT AND, BY ACCEPTING ANY
SECURITY, EACH HOLDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS INDENTURE, ANY
SECURITY, AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
- 28 -
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first above written.
LASON, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:________________________________
Name:
Title:
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first above written.
LASON, INC.
By:________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A
(FACE OF SECURITY)
No.__________ $_______________
LASON, INC.
NON-NEGOTIABLE 0% CONTINGENT PAYMENT JUNIOR NOTES DUE DECEMBER, 2006
Lason, Inc., a Delaware corporation (the "Company"), promises to pay
(subject to the express conditions set forth on the reverse hereof and in the
Indenture) to [NAME OF HOLDER] (the "Holder"), or [his] [her] legal heirs and
estates, the sum of ____________ United States Dollars (the "Initial Principal
Amount") subject to the terms and conditions set forth in this Security and in
the Indenture (defined below). Payment of this Security is expressly
conditioned upon satisfaction by the Holder of various performance tests as set
forth on the reverse of this Security and in such Indenture.
The Company may prepay this Security at any time without premium or
penalty.
This Security may not be sold, assigned, transferred, pledged,
hypothecated, devised, exchanged or otherwise disposed of except for in the
event of the death of the Holder, in which case the Holder's legal heir or
estate shall be deemed to be the Holder for purposes of receiving payment
hereunder.
This Security is subordinated as specified on the other side of this
Security and in Article 9 of the Indenture. See the reverse and the Indenture
referenced for additional provisions of this Security.
THIS SECURITY IS NON-NEGOTIABLE.
Capitalized words and phrases not defined in this Security shall have
the meanings ascribed to them in the Indenture.
Dated:__________
Authenticated:_______________
STATE STREET BANK
AND TRUST COMPANY, as Trustee LASON, INC., as Issuer
By:______________________________ By:_____________________________
Authorized Signatory
A-1
NON-NEGOTIABLE 0% CONTINGENT PAYMENT JUNIOR NOTES DUE DECEMBER, 2006
(1) Payment. This Security shall not earn interest. In accordance with
the table below and Section 3.1 of the Indenture, the Company will pay a
portion of the Initial Principal Amount (each such portion, a "Payment Amount")
on each date set forth below (each, a "Payment Date"), subject to the express
condition that the Business Unit managed by the Holder has satisfied the
relevant Performance Test set forth in the Indenture for the relevant Testing
Period ended prior to such Payment Date:
Relevant
Payment Date Payment Amount Performance Test
Final Business Day 10% of the Initial Principal Amount 2002 Test
Second Calendar Quarter/2003
Final Business Day 10% of the Initial Principal Amount 2002 Test
Fourth Calendar Quarter/2003
Final Business Day 10% of the Initial Principal Amount 2003 Test
Second Calendar Quarter/2004
Final Business Day 10% of the Initial Principal Amount 2003 Test
Fourth Calendar Quarter/2004
Final Business Day 10% of the Initial Principal Amount 2004 Test
Second Calendar Quarter/2005
Final Business Day 10% of the Initial Principal Amount 2004 Test
Fourth Calendar Quarter/2005
Final Business Day 20% of the Initial Principal Amount 2005 Test
Second Calendar Quarter/2006
Final Business Day 20% of the Initial Principal Amount 2005 Test
Fourth Calendar Quarter/2006
In the event that the Holder fails to satisfy the 2002 Test or the 2003 Test
but satisfies the 2002-2003 Cumulative Test, the Payment Amounts for both
Payment Dates in 2004 shall be 20% of the Initial Principal Amount. Holders
must surrender Securities to the Paying Agent to collect Payment Amounts due,
if any, on the final Payment Date. The Company will remit all Payment Amounts
in United States Dollars. The Company may pay Principal by wire transfer or by
check. Except as provided in this paragraph, with respect to a scenario in
which the 2002 Test or the 2003 Test is unsatisfied but the 2002-2003
Cumulative Test is satisfied, Holder forever forfeits any Payment Amount
related to a failed Performance Test and all such Payment Amounts related to a
failed Performance Test shall cease to be obligations of the Company as of the
last day of the relevant Testing Period, and the Company may assert the failure
to meet any such Performance Test as an absolute defense and bar to the payment
of any such Payment Amount.
(2) Agents. Initially, State Street Bank and Trust Company
("Trustee"), ▇▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration (Lason, Inc. Contingent Payment
Junior Notes due 2006), will act as Registrar and Paying Agent. The Company may
change any such Agent without notice. The Company or
A-2
an Affiliate may act in any such capacity. Subject to certain conditions, the
Company may change the Trustee.
(3) Indenture. The Company issued the Securities under that certain
Junior Note Indenture dated as of June 30, 2002 ("Indenture") between the
Company and the Trustee. The terms of the Securities include those stated in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture for a statement of such terms. The Indenture is
not subject to the provisions of the Trust Indenture Act of 1939 (15 U.S.C.
ss. 77aaa-77bbbb) (the "Act") by reason of Section 304(a)(9) thereof. The
Securities are unsecured subordinated general obligations of the Company limited
to $3,117,790 in aggregate principal amount. Any conflict between this
Security and the Indenture will be governed by the Indenture.
(4) Subordination. The Securities are subordinated to Senior Debt as
defined in the Indenture and as more fully set forth in Article 9 of the
Indenture. To the extent provided in the Indenture, Senior Debt must be paid in
full in cash before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to such subordination and
authorizes the Trustee to give it effect.
(5) Transfer, Exchange. The Holder may transfer or exchange this Security
upon its death to its legal heirs and estates. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes required by law. The Holder hereof takes this
Security subject to all defenses, claims in recoupment, rights of setoff and
counterclaims that could be asserted against any prior payee or holder.
(6) Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Securities may be amended, and any default or noncompliance may be
waived, with the consent of the Holders of a majority in Principal amount of the
Securities. Without the consent of any Securityholder, the Indenture or the
Securities may be amended to cure any ambiguity, defect or inconsistency, to
provide for assumption of Company obligations to Securityholders or to make any
change that does not adversely affect the rights of any Securityholder.
(7) Successors. When successors assume all the obligations of the Company
under the Securities and the Indenture, the Company will be released from those
obligations, except as provided in the Indenture.
(8) Satisfaction and Discharge Prior to Redemption or Maturity. Subject
to certain conditions, the Company at any time may terminate some or all of its
obligations under the Securities and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of Principal on
the Securities at redemption or maturity.
(9) Defaults and Remedies. Subject to the Indenture, if an Event of
Default (other than a Payment Default) occurs and is continuing, the Trustee may
exercise remedies to enforce the provision the noncompliance with which gave
rise to such Event of Default. Securityholders may not enforce the Indenture or
the Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in Principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Payment Default) if it determines that
A-3
withholding notices is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
(10) Trustee Dealings with Company. State Street Bank and Trust Company,
the Trustee under the Indenture, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for, otherwise deal
with the Company or its Affiliates as if it were not Trustee, subject to the
Indenture and the Act.
(11) No Recourse against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder, by accepting a Security, waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
(12) Authentication. This Security shall not be valid until authenticated
by a manual signature of the Trustee.
(13) Non-Petition. Holder, by accepting this Security, agrees that, until
the date that is one year plus one day following the date on which all
obligations owed on the Securities have been paid in full in cash, it will not,
directly or indirectly, institute or cause to be instituted against the Company
any bankruptcy or insolvency proceeding.
(14) Governing Law. The Indenture and the Securities shall be governed by
the internal laws by the State of
New York.
(15) Forum Selection; Consent to Jurisdiction; Waiver of Jury Trial. By
accepting this Security, the Holder consents to the exclusive jurisdiction of
the courts of Michigan and of the United States District Court for the Eastern
District of Michigan in connection with any litigation arising in connection
with this Security or the Indenture and submits to such jurisdiction, and
waives any right to a trial by jury in any such connection, all as more
particularly set forth in the Indenture.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: LASON, INC.,
ATTN: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CFO, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
FACSIMILE (▇▇▇) ▇▇▇-▇▇▇▇.
A-4