EXHIBIT 4.4
EXECUTION COPY
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ALARIS MEDICAL SYSTEMS, INC.
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SERIES A AND SERIES B $170,000,000
11 5/8% SENIOR SECURED NOTES DUE 2006
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INDENTURE
Dated as of October 16, 2001
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HSBC BANK USA
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Trustee
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CROSS-REFERENCE TABLE*
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
310(a)(1).............................................7.10
(a)(2).............................................7.10
(a)(3).............................................N.A.
(a)(4).............................................N.A.
(a)(5).............................................7.10
(b)................................................7.03; 7.10
(c)................................................N.A.
311(a)................................................7.11
(b)................................................7.11
(c)................................................N.A.
312(a)................................................2.05
(b)................................................13.03
(c)................................................13.03
313(a)................................................7.06
(b)(1).............................................7.06
(b)(2).............................................7.06; 7.07
(c)................................................7.06; 13.02
(d)................................................7.06
314(a)................................................4.03; 4.04; 13.05
(b)................................................10.02
(c)(1).............................................13.04
(c)(2).............................................13.04
(c)(3).............................................N.A.
(d)................................................10.06
(e)................................................13.05
(f)................................................N.A.
315(a)................................................7.01
(b)................................................7.05; 13.02
(c)................................................7.01
(d)................................................7.01
(e)................................................6.11
316(a)(last sentence).................................2.09
(a)(1)(A)..........................................6.05
(a)(1)(B)..........................................6.04
(a)(2).............................................N.A.
(b)................................................6.07
(c)................................................2.12
317(a)(1).............................................6.08
(a)(2).............................................6.09
(b)................................................2.04
318(a)................................................13.01
(b)................................................N.A.
(c)................................................13.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the
Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions...............................................1
SECTION 1.02. Other Definitions........................................29
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act....................................................30
SECTION 1.04. Rules of Construction....................................30
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating..........................................31
SECTION 2.02. Execution and Authentication.............................32
SECTION 2.03. Registrar and Paying Agent...............................32
SECTION 2.04. Paying Agent to Hold Money in Trust......................33
SECTION 2.05. Lists of Holders of the Notes............................33
SECTION 2.06. Transfer and Exchange....................................33
SECTION 2.07. Replacement Notes........................................46
SECTION 2.08. Outstanding Notes........................................46
SECTION 2.09. Treasury Notes...........................................46
SECTION 2.10. Temporary Notes..........................................47
SECTION 2.11. Cancellation.............................................47
SECTION 2.12. Record Date..............................................47
SECTION 2.13. Defaulted Interest.......................................47
SECTION 2.14. Computation of Interest..................................47
SECTION 2.15. CUSIP Number.............................................48
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. Notices to Trustee.......................................48
SECTION 3.02. Selection of Notes to be Purchased or
Redeemed...............................................48
SECTION 3.03. Notice of Redemption.....................................49
SECTION 3.04. Effect of Notice of Redemption...........................50
SECTION 3.05. Deposit of Redemption Price..............................50
SECTION 3.06. Notes Redeemed in Part...................................51
SECTION 3.07. Optional Redemption......................................51
SECTION 3.08. Mandatory Redemption.....................................51
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SECTION 3.09. Offer to Purchase by Application of Excess
Proceeds...............................................51
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes.........................................53
SECTION 4.02. Maintenance of Office or Agency..........................54
SECTION 4.03. Reports..................................................54
SECTION 4.04. Compliance Certificate...................................55
SECTION 4.05. Taxes....................................................56
SECTION 4.06. Stay, Extension and Usury Laws...........................56
SECTION 4.07. Restricted Payments......................................56
SECTION 4.08. Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries......................60
SECTION 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock........................................62
SECTION 4.10. Asset Sales..............................................65
SECTION 4.11. Transactions With Affiliates.............................67
SECTION 4.12. Liens....................................................68
SECTION 4.13. Sale and Leaseback Transactions..........................68
SECTION 4.14. Offer to Purchase Upon Change of Control.................68
SECTION 4.15. Corporate Existence......................................70
SECTION 4.16. [Intentionally Omitted]..................................70
SECTION 4.17. Line of Business.........................................71
SECTION 4.18. Sales of Accounts Receivable.............................71
SECTION 4.19. Limitation on Guarantees by Restricted
Subsidiaries...........................................72
SECTION 4.20. Impairment of Security Interest..........................73
SECTION 4.21. Limitation on Issuances and Sales of Equity
Interests in Wholly Owned Restricted
Subsidiaries...........................................73
SECTION 4.22. Maintenance of Insurance, Properties, Books
and Records............................................73
ARTICLE 5
SUCCESSORS
SECTION 5.01. Merger, Consolidation, or Sale of Assets.................76
SECTION 5.02. Successor Corporation Substituted........................78
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default........................................79
SECTION 6.02. Acceleration.............................................81
SECTION 6.03. Other Remedies...........................................81
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SECTION 6.04. Waiver of Past Defaults..................................82
SECTION 6.05. Control By Majority......................................82
SECTION 6.06. Limitation on Suits......................................82
SECTION 6.07. Rights of Holders of Notes to Receive Payment............82
SECTION 6.08. Collection Suit by Trustee...............................83
SECTION 6.09. Trustee May File Proofs of Claim.........................83
SECTION 6.10. Priorities...............................................83
SECTION 6.11. Undertaking For Costs....................................84
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee........................................84
SECTION 7.02. Rights of Trustee........................................85
SECTION 7.03. Individual Rights of Trustee.............................86
SECTION 7.04. Trustee's Disclaimer.....................................86
SECTION 7.05. Notice of Defaults.......................................86
SECTION 7.06. Reports By Trustee to Holders of the Notes...............87
SECTION 7.07. Compensation and Indemnity...............................87
SECTION 7.08. Replacement of Trustee...................................88
SECTION 7.09. Successor Trustee by Merger, Etc.........................89
SECTION 7.10. Eligibility; Disqualification............................89
SECTION 7.11. Preferential Collection of Claims Against the
Company................................................89
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance.............................................90
SECTION 8.02. Legal Defeasance and Discharge...........................90
SECTION 8.03. Covenant Defeasance......................................90
SECTION 8.04. Conditions to Legal or Covenant Defeasance...............91
SECTION 8.05. Deposited Money and Government Securities to
be Held in Trust; Other Miscellaneous
Provisions.............................................92
SECTION 8.06. Repayment to the Company.................................93
SECTION 8.07. Reinstatement............................................93
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders of the Notes..................94
SECTION 9.02. With Consent of Holders of Notes.........................94
SECTION 9.03. Compliance with Trust Indenture Act......................96
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SECTION 9.04. Revocation and Effect of Consents........................96
SECTION 9.05. Notation on or Exchange of Notes.........................96
SECTION 9.06. Trustee to Sign Amendments, Etc..........................97
ARTICLE 10
SECURITY DOCUMENTS
SECTION 10.1. Security Documents; Additional Collateral................97
SECTION 10.2. Recording, Etc..........................................100
SECTION 10.3. Certain Dispositions of Collateral Without
Release...............................................101
SECTION 10.4. Possession, Use and Release of Collateral...............103
SECTION 10.5. Eminent Domain and Other Governmental Takings...........106
SECTION 10.6. Trust Indenture Act Requirements........................107
SECTION 10.7. Suits to Protect the Collateral.........................108
SECTION 10.8. Purchaser Protected.....................................108
SECTION 10.9. Powers Exercisable by Receiver or Trustee...............108
SECTION 10.10. Disposition of Obligations Received.....................108
SECTION 10.11. Determinations Relating to Collateral...................109
SECTION 10.12. Release upon Termination of the Company's
Obligations...........................................109
ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.01. Note Guarantee..........................................110
SECTION 11.02. Execution and Delivery of Note Guarantee................111
SECTION 11.03. Guarantors May Consolidate, Etc., on Certain
Terms.................................................111
SECTION 11.04. Releases Following Sale of Assets.......................111
SECTION 11.05. Additional Guarantors...................................112
SECTION 11.06. Limitation on Guarantor Liability.......................112
SECTION 11.07. "Trustee" To Include Paying Agent.......................112
ARTICLE 12
APPLICATION OF TRUST MONIES
SECTION 12.01. Trust Monies............................................113
SECTION 12.02. Retirement of Notes.....................................113
SECTION 12.03. Withdrawals of Net Insurance Proceeds...................114
SECTION 12.04. Withdrawal of Trust Monies for Reinvestment.............117
SECTION 12.05. Powers Exercisable Notwithstanding Event of
Default...............................................119
SECTION 12.06. Powers Exercisable by Trustee or Receiver...............119
SECTION 12.07. Disposition of Notes Retired............................119
SECTION 12.08. Investment of Trust Monies..............................119
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ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls............................120
SECTION 13.02. Notices.................................................120
SECTION 13.03. Communication by Holders of Notes with Other
Holders of Notes......................................121
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent.............................................121
SECTION 13.05. Statements Required in Certificate or Opinion...........122
SECTION 13.06. Rules by Trustee and Agents.............................122
SECTION 13.07. No Personal Liability of Directors, Officers,
Employees and Stockholders............................122
SECTION 13.08. Governing Law...........................................122
SECTION 13.09. No Adverse Interpretation of Other Agreements...........123
SECTION 13.10. Successors..............................................123
SECTION 13.11. Severability............................................123
SECTION 13.12. Counterpart Originals...................................123
SECTION 13.13. Table of Contents, Headings, Etc........................123
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
EXHIBIT E FORM OF NOTE GUARANTEE
EXHIBIT F FORM OF SECURITY AGREEMENT
EXHIBIT G FORM OF MORTGAGE
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INDENTURE dated as of October 16, 2001 between ALARIS Medical Systems,
Inc. (the "COMPANY") and HSBC Bank USA, as trustee (the "TRUSTEE").
The Company, any Guarantor and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the holders
(the "HOLDERS") of the 11 5/8% Series A Senior Secured Notes due 2006 (the
"SERIES A NOTES") and the 11 5/8% Series B Senior Secured Notes due 2006 (the
"SERIES B NOTES" and, together with the Series A Notes, the "NOTES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note in the form of EXHIBIT A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding
aggregate principal amount at maturity of the Notes sold in reliance on Rule
144A.
"ACCOUNTS RECEIVABLE SUBSIDIARY" means a newly created Wholly Owned
Subsidiary of the Company
(i) which is formed solely for the purpose of, and which engages in
no activities other than activities in connection with, financing accounts
receivable of the Company and/or its Restricted Subsidiaries;
(ii) which is designated by the Board of Directors of the Company as
an Accounts Receivables Subsidiary pursuant to a Board of Directors'
resolution set forth in an Officers' Certificate and delivered to the
Trustee;
(iii) that has total assets at the time of such creation and
designation with a book value of $10,000 or less;
(iv) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of which (a) is at any time Guaranteed by the
Company or any Restricted Subsidiary of the Company, (b) is at any time
recourse to or obligates the Company or any other Restricted Subsidiary of
the Company in any way, other than pursuant to representations and
covenants entered into in the ordinary course of business in connection
with the sale of accounts receivable to such Accounts Receivable
Subsidiary or (c) subjects any asset of the Company or any other
Restricted Subsidiary of the Company, directly or indirectly, contingently
or otherwise, to the satisfaction thereof, other than pursuant to
representations and covenants entered into in the ordinary course of
business in connection with sales of accounts receivable;
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(v) with which neither the Company nor any Restricted Subsidiary of
the Company has any contract, agreement, arrangement or understanding
other than contracts, agreements, arrangements and understandings entered
into in the ordinary course of business in connection with sales of
accounts receivable in accordance with Section 4.18 hereof and fees
payable in the ordinary course of business in connection with servicing
accounts receivable; and
(vi) with respect to which neither the Company nor any Restricted
Subsidiary of the Company has any obligation (a) to subscribe for
additional shares of Capital Stock or other Equity Interests therein or
make any additional capital contribution or similar payment or transfer
thereto or (b) to maintain or preserve the solvency or any balance sheet
term, financial condition, level of income or results of operations
thereof.
"ACQUIRED DEBT" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other
Person merges with or into or becomes a Subsidiary of such specified
Person, including Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and
(ii) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"AFTER-ACQUIRED PROPERTY" means (i) in the case of the Company or any
Guarantor, any and all assets or property of the type constituting Collateral
acquired after the Issue Date, including any assets or property of the type
constituting Collateral acquired by the Company or any Guarantor from a transfer
from the Company or a Guarantor and (ii) in the case of any Restricted
Subsidiary that is not a Guarantor, any and all assets or property of the type
constituting Collateral acquired after the Issue Date, including any assets or
property of the type constituting Collateral acquired by such Restricted
Subsidiary from a transfer from the Company or any Guarantor. Notwithstanding
the foregoing, the term "After-Acquired Property" shall not include any interest
in owned Real Property having a Fair Market Value of less than $1,500,000.
"AGENT" means the Registrar, any Paying Agent or co-registrar.
"AMEND" means to amend, supplement, restate, amend and restate or
otherwise modify; and "amendment" shall have a correlative meaning.
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"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of
or for beneficial interest in a Global Note, the rules and procedures of the
Depositary Euroclear and Clearstream that apply to such transfer or exchange.
"ASSET" means any asset or property, whether real, personal or mixed,
tangible or intangible.
"ASSET SALE" means
(i) the Transfer of any assets other than (A) in the ordinary course
of business or (B) sales of accounts receivables to an Accounts Receivable
Subsidiary in accordance with Section 4.18 (PROVIDED that the Transfer of
all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole will be governed by the provisions of this
Indenture
described under Section 4.14 hereof and/or the provisions described under
Section 5.01 hereof and not by the provisions of Section 4.10), and
(ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries
in either case, whether in a single transaction or a series of related
transactions
(a) that have a Fair Market Value in excess of $5.0 million
or
(b) for net proceeds in excess of $5.0 million.
Notwithstanding the foregoing, the following will not be deemed to be
Asset Sales:
(i) a Transfer of assets by the Company to a Restricted Subsidiary
or by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary;
(ii) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary;
(iii) a Restricted Payment that is permitted by Section 4.07 hereof;
and
(iv) the sale and leaseback of any assets within 90 days of the
acquisition of such assets.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"BANKRUPTCY LAW" means Title 11 of the United States Code, as amended, or
any similar federal, state or foreign law for the relief of debtors.
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"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors or comparable governing body of such Person.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be so required to be capitalized on the balance sheet in accordance
with GAAP.
"CAPITAL STOCK" means
(i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; and
(iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited).
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) any Transfer (other than by way of merger or consolidation) of
all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" (as defined in Section
13(d) of the Exchange Act) or "group" (as defined in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act) other than the Principal and his
Related Parties;
(ii) the adoption of a plan for the liquidation or dissolution of the
Company, other than a liquidation or dissolution that results in
substantially all of the assets of the Company being held by Holdings;
(iii) the Company consolidates with, or merges with or into, another
"person" (as defined above) or "group" (as defined above) in a transaction
or series of related transactions in which the Voting Stock of the Company
is converted into or exchanged for cash, securities or other assets, other
than any transaction where (A) the outstanding Voting Stock of the Company
is converted into or exchanged for Voting Stock (other than Disqualified
Stock) of the surviving or transferee corporation and (B) either (1) the
"beneficial owners" (as defined in Rule 13d-3 under the Exchange Act) of
the outstanding Voting Stock of the Company immediately prior to such
transaction own beneficially, directly or indirectly through one or more
Subsidiaries, not less than a majority of the total outstanding Voting
Stock of the surviving or transferee corporation immediately after such
transaction or (2) if, immediately prior to such transaction the Company
is a direct or indirect Subsidiary of any other Person (each such other
Person, the "HOLDING COMPANY"), the "beneficial owners" (as defined above)
of the outstanding Voting Stock of such Holding Company immediately prior
to such transaction own beneficially, directly or indirectly through one
or more Subsidiaries, not less than a majority of the outstanding Voting
Stock of the surviving or transferee corporation immediately after such
transaction;
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(iv) the consummation of any transaction or series of related
transactions (including, without limitation, by way of merger or
consolidation) the result of which is that any "person" (as defined
above) or "group" (as defined above) other than the Principal and his
Related Parties becomes the "beneficial owner" (as defined above) of
more than 40% of the voting power of the Voting Stock of the Company, or
(v) during any consecutive two-year period, the first day on which a
majority of the members of the Board of Directors of Holdings who were
members of the Board of Directors at the beginning of such period are not
Continuing Directors.
"CLEARSTREAM" means Clearstream Banking, Societe Anonyme, Luxembourg.
"COLLATERAL" means, collectively, all of the assets that are from time to
time subject or are required to be subject to the Lien of this Indenture and the
Security Documents.
"COLLATERAL ACCOUNT" means the collateral account established pursuant to
this Indenture and the Security Documents.
"COMMISSION" or "SEC" means the Securities and Exchange Commission.
"COMPANY" means ALARIS Medical Systems, Inc., as obligor under the
Notes.
"CONSOLIDATED EBITDA" means, with respect to any Person for any period,
the Consolidated Net Income of such Person and its Restricted Subsidiaries for
such period, PLUS, to the extent deducted in computing Consolidated Net Income:
(i) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period;
(ii) Consolidated Interest Expense of such Person for such period;
(iii) depreciation and amortization (including amortization of
goodwill and other intangibles) and all other non-cash charges
(excluding any such non-cash charge to the extent that it represents an
accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period)
of such Person and its Restricted Subsidiaries for such period; and
(iv) any extraordinary or non-recurring loss and any net loss
realized in connection with either an Asset Sale or the
extinguishment of Indebtedness,
in each case, on a consolidated basis determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash
charges of, a Restricted Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated EBITDA only to the extent
(and in the same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person.
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"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for any
period, the interest expense of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP
(including amortization of original issue discount and deferred financing costs,
except as set forth in the proviso to this definition, non-cash interest
payments, the interest component of all payments associated with Capital Lease
Obligations, net payments, if any, pursuant to Hedging Obligations and imputed
interest with respect to Attributable Debt; PROVIDED, HOWEVER, that in no event
shall any amortization of deferred financing cost incurred on or prior to the
date of the indenture governing the 9 3/4% Notes in connection with the Existing
Credit Facility or any amortization of deferred financing costs incurred in
connection with the issuance of the 9 3/4% Notes be included in Consolidated
Interest Expense).
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that
(i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of
dividends or distributions paid to the referent Person or (subject to
clause (iv) below) a Restricted Subsidiary thereof in cash;
(ii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(iii) the cumulative effect of a change in accounting principles
shall be excluded; and
(iv) the Net Income of any Restricted Subsidiary shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not,
at the date of determination, permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders.
"CONTESTED COLLATERAL LIEN CONDITIONS" shall mean the following
conditions:
(i) any proceeding instituted contesting such Lien shall conclusively
operate to stay the sale or forfeiture of any portion of the Collateral on
account of such Lien; and
(ii) in the event the amount of any such Lien shall exceed
$500,000, at the option and upon request of the Trustee, the Company or
the applicable Restricted Subsidiary shall maintain cash reserves in an
amount sufficient to pay and discharge such Lien and the Trustee's
reasonable estimate of all interest and penalties related thereto.
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of the relevant Person who:
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(i) was a member of such Board of Directors on the date of this
Indenture;
(ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or
election; or
(iii) became a member of the Board of Directors as a result of the
actions of the Principal; PROVIDED that at the time the Principal took
any such action, the Principal was the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) in excess of 50% of the Voting
Stock of the Company.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"CREDIT AGREEMENTS" means one or more unsubordinated debt facilities or
commercial paper facilities, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), foreign
currency hedging arrangements or letters of credit, in each case, as amended or
refinanced in whole or in part from time to time.
"CUSTODIAN" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in the form of
EXHIBIT A hereto except that such Note shall not bear the Global Note Legend and
shall not have the "Schedule of Exchanges of Interests in the Global Note"
attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DESTRUCTION" means any damage to, loss or destruction of all or any
portion of the Collateral. "DESTROYED" shall have a correlative meaning.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable, except to the extent such Capital Stock is exchangeable into
Indebtedness at the option of the issuer thereof and only subject to the terms
of any debt instrument to which such issuer is a party), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, or convertible or exchangeable into
-8-
Indebtedness on or prior to the date on which the Notes mature; PROVIDED,
HOWEVER, that any Capital Stock that would constitute Disqualified Stock
solely because the holders thereof have the right to require the Company to
repurchase such Capital Stock upon the occurrence of a Change of Control or
an Asset Sale shall not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof.
"DOMESTIC SUBSIDIARY" means a Restricted Subsidiary of the Company which
is organized under the laws of the United States or any State thereof or the
District of Columbia.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus of not less than $100.0 million or its equivalent
in foreign currency, whose short-term debt is rated "A-3" or higher according to
Standard & Poor's Ratings Group ("S&P") or "P-2" or higher according to ▇▇▇▇▇'▇
Investor Services, Inc. ("MOODY'S") or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments.
"EQUIPMENT" shall have the meaning assigned thereto in the Security
Agreement.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means ▇▇▇▇▇▇ Guaranty Trust Company of
New York, Brussels
office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" has the meaning set forth in the Registration Rights
Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the
Registration Rights Agreement.
"EXISTING CREDIT FACILITY" means that certain credit agreement dated as of
November 26, 1996, as amended, among the Company, Holdings, Bankers Trust
Company, as administrative agent and syndication agent, Paribas, as
documentation agent, and the lenders party thereto.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the date hereof after giving effect to
the intended use of proceeds of Notes issued on the Issue Date, until such
amounts are repaid, including, without limitation, the 9 3/4% Notes.
"FAIR MARKET VALUE" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) that would be
negotiated in an arm's-length transaction for cash between a willing seller and
a willing and able buyer, neither of which is under any compulsion to complete
the transaction, as such price is determined in good faith by management of the
Company or by the Board of Directors of the Company or a duly authorized
committee thereof. Fair Market Value
-9-
(other than of any asset with a public trading market) in excess of $5.0
million shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution
delivered to the Trustee.
"FINANCIAL ADVISOR" means an accounting, appraisal or investment banking
firm of nationally recognized standing.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated EBITDA of such Person and its Restricted
Subsidiaries for such period to the Fixed Charges of such Person and its
Restricted Subsidiaries for such period. In the event that the Company or any of
its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues or redeems
preferred stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but on or prior to the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio is made
(the "CALCULATION DATE"), then the Fixed Charge Coverage Ratio shall be
calculated giving PRO FORMA effect to such incurrence, assumption, Guarantee or
redemption of Indebtedness, or such issuance or redemption of preferred stock,
and the application of proceeds from any such incurrence or issuance, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. For purposes of making the computation referred to above,
(i) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be deemed to have occurred on the first day of
the four-quarter reference period and shall give PRO FORMA effect to the
Indebtedness and the Consolidated EBITDA of the Person which is the
subject of any such acquisition,
(ii) the Consolidated EBITDA attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be
excluded, and
(iii) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, shall be excluded, but only to the
extent that the obligations giving rise to such Fixed Charges will not be
obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"FIXED CHARGES" means, with respect to any Person for any period,
the sum of
(i) the Consolidated Interest Expense of such Person for such
period; and
(ii) any interest expense on Indebtedness of another Person that
is (A) Guaranteed by the referent Person or one of its Restricted
Subsidiaries (whether or not such Guarantee is called upon) or (B)
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries (whether or not such Lien is called upon); PROVIDED that
with respect to
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clause (ii)(B), the amount of Indebtedness (and attributable interest
expense) shall be equal to the lesser of (a) the principal amount of
the Indebtedness secured by the assets of such Person or one of its
Restricted Subsidiaries and (b) the Fair Market Value of the assets
securing such Indebtedness; and
(iii) the product of (A) all cash dividend payments (and non-cash
dividend payments in the case of a Person that is a Subsidiary) on any
series of preferred stock of such Person, TIMES (B) a fraction, the
numerator of which is one and the denominator of which is one minus the
then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.
"FOREIGN SUBSIDIARY" means any Restricted Subsidiary of the Company
organized and existing under the laws of any jurisdiction outside of the United
States.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, the Securities and Exchange Commission
or in such other statements by such other entity as may be approved by a
significant segment of the accounting profession of the United States, which are
in effect from time to time; PROVIDED, HOWEVER, that all reports and other
financial information provided by the Company to the Holders of the Notes, the
Trustee and/or the Commission shall be prepared in accordance with GAAP, as in
effect on the date of such report or other financial information.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
EXHIBIT A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in 2.06(g)(ii), which is
required to be placed on all Global Notes issued under this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTEE OBLIGATIONS" means any principal, interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable with
respect to the Note Guarantees.
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"GUARANTOR" means
(i) each Restricted Subsidiary that executes and delivers a Note
Guarantee pursuant to the covenant described in Section 4.19 hereof and
(ii) each Restricted Subsidiary that otherwise executes and
delivers a Note Guarantee,
in each case, until such time as such Restricted Subsidiary is released from its
Note Guarantee in accordance with the provisions of this Indenture.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under
(i) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements;
(ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates or foreign exchange rates; and
(iii) indemnity agreements and arrangements entered into in
connection with the agreements and arrangements described in clauses
(i) and (ii).
"HOLDER" means any registered holder, from time to time, of the Notes.
"HOLDINGS" means
(i) ALARIS Medical, Inc., a Delaware corporation; or
(ii) if ALARIS Medical, Inc. ceases to either (a) exist or (b)
beneficially own, directly or indirectly, in excess of 50% of the Equity
Interests of the Company, the ultimate corporate parent of the Company
that owns all of the outstanding Equity Interests of the Company either
directly or through one or more wholly-owned Subsidiaries; or
(iii) if there exists no corporate parent of the Company, the
Company.
"IAI GLOBAL NOTE" means the Global Note, if issued, in the form of EXHIBIT
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that, if issued, will be issued in a denomination equal to the
outstanding principal amount at maturity of the Notes held by Institutional
Accredited Investors.
"INCUR" means, with respect to any Indebtedness (including Acquired Debt),
to create, incur, issue, assume, Guarantee or otherwise become directly or
indirectly liable for or with respect to, or become responsible for, the payment
of such Indebtedness (including Acquired Debt); PROVIDED that
-12-
(i) neither the accrual of interest nor the accretion of original
issue discount shall be considered an incurrence of Indebtedness,
and
(ii) the assumption of Indebtedness by the surviving entity of a
transaction permitted by the last sentence of Section 5.01 hereof in
existence at the time of such transaction shall not be deemed to be an
incurrence of Indebtedness. The term "INCURRENCE" has a corresponding
meaning.
"INDEBTEDNESS" means, with respect to any Person without duplication, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or representing
Capital Lease Obligations or the balance deferred and unpaid of the purchase
price of any asset, except any such balance that constitutes an accrued expense
or trade payable, or representing any Hedging Obligations if and to the extent
any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person), the maximum fixed repurchase price of Disqualified
Stock issued by such Person and the liquidation preference of preferred stock
issued by such Person, in each case if held by any Person other than the Company
or a Wholly Owned Restricted Subsidiary of the Company, and, to the extent not
otherwise included, the Guarantee by such Person of any such indebtedness of any
other Person. The amount of any Indebtedness outstanding as of any date shall
be:
(i) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount, and
(ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"INITIAL SALE" means the first transaction in which accounts receivable
are sold by the Company and/or its Restricted Subsidiaries to an Accounts
Receivable Subsidiary.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"INSTRUMENT CONTRACT" means any contract or agreement to which the Company
or any of its Restricted Subsidiaries is a party pursuant to which the other
party to any such contract or agreement acquires on behalf of itself or another
party instruments from the Company or such Restricted Subsidiary at no or
reduced initial cost by paying a premium (a portion of which is recorded by the
Company
-13-
in accordance with GAAP as interest income) for subsequent purchases of
disposable administration sets.
"INSURANCE CERTIFICATE" shall mean a certificate evidencing the policies,
coverages and other requirements described in Section 4.22 hereof (i) in
substantially the form commonly known as "▇▇▇▇▇ 27" that (A) provides that the
insurance has been issued, is in full force and effect, and conveys all the
rights and privileges afforded under the insurance policies required pursuant to
Section 4.22 hereof, (B) provides an unequivocal obligation to give notice in
advance to additional interested parties of termination and notification in
advance of changes and (C) purports to convey all the privileges of the
insurance policies required pursuant to Section 4.22 hereof to the certificate
holders and (ii) that otherwise complies with the requirements with respect
thereto set forth in Section 4.22 hereof.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all other items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP; PROVIDED that an acquisition of assets, Equity Interests or other
securities by the Company for consideration consisting of common equity
securities of the Company shall not be deemed to be an Investment. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company, or any Restricted Subsidiary of the Company issues Equity Interests,
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale, disposition or issuance
equal to the Fair Market Value of the Equity Interests of such Person held by
the Company or such Restricted Subsidiary immediately following any such sale,
disposition or issuance.
"ISSUE DATE" means the date on which Notes are first issued under this
Indenture.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of
New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any
-14-
filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant to
Section 4 of the Registration Rights Agreement.
"MARKETABLE SECURITIES" means
(i) Government Securities,
(ii) any certificate of deposit maturing not more than 270 days
after the date of acquisition issued by, or time deposit of, an
Eligible Institution or any lender under the Credit Agreement,
(iii) commercial paper maturing not more than 270 days after the
date of acquisition of an issuer (other than an Affiliate of the
Company) with a rating, at the time as of which any investment therein
is made, of "A-2" or higher according to S&P or "P-2" or higher
according to Moody's or carrying an equivalent rating by a nationally
recognized rating agency if both of the two named rating agencies cease
publishing ratings of investments,
(iv) any bankers acceptances or money market deposit accounts
issued by an Eligible Institution, and
(v) any fund investing exclusively in investments of the types
described in clauses (i) through (iv) above.
"MORTGAGE" means in the case of owned Real Property located in the United
States, each mortgage instrument (or deed of trust) and assignment of leases and
rents, substantially in the form of EXHIBIT G (including such changes to such
form as may be necessary or desirable to conform to applicable local laws or
customs regarding property in the jurisdiction where such instrument is to be
recorded), as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms hereof and thereof.
"MORTGAGEE" shall mean the "mortgagee" or the "beneficiary" as such loan
term shall be defined in any Mortgage.
"MORTGAGED PROPERTY" means any Real Property that is subject to a
Mortgage.
"MORTGAGOR" shall mean the "mortgagor" or the "grantor" as such term shall
be defined in any Mortgage..
"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP, excluding, however,
(i) any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection with (a)
any Asset Sale (including, without limitation,
-15-
dispositions pursuant to sale and leaseback transactions) or (b) the
extinguishment of any Indebtedness of such Person or any of its
Restricted Subsidiaries, and
(ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"NET INSURANCE PROCEEDS" means the insurance proceeds (excluding liability
insurance proceeds payable to the Trustee for any loss, liability or expense
incurred by it) actually received by the Company or any Restricted Subsidiary as
a result of damage to, or the loss, destruction or condemnation of, all or any
portion of the Collateral, less collection costs, including fees and expenses of
attorneys and insurance adjusters paid by the Company or any Restricted
Subsidiary.
"NET PROCEEDS" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, amounts
required to be applied to the repayment of Indebtedness (other than long-term
Indebtedness of a Restricted Subsidiary of such Person and Indebtedness under
any Credit Agreement) secured by a Lien on the asset or assets that are the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.
"9 3/4% NOTES" means the 9 3/4% Senior Subordinated Notes due 2006 of the
Company issued pursuant to an indenture dated November 26, 1996, as
supplemented, among the Company, IMED International Trading Corp., IVAC Overseas
Holdings Inc. and United States Trust Company of
New York, as trustee.
"NON-RECOURSE DEBT" means Indebtedness
(i) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(ii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company
or any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that in no
event shall Indebtedness of any Unrestricted Subsidiary fail to be
Non-Recourse Debt solely as a result of any default provisions
contained in a Guarantee thereof by the Company or any of its
Restricted Subsidiaries if the Company or such Restricted Subsidiary
was otherwise permitted to incur such Guarantee pursuant to this
Indenture.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
-16-
"NOTE CUSTODIAN" means the Trustee, as custodian for the Depository with
respect to the Notes in global form, or any successor entity thereto.
"NOTES" means the Company's Series A Notes and Series B Notes.
"OBLIGATIONS" means any principal, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided in the documentation with respect thereto, whether or not such interest
is an allowed claim under applicable law), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"OFFERING MEMORANDUM" means the Offering Memorandum, dated October 11,
2001, relating to the offering of the Notes.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, delivered to the Trustee that meets the requirements of
Section 13.05 hereof.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company.
"PARTICIPANT" means, with respect to DTC, Euroclear or Clearstream, a
Person who has an account with DTC, Euroclear or Clearstream, respectively (and,
with respect to DTC, shall include Euroclear and Clearstream).
"PARTICIPATING BROKER-DEALER" has the meaning set forth in the
Registration Rights Agreement.
"PERMITTED BUSINESS" means:
(i) the same or a similar line of business as the Company and its
Restricted Subsidiaries are engaged in on the date hereof, and
(ii) such business activities as are complementary to or are
incidental, ancillary or related to the foregoing.
"PERMITTED COLLATERAL LIENS" means
(i) Liens on assets of a Person merged with or into or
consolidated with the Company or any Guarantor after the Issue Date
existing at the time such Person is merged with or into or consolidated
with the Company or any Guarantor; PROVIDED that such Liens were not
-17-
incurred in connection with, or in contemplation of, such merger or
consolidation and do not extend to any assets of the Company or any
Guarantor other than the assets of such Person acquired in such merger
or consolidation;
(ii) Liens on assets of a Person that becomes a Guarantor after
the Issue Date existing at the time such Person becomes a Guarantor;
PROVIDED that such Liens were not incurred in connection with, or in
contemplation of, such Person becoming a Guarantor and do not extend to
any assets of the Company or any Guarantor;
(iii) Liens on assets acquired after the Issue Date existing at
the time of acquisition thereof by the Company or any Guarantor;
PROVIDED that such Liens were not incurred in connection with, or in
contemplation of, such acquisition and do not extend to any assets of
the Company or any Guarantor other than the specific assets so acquired;
(iv) Liens to secure the performance of statutory obligations,
surety or appeal bonds or performance bonds, landlords', carriers',
warehousemen's, mechanics', suppliers', materialmen's or other like
liens, in any case incurred in the ordinary course of business and with
respect to amounts not yet delinquent or being contested in good faith
by appropriate proceedings promptly instituted and diligently
conducted; PROVIDED that (A) a reserve or other appropriate provision,
if any, as is required by GAAP shall have been made therefor, (B) the
Contested Collateral Lien Conditions shall at all times be satisfied
and (C) such Liens relating to statutory obligations, surety or appeal
bonds or performance bonds shall only extend to or cover cash and
Marketable Securities not in the Collateral Account;
(v) Liens existing on the date hereof to the extent permitted by
the applicable Security Documents;
(vi) Liens for taxes, assessments or governmental charges or
claims or other like statutory Liens, in any case incurred in the
ordinary course of business, that do not secure Indebtedness for
borrowed money and (A) that are not yet delinquent or (B) that are
being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; PROVIDED that (1) any reserve or
other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor and (2) the Contested Collateral
Lien Conditions shall at all times be satisfied;
(vii) Liens to secure Indebtedness (including Capital Lease
Obligations) of the type described in clause (iii)(A) of the second
paragraph of Section 4.09 hereof covering only the assets acquired with
such Indebtedness;
(viii) Liens securing Indebtedness incurred to refinance Indebtedness
secured by the Liens of the type described in clauses (i), (ii), (iii) and
(v) of this definition; PROVIDED that (A) any such Lien shall not extend
to or cover any assets not securing the Indebtedness so refinanced and (B)
the refinancing Indebtedness secured by such Lien shall have been
permitted pursuant to clause (v) of the second paragraph of Section 4.09
hereof;
-18-
(ix) Liens in favor of the Trustee to secure the performance of the
Company and the Guarantors under this Indenture, the Notes, the Note
Guarantees and the Security Documents;
(x) (A) Liens in the form of zoning restrictions, easements,
licenses, reservations, covenants, conditions or other restrictions on
the use of real property or other minor irregularities in title
(including leasehold title) that do not (1) secure Indebtedness or (2)
individually or in the aggregate materially impair the value or
marketability of the real property affected thereby or the occupation,
use and enjoyment in the ordinary course of business of the Company and
the Guarantors at such real property and (B) with respect to leasehold
interests in real property, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of such leased
property encumbering the landlord's or owner's interest in such leased
property;
(xi) Liens in the form of pledges or deposits securing bids, tenders,
contracts (other than contracts for the payment of money) or leases to
which the Company or any Guarantor is a party, in each case, made in the
ordinary course of business for amounts (A) not yet due and payable or (B)
being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted; PROVIDED that (1) a reserve or other
appropriate provision, if any, as is required by GAAP shall have been made
therefor, (2) the Contested Collateral Lien Conditions shall at all times
be satisfied and (3) such Liens shall in no event encumber any Collateral
other than cash and Marketable Securities not in the Collateral Account;
(xii) Liens resulting from operation of law with respect to any
judgments, awards or orders to the extent that such judgments, awards
or orders do not cause or constitute a Default under this Indenture;
PROVIDED that any such Liens in an amount in excess of $500,000 on
Mortgaged Property shall be paid, discharged, bonded or stayed prior to
the sale or forfeiture of any portion of such Collateral on account of
such Liens;
(xiii) Liens in the form of licenses, leases or subleases granted or
created by the Company or any Guarantor, which licenses, leases or
subleases (A) do not interfere, individually or in the aggregate, in any
material respect with the business of the Company or such Guarantor or
individually or in the aggregate materially impair the use (for its
intended purpose) or the value of the property subject thereto and (B) to
the extent relating to Mortgaged Property are subordinate to the Lien
granted and evidenced by the Security Documents in accordance with the
provisions thereof; PROVIDED that any such Lien shall not extend to or
cover any assets of the Company or any Guarantor that is not the subject
of any such license, lease or sublease;
(xiv) Liens securing Hedging Obligations permitted to be incurred
under this Indenture; PROVIDED that such Liens shall only extend to or
cover cash and Marketable Securities not in the Collateral Account in
an aggregate amount not to exceed $20,000,000 at any time outstanding;
-19-
(xv) Liens in favor of the Company or any Guarantor; PROVIDED that
any Liens of the type described in this clause (xv) shall be subject to
the Lien granted and evidenced by the Security Documents;
(xvi) Liens incurred in the ordinary course of business of the
Company or any Guarantor with respect to obligations that do not exceed
$1,500,000 in the aggregate at any one time outstanding (a) that are
not yet delinquent or (b) that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
PROVIDED that (i) any reserve or other appropriate provision as shall
be required in conformity with GAAP shall have been made therefor and
(ii) the Contested Collateral Lien Conditions shall at all times be
satisfied;
(xvii) Liens in favor of the lessee on medical instruments or other
medical devices which are the subject of leases entered into in the
ordinary course of business; PROVIDED that no such Lien shall extend to or
cover any assets of the Company or any Guarantor that are not the subject
of any such lease;
(xviii) Liens in favor of the contracting party, assignee or
purchaser on medical instruments or other medical devices which are the
subject of Instrument Contracts entered into in the ordinary course of
business; PROVIDED that no such Lien shall extend to or cover any
assets of the Company or any Guarantor that are not the subject of any
such Instrument Contract; and
(xix) Liens on fixtures or personal property granted to landlords
pursuant to leases to the extent that such Liens are not yet due and
payable; PROVIDED that (i) with respect to any such Liens in existence
on the date hereof, the Company or any applicable Guarantor has used
its commercially reasonable efforts to obtain a landlord lien waiver
reasonably satisfactory to the Trustee and (ii) with respect to any
leases entered into after the date hereof, the Company or any
applicable Guarantor shall use its commercially reasonable efforts to
(x) enter into a lease that does not ▇▇▇▇▇ ▇ ▇▇▇▇ on fixtures or
personal property in favor of the landlord thereunder or (y) obtain a
landlord lien waiver reasonably satisfactory to the Trustee;
PROVIDED, HOWEVER, that no Liens shall be permitted to exist, directly or
indirectly, on any Securities Collateral (as defined in the Security Agreement).
"PERMITTED INVESTMENTS" means
(i) Investments in the Company or in a Guarantor (including, without
limitation, Guarantees of the Indebtedness and/or other Obligations of the
Company and/or any Guarantor, so long as such Indebtedness and/or other
Obligations are permitted under this Indenture);
(ii) Investments in Marketable Securities;
(iii) Investments by the Company or any Restricted Subsidiary of the
Company in, or the purchase of the securities of, a Person if, as a result
of such Investment, (A) such person
-20-
becomes a Guarantor or (B) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of
its assets to, or is liquidated into, the Company or a Guarantor;
(iv) Investments in accounts and notes receivable acquired in the
ordinary course of business;
(v) Investments in connection with the sale of medical instruments
pursuant to Instrument Contracts or any leasing of medical instruments in
the ordinary course of business;
(vi) any non-cash consideration received in connection with an Asset
Sale that complies with Section 4.10 hereof;
(vii) Investments in connection with Hedging Obligations permitted
to be incurred under Section 4.09 hereof;
(viii) loans to employees in an aggregate amount not to exceed
$1.0 million at any time outstanding;
(ix) Investments in an Accounts Receivable Subsidiary received in
consideration of sales of accounts receivable in accordance with Section
4.18 hereof;
(x) Investments existing on the Issue Date in Restricted
Subsidiaries and any substitutions or replacements of any such
Investment so long as the aggregate amount of such Investment is not
increased by such substitution or replacement;
(xi) additional Investments in Foreign Subsidiaries in an aggregate
amount not to exceed $30.0 million at any time outstanding; and
(xii) additional Investments in an aggregate amount not to exceed
$1.0 million at any time outstanding.
"PERMITTED LIENS" means
(i) Liens on assets of the Company and its Subsidiaries securing
(A) any Credit Agreement, (B) Indebtedness of any Restricted Subsidiary
that is not a Guarantor, which Indebtedness is permitted to be incurred
pursuant to Section 4.09 hereof, or (C) Hedging Obligations permitted
to be incurred under this Indenture;
(ii) Liens in favor of the Company or any of its Restricted
Subsidiaries;
(iii) Liens on assets of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; PROVIDED that such Liens were not incurred in
connection with, or in contemplation of, such merger or consolidation and
do not extend to any assets of the Company or any Restricted Subsidiary of
the Company other than the assets acquired in such merger or
consolidation;
-21-
(iv) Liens on assets of a Person existing at the time such Person
becomes a Restricted Subsidiary of the Company; PROVIDED that such
Liens were not incurred in connection with, or in contemplation of,
such Person becoming a Restricted Subsidiary and do not extend to any
assets of the Company or any other Restricted Subsidiary of the Company;
(v) Liens on assets existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company; PROVIDED that
such Liens were not incurred in connection with, or in contemplation
of, such acquisition and do not extend to any assets of the Company or
any of its Restricted Subsidiaries other than the assets so acquired;
(vi) Liens to secure the performance of statutory obligations,
surety or appeal bonds or performance bonds, or landlords', carriers',
warehousemen's, mechanics', suppliers', materialmen's or other like
Liens, in any case incurred in the ordinary course of business and with
respect to amounts not yet delinquent or being contested in good faith
by appropriate process of law, if a reserve or other appropriate
provision, if any, as is required by GAAP shall have been made therefor;
(vii) Liens existing as of the date hereof;
(viii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; PROVIDED that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor;
(ix) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iii) of the second paragraph of
Section 4.09 hereof covering only the assets acquired with such
Indebtedness or the assets which are the subject of the sale and
leaseback transaction, as the case may be;
(x) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations not constituting Indebtedness for borrowed money that do
not exceed $5.0 million in the aggregate at any one time outstanding;
(xi) Liens securing Indebtedness incurred to refinance
Indebtedness that has been secured by a Lien permitted under this
Indenture; PROVIDED that (a) any such Lien shall not extend to or cover
any assets not securing the Indebtedness so refinanced and (b) the
refinancing Indebtedness secured by such Lien shall have been permitted
to be incurred under Section 4.09 hereof;
(xii) Liens in favor of the lessee on medical instruments or other
medical devices which are the subject of leases entered into in the
ordinary course of business; PROVIDED that any such Lien shall not
extend to or cover any assets of the Company and its Restricted
Subsidiaries that is not the subject of any such lease;
-22-
(xiii) Liens in favor of the contracting party, assignee or
purchaser on medical instruments or other medical devices which are the
subject of Instrument Contracts entered into in the ordinary course of
business; PROVIDED that any such Lien shall not extend to or cover any
assets of the Company and its Restricted Subsidiaries that are not the
subject of any such Instrument Contract;
(xiv) Liens to secure Attributable Debt that is permitted to be
incurred pursuant to Section 4.13 hereof; PROVIDED that any such Lien
shall not extend to or cover any assets of the Company other than the
assets which are the subject of the sale and leaseback transaction in
which the Attributable Debt is incurred;
(xv) Liens in favor of the Trustee to secure the performance of the
Company and the Guarantors under this Indenture, the Notes, the Note
Guarantees and the Security Documents;
(xvi) Liens on fixtures or personal property granted to landlords
pursuant to leases to the extent that such Liens are not yet due and
payable;
(xvii) (a) Liens in the form of zoning restrictions, easements,
licenses, reservations, covenants, conditions or other restrictions on
the use of real property or other minor irregularities in title
(including leasehold title) that do not (i) secure Indebtedness or (ii)
individually or in the aggregate materially impair the value or
marketability of the real property affected thereby or the occupation,
use and enjoyment in the ordinary course of business of the Company and
the Restricted Subsidiaries at such real property and (b) with respect
to leasehold interests in real property, mortgages, obligations, liens
and other encumbrances incurred, created, assumed or permitted to exist
and arising by, through or under a landlord or owner of such leased
property encumbering the landlord's or owner's interest in such leased
property;
(xviii) Liens in the form of pledges or deposits securing bids,
tenders, contracts (other than contracts for the payment of money) or
leases to which the Company or any Restricted Subsidiary is a party, in
each case, made in the ordinary course of business for amounts (a) not
yet due and payable or (b) being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted;
(xix) Liens resulting from operation of law with respect to any
judgments, awards or orders to the extent that such judgments, awards
or orders do not cause or constitute a Default; and
(xx) Liens in the form of licenses, leases or subleases granted or
created by the Company or any Restricted Subsidiary, which Liens do not
interfere, individually or in the aggregate, in any material respect
with the business of the Company or such Restricted Subsidiary;
PROVIDED that any such Lien shall not extend to or cover any assets of
the Company and its Restricted Subsidiaries that are not the subject of
any such license, lease or sublease.
-23-
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to refinance other Indebtedness of the Company or any
of its Restricted Subsidiaries; PROVIDED that:
(i) the principal amount of such Permitted Refinancing
Indebtedness does not exceed the principal amount of the Indebtedness
so refinanced (plus the amount of reasonable expenses incurred in
connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity
date at least as late as the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being refinanced;
(iii) if the Indebtedness being refinanced is subordinated in
right of payment to the Notes, such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being refinanced; and
(iv) such Indebtedness is incurred by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
refinanced.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof (including any subdivision or
ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"PLEDGOR" means each of the Company and the Guarantors, from time to time,
party to any of the Security Documents executed on the date hereof and each
other party that becomes a pledgor, mortgagor, transferor or assignor under any
Security Document.
"PRINCIPAL" means ▇▇▇▇▇▇ ▇. Picower.
"PRIOR LIENS" has the meaning ascribed to that term in the applicable
Security Document.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not Disqualified
Stock.
"REAL PROPERTY" means any interest in any real property or any portion
thereof whether owned in fee or leased or otherwise owned.
-24-
"REFINANCE" means to refinance, repay, replace, renew, extend, refund
or restructure.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company, UBS Warburg
LLC and Bear, ▇▇▇▇▇▇▇ & Co. Inc., as such agreement may be amended, modified
or supplemented from time to time.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL NOTE" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount at maturity of the
Notes sold in reliance on Rule 904 of Regulation S.
"RELATED PARTY" means, with respect to the Principal,
(i) any spouse or immediate family member of the Principal or
(ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding (directly or through one or more Subsidiaries) an 80% or more
controlling interest of which consist of the Principal and/or such other
Persons referred to in the immediately preceding clause (i).
"REPLACEMENT ASSETS" means
(i) a business permitted by Section 4.17 hereof,
(ii) a controlling equity interest in any Person engaged in a line
of business permitted by Section 4.17 hereof, or
(iii) tangible assets, product distribution rights or intellectual
property or rights thereto used in a line of business permitted by Section
4.17 hereof.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
-25-
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY AGREEMENT" means that certain security agreement, between the
Company, certain Subsidiaries of the Company from time to time party thereto,
and the Trustee, as collateral agent, substantially in the form of EXHIBIT F
hereto.
"SECURITY DOCUMENTS" mean, collectively,
(i) the Security Agreement, and
(ii) all security agreements, mortgages, deeds of trust, pledges,
collateral assignments and other agreements or instruments evidencing or
creating any security interest or loan in favor of the Trustee on behalf
of itself and the Holders in any or all of the Collateral, including,
without limitation, (1) a Mortgage executed by the Company in favor of the
Trustee relating to the Company's owned Real Property located Granville
County, North Carolina and (2) such foreign pledge agreements as may be
executed pursuant to the Security Documents,
in each case as amended from time to time in accordance with their terms.
"SECURITY INTERESTS" means the Liens on the Collateral created by the
Security Documents in favor of the Trustee, for its benefit and for the
benefit of the Holders.
"SERIES A NOTES" means the Company's 11-5/8% Series A Senior Secured
Notes due 2006 issued pursuant to this Indenture.
"SERIES B NOTES" means the Company's 11-5/8% Series B Senior Secured
Notes due 2006 issued pursuant to this Indenture in an Exchange Offer or upon
the request of any holder of Series A Notes covered by a Shelf Registration
Statement, in exchange for such Series A Notes.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in
effect on the date hereof.
-26-
"SUBSIDIARY" means, with respect to any Person,
(i) any corporation, association or other business entity of which
more than 50% of the total voting power of Voting Stock is at the time
owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries of that Person (or a combination thereof) and
(ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof);
PROVIDED, HOWEVER, that the Accounts Receivable Subsidiary and its
Subsidiaries shall not be deemed Subsidiaries of the Company or any of its
other Subsidiaries.
"SURVEY" means a survey of any parcel of owned Real Property (and all
improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state or province in which such Real Property is
located, (ii) dated (or redated) not earlier than six months prior to the
date of delivery thereof (unless there shall have occurred within six months
prior to such date of delivery any exterior construction on the site of such
Real Property, in which event such survey shall be dated (or redated) after
the completion of such construction or if such construction shall not have
been completed as of such date of delivery, not earlier than 20 days prior to
such date of delivery), (iii) certified by the surveyor in a manner
reasonably acceptable to the title company providing title insurance in
respect of the Liens granted under the Mortgages and (iv) complying in all
respects with the minimum detail requirements of the American Land Title
Association, or local equivalent, as such requirements are in effect on the
date of preparation of such survey, or that is otherwise reasonably
acceptable to the Trustee (giving consideration to the applicable
transaction).
"TAKING" means any taking of all or any portion of the Collateral by
condemnation or other eminent domain proceedings, pursuant to any law,
general or special, or by reason of the temporary requisition of the use or
occupancy of all or any portion of the Collateral by any governmental
authority, civil or military, or any sale pursuant to the exercise by any
such governmental authority of any right which it may then have to purchase
or designate a purchaser or to order a sale of all or any portion of the
Collateral. "TAKEN" shall have a correlative meaning.
"TAXES" means any tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest, expenses and other
liabilities related thereto), levied, imposed or assessed by or on behalf of
any taxing authority.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TRANSFER" means to sell, assign, transfer, lease (other than pursuant
to an operating lease entered into in the ordinary course of business),
convey or otherwise dispose of, including by sale and leaseback transaction,
consolidation, merger, liquidation, dissolution or otherwise, in one
transaction or a series of transactions.
-27-
"TRUST MONIES" means all cash and Marketable Securities received by the
Trustee
(i) upon the release of Collateral from the Lien of this Indenture
or the Security Documents, including all Net Proceeds and all monies
received in respect of the principal of all purchase money, governmental
and other obligations;
(ii) as compensation for or proceeds of the sale of all or any part
of the Collateral taken by eminent domain or purchased by or sold pursuant
to any order of a governmental authority or otherwise disposed of;
(iii) as Net Insurance Proceeds;
(iv) pursuant to the Security Documents;
(v) as proceeds of any sale or other disposition of all or any part
of the Collateral by or on behalf of the Trustee or any collection,
recovery, receipt, appropriation or other realization of or from all or
any part of the Collateral pursuant to this Indenture or any of the
Security Documents or otherwise; or
(vi) for application as provided in the relevant provisions of this
Indenture or any Security Document or which disposition is not otherwise
specifically provided for in this Indenture or in any Security Document;
PROVIDED, HOWEVER, that Trust Monies shall in no event include any asset
deposited with the Trustee for any redemption, legal defeasance or
covenant defeasance of Notes, for the satisfaction and discharge of this
Indenture or to pay the purchase price of Notes pursuant to a Change of
Control Offer or Asset Sale Offer.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"UCC" means the Uniform Commercial Code in effect in the applicable
jurisdiction.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent Global Note in the form of
EXHIBIT A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated by
the Board of Directors of the Company as an Unrestricted Subsidiary pursuant
to a Board Resolution, but only to the extent that such Subsidiary
(i) has no Indebtedness other than Non-Recourse Debt;
-28-
(ii) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that would be obtained at the time from Persons who
are not Affiliates of the Company;
(iii) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and
(iv) has not Guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and
was permitted by Section 4.07 hereof. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such
date (and, if such Indebtedness is not permitted to be incurred as of such
date under Section 4.09 hereof, the Company shall be in default of such
covenant from the date of such incurrence).
The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that such
designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if:
(i) such Indebtedness is permitted under Section 4.09 hereof; and
(ii) no Default or Event of Default would be in existence following
such designation.
"U.S. PERSON" means a U.S. person as defined in Rule 902 under the
Securities Act.
"VOTING STOCK" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of any Person (irrespective of whether or not, at the
time, stock of any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency).
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing
(i) the then outstanding principal amount of such Indebtedness
into
-29-
(ii) the total of the product obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall
at the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- ----------
"ACCELERATION NOTICE"......................... 6.02
"AFFILIATE TRANSACTION"....................... 4.11
"ASSET SALE OFFER"............................ 4.10
"AUTHENTICATION ORDER"........................ 2.02
"CHANGE OF CONTROL OFFER"..................... 4.14
"CHANGE OF CONTROL PAYMENT"................... 4.14
"CHANGE OF CONTROL PAYMENT DATE".............. 4.14
"COVENANT DEFEASANCE"......................... 8.03
"DTC"......................................... 2.03
"EVENT OF DEFAULT"............................ 6.01
"EXCESS PROCEEDS"............................. 4.10
"FINANCIER"................................... 4.18
"GUARANTEED INDEBTEDNESS"..................... 4.19
"LEGAL DEFEASANCE"............................ 8.02
"NOTE GUARANTEE".............................. 4.19
"OFFER AMOUNT"................................ 3.09
"OFFER PERIOD"................................ 3.09
"PAYING AGENT"................................ 2.03
"PAYMENT DEFAULT"............................. 6.01
"PROMISSORY NOTE"............................. 4.18
"PURCHASE DATE"............................... 3.09
"REGISTRAR"................................... 2.03
"RELEASE NOTICE".............................. 10.04(a)
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"RELEASED INTERESTS".......................... 10.04
"RESTRICTED PAYMENTS"......................... 4.07
"VALUATION DATE".............................. 10.04(a)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the Notes means the Company, each Guarantor and any
successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the Commission from time to time; and
-31-
(g) For purposes of making any determination of any amount under any
single definition set forth in Section 1.01 hereof, such determination
shall be made without double counting of any item; provided that with
respect to the definition of "Fixed Charge Coverage Ratio" it shall not be
deemed to be double counting if an item is included in the calculation of
each of "Consolidated EBITDA" and "Fixed Charges."
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provisions of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be substantially in
the form of EXHIBIT A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Notes issued in the form of Definitive Note shall be
substantially in the form of EXHIBIT A attached hereto (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount at
maturity of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount at maturity of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the aggregate principal
amount at maturity of outstanding Notes represented thereby shall be made by
the Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by
Section 2.06 hereof. Notes offered and sold to QIBs in reliance on Rule 144A
shall be issued initially in the form of a 144A Global Note, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. Notes
offered and sold in reliance on Regulation S shall be issued initially in the
form of the Regulation S Global Note, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Unrestricted Global
Notes shall be issued initially in accordance with Sections 2.06(b)(iv),
2.06(d)(ii) and 2.06(f), duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate
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principal amount of each of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee as
hereinafter provided.
(c) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream Bank" and "Customer Handbook" of Clearstream shall be applicable
to interests in the Regulation S Global Note that are held by the
Participants through Euroclear or Clearstream.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (the "AUTHENTICATION ORDER"), authenticate Notes for issuance up to
the aggregate principal amount stated in paragraph 4 of the Notes. The
Trustee shall, upon a written order of the Company signed by two Officers,
authenticate Series B Notes for original issuance in exchange for a like
principal amount of Series A Notes exchanged in the Exchange Offer or
otherwise exchanged for Series A Notes pursuant to the terms of the
Registration Rights Agreement. The aggregate principal amount of the Notes
outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Holders
or an Affiliate of the Holders.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and (ii)
an office or agency where Notes may be presented for payment ("PAYING
AGENT"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any
co-registrar and the term "Paying Agent" includes any additional paying
agent. The Company may change any Paying Agent or Registrar without notice to
any Holder. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar.
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The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes. The Company initially
appoints the Trustee to act as the Registrar and Paying Agent and to act as
Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes,
and shall notify the Trustee of any default by the Company or any Guarantor
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the
money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent
for the Notes.
SECTION 2.05. HOLDERS LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company or any Guarantor shall furnish to
the Trustee at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Notes and the Company shall otherwise comply
with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or any such nominee to a successor Depositary or a
nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act
as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by
the Company within 90 days after the date of such notice from the Depositary
or (ii) the Company in its sole discretion determines that the Global Notes
(in whole but not in part) should be exchanged for Definitive Notes and
delivers a written notice to such effect to the Trustee. Upon the occurrence
of either of the preceding events in (i) or (ii) above, Definitive Notes
shall be issued in such names as the Depositary shall instruct the Trustee.
Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall
be authenticated and delivered in the form of, and shall be, a Global Note. A
Global
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Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (d) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN GLOBAL NOTES. The
transfer and exchange of beneficial interests in a Global Note shall be effected
through the Depositary, in accordance with the provisions of this Indenture and
the Applicable Procedures. Beneficial interests in the Restricted Global Notes
shall be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more of the
other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
GLOBAL NOTES. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from
a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL
NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery
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thereof in the form of a beneficial interest in another Restricted Global
Note if the transfer complies with the requirements of Section 2.06(b)(ii)
above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of EXHIBIT B hereto,
including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of EXHIBIT B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of EXHIBIT B hereto, including the
certifications and certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED
GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1)
a broker-dealer, (2) a Person participating in the distribution of
the Series B Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of EXHIBIT C
hereto, including the certifications in item (1)(a) thereof;
or
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(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of EXHIBIT B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO RESTRICTED
DEFINITIVE NOTES. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the
form of EXHIBIT C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate
to the effect set forth in EXHIBIT B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications
in item (2) thereof;
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(D) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in EXHIBIT B hereto, including
the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in EXHIBIT B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in EXHIBIT B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO UNRESTRICTED
DEFINITIVE NOTES. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Series B Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
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(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of EXHIBIT C hereto, including the certifications in item
(1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of EXHIBIT B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(c)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall not bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS IN GLOBAL NOTES.
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(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of EXHIBIT C
hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in EXHIBIT B hereto, including
the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications
in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act,
a certificate to the effect set forth in EXHIBIT B hereto, including
the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than
those listed in subparagraphs (B) through (D) above, a certificate
to the effect set forth in EXHIBIT B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in EXHIBIT B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in EXHIBIT B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, in the case of clause (c) above, the
Regulation S Global Note, and in all other cases, the IAI Global Note.
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(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Series B Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of EXHIBIT C hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of EXHIBIT B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of
the Unrestricted Global Note.
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(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased the aggregate principal amount
of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE NOTES. Any
Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate
in the form of EXHIBIT B hereto, including the certifications in
item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
EXHIBIT B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
EXHIBIT B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES.
Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
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(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Series B Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of EXHIBIT C
hereto, including the certifications in item (1)(d) thereof;
or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of EXHIBIT B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Series B
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted
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for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE `SECURITIES ACT'), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF, IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO (A) OFFER,
SELL, PLEDGE, OR OTHERWISE TRANSFER THIS SECURITY ONLY (1) TO ALARIS (2)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A
`QUALIFIED INSTITUTIONAL BUYER' AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (4) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (5) TO AN
INSTITUTIONAL `ACCREDITED INVESTOR' WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
OR (6) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL IF
ALARIS SO REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES TO APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THAT IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVI-
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DENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this
Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a
legend in substantially the following form:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION
("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is
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being exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note, such other
Global Note shall be increased accordingly and an endorsement shall be made
on such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO ALL TRANSFERS AND EXCHANGES. (i) To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Global Notes and Definitive Notes upon the
Company's order or at the Registrar's request.
(ii) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange of any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register
the transfer of or to exchange a Note between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
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(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or any Guarantor or an Affiliate of
the Company or any Guarantor holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Guarantor, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be disregarded.
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SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee upon receipt of an Authentication Order shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall upon receipt of a written order of the Company signed by two Officers
authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to it for registration of transfer, exchange or payment. The Trustee
and no one else shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall destroy canceled Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Notes shall be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12. RECORD DATE.
The record date for purposes of determining the identity of Holders of the
Notes entitled to vote or consent to any action by vote or consent authorized or
permitted under this Indenture shall be determined as provided for in TIA
Section 316(c).
SECTION 2.13. DEFAULTED INTEREST.
If the Company or any Guarantor defaults in a payment of interest on the
Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment. The Company shall fix or cause
to be fixed each such special record date and payment date, PROVIDED that no
such special record date shall be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or upon the written request of the Company, the Trustee, in
the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.14. COMPUTATION OF INTEREST.
Interest on the Notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
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SECTION 2.15. CUSIP NUMBER.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to the Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. The Company will promptly notify the Trustee of any
change in the CUSIP number.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45
days but not more than 60 days before a redemption date, unless a shorter period
is acceptable to the Trustee, an Officers' Certificate setting forth (i) the
clause Section 3.07 pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.
If the Company is required to make an offer to purchase Notes pursuant to
the provisions of Sections 3.09 or 4.14 hereof, it shall furnish to the Trustee,
at least 45 days before the scheduled purchase date, an Officers' Certificate
setting forth (i) the Section of this Indenture pursuant to which the offer to
purchase shall occur, (ii) the terms of the offer, (iii) the purchase price,
(iv) the principal amount of the Notes to be purchased, (v) the purchase date,
and (vi) further setting forth a statement to the effect that (a) the Company or
one of its Restricted Subsidiaries has effected an Asset Sale and there are
Excess Proceeds aggregating more than $15.0 million and the amount of such
Excess Proceeds or (b) a Change of Control has occurred, as applicable.
SECTION 3.02. SELECTION OF NOTES TO BE PURCHASED OR REDEEMED.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a PRO RATA basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
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The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in principal amounts at maturity of $1,000 or whole
multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not a multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address. If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the redemption date, interest
will cease to accrue on Notes or portions thereof called for redemption.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price and accrued interest and Liquidated
Damages, if any;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest and Liquidated Damages, if any, on Notes called for
redemption cease to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are
being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; PROVIDED, HOWEVER, that the Company
shall have delivered to the Trustee, at
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least 45 days prior to the redemption date (or such shorter period as shall
be acceptable to the Trustee), an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in
such notice as provided in the preceding paragraph. The notice mailed in the
manner herein provided shall be conclusively presumed to have been duly given
whether or not the Holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the Holder of any Note
shall not affect the validity of the proceeding for the redemption of any
other Note.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price, plus accrued and unpaid interest and
Liquidated Damages, if any, to such date. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or before 12:00 p.m. (
New York City time) on each redemption date or
the date on which Notes must be accepted for purchase pursuant to Section 3.09
or 4.14, the Company shall deposit with the Trustee or with the Paying Agent, in
immediately available funds, money sufficient to pay the redemption price of and
accrued and unpaid interest and Liquidated Damages, if any, on all Notes to be
redeemed or purchased on that date. The Trustee or the Paying Agent shall
promptly return to the Company upon its written request any money deposited with
the Trustee or the Paying Agent by the Company in excess of the amounts
necessary to pay the redemption price of (including any applicable premium),
accrued interest on and Liquidated Damages, if any, all Notes to be redeemed or
purchased.
If Notes called for redemption or tendered in an Asset Sale Offer or
Change of Control Offer are paid or if the Company has deposited with the
Trustee or Paying Agent money sufficient to pay the redemption or purchase price
of, unpaid and accrued interest and Liquidated Damages, if any, on all Notes to
be redeemed or purchased, on and after the redemption or purchase date, interest
and Liquidated Damages, if any, shall cease to accrue on the Notes or the
portions of Notes called for redemption or tendered and not withdrawn in an
Asset Sale Offer or Change of Control Offer (regardless of whether certificates
for such securities are actually surrendered). If a Note is redeemed or
purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest and Liquidated
Damages, if any, shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, and Liquidated Damages, if any, from the
redemption or purchase date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes and in Section 4.01 hereof.
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SECTION 3.06. NOTES REDEEMED OR PURCHASED IN PART.
Upon surrender of a Note that is redeemed or purchased in part, the
Company shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or purchased portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as provided in the next paragraph, the Notes shall not be
redeemable at the Company's option prior to December 1, 2005. Thereafter, the
Notes shall be subject to redemption at the option of the Company, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
price equal to 105.813% of the principal amount thereof, together with accrued
and unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date.
(b) Notwithstanding the foregoing, on or prior to December 1, 2003, the
Company, on one or more occasions, may redeem up to 35% in aggregate principal
amount of Notes at a redemption price equal to 111.625% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any, with
the net cash proceeds of one or more public or private offerings of common stock
of Holdings or the Company; PROVIDED that (1) in the case of an offering by
Holdings, Holdings shall have contributed such net cash proceeds to the Company
as a common equity contribution; (2) at least 65% in aggregate principal amount
of the Notes remain outstanding immediately after the occurrence of each such
redemption; and (3) such redemption occurs within 90 days of the date of the
closing of any such public or private offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Section 4.14 hereof, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an Asset Sale Offer, it shall follow the procedures
specified below:
The Asset Sale Offer shall remain open for a period of twenty (20)
Business Days after the commencement date relating to such Asset Sale Offer,
except to the extent that a longer period is required by applicable law (as so
extended, the "OFFER PERIOD"). No later than five Business Days after the
termination of the Offer Period (the "PURCHASE DATE"), the Company shall
purchase the principal amount of Notes required to be purchased pursuant to
Sections 3.02 and 4.10 hereof (the "OFFER AMOUNT") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the Asset Sale
Offer.
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If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest, if any, shall be payable to Holders who tender Notes pursuant to the
Asset Sale Offer.
On the commencement date of any Asset Sale Offer, the Company shall send
or cause to be sent, by first class mail, a notice to the Trustee and each of
the Holders. Such notice, which shall govern the terms of the Asset Sale Offer,
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer and shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in the payment of the purchase
price, any Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest and Liquidated Damages, if any, after the
Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice not later than the close of business on the last
day of the Offer Period;
(f) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the close of business on the last day of the Offer Period,
a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before 12:00 p.m. (
New York City time) on each Purchase Date, the
Company shall irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate pur-
-53-
chase price with respect to a principal amount of Notes equal to the Offer
Amount, together with accrued and unpaid interest thereon, to be held for
payment in accordance with the terms of this Section 3.09. On the Purchase
Date, the Company shall, to the extent lawful, (i) accept for payment, on a
pro rata basis to the extent necessary, the Offer Amount of Notes or portions
thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer
Amount has been tendered, all Notes tendered, (ii) deliver or cause the
Paying Agent or Depositary, as the case may be, to deliver to the Trustee
Notes so accepted and (iii) deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.09. The Company, the
Depository or the Paying Agent, as the case may be, shall promptly (but in
any case not later than three (3) Business Days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the purchase price of
the Notes tendered by such Holder and accepted by the Company for purchase,
plus any accrued and unpaid interest thereon, and the Company shall promptly
issue a new Note, and the Trustee, shall authenticate and mail or deliver
such new Note, to such Holder, equal in principal amount to any unpurchased
portion of such Holder's Notes surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce in a newspaper of general circulation or in a
press release provided to a nationally recognized financial wire service the
results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01, 3.02, 3.05 and 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, interest and Liquidated Damages, if any,
shall be considered paid for all purposes hereunder on the date the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
(
New York City time) money deposited by the Company in immediately available
funds and designated for and sufficient to pay all such principal, premium, if
any, interest and Liquidated Damages, if any, then due. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful.
-54-
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of
New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03 hereof.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the Commission so
long as any Notes are outstanding, the Company and the Guarantors, if any, shall
furnish to the Trustee and the Holders of the Notes the following:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" that describes the financial condition and results of
operations of the Company and its Restricted Subsidiaries and, with
respect to the annual information only, a report thereon by the Company's
certified independent accountants;
(ii) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports;
and
(iii) any other information, reports and documents that the Company
is required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act.
in each case, within the time periods specified in the Commission's rules and
regulations; PROVIDED that such information and reports need not be furnished to
the Holders if they are generally available on the Internet free of charge.
-55-
In addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability within the time periods specified in
the Commission's rules and regulations (unless the Commission shall not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, the Company and the Guarantors
will, for so long as any Notes remain outstanding, furnish to the Holders of the
Notes and to securities analysts and prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. The Company and the Guarantors will also comply with the other
provisions of TIA Section 314(a).
The financial information to be distributed to Holders of Notes shall be
filed with the Trustee and mailed to the Holders at their addresses appearing in
the register of Notes maintained by the Registrar, within 120 days after the end
of each fiscal year of the Company and within 60 days after the end of each of
the first three quarters of each such fiscal year. The Company shall provide the
Trustee with a sufficient number of copies of all reports and other documents
and information and if requested by the Company the Trustee will deliver such
reports to the Holders under this Section 4.03.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether each of the Company and the Guarantors has kept, observed,
performed and fulfilled its obligations under this Indenture (including with
respect to any Restricted Payments made during such year, the basis upon which
the calculations required by Section 4.07 hereof were computed, which
calculations may be based on the Company's latest available financial
statements) and the Security Documents, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge each
entity has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and the Security Documents and is not in default in
the performance or observance of any of the terms, provisions and conditions of
this Indenture and the Security Documents (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the Company is taking or proposes
to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of, interest or Liquidated Damages, if any, on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation, reasonably satisfactory to the
Trustee) that in making the examination necessary for certification of such
financial statements, nothing has come to their attention that would lead them
to believe that the Company has violated any provisions of Article 4 or Article
5 hereof or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or
-56-
indirectly to any Person for any failure to obtain knowledge of any such
violation. In the event that such written statement of the Company's
independent public accountants cannot be obtained, the Company shall deliver
an Officers' Certificate certifying that it has used its best efforts to
obtain such statements and was unable to do so.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies,
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly,
(i) declare or pay any dividend or make any distribution (including
in connection with any merger or consolidation) on account of any Equity
Interests of the Company or any of its Restricted Subsidiaries (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or dividends or distributions payable
to the Company or any Wholly Owned Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company, any of its Restricted Subsidiaries or any
other Affiliate of the Company (other than any such Equity Interests owned
by the Company or any Wholly Owned Restricted Subsidiary of the Company);
(iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is
subordinated by its terms in right of pay-
-57-
ment to the Notes or a Note Guarantee, except at the original final
maturity thereof or in accordance with the scheduled mandatory
redemption or repayment provisions set forth in the original
documentation governing such Indebtedness (but not pursuant to any
mandatory offer to repurchase upon the occurrence of any event); or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of
such Restricted Payment:
(A) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(B) the Company would, at the time of such Restricted Payment and
after giving PRO FORMA effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph
of Section 4.09; and
(C) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries from and after January 1, 1997 (excluding Restricted Payments
permitted by clauses (ii), (iii), (v), (vi), (viii), (xi), (xii) and
(xiii) of the next succeeding paragraph), is less than the sum of
(1) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from January 1, 1997 to the
end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, minus 100% of such deficit); PLUS
(2) 100% of the aggregate net cash proceeds received by the
Company from and after January 1, 1997 from the issuance and sale of
its Qualified Capital Stock or from contributions to its common
equity; PLUS
(3) 100% of the aggregate net cash proceeds received by the
Company from the issuance and sale from and after January 1, 1997 of
debt securities of the Company that have been converted into Equity
Interests (other than Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or debt securities that have been converted into
Disqualified Stock); PLUS
(4) to the extent that any Restricted Investment that was made
from and after January 1, 1997 is sold for cash or otherwise
liquidated or repaid for cash, the cash return of capital with
respect to such Restricted Investment (less the cost of disposition,
if any);
-58-
PROVIDED that no cash proceeds received by the Company from the issue or
sale of any Equity Interests issued by the Company will be counted in
determining the amount available for Restricted Payments under this clause
(C) to the extent such proceeds were used to purchase, redeem or otherwise
acquire or retire for value any Equity Interests of the Company pursuant
to clause (ii) of the next succeeding paragraph, to pay, purchase, redeem,
defease or otherwise acquire or retire for value any subordinated
Indebtedness pursuant to clause (iii) of the next succeeding paragraph, to
repurchase, redeem or acquire any Equity Interests of the Company pursuant
to clause (iv) of the next succeeding paragraph or to redeem Notes
pursuant to Section 3.07(b).
The foregoing provisions shall not prohibit any or all of the following
(each and all of which constitutes an independent exception to the foregoing
provisions and may occur in addition to any action permitted to occur under any
other exception):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would
have complied with the provisions of this Indenture;
(ii) the purchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company in exchange for, or out
of the net cash proceeds of, the substantially concurrent issuance and
sale (other than to a Subsidiary of the Company) of other Equity
Interests of the Company (other than Disqualified Stock); PROVIDED that
the amount of any such net cash proceeds that are utilized for any such
purchase, redemption or other acquisition or retirement shall be excluded
from clause (C) of the preceding paragraph;
(iii) the payment, purchase, redemption, defeasance or other
acquisition or retirement for value of subordinated Indebtedness with the
net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness or the substantially concurrent issuance and sale (other
than to a Subsidiary of the Company) of Equity Interests of the Company
(other than Disqualified Stock); PROVIDED that the amount of any such net
cash proceeds that are utilized for any such purchase, redemption or
other acquisition or retirement shall be excluded from clause (C) of the
preceding paragraph;
(iv) a Restricted Payment to fund the purchase, redemption or other
acquisition or retirement for value of any Equity Interests of Holdings or
the Company held by any member of management of Holdings, the Company or
any of its Restricted Subsidiaries pursuant to any management equity
subscription agreement or stock option agreement; PROVIDED that (A) the
aggregate price paid for all such purchased, redeemed, acquired or retired
Equity Interests shall not exceed $1.0 million in any twelve-month period
PLUS the aggregate cash proceeds received by the Company during such
twelve-month period from any reissuance of Equity Interests by Holdings or
the Company to members of management of Holdings, the Company and its
Restricted Subsidiaries (not to exceed in any event $3.0 million in any
single twelve-month period), and (B) no Default or Event of Default has
occurred and is continuing immediately after such transaction; PROVIDED
that the amount in excess of $1.0 million (or $3.0 million, as the case
may be) expended for all such purchases, redemptions and other
ac-
-59-
quisitions and retirements of Equity Interests pursuant to this clause
(iv) in any twelve-month period shall be excluded from clause (C) of the
preceding paragraph;
(v) the payment of dividends (A) by a Restricted Subsidiary on any
class of common stock of such Restricted Subsidiary if such dividend is
paid PRO RATA to all holders of such class of common stock and (B) by a
Guarantor on any class of preferred stock issued in compliance with
Section 4.09;
(vi) the repurchase of any class of common stock of a Restricted
Subsidiary of the Company if such repurchase is made PRO RATA with respect
to such class of common stock;
(vii) the payment of dividends or the making of loans or advances
by the Company to Holdings in order to permit the payment by Holdings of
interest in respect of its 7 1/4% convertible subordinated debentures
due 2002;
(viii) payments pursuant to a tax sharing agreement between any one
or more of the Company and its Subsidiaries, on the one hand, and any
other Person with which the Company and/or such Subsidiaries are required
or permitted to file a consolidated tax return or with which the Company
and/or such Subsidiaries are part of a consolidated group for tax
purposes, on the other hand, which payments by the Company and the
Restricted Subsidiaries are not in excess of the tax liabilities that
would have been payable by them on a stand-alone basis;
(ix) the payment of dividends or the making of loans or advances by
the Company to Holdings so long as the proceeds thereof are promptly used
by Holdings to pay operating expenses in the ordinary course of business
(including, without limitation, professional fees and expenses) and other
similar corporate overhead costs, expenses and expenditures, or to pay
salaries or other compensation of employees who perform services for
Holdings and the Company; PROVIDED that the aggregate amount of dividends,
loans or advances paid pursuant to this clause (ix) shall not during any
fiscal year of the Company exceed, when added to any licensing agreement
payments made by the Company or any of its Subsidiaries to Holdings during
such fiscal year, $1,500,000;
(x) Restricted Payments in an aggregate amount not to exceed $15.0
million for the purpose described in the Offering Memorandum under
"Description of Certain Indebtedness -- Indebtedness of Holdings --
7 1/4% convertible subordinated debentures";
(xi) repurchases of Equity Interests deemed to occur upon the
exercise of stock options if such Equity Interests represent a portion of
the exercise price thereof;
(xii) purchases of 9 3/4% Notes, or payment of dividends or the
making of loans or advances by the Company to Holdings in order to permit
purchases by Holdings of its 11 1/8% senior discount notes due 2008, in
each case to the extent required under the related indentures in
connection with a Change of Control or an Asset Sale; PROVIDED that the
Company has first complied with its obligations under Section 4.14 and
Section 4.10 as applicable
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(and in the case of Asset Sales, this clause (xii) shall be available
only to the extent of Excess Proceeds remaining after the Company has
purchased all Notes properly tendered in an Asset Sale Offer); and
(xiii) purchases of up to $20.0 million aggregate principal amount
of 9 3/4% Notes on or prior to the Issue Date.
The Board of Directors may designate any Restricted Subsidiary, or any
newly acquired or created Subsidiary, to be an Unrestricted Subsidiary if such
designation would not cause a Default. For purposes of making such designation,
all outstanding Investments by the Company and its Restricted Subsidiaries
(except to the extent repaid in cash) in the Subsidiary so designated, and all
Investments by the Company and its Restricted Subsidiaries to be made in
connection with such acquisition or creation, will be deemed to be Restricted
Payments at the time of such designation and shall reduce the amount available
for Restricted Payments under the first paragraph of this Section 4.07. All such
outstanding Investments shall be deemed to constitute Restricted Investments in
an amount equal to the greater of (i) the net book value of such Investments at
the time of such designation and (ii) the Fair Market Value of such Investments
at the time of such designation. Such designation shall only be permitted if
such Restricted Investment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations
shall be based upon the Company's latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to
(i) pay dividends or make any other distributions to the Company
or any of its Restricted Subsidiaries on its Capital Stock;
(ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(iii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(iv) Transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries
except for such encumbrances or restrictions existing under or by reason
of any of the following:
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(A) Existing Indebtedness or any Credit Agreement, as in effect on
the date hereof and any amendments or refinancings thereof; PROVIDED that
such amendments or refinancings are no more restrictive, with respect to
such encumbrances or restrictions, in the aggregate than those contained
in such Existing Indebtedness or any Credit Agreement as in effect on the
date hereof;
(B) this Indenture, the Notes and the Note Guarantees;
(C) applicable law;
(D) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries, as
in effect at the time of acquisition (except to the extent such
Indebtedness was incurred in connection with, or in contemplation of, such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the assets of the Person, so acquired; PROVIDED that in the case of
Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(E) customary non-assignment provisions in leases and other
agreements entered into in the ordinary course of business and consistent
with past practices;
(F) purchase money obligations for assets acquired in the ordinary
course of business that impose restrictions of the nature described in
clause (D) above on the assets so acquired;
(G) an agreement that has been entered into for the sale or
disposition of all or substantially all of the Equity Interests or assets
of a Restricted Subsidiary; PROVIDED that such restrictions are limited to
the Restricted Subsidiary that is the subject of such agreement pending
its sale or other disposition;
(H) Permitted Refinancing Indebtedness; PROVIDED that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive in the aggregate than
those contained in the agreements governing the Indebtedness being
refinanced;
(I) restrictions applicable to any Foreign Subsidiary pursuant to
Indebtedness incurred pursuant to clause (x) of the second paragraph of
Section 4.09 hereof; PROVIDED that such restrictions shall be limited to
customary net worth, leverage, cash flow and other financial ratios
applicable to such Foreign Subsidiary, customary restrictions on mergers
and consolidations involving such Foreign Subsidiary, customary
restrictions on transactions with affiliates of such Foreign Subsidiary
and customary provisions subordinating the payment of intercompany
Indebtedness owed by such Foreign Subsidiary to the Company or any of its
Restricted Subsidiaries upon the occurrence of a default in respect of
Indebtedness of such Foreign Subsidiary or its Subsidiaries and/or events
of insolvency with respect to such Foreign Subsidiary or its Subsidiaries;
and PROVIDED FURTHER that in no event shall any Indebted-
-62-
ness incurred by a Foreign Subsidiary prohibit such Foreign Subsidiary
from making any dividend or other distribution to the Company or its
Restricted Subsidiaries or from otherwise making any loan to the Company
or its Restricted Subsidiaries in the absence of a breach by such Foreign
Subsidiary of the covenants contained in such Indebtedness;
(J) Liens securing Obligations otherwise permitted to be incurred
pursuant to Section 4.12 that limit the right of the Company or any of its
Subsidiaries to dispose of the assets subject to such Lien; or
(K) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, incur any Indebtedness (including Acquired Debt) and the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock; PROVIDED, HOWEVER, that the
Company may incur Indebtedness or issue shares of Disqualified Stock and any
Guarantor may incur Indebtedness or issue shares of Disqualified Stock or
preferred stock, if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or such preferred stock is
issued would have been at least 2.5 to 1.0, determined on a PRO FORMA basis
(including a PRO FORMA application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock or the
preferred stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The foregoing provisions shall not apply to any of the following (each and
all of which (x) may be issued or incurred, (y) constitutes an independent
exception to the foregoing provisions and (z) may be incurred in addition to any
other Indebtedness permitted to be incurred under any other exception):
(i) the incurrence by any one or more of the Company and the
Guarantors of Indebtedness and letters of credit pursuant to Credit
Agreements (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company or any
Guarantor) in an aggregate principal amount not to exceed $20.0 million
at any time outstanding; PROVIDED that the amount of Indebtedness
permitted to be incurred pursuant to any Credit Agreement in accordance
with this clause (i) shall be in addition to any Indebtedness permitted
to be incurred pursuant to any Credit Agreement or otherwise in reliance
on, and in accordance with, clause (ix) below;
(ii) the incurrence by the Company of Indebtedness represented by
the Series A Notes issued on the Issue Date and the Series B Notes issued
in exchange thereof, and the incurrence by any Guarantor of Indebtedness
represented by a Note Guarantee;
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(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness (A) represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each
case, incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property used in
the business of the Company or such Restricted Subsidiary, or (B) in
connection with sale and leaseback transactions; PROVIDED that the (x)
aggregate principal amount of Indebtedness incurred pursuant to this
clause (iii), and refinancings thereof, shall not exceed $10.0 million at
any time outstanding and (y) the aggregate principal amount of
Indebtedness incurred pursuant to clause (iii)(B), and refinancings
thereof, shall not exceed $5.0 million at any time outstanding;
(iv) Existing Indebtedness;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refinance, Existing Indebtedness or
Indebtedness that was incurred pursuant to the first paragraph of this
covenant or pursuant to clause (ii) above or this clause (v);
(vi) (x) Indebtedness of the Company owed to a Guarantor; PROVIDED,
HOWEVER, that upon any such Guarantor ceasing to be a Guarantor or such
Indebtedness being owed to any Person other than a Guarantor, the Company
shall be deemed to have incurred Indebtedness not permitted by this clause
(vi), and (y) Indebtedness of any Restricted Subsidiary of the Company
owed to the Company or any of its other Restricted Subsidiaries; PROVIDED
that (a) any such Indebtedness shall be unsubordinated and shall be
evidenced by an intercompany note pledged to the Trustee for the benefit
of the Holders under the Security Documents and (b) upon such Indebtedness
being owed to any Person other than the Company or a Restricted
Subsidiary, such Restricted Subsidiary, as applicable, shall be deemed to
have incurred Indebtedness not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary
course of business for the purpose of fixing or hedging (a) interest rate
risk with respect to any floating rate Indebtedness of such Person so
long as such floating rate Indebtedness is permitted by the terms of this
Indenture to be outstanding or (b) exchange rate risk with respect to
agreements or Indebtedness of such Person payable or denominated in a
currency other than U.S. dollars and, in each case, not for speculative
purposes;
(viii) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; PROVIDED that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company in an amount equal to then outstanding amount
thereof;
(ix) the incurrence by the Company or any Guarantor of Indebtedness
or issuance of preferred stock (in addition to Indebtedness and preferred
stock that may be incurred or is-
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sued pursuant to any other clause of this paragraph) in an aggregate
principal amount not to exceed $25.0 million at any time outstanding;
(x) the incurrence by any Foreign Subsidiary of Indebtedness and
letters of credit to fund working capital and capital expenditure
requirements (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of such Foreign
Subsidiary thereunder) in an aggregate principal amount not to exceed
$15.0 million at any time outstanding;
(xi) Obligations in respect of performance and surety bonds
provided by the Company or any Guarantor in the ordinary course of
business; and
(xii) (x) the Guarantee by the Company or any Guarantor of
Indebtedness of the Company or any Guarantor and (y) the Guarantee by
any Restricted Subsidiary of the Company that is not a Guarantor of
Indebtedness of any other Restricted Subsidiary of the Company that is
not a Guarantor; PROVIDED that, in each case, the Indebtedness being
Guaranteed is permitted to be incurred by another provision of this
covenant.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories described in clauses (i) or (iii) through (xii) above as of
the date of incurrence thereof, or is entitled to be incurred pursuant to the
first paragraph of this Section 4.09 as of the date of incurrence thereof, the
Company shall, in its sole discretion, classify such item of Indebtedness on the
date of its incurrence and may later reclassify such item of Indebtedness in any
manner that complies with this Section 4.09, except that Indebtedness, if any,
incurred or outstanding under any Credit Agreement on the Issue Date shall be
deemed to have been incurred under clause (i) above. Accrual of interest,
accretion or amortization of original issue discount, the payment of interest on
any Indebtedness in the form of additional Indebtedness with the same terms and
the payment of dividends on Disqualified Stock in the form of additional shares
of the same class of Disqualified Stock shall not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Stock for purposes of this
Section 4.09; PROVIDED, in each such case, that the amount thereof is included
in Fixed Charges of the Company as accrued. The maximum amount of Indebtedness
that the Company or any Restricted Subsidiary may incur pursuant to this
covenant will not be deemed to be exceeded solely as the result of fluctuations
in the exchange rates of currencies.
The Company will not, and will not permit any Guarantor to, directly or
indirectly, incur any Indebtedness that is or purports to be by its terms (or by
the terms of any agreement governing such Indebtedness) subordinated to any
other Indebtedness of the Company or of such Guarantor, as the case may be,
unless such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinate to the Notes or the Note
Guarantee of such Guarantor, to the same extent and in the same manner as such
Indebtedness is subordinated to such other Indebtedness of the Company or such
Guarantor, as the case may be.
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SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless each of the following
requirements is satisfied:
(i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(ii) at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash and/or
Marketable Securities; PROVIDED that the amount of
(A) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet or in the notes
thereto) of the Company or any of its Restricted Subsidiaries (other
than contingent liabilities and liabilities that are by their terms
subordinated to the Notes or any Note Guarantee) that are assumed by
the Transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary
from further liability; and
(B) any notes or other obligations received by the Company or
any such Restricted Subsidiary from such Transferee that are
contemporaneously (subject to ordinary settlement periods) converted
by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received), shall be deemed to be cash for
purposes of this provision;
PROVIDED, FURTHER, that the 75% limitation referred to above shall not
apply to any Transfer of assets in which the cash portion of the
consideration received therefor is equal to or greater than the after-tax
net cash proceeds that would have been received by the Company had a
transaction involving the same assets complied with the aforementioned 75%
limitation but was not structured with the same tax benefits as the actual
transaction; and
(iii) if such Asset Sale involves the Transfer of Collateral, it
complies with the provisions described under Section 10.4, all
consideration received in the form of cash or Marketable Securities shall
be paid directly by the purchaser of such Collateral to the Trustee for
deposit into the Collateral Account, and all consideration received in any
other form shall be expressly made subject to the Lien of this Indenture
and the applicable Security Documents (and shall otherwise comply with the
provisions of this Indenture applicable to After-Acquired Property).
Within 367 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or such Restricted Subsidiary shall, subject to the following
paragraph, cause such Net Proceeds to be applied as follows:
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(i) in the case of any Transfer of Collateral, to make an investment
or expenditure for Replacement Assets, which shall be made subject to the
Lien of this Indenture and the applicable Security Documents (and shall
otherwise comply with the provisions of this Indenture applicable to
After-Acquired Property); and
(ii) in all other cases:
(A) to repay Indebtedness outstanding under any Credit
Agreement; or
(B) to make an investment in or expenditure for Replacement
Assets.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph shall be deemed to constitute, "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Company shall be required to make an offer to all Holders (an "ASSET SALE
OFFER") to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in Section 3.09 hereof. To the extent that the aggregate
principal amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company or any Restricted Subsidiary may use any
remaining Excess Proceeds for any purpose not prohibited under this Indenture;
PROVIDED, HOWEVER, that to the extent that all or any portion of any remaining
Excess Proceeds comprises proceeds of Asset Sales of Collateral, such Excess
Proceeds shall remain subject to the Lien of this Indenture and the applicable
Security Documents and shall remain on deposit in the Collateral Account. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on
a PRO RATA basis. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
Notwithstanding the three immediately preceding paragraphs, the Company
and the Restricted Subsidiaries shall be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent
(i) at least 75% of the consideration received in connection with
such Asset Sale constitutes Replacement Assets or a combination of
Replacement Assets and cash;
(ii) such Asset Sale is for Fair Market Value (which, in the case,
of any Replacement Assets the Fair Market Value of which exceeds $3.0
million, shall be evidenced by the opinion of a Financial Advisor);
PROVIDED that any Net Proceeds in the form of cash received by the
Company or any of its Restricted Subsidiaries in connection with any
Asset Sale permitted to be consummated pursuant to this paragraph shall
be subject to the provisions of the two immediately preceding
paragraphs; and
(iii) if such Asset Sale involves the Transfer of Collateral, the
Company and the Restricted Subsidiaries comply with clause (iii) of the
first paragraph of this Section 4.10.
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The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this Section 4.10, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this paragraph by virtue thereof.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, Transfer any of its assets to, or purchase any assets from, or
enter into any contract, agreement, understanding, loan, advance or Guarantee
with, or for the benefit of (other than solely in its capacity as a direct or
indirect stockholder of the Company), any Affiliate (each of the foregoing, an
"AFFILIATE TRANSACTION"), unless
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or such Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or
such Restricted Subsidiary with an unrelated Person;
(ii) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million, the Company delivers to the Trustee a resolution of the Board of
Directors of the Company set forth in an Officers' Certificate certifying
that such Affiliate Transaction complies with clause (i) above and that
such Affiliate Transaction is approved by a majority of the disinterested
members of the Board of Directors of the Company; and
(iii) with respect to any Affiliate Transaction involving aggregate
consideration with excess of $10.0 million, the Company delivers to the
Trustee a written opinion issued by a Financial Advisor stating that it
has determined such Affiliate Transaction to be fair to the Company or
such Restricted Subsidiary from a financial point of view.
The following will not be subject to the provisions of the preceding
paragraph:
(i) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business of the
Company or such Restricted Subsidiary;
(ii) transactions between or among the Company and/or its Restricted
Subsidiaries;
(iii) payment of employee benefits, including bonuses, retirement
plans and stock options, and director fees in the ordinary course of
business;
(iv) Restricted Payments permitted by Section 4.07 hereof; and
(v) transactions permitted by the provisions of Section 4.18
hereof.
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SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind upon any of
its assets, now owned or hereafter acquired, other than
(i) in the case of any asset that does not constitute Collateral,
Permitted Liens; PROVIDED that any Lien on such assets shall be permitted
notwithstanding that it is not a Permitted Lien if all payments due under
this Indenture, the Notes and the Note Guarantees are secured on an equal
and ratable basis with the obligations so secured until such time as
obligations are no longer secured by a Lien; and
(ii) in the case of any asset that constitutes Collateral,
Permitted Collateral Liens.
In the case of clause (i), if the obligations so secured are subordinated
by their terms to the Notes or a Note Guarantee, the Lien securing such
obligations will also be so subordinated by its terms at least to the same
extent.
SECTION 4.13. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED that
the Company or any Guarantor may enter into a sale and leaseback transaction not
involving Collateral if
(i) the Company or such Guarantor could have incurred Indebtedness
in an amount equal to the Attributable Debt relating to such sale and
leaseback transaction pursuant to (A) the Fixed Charge Coverage Ratio test
set forth in the first paragraph of Section 4.09 and/or (B) clause
(iii)(B) of Section 4.09 hereof (as limited by the proviso to such
clause);
(ii) the Lien to secure such Indebtedness does not extend to or cover
any assets of the Company or any of its Restricted Subsidiaries other than
the assets which are the subject of the sale and leaseback transaction;
(iii) the gross cash proceeds of such sale and leaseback transaction
are at least equal to the Fair Market Value of the asset that is the
subject of such sale and leaseback transaction; and
(iv) the Transfer of assets in such sale and leaseback transaction is
permitted by, and the proceeds of such transaction are applied in
compliance with, Section 4.10 hereof.
SECTION 4.14. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder will have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "CHANGE OF CONTROL OFFER") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
inter-
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est and Liquidated Damages, if any, thereon to the date of purchase (the
"CHANGE OF CONTROL PAYMENT"). Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes properly tendered will be accepted for
payment;
(ii) the purchase price (including accrued interest) and the purchase
date (the "CHANGE OF CONTROL PAYMENT DATE"), which will be no earlier than
30 days nor later than 60 days from the date such notice is mailed;
(iii) that any Note not properly tendered will continue to
accrue interest;
(iv) that, unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer will cease to accrue interest, and Liquidated Damages, if
any, after the Change of Control Payment Date;
(v) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, or transfer by book-entry, to the Paying Agent at the
address specified in the notice not later than the close of business on
the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the Change
of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing
his election to have such Notes purchased;
(vii) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry), which unpurchased
portion must be equal to $1,000 in principal amount or an integral
multiple thereof; and
(viii) the circumstances and material facts regarding such Change of
Control (including, but not limited to, information with respect to pro
forma and historical financial information after giving effect to such
Change of Control, and information regarding the Person or Persons
acquiring control).
On the Change of Control Payment Date, the Company shall, to the
extent lawful,
(i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
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(ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered;
and
(iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
The Paying Agent shall promptly mail to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; PROVIDED that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Indenture are applicable.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change of Control Offer made by the Company
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with provisions of
Section 4.14, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
paragraph by virtue thereof.
SECTION 4.15. CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5 hereof, as the case may be, the
Company and each of the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
SECTION 4.16. [INTENTIONALLY OMITTED].
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SECTION 4.17. LINE OF BUSINESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses.
SECTION 4.18. SALES OF ACCOUNTS RECEIVABLE.
The Company may, and any of its Restricted Subsidiaries may, sell, at any
time and from time to time, all of their respective accounts receivable to an
Accounts Receivable Subsidiary; PROVIDED that
(i) the cash received in each such sale is not less than 90% of the
aggregate face value of the receivables sold and the remainder of the
consideration received in each such sale is a promissory note (a
"PROMISSORY NOTE") which is subordinated to no Indebtedness or obligation
other than the financial institution or other entity providing the
financing to the Accounts Receivable Subsidiary with respect to such
accounts receivable (a "FINANCIER"); PROVIDED, FURTHER, that the Initial
Sale will include all eligible accounts receivable of the Company and/or
its Restricted Subsidiaries that will be party to such arrangements in
existence on the date of the Initial Sale;
(ii) the cash proceeds received from the Initial Sale less reasonable
and customary transaction costs will be deemed to be Net Proceeds and will
be applied in accordance with the second paragraph of Section 4.10 hereof;
and
(iii) the Company and its Restricted Subsidiaries shall sell their
accounts receivable to the Accounts Receivable Subsidiary no less
frequently than on a weekly basis.
The Company
(i) shall not permit any Accounts Receivable Subsidiary to sell any
accounts receivable purchased from the Company or any of its Restricted
Subsidiaries to any other Person except on an arm's-length basis and
solely for consideration in the form of cash or Marketable Securities;
(ii) shall not permit the Accounts Receivable Subsidiary to engage in
any business or transaction other than the purchase, financing and sale of
accounts receivable of the Company and its Restricted Subsidiaries and
activities incidental thereto;
(iii) shall not permit any Accounts Receivable Subsidiary to incur
Indebtedness in an amount in excess of the book value of such Accounts
Receivable Subsidiary's total assets, as determined in accordance with
GAAP;
(iv) shall, at least as frequently as monthly, cause the Accounts
Receivable Subsidiary to remit to the Company as payment on the Promissory
Notes, all available cash or Marketable Securities not held in a
collection account pledged to a Financier, to the extent not
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applied to pay or maintain reserves for reasonable operating expenses of
the Accounts Receivable Subsidiary or to satisfy reasonable minimum
operating capital requirements; and
(v) shall not, and shall not permit any of its Subsidiaries to, sell
accounts receivable to any Accounts Receivable Subsidiary upon (1) the
occurrence of a Default with respect to the Company and its Restricted
Subsidiaries and (2) the occurrence of any event specified in Section
6.01(vii) or (viii) (without giving effect to any grace periods specified
therein) with respect to such Accounts Receivable Subsidiary.
SECTION 4.19. LIMITATION ON GUARANTEES BY RESTRICTED SUBSIDIARIES.
The Company shall not permit any of its Restricted Subsidiaries, directly
or indirectly, to Guarantee any Indebtedness of the Company or Holdings
("GUARANTEED INDEBTEDNESS") unless such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture pursuant to
which such Restricted Subsidiary guarantees (the "NOTE GUARANTEE(S)"), jointly
and severally with all other Guarantors, on the same basis as such Guaranteed
Indebtedness is Guaranteed, all of the Company's obligations hereunder, as
further provided in Article 11 hereof. If the Guaranteed Indebtedness (1) ranks
PARI PASSU in right of payment with the Notes, then the Guarantee of such
Guaranteed Indebtedness shall rank PARI PASSU with, or be subordinated in right
of payment to, the Note Guarantee or (2) is subordinated by its terms in right
of payment to the Notes, then the Guarantee of such Guaranteed Indebtedness
shall be subordinated to the Note Guarantee at least to the extent that the
Guaranteed Indebtedness is subordinated to the Notes. The Company and such new
Guarantor shall comply with Section 11.05.
The Note Guarantee of any Restricted Subsidiary will be automatically and
unconditionally released and discharged upon any of the following:
(i) any sale, exchange or transfer by the Company or any Restricted
Subsidiary to any Person that is not an Affiliate of the Company of all of
the Equity Interests of, or all or substantially all the assets of, such
Restricted Subsidiary, which sale, exchange or transfer is made in
accordance with the provisions of this Indenture; PROVIDED that if the
Company or the Restricted Subsidiary intends to comply with Section 4.10
by making an investment or expenditure in Replacement Assets, the Company
or such Restricted Subsidiary must, among other things, deliver to the
Trustee a written agreement that it will make such investment or
expenditure within the time frame set forth in Section 4.10;
(ii) the designation of such Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with the provisions of this
Indenture; or
(iii) the payment and discharge of the Guaranteed Indebtedness except
if such payment occurs through payment, in whole or in part, on the
Guarantee thereof;
PROVIDED, in each such case, the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for in this Indenture relating
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to such transactions have been complied with and that such release is authorized
and permitted under this Indenture.
SECTION 4.20. IMPAIRMENT OF SECURITY INTEREST.
The Company will not, and will not permit any Restricted Subsidiary to,
take, or knowingly or negligently omit to take, any action, which action or
omission might or would have the result of materially impairing the security
interest in favor of the Trustee on behalf of the Holders with respect to the
Collateral, and the Company shall not grant to any Person (other than the
Trustee on behalf of the Holders) any interest whatsoever in the Collateral
(other than as permitted by the Security Documents).
No Pledgor shall file or record any instrument or document with any
entity, officer or office having responsibility for recording of Security
Interests which purports to terminate, vitiate or extinguish a Security Interest
in or Lien on Collateral.
SECTION 4.21. LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN
WHOLLY OWNED RESTRICTED SUBSIDIARIES.
The Company
(i) shall not, and shall not permit any Restricted Subsidiary of the
Company to, Transfer any Equity Interests in any Wholly Owned Restricted
Subsidiary of the Company to any Person (other than the Company or a
Wholly Owned Restricted Subsidiary of the Company), unless
(A) such Transfer is of all the Equity Interests in
such Wholly Owned Restricted Subsidiary; and
(B) the cash Net Proceeds from such Transfer are applied in
accordance with Section 4.10; and
(ii) shall not permit any Wholly Owned Restricted Subsidiary of the
Company to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to
any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company.
SECTION 4.22. MAINTENANCE OF INSURANCE, PROPERTIES, BOOKS AND RECORDS.
(a) The Company shall and each Guarantor shall maintain property and
casualty, business interruption, workers' compensation and such other insurance
against such risks and in such amounts as are customarily carried by similar
businesses with deductibles, retentions, self-insured amounts and coinsurance
customarily carried by similar businesses of similar size; PROVIDED that, with
respect to the Collateral, the Company and each Guarantor shall maintain the
following insurance policies and coverages with policy limits and deductibles in
such amounts as would be maintained by a prudent operator of property similar in
use and configuration to the applicable Collateral and located
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in the locality where the applicable Collateral is located or as the Trustee
may otherwise reasonably request:
(i) Physical hazard insurance on a "special causes of loss" form as
prescribed by ISO or equivalent covering hazards commonly covered by such
policies, in an amount equal to the full replacement cost of the Mortgaged
Property and Equipment;
(ii) Commercial general liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the Mortgaged
Property (and any other adjoining streets, sidewalks and passageways) and
other Collateral covering such matters as are customarily covered by such
policies, arising out of or connected with the possession, use, leasing,
operation or condition of the Collateral;
(iii) Explosion insurance in respect of any boilers, machinery
and similar apparatus located on or comprising the Mortgaged
Property and Equipment;
(iv) If the Mortgaged Property is located in an area identified by
the Federal Emergency Management Agency as an area having special flood
hazards pursuant to the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, each as amended, or any successor laws,
flood insurance;
(v) Worker's compensation insurance as required by the laws of the
state where the Collateral is located to protect the Pledgors and the
Trustee against claims for injuries sustained in the course of employment
at the premises of the Pledgors; and
(vi) Such other types of insurance against such risks as the Trustee
may from time to time reasonably require to the extent such insurance is
commercially available at commercially reasonable prices and to the extent
secured parties are requiring debtors to obtain such insurance in
connection with financings of the type contemplated by this Indenture.
(b) Each insurance policy described in Section 4.22(a) shall
provide that:
(i) it may not be (A) materially modified, reduced, cancelled (for
other than nonpayment of premium) or otherwise terminated without at least
thirty (30) days' prior written notice to the Trustee or (B) cancelled for
nonpayment of premium without at least ten (10) days' prior written notice
to the Trustee;
(ii) the Trustee is permitted to pay any premium therefor within
thirty (30) days after receipt of any notice stating that such premium has
not been paid when due;
(iii) all losses thereunder shall be payable notwithstanding any act
or negligence of the applicable Pledgor or its agents or employees which
otherwise might have resulted in a forfeiture of all or a part of such
insurance payments in accordance with standard commercial insurance
contracts and the required loss payable and additional insurance
endorsements;
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(iv) with respect to the insurance policies described in clauses (i),
(iii), (iv) and, to the extent applicable (vi) of Section 4.22(a), all
losses payable thereunder shall be payable to the Trustee, as loss payee,
pursuant to a standard non-contributory
New York mortgagee endorsement and
shall be in an amount at least sufficient to prevent coinsurance
liability; and
(v) with respect to the insurance policies described in clauses (ii)
and (v) and to the extent applicable (vi) of Section 4.22(a), the Trustee
shall be named as an additional insured.
(c) Settlement or adjustment of any claim under any of the insurance
policies described in Section 4.22(a), if such claim involves any loss in excess
of $5,000,000 (as determined by the Board of Directors acting reasonably and in
good faith), shall require the consent of the Trustee, and the Pledgors shall
cause each such policy to contain a provision to such effect.
(d) On an annual basis and prior to the expiration of any insurance policy
described in Section 4.22(a), the Pledgors shall deliver to the Trustee an
insurance policy or policies renewing or extending such expiring insurance
policy or policies or renewal or extension Insurance Certificates or other
reasonable evidence of renewal or extension providing that the insurance
policies are in full force and effect, together with an Officers' Certificate
stating that such policies or renewals thereof complies with the terms of this
Indenture.
(e) The Pledgors shall not purchase separate insurance policies concurrent
in form or contributing in the event of loss with the insurance policies
required to be maintained under this Section 4.22 unless the Trustee is included
thereon as an additional insured and, if applicable, with loss payable to the
Trustee under an endorsement containing the provisions described in Section
4.22(b). The Pledgors shall immediately notify the Trustee whenever any such
separate insurance policy is obtained and shall promptly deliver to the Trustee
the insurance policy or Insurance Certificate evidencing such insurance.
(f) The Pledgors may maintain the coverages required by Section 4.22 under
blanket policies covering the Collateral and other locations owned or operated
by the Pledgors or an Affiliate of the Pledgors if the terms of such blanket
policies otherwise comply with the provisions of Section 4.22(b) and contain
specific coverage allocations in respect of the locations of Collateral
complying with the provisions of Section 4.22(b).
(g) If there shall occur any Taking or the commencement of any proceeding
thereof, the applicable Pledgor shall immediately notify the Trustee upon
receiving notice of such Taking or commencement of proceedings therefor. The
Trustee may, at its option, participate in any proceedings or negotiations which
might result in any Taking, and the Trustee shall deliver or cause to be
delivered to the Trustee all instruments requested by it to permit such
participation. The Trustee may be represented by counsel satisfactory to it at
the expense of the applicable Pledgor in connection with any such participation.
The Pledgor shall pay all fees, costs and expenses incurred by the Trustee in
connection with any Taking and in seeking and obtaining any award or payment on
account thereof.
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(h) All insurance under this Section will be issued by carriers having
an A.M. Best & Company, Inc. rating of B+ or higher, or if such carrier is
not rated by A.M. Best & Company, Inc., having the financial stability and
size deemed appropriate by the Company after consultation with a reputable
insurance broker.
(i) Subject to, and in compliance with, the provisions of Sections 10.03
and 10.04 and to the provisions of the applicable Security Documents, the
Company and each Guarantor shall cause all properties used or useful in the
conduct of its business to be maintained and kept in good working condition,
repair and order (ordinary wear and tear and damage from casualty and
condemnation excepted).
(j) The Company and the Guarantors shall keep proper books of record and
account, in which full and correct entries shall be made of all financial
transactions and the assets of the Company and each of the Guarantors, in
accordance with GAAP.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving entity), or Transfer all or substantially all of
its properties or assets to, another Person unless
(i) the Company is the surviving corporation or the Person formed by
or surviving any such consolidation or merger (if other than the Company)
or to which such Transfer has been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such Transfer
has been made assumes all the obligations of the Company under the Notes
and this Indenture, the Registration Rights Agreement and the Security
Documents pursuant to a supplemental indenture or amendment of the
relevant documents, in form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction, no Default exists;
(iv) the Company or the Person formed by or surviving any such
consolidation or merger, or to which such Transfer has been made will, at
the time of such transaction after giving PRO FORMA effect thereto as if
such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of Section 4.09 hereof; and
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(v) each of the conditions in the second succeeding
paragraph is satisfied.
The Company may not, directly or indirectly, lease all or substantially all of
its properties or assets in one or more related transactions to any Person. The
foregoing will not prohibit a consolidation or merger between the Company and a
Wholly Owned Restricted Subsidiary, the Transfer of all or substantially all of
the properties or assets of the Company to a Wholly Owned Restricted Subsidiary
or the Transfer of all or substantially all of the properties or assets of a
Wholly Owned Restricted Subsidiary to the Company; PROVIDED that if the Company
is not the surviving entity of such transaction or the Person to which such
Transfer is made, the surviving entity or the Person to which such Transfer is
made shall comply with clause (ii) of this paragraph.
Except as provided under Section 4.19 or Article 11, no Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) or Transfer all or substantially all of its properties or
assets to another Person, whether or not affiliated with such Guarantor, unless
(i) either (A) such Guarantor is the surviving Person; or (B) the
Person formed by or surviving any such consolidation or merger assumes, by
supplemental indenture in form and substance satisfactory to the Trustee,
all of the obligations of such Guarantor under the Note Guarantee of such
Guarantor, this Indenture, the Registration Rights Agreement and the
Security Documents, and, in the case of a consolidation or merger with
Holdings, is a corporation organized and existing under the laws of the
United States, any state thereof or the District of Columbia;
(ii) immediately after such transaction, no Default exists; and
(iii) each of the conditions in the next paragraph is satisfied.
The following additional conditions shall apply to each transaction
described in the above paragraphs:
(i) the Company, such Guarantor or the relevant surviving entity, as
applicable, will cause such amendments or other instruments to be filed
and recorded in such jurisdictions as may be required by applicable law to
preserve and protect the Lien of the Security Documents on the Collateral
owned by or Transferred to such Person, together with such financing
statements as may be required to perfect any security interests in such
Collateral which may be perfected by the filing of a financing statement
under the Uniform Commercial Code of the relevant states;
(ii) the Collateral owned by or Transferred to the Company, such
Guarantor or the relevant surviving entity, as applicable, shall
(A) continue to constitute Collateral under this
Indenture and the Security Documents;
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(B) be subject to the Lien in favor of the Trustee for
the benefit of the Holders; and
(C) not be subject to any Lien other than Liens
permitted by the Security Documents;
(iii) the assets of the Person which is merged or consolidated with or
into the relevant surviving entity, to the extent that they are assets of
the types which would constitute Collateral under the Security Documents,
shall be treated as After-Acquired Property and such surviving entity
shall take such action as may be reasonably necessary to cause such assets
to be made subject to the Lien of the Security Documents in the manner and
to the extent required in this Indenture; and
(iv) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such transaction
and, if a supplemental indenture or supplemental Security Documents are
required in connection with such transaction, such supplemental indenture
and Security Documents comply with the applicable provisions of this
Indenture, that all conditions precedent in this Indenture relating to
such transaction have been satisfied and that such supplemental indenture
and Security Documents are enforceable.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, combination or merger of the Company or a
Guarantor, or any Transfer of all or substantially all of the assets of the
Company in accordance with Section 5.01, in which the Company or such Guarantor
is not the continuing obligor under the Notes or its Note Guarantee, the
surviving entity formed by such consolidation or into which the Company or such
Guarantor is merged or to which the Transfer is made will succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Guarantor under this Indenture, the Notes, the Security Documents and the Note
Guarantees with the same effect as if such surviving entity had been named
therein as the Company or such Guarantor and, except in the case of a Transfer,
the Company or such Guarantor, as the case may be, will be released from the
obligation to pay the principal of and interest on the Notes or in respect of
its Note Guarantee, as the case may be, and all of the Company's or such
Guarantor's other obligations and covenants under the Notes, this Indenture, the
Security Documents and its Note Guarantee, if applicable; PROVIDED that the
Consolidated Net Income of any person other than the Company and its Restricted
Subsidiaries shall be included only for periods subsequent to the effective time
of such merger, consolidation, combination or transfer of assets; and (ii) in
the case of any sale, assignment, transfer, lease, conveyance, or other
disposition of less than all of the assets of the predecessor Company, the
predecessor Company shall not be released or discharged from the obligation to
pay the principal of or interest on the Notes.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "EVENT OF DEFAULT":
(i) default for 30 days in the payment when due of interest
with respect to the Notes;
(ii) default in payment when due of principal or premium, if
any, on the Notes at maturity, upon redemption or otherwise;
(iii) failure by the Company or any Guarantor for 30 days after
receipt of notice from the Trustee or Holders of at least 25% in principal
amount of the Notes then outstanding to comply with the provisions
described under Section 4.07, 4.09, 4.10, 4.13, 4.14, 4.18 or 5.01 hereof;
(iv) failure by the Company or any Guarantor for 60 days after notice
from the Trustee or the Holders of at least 25% in principal amount of the
Notes then outstanding to comply with its other agreements in this
Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is Guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the date hereof, which default (A) (i) is
caused by a failure to pay when due at final stated maturity (giving
effect to any grace period related thereto) principal of such Indebtedness
(a "PAYMENT DEFAULT") or (ii) results in the acceleration of such
Indebtedness prior to its express maturity, and (B) in each case, the
principal amount of any such Indebtedness due to be paid, together with
the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $10.0 million or more;
(vi) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments (to the extent not covered by insurance and as to
which the insurer has not acknowledged coverage in writing) aggregating in
excess of $10.0 million, which judgments are not paid, fully bonded,
discharged or stayed within 60 days after their entry;
(vii) the Company or any Restricted Subsidiary that is a Significant
Subsidiary or group of Restricted Subsidiaries that, together, would
constitute a Significant Subsidiary, pursuant to or within the meaning of
any Bankruptcy Law:
(A) commences a voluntary case,
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(B) consents to the entry of an order for relief
against it in an involuntary case in which it is the debtor,
(C) consents to the appointment of a custodian of it
or for all or substantially all of its property
(D) makes a general assignment for the benefit of its
creditors, or
(E) admits in writing its inability generally to pay
its debts as the same become due;
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary or group of Restricted
Subsidiaries that, together, would constitute a Significant
Subsidiary of the Company in an involuntary case in which it is the
debtor,
(B) appoints a custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or group of Restricted
Subsidiaries that, together, would constitute a Significant
Subsidiary of the Company or for all or substantially all of the
property of the Company or any Restricted Subsidiary that is a
Significant Subsidiary or group of Restricted Subsidiaries that,
together, would constitute a Significant Subsidiary of the Company,
or
(C) orders the liquidation of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or group of Restricted
Subsidiaries that, together, would constitute a Significant
Subsidiary of the Company,
and the order or decree contemplated in clause (A), (B) or (C),
remains unstayed and in effect for 60 consecutive days;
(ix) any Note Guarantee of any Subsidiary ceases to be in full force
and effect (other than in accordance with the terms of such Note Guarantee
and this Indenture) or is declared null and void and unenforceable or
found to be invalid or any Guarantor denies its liability under its Note
Guarantee (other than by reason of release of a Guarantor from its Note
Guarantee in accordance with the terms of this Indenture and the Note
Guarantee); or
(x) default by the Company or any Guarantor in the performance of
the Security Documents which adversely affects the enforceability or the
validity of the Trustee's Lien on the Collateral or which adversely
affects the condition or value of the Collateral, taken as a whole, in any
material respect, repudiation or disaffirmation by the Company or any
Guarantor of its obligations under the Security Documents or the
determination in a judicial proceeding that the Security Documents are
unenforceable or invalid against the Company or any Guarantor in any
material respect for any reason.
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To the extent that the last day of the period referred to in clause (i),
(iii), (iv) or (vi) of the immediately preceding paragraph is not a Business
Day, then the first Business Day following such day shall be deemed to be the
last day of the period referred to in such clauses. Any "day" will be deemed to
end as of 11:59 p.m., New York City time.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default with respect to the
Company specified in clauses (vii) and (viii) of Section 6.01 hereof) occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare the unpaid principal of, premium, if any,
accrued and unpaid interest and Liquidated Damages, if any, on all the Notes to
be due and payable by notice in writing to the Company (and the Trustee, if
given by the Holders) specifying the respective Event of Default and that it is
a "notice of acceleration" (the "ACCELERATION NOTICE"), and the same shall
become immediately due and payable. If an Event of Default with respect to the
Company specified in clauses (vii) or (viii) of Section 6.01 hereof occurs, all
outstanding Notes shall IPSO FACTO become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
The Holders of a majority in principal amount of the then outstanding Notes by
written notice to the Trustee may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal or interest that has
become due solely because of the acceleration) have been cured or waived.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of this Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
December 1, 2005 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to December 1, 2005, then the
premium specified in this Indenture shall also become immediately due and
payable to the extent permitted by law upon the acceleration of the Notes.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any,
interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes, the Security Documents or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of at least a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange for Notes) by notice to the Trustee may on behalf of the Holders of all
of the Notes waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of
principal of or premium, if any, or interest or Liquidated Damages, if any, on
the Notes. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture, the
Guarantees or the Notes only if:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or
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after the respective due dates expressed in the Note (including in connection
with an offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company or any other obligor
under the Notes for the whole amount of principal of, premium and Liquidated
Damages, if any, and interest remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
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SECOND: to Holders for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for principal, premium and
Liquidated Damages, if any, and interest, respectively; and
THIRD: to the Company, the Guarantors or to such party as a
court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing of which it has
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Indenture and the Security Documents 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 his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture, the Security Documents or the TIA
and the Trustee need perform only those duties that are specifically set
forth in this Indenture, the Security Documents or the TIA and no others,
and no implied covenants or obligations shall be read into this Indenture
or the Security Documents against the Trustee; and
(ii) 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 Inden-
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ture. 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 liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof and the Trustee shall be
entitled from time to time to request such direction.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.01.
(e) No provision of this Indenture or the Security Documents shall require
the Trustee to expend or risk its own funds or incur any liability. The Trustee
shall be under no obligation to exercise any of its rights and powers under this
Indenture or the Security Documents at the request of any Holders, unless such
Holder shall have offered to the Trustee security and indemnity satisfactory to
it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on the truth of the statements and
correctness of the opinions contained in, and shall be protected from acting or
refraining from acting upon, any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney, to the
extent reasonably required by such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel of the Trustee's own
choosing and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authori-
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zation and protection from liability in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and 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.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or any Guarantor, as
applicable.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company, the Guarantors or
any Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as Trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture, the Note Guarantees or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Note pursuant to Section
6.01(i) or (ii) hereof, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
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SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA
Sections 313(b)(1) and 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Company has informed the Trustee in writing the Notes are
listed in accordance with TIA Section 313(d). The Company shall promptly notify
the Trustee in writing when the Notes are listed on any stock exchange and of
any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors, jointly and severally, shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. To the extent lawful, the Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company and the Guarantors, jointly and severally, shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company and the Guarantors, jointly and severally, shall indemnify the
Trustee against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the reasonable costs and expenses of
enforcing this Indenture against the Company and the Guarantors (including this
Section 7.07) and defending itself against any claim (whether asserted by the
Company and the Guarantors or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder except to the extent any such loss, liability or expense may be
attributable to its gross negligence, bad faith or willful misconduct. The
Trustee shall notify the Company and the Guarantors, jointly and severally,
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company and the Guarantors shall not relieve the Company and the
Guarantors of its obligations hereunder. The Company and the Guarantors, jointly
and severally, shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company and the
Guarantors shall pay the reasonable fees and expenses of such counsel. The
Company and the Guarantors need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.
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To secure the Company's and the Guarantors' payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, including without limitation, the
Collateral, except that held in trust to pay principal, interest and Liquidated
Damages, if any, on particular Notes. Such Lien shall survive the satisfaction
and discharge of this Indenture and the resignation or removal of the Trustee.
The Trustee's right to receive payment of any amounts due under this Section
7.07 shall not be subordinate to any other Company Indebtedness.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(vii) or (viii) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. 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 7.08.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) 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. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10
hereof, such Holder of a Note may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a 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 the
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, PROVIDED that all sums owing to
the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
PROVIDED, such corporation or association shall be otherwise eligible and
qualified under this Article 7 and shall notify the Company of its successor
hereunder.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and has a combined capital and surplus of at least $100.0 million as
set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have all
of its obligations and the obligations of the Guarantors discharged with respect
to the outstanding Notes and the Note Guarantees pursuant to Section 8.02 or
8.03 hereof and upon compliance with the conditions set forth below in this
Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each Guarantor shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from its obligations with respect to all
outstanding Notes and Note Guarantees on the date the conditions set forth below
are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes and Note
Guarantees, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and Note Guarantees and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive payments in respect of the principal
of, premium, if any, interest and Liquidated Damages, if any, on such Notes when
such payments are due or on the redemption date, as the case may be, from the
trust referred to in Section 8.04(a), (b) the Company's obligations with respect
to such Notes under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10 and 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
including without limitation thereunder Section 7.07, 8.05 and 8.07 hereunder
and the Company's obligations in connection therewith and (d) the provisions of
this Article 8. Subject to compliance with this Article 8, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each Guarantor shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from its obligations under the covenants contained in Sections 3.09,
4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.18, 4.19,
4.20, 4.21, 4.22, 5.01 and 11.01 hereof with respect to the outstanding Notes
and Note Guarantees on and after the date the conditions set forth below are
satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes and Note
Guarantees shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with
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such covenants, but shall continue to be deemed "outstanding" for all other
purposes hereunder (it being understood that such Notes and Note Guarantees
shall not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and
Note Guarantees, the Company, its Subsidiaries or any Guarantor may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or
an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes and Note Guarantees
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(i) through 6.01(vi) and Sections 6.01(ix) and 6.01(x)
hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes and Note Guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, (i) cash in United States dollars, (ii)
non-callable Government Securities or (iii) a combination thereof, in such
amounts as shall be sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay the principal of,
premium, if any, and interest on the outstanding Notes on the stated
maturity or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or
to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) since the date hereof, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Notes shall not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance
and shall be subject to federal income tax on the same amounts, in the
same manner and at the same time as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes shall not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance
and shall
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be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01(vii) and (viii) hereof are concerned,
at any time in the period ending on the 91st day after the date of deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Company or others;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(i) the Trustee shall have received such other documents and
assurances as the Trustee shall have reasonably required.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"TRUSTEE") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, interest and
Liquidated Damages, if any, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to
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Section 8.04 hereof or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account
of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, subject to the
payment of any monies owed to the Trustee under Section 7.07 hereof, the Trustee
shall deliver or pay to the Company from time to time upon the written request
of the Company, and be relieved of all liability with respect to, any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any,
interest or Liquidated Damages, if any, on any Note and remaining unclaimed for
one year after such principal, and premium, if any, or interest or Liquidated
Damages, if any, has become due and payable shall be paid to the Company on its
written request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company and the Guaranteeing
Subsidiaries under this Indenture, the Notes and the Note Guarantees shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the
case may be; PROVIDED, HOWEVER, that, if the Company makes any payment of
principal of, premium, if any, interest or Liquidated Damages, if any, on any
Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF THE NOTES.
Notwithstanding Section 9.02 hereof, without the consent of any Holder of
Notes, the Company, the Guarantors and the Trustee may amend or supplement this
Indenture, the Note Guarantees or the Notes or the Security Documents:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes in the case of a merger, consolidation or sale of
all of the Company's assets pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any such Holder;
(e) to comply with requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
TIA;
(f) to add any Guarantor; or
(g) to add any additional assets as Collateral.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, this Indenture, the Notes
or any Note Guarantee or the Security Documents may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for Notes), and, subject to
Sections 6.02, 6.04 and 6.07 hereof, any existing Default or Event of Default
(other than a Default or
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Event of Default in the payment of the principal of, or premium, if any, or
interest or Liquidated Damages, if any, on the Notes (except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture, the Notes, any Note Guarantee or the
Security Documents may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including consents obtained in connection with or a tender offer or
exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.06 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of such amended or
supplemental Indenture unless such amended or supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may, but shall not be obligated to, enter into such
amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.02, 6.04 and 6.07 hereof, the Holders
of a majority in aggregate principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Company or any Guarantor with
any provision of this Indenture, the Notes, the Note Guarantees or the Security
Documents. However, without the consent of each Holder affected, an amendment,
or waiver may not (with respect to any Note or Note Guarantee held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal amount of or change the fixed maturity of
any Note, or alter the provisions with respect to the redemption of the
Notes (other than the provisions described in Sections 3.09, 4.10 and
4.14);
(c) reduce the rate of or change the time for payment of
interest on any Notes;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding and a waiver of
the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
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(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption or repurchase payment with respect to
any Note;
(h) except as provided in Sections 8.02, 8.03 and 11.04 hereof,
release any Guarantor from its obligations under the Note Guarantees or
make any change in the Note Guarantees that would adversely affect the
Holders;
(i) make any change in the foregoing amendment and waiver
provisions of this Article 9;
(j) subordinate the Notes or any Note Guarantee to any other
Indebtedness; or
(k) release from the Lien of this Indenture or the Notes and the
Security Documents all or substantially all of the Collateral.
Notwithstanding the foregoing, without the consent of the Holders of at
least two-thirds in principal amount of the Notes then outstanding (including,
without limitation, consents obtained in connection with a purchase of, tender
offer or exchange offer for the Notes), no amendment or waiver to this Indenture
may make any change in the provisions of the covenants in Sections 3.09, 4.10
and 4.14 hereof that adversely affect the rights of any Holders of Notes.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
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SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Company and the Guaranteeing Subsidiaries in
accordance with its terms.
ARTICLE 10
SECURITY DOCUMENTS
SECTION 10.01. SECURITY DOCUMENTS; ADDITIONAL COLLATERAL.
(a) SECURITY DOCUMENTS. In order to secure the due and punctual payment of
the Notes, and the other amounts payable to the Trustee hereunder, the Company
and the Trustee shall on the Issue Date enter into the Security Documents to
create the Security Interests and for related matters. Any Guarantor shall, upon
becoming a Guarantor, become a party to the Security Agreement and each
applicable Security Document as shall be necessary or appropriate to grant and
create a valid Lien on and security interest in the personal property of such
Guarantor of the type described in the Security Agreement and all Real Property
owned by such Guarantor, in each case, subject to no Liens other than Permitted
Collateral Liens; PROVIDED that such Guarantor shall not be required to grant a
mortgage Lien on any owned Real Property having a Fair Market Value of less than
$1,500,000. The Trustee and the Pledgors hereby agree that the Trustee holds the
Collateral in trust for its benefit and for the benefit of the Holders pursuant
to the terms of the Security Documents. Unless an Event of Default has occurred
and is continuing, the Pledgors will have the right to remain in possession and
retain exclusive control of the Collateral (other than any cash, securities,
obligations and Marketable Securities constituting part of the Collateral and
deposited with the Trustee and other than as set forth in the Security
Documents), to freely operate the Collateral and to collect, invest and dispose
any income thereon.
(b) ADDITIONAL COLLATERAL. Promptly upon the acquisition or
receipt by the Company or any Pledgor of After-Acquired Property:
(i) Subject to the terms of the Security Documents, the Company or
the applicable Pledgor, as the case may be, and the Trustee will, if
necessary, (A) enter into such amendments or supplements to the Security
Documents or such additional Mortgages (in each case in registrable or
recordable form) and other Security Documents, and cause such amendments,
supplements, mortgages and other Security Documents to be filed and
recorded in all such governmental offices as shall be necessary in order
to grant and create a valid Lien
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on and security interest in such After-Acquired Property in favor of the
Trustee (subject to no Liens except Permitted Collateral Liens), (B) cause
appropriate financing statements to be filed in such governmental offices
as shall be reasonably necessary in order to perfect any security interest
in such After-Acquired Property as to which a security interest may, under
the UCC of the applicable jurisdiction, be perfected by the filing of a
financing statement and (C) if any such After-Acquired Property consists
of stock certificates, promissory notes or other property as to which,
under the relevant UCC, a security interest may be perfected only by
possession, deliver such certificates, promissory notes and other
property, together with stock powers or assignments duly endorsed in
blank, to the Trustee;
(ii) in the case of After-Acquired Property which constitutes
personal property having a value in excess of $5,000,000, the Company or
the applicable Pledgor, as the case may be, shall also deliver to the
Trustee the following:
(A) an Opinion of Counsel substantially to the effect that, in
the opinion of such counsel, the applicable Security Documents and
all other instruments of further assurance or assignment have been
properly recorded and filed so as to make effective and, to the
extent required by the Security Agreement, perfect the Security
Interests in such personal property under the Security Documents and
reciting the details of such action;
(B) an Officers' Certificate of the Company stating that any
specific encumbrances on such personal property are Permitted
Collateral Liens; and
(C) evidence of payment or a closing statement indicating
payments to be made of all filing fees, recording charges, transfer
taxes and other costs and expenses including reasonable legal fees
and disbursements of counsel for the Trustee (and any local counsel)
that may be incurred to validly and effectively subject such
personal property to the Lien of any applicable Security Document;
(iii) in the case of After-Acquired Property which constitutes owned
Real Property, the Company or the applicable Pledgor, as the case may be,
shall also deliver to the Trustee the following:
(A) a title insurance policy or an endorsement to an existing
title insurance policy, in the Chicago Title Insurance Loan Policy
Extended Coverage form, or its equivalent, and in an amount at least
equal to the purchase price thereof (or, if such property was not
purchased or such purchase price cannot be determined by the
Company, the Fair Market Value thereof as determined by the Board of
Directors and set forth in an Officers' Certificate delivered to the
Trustee), in favor of the Trustee insuring that the Lien of the
Security Documents or any additional Security Documents constitutes
a valid and perfected Lien, subject to no Liens except Permitted
Collateral Liens, on such Real Property in an aggregate amount equal
to the purchase price or the Fair Market Value, as applicable, of
the Real Property and containing such endorsements and other
assurances of the type included in the title insurance
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policy delivered to the Trustee on the Issue Date with respect to
the Collateral which constitutes Real Property, together with an
Officers' Certificate stating that any Liens on such Real Property
are Liens permitted by this Indenture and the applicable Security
Documents;
(B) an Opinion of Counsel either (a) substantially to the
effect that, in the opinion of such counsel, the applicable Security
Documents and all other instruments of further assurance or
assignment have been properly recorded and filed so as to make
effective and perfect the Security Interests in such Real Property
under the Security Documents and reciting the details of such action
or (b) to the effect that, in the opinion of such counsel, no such
action is necessary to perfect the Security Interests in such Real
Property;
(C) a Survey with respect to such Real Property;
(D) a policy or certificate of insurance as required by
Section 4.22 hereof relating to such Real Property, which policy or
certificate shall bear mortgagee endorsements of the character
required by such Section;
(E) evidence of payment or a closing statement indicating
payments to be made by the Company or the applicable Pledgor of all
title premiums, filing fees, recording and registration charges,
transfer taxes and other costs and expenses including reasonable
legal fees and disbursements of counsel for the Trustee (and any
local counsel) that may be incurred to validly and effectively
subject such Real Property to the Lien of any applicable Security
Document to perfect such Lien;
(F) copies of all leases with respect to such Real Property,
all of which leases shall be in conformance in all material respects
with any applicable provisions of the Security Documents;
(G) an Officers' Certificate of the Company stating that there
has been issued and is in effect a valid and proper certificate of
occupancy or local or foreign equivalent, if required by the local
or foreign codes or ordinances for the use then being made of such
Real Property and that there is not outstanding any citation,
violation or similar notice indicating that such Real Property
contains conditions which are not in any material respects in
compliance with local or foreign codes or ordinances relating to
building or fire safety or structural soundness;
(H) such consents, approvals, amendments, supplements,
estoppels, tenant subordination agreements or other instruments as
shall be necessary in order for the owner or holder of the fee
interest to grant the Lien contemplated by the Mortgage with respect
to such Real Property; and
(I) a copy of a Phase I environmental assessment report (or
equivalent or form) with respect to such Real Property.
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(iv) in connection with the deliveries made pursuant to clauses (ii)
and (iii) of this Section 10.01(b), the Company or the applicable Pledgor
shall deliver to the Trustee an Opinion of Counsel and an Officers'
Certificate to the effect that the documents that have been or are
therewith delivered to the Trustee pursuant to this Section 10.01(b)
(including any amendments, supplements, mortgages or other Security
Documents referred to in clause (i) above) conform in all material
respects to the requirements of this Indenture.
(c) Each Holder, by accepting a Note, agrees to all of the terms and
provisions of the Security Documents, as the same may be amended from time to
time pursuant to the provisions of the Security Documents and this Indenture.
SECTION 10.02. RECORDING, ETC.
(a) The Company and each other Pledgor shall take or cause to be taken all
action required or desirable to maintain, perfect, preserve and protect the
Security Interests in the Collateral granted by the Security Documents, to the
extent required thereby, including, but not limited to, causing all financing
statements, any Mortgage, the Security Agreements (or a short form version
thereof) and other Security Documents, other instruments of further assurance,
including, without limitation, continuation statements covering security
interests in personal property, and all mortgages securing purchase money
obligations delivered to the Trustee or to the trustee, mortgagee or other
holder of a Permitted Lien under Section 10.04 to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, and will execute and file such financing statements and cause to be
issued and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve and protect the rights of the
Holders and the Trustee under this Indenture and the Security Documents to all
property comprising the Collateral.
The Company shall from time to time promptly pay and discharge all
mortgage and financing and continuation statement recording and/or filing fees,
charges and Taxes relating to this Indenture and the Security Documents, any
amendments thereto and any other instruments of further assurance. Without
limiting the generality of the foregoing covenant, in the event at any time the
Trustee shall determine that additional mortgage recording, transfer or similar
Taxes are required to be paid to perfect or continue any Lien on any Real
Property in an amount at least equal to the Fair Market Value from time to time
of such Real Property, the Company shall pay such Taxes promptly upon demand by
the Trustee. Notwithstanding the foregoing, the Trustee shall not have any duty
or obligation to ascertain whether any such Taxes are required to be paid at any
time, and the determination referred to in the preceding sentence shall only be
made by the Trustee upon receipt of written notice that such Taxes are due and
owing.
(b) The Company shall furnish or cause to be furnished to the
Trustee:
(i) at the time of execution and delivery of this Indenture,
Opinion(s) of Counsel substantially in the form of the opinions of counsel
delivered on the Issue Date to the initial purchasers of the Notes;
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(ii) at the time of execution and delivery of this Indenture, with
respect to each Mortgage, a policy of title insurance (or a commitment to
issue such policy) insuring (or committing to insure) the Lien of such
Mortgage as a valid mortgage Lien, subject only to Liens specified in such
Mortgage as "PRIOR LIENS";
(iii) within 30 days after the Issue Date, Opinion(s) of Counsel
either (a) substantially to the effect that, in the opinion of such
counsel, this Indenture, each Security Document and all other instruments
of further assurance or assignment have been properly recorded, or filed
to the extent necessary to perfect or create the Security Interests
created by each such Security Document, to the extent that perfection of
such Security Interests is required by the Security Documents, and
reciting the details of such action, and stating that as to the Security
Interests created pursuant to each such Security Document, such
recordings, registrations and filings are the only recordings,
registrations and filings necessary to give notice thereof and that no
re-recordings, re-registrations or refilings are necessary to maintain
such notice (other than as stated in such opinion), or (b) if perfection
of such Security Interests is required by the Security Documents, to the
effect that, in the opinion of such counsel, no such action is necessary
to perfect such Security Interests; and
(iv) within 30 days after October 16 in each year beginning with
October 16, 2002, an Opinion of Counsel, dated as of such date, either (a)
to the effect that, in the opinion of such counsel, such action has been
taken with respect to the recordings, registrations, filings,
re-recordings, re-registrations and refilings of all instruments of
further assurance as is necessary to maintain the validity, enforceability
and perfection of the Security Interests of each of the Security
Documents, to the extent that perfection of such Security Interests is
required by the Security Documents, and reciting with respect to such
Security Interests the details of such action (or to the extent that
further action is required to be taken within the next twelve months,
details of such further action) or referencing prior Opinions of Counsel
in which such details are given, or (b) if perfection of such Security
Interests is required by the Security Documents, to the effect that, in
the opinion of such counsel, no such action is necessary to maintain such
Security Interests.
SECTION 10.03. CERTAIN DISPOSITIONS OF COLLATERAL WITHOUT RELEASE.
(a) Notwithstanding the provisions of Section 10.04 hereof, so long as no
Default shall have occurred and be continuing or would result therefrom, the
Company and the Pledgors may in the ordinary course, without any requirement of
release or consent by the Trustee:
(i) Transfer any asset constituting personal property subject to the
Lien of the Security Documents which has become worn out or obsolete and
which either has an aggregate Fair Market Value of $500,000 or less, or
which is replaced by an asset of substantially equivalent or greater value
which becomes subject to the Lien of the Security Documents as
After-Acquired Property (it being understood that any proceeds received in
accordance with this clause (i) shall not constitute Trust Monies and
shall not be required to be deposited in the Collateral Account);
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(ii) subject to the provisions of the Security Documents, abandon,
terminate, cancel, release or make alterations in or substitutions of any
leases, contracts or of rights-of-way subject to the Lien of the Security
Documents; PROVIDED that (i) any altered or substituted leases, contracts
or rights-of-way shall forthwith, without further action, be subject to
the Lien of the Security Documents to the same extent as those previously
existing and (ii) if the relevant Pledgor shall receive any money or
property in excess of such Pledgor's expenses in connection with such
termination, cancellation, release, alteration or substitution as
consideration or compensation for such termination, cancellation, release,
alteration or substitution, such money or property shall be treated as
monies received in connection with an Asset Sale and subject to the
provisions of Section 4.10 hereof;
(iii) surrender or modify any franchise, license or permit subject to
the Lien of any of the Security Documents which it may own or under which
it may be operating; PROVIDED that, after the surrender or modification of
any such franchise, license or permit, the relevant Pledgor shall still,
in its reasonable business judgment, be entitled, under some other or
without any franchise, license or permit, to conduct its business in the
territory in which it is then operating; and PROVIDED, FURTHER, that if
such Pledgor shall be entitled to receive any money or property in excess
of such Pledgor's expenses in connection with such surrender or
modification as consideration or compensation for such surrender or
modification, such money or property, such monies shall be treated as
monies received in connection with an Asset Sale and subject to the
provisions of Section 4.10 hereof;
(iv) alter, repair, replace, change the location or position of and
add to its plants, structures, machinery, systems, equipment, fixtures and
appurtenances; PROVIDED that any such action shall comply with the terms
of the Security Documents;
(v) demolish, dismantle, tear down, scrap or abandon any Collateral
if, in the Company's or such Pledgor's reasonable business judgment, such
demolition, dismantling, tearing down, scrapping or abandonment is in the
best interest of the Company or such Pledgor;
(vi) grant a license of any Patent, Trademark or Copyright (each as
defined in the relevant Security Documents); PROVIDED that the Company or
such Pledgor receives consideration at least equal to the Fair Market
Value of such license;
(vii) abandon any Patent, Trademark or Copyright where subsequent
applications relating to such Patent, Trademark or Copyright have been
filed with respect to similar subject matter or where the relevant
Pledgor, in its reasonable business judgment, concludes that such Patent,
Trademark or Copyright is no longer useful in the conduct of such
Pledgor's business;
(viii) grant rights-of-way and easements over or in respect of any Real
Property; PROVIDED that such grant will not in any material respect, in
the reasonable business judgment of the relevant Pledgor, impair the
usefulness of such property in the conduct of the relevant Pledgor's
business and will not be prejudicial to the interests of the Holders;
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(ix) subject to the provisions of the Security Documents, grant
leases or subleases in respect of any owned Real Property in the event
that the relevant Pledgor determines, in its reasonable business judgment,
that such owned Real Property is no longer useful in the conduct of such
Pledgor's business and that such lease or sublease would not be reasonably
likely to have an adverse effect on the value of the property subject
thereto; PROVIDED that any such lease or sublease shall by its terms be
subject and subordinate to the Lien, and otherwise comply with the
provisions, of the Mortgage affecting such Real Property; and
(x) Transfer any asset constituting personal property subject to the
Lien of the Security Documents which has an aggregate Fair Market Value of
$500,000 or less and which is replaced by an asset of substantially
equivalent or greater value which becomes subject to the Lien of the
Security Document as After-Acquired Property (it being understood that any
proceeds received in accordance with this clause (x) shall not constitute
Trust Monies and shall not be required to be deposited in the Collateral
Account).
(b) In the event that the Company or any Pledgor has sold, exchanged or
otherwise disposed of or proposes to sell, exchange or otherwise dispose of any
portion of the Collateral which under the provisions of this Section 10.03 may
be sold, exchanged or otherwise disposed of by such Pledgor without any release
or consent of the Trustee, and the Company or any Pledgor requests the Trustee
to furnish a written disclaimer, release or quitclaim of any interest in such
property under any of the Security Documents, the Trustee shall promptly execute
such an instrument (in recordable form, where appropriate) upon delivery to the
Trustee of an Officers' Certificate by the Company or any Pledgor reciting the
sale, exchange or other disposition made or proposed to be made and describing
in reasonable detail the property affected thereby, and stating that such
property is property which by the provisions of this Section 10.03 may be sold,
exchanged or otherwise disposed of or dealt with by the Company or any Pledgor
without any release or consent of the Trustee.
Any disposition of Collateral made in strict compliance with the
provisions of this Section 10.03 shall be deemed not to impair the Security
Interests in contravention of the provisions of this Indenture.
SECTION 10.04. POSSESSION, USE AND RELEASE OF COLLATERAL.
Unless an Event of Default has occurred and is continuing, the Company or
the applicable Guarantor shall have the right to remain in possession and retain
exclusive control of the Collateral (other than any cash, securities,
obligations and Marketable Securities constituting part of the Collateral and
deposited with the Trustee and other than as set forth in the Security
Documents), to sell inventory in the ordinary course of business, to freely
operate the Collateral and to collect, invest and dispose of any income thereon
in accordance with the Indenture and the Security Documents. In addition to
their rights under Section 10.03, the Company and Pledgors shall have the right
to obtain a release of items of Collateral (other than Trust Monies, which Trust
Monies are subject to release from the Lien of the Security Documents as
provided under Article 12) (the "RELEASED INTERESTS") which the Company or the
applicable Pledgor proposes to Transfer and the Trustee shall release the
Released Interests from the Lien of the Security Documents and reconvey the
Released Interests to the
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appropriate Pledgor, upon compliance with the condition that the appropriate
Pledgor deliver to the Trustee the following:
(a) RELEASE NOTICE. A notice (each, a "RELEASE NOTICE") from the
appropriate Pledgor requesting the release of the Released Interest (i)
describing the proposed Released Interest, (ii) specifying the Fair Market
Value of such Released Interest on a date within 60 days of such notice
(the "VALUATION DATE"), (iii) specifying that the purchase price received
is at least equal to the Fair Market Value of the Released Interest, (iv)
stating that the release of such Released Interest will not interfere with
the Trustee's ability to realize the value of the remaining Collateral and
will not impair the maintenance and operation of the remaining Collateral,
(v) certifying that (x) if such Transfer would constitute an Asset Sale,
such Asset Sale complies with the terms and conditions of this Indenture
with respect thereto, (vi) in the event that any assets other than cash or
Marketable Securities comprise a portion of the consideration received in
such Asset Sale, specifically describing such assets and (vi) accompanied
by a counterpart of the instruments proposed to give effect to the release
fully executed and acknowledged (if applicable) by all parties thereto
other than the Trustee;
(b) OFFICERS' CERTIFICATE. An Officers' Certificate of the
appropriate Pledgor stating that (i) such Transfer does not include the
sale of assets other than the Released Interest and shall comply with the
terms and conditions of this Indenture with respect to Asset Sales, (ii)
all Net Proceeds from the sale of the Released Interests (x) if such
Transfer would constitute an Asset Sale, will be applied pursuant to the
provisions of this Indenture with respect to Asset Sales or (y) if such
Transfer would not constitute an Asset Sale, be deposited in the
Collateral Account pending application to acquire Replacement Assets,
(iii) there is no Default in effect or continuing on the date thereof, the
Valuation Date or the date of such Transfer, (iv) the release of the
Collateral will not result in a Default, and (v) all conditions precedent
in this Indenture and in the Security Documents relating to the release in
question have been complied with;
(c) DELIVERY OF NET PROCEEDS AND OTHER PROPERTY. The aggregate cash
proceeds (net of the costs and expenses of the type described in the
definition of "NET PROCEEDS") and other property (other than cash or
Marketable Securities which shall be paid directly to the Trustee for
deposit in the Collateral Account) received as consideration from the
Transfer shall be delivered to the Trustee to the extent required pursuant
to the applicable Security Documents, together with such instruments of
conveyance, assignment and transfer, if any, as may be necessary, in the
Opinion of Counsel, to subject to the Lien of this Indenture and the
Security Documents all the right, title and interest of the Pledgors in
and to such property;
(d) OPINIONS OF COUNSEL. One or more Opinions of Counsel which, when
considered collectively, shall be delivered substantially to the effect
(i) that any obligation included in the consideration for any Released
Interest and to be received by the Trustee pursuant to Section 10.04(c) is
a valid and binding obligation enforceable in accordance with its terms,
subject to such customary exceptions regarding equitable principles,
creditors' rights generally and bankruptcy as shall be reasonably
acceptable to the Trustee in its sole judgment, and is effectively pledged
under the Security Documents, (ii) that any Lien granted by a purchaser
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to secure a purchase money obligation is a fully perfected Lien and such
instrument granting such Lien is enforceable in accordance with its terms,
(iii) either (x) that such instruments of conveyance, assignment and
transfer as have been or are then delivered to the Trustee are sufficient
to subject to the Lien of the Security Documents all the right, title and
interest of the Company in and to any property (other than cash or
Marketable Securities) and obligations that is included in the
consideration for the Released Interest and is to be received by the
Trustee pursuant to Section 10.04(c), or (y) that no instruments of
conveyance, assignment or transfer are necessary for such purpose, (iv)
that the Pledgor has corporate power to own all property included in the
consideration for such release, and (v) that all conditions precedent
herein and under any of the Security Documents relating to the release of
such Collateral have been complied with;
(e) REGARDING MORTGAGED PROPERTY. If the Collateral to be released
is (i) only a portion of a discrete parcel of Mortgaged Property, an
endorsement to the title insurance policy or an Opinion of Counsel
confirming that after such release, the Lien of the applicable Mortgage
continues unimpaired as a first priority perfected Lien upon the remaining
Mortgaged Property subject only to those Liens permitted by the applicable
Mortgage; and (ii) Mortgaged Property having a fair value in excess of
$500,000, the Company shall have delivered to the Trustee a Survey
depicting the Real Property to be released; and
(f) OTHER DOCUMENTS. All documentation required by the TIA, if any,
prior to the release of Collateral by the Trustee and, in the event there
is to be a substitution of property for the Collateral subject to the
Transfer, all documentation necessary to subject such new Collateral to
the Lien of the Security Documents.
In connection with any release, the Company shall (i) execute, deliver and
record or file and obtain such instruments as the Trustee may reasonably
require, including, without limitation, amendments to the Security Documents,
and (ii) deliver to the Trustee such evidence of the satisfaction of the
applicable provisions of this Indenture and the Security Documents as the
Trustee may reasonably require.
Notwithstanding the foregoing provisions of this Section 10.04, the
Company may obtain a release of any Net Proceeds required to purchase Notes
pursuant to Section 4.10 hereof by directing the Trustee in writing to cause to
be applied such Net Proceeds to such purchase in accordance with Section 4.10
hereof, as applicable, and Article 12.
In case an Event of Default shall have occurred and be continuing, the
Pledgors, while in possession of the Collateral (other than cash, Marketable
Securities, securities and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder or under any Security Document
or with the trustee, mortgagee or other holder of a Prior Lien permitted by the
Security Documents), may do any of the things enumerated in this Section 10.04
only if the Trustee, in its discretion, or the Holders of a majority of the
principal amount of the Notes outstanding, by appropriate action of such
Holders, shall consent to such action, in which event any certificate filed
under this Section 10.04 shall omit the statement to the effect that no Event of
Default has occurred and is con-
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tinuing. This paragraph shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.01(i) or (ii).
All cash or Marketable Securities received by the Trustee pursuant to this
Section 10.04 shall be held by the Trustee as Trust Monies subject to
application as provided in this Section 10.04 or in Article 12, as appropriate.
All purchase money and other obligations received by the Trustee pursuant to
this Section 10.04 shall be held by the Trustee as Collateral.
Any releases of Collateral made in strict compliance with the provisions
of this Section 10.04 shall be deemed not to impair the Security Interests
created by the Security Documents in favor of the Trustee, in contravention of
the provisions of this Indenture.
SECTION 10.05. EMINENT DOMAIN AND OTHER GOVERNMENTAL TAKINGS.
Should any of the Collateral be subject to a Taking, the Trustee shall
release the property so taken or purchased, but only upon receipt by the Trustee
of the following:
(a) an Officers' Certificate of the Company stating that such
property has been Taken and the amount of the award or payment therefor,
and that all conditions precedent herein provided for relating to such
release have been complied with;
(b) the award or payment for such property (net of the costs of
obtaining such award or payment) shall be exchanged for Marketable
Securities and deposited with the Trustee, to be held as Trust Monies
subject to the application thereof pursuant to Article 12; PROVIDED that,
in lieu of all or any part of such award or payment, the applicable
Pledgor shall have the right to deliver to the Trustee a certificate of
the trustee, mortgagee or other holder of a Prior Lien on all or any part
of the property to be released, stating that such award or payment (net of
the costs of obtaining such award or payment), or a specified portion
thereof, has been deposited with such trustee, mortgagee or other holder
pursuant to the requirements of such Prior Lien, in which case the balance
of the award, if any, shall be delivered to the Trustee; and
(c) an Opinion of Counsel substantially to the effect:
(1) that such property has been Taken by eminent domain, or
has been sold pursuant to the exercise of a right vested in a
governmental authority to purchase, or to designate a purchaser or
order a sale of, such property;
(2) in the case of any Taking by eminent domain, that the
award for the property so taken has become final or that the board
of directors of the applicable Pledgor has determined that an appeal
from such award is not advisable in the interests of the Company or
any other Pledgor, as applicable, or the Holders of the Notes;
(3) in the case of any such sale, that the payment with
respect to the property so sold is not less than the amount to which
the applicable Pledgor is legally
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entitled under the terms of such right to purchase or designate a
purchaser, or under the order or orders directing such sale, as the
case may be;
(4) in case, pursuant to Section 10.05(b), the award or
payment for such property (net of the costs of obtaining such award
or payment), or a specified portion thereof, shall be certified to
have been deposited with the trustee, mortgagee or other holder of a
Prior Lien, that the property to be released, or a specified portion
thereof, is or immediately before such Taking was subject to such
Prior Lien, and that such deposit is required by such Prior Lien;
and
(5) that the instrument or the instruments and the award or
payment of such Taking which have been or are therewith delivered to
and deposited with the Trustee conform to the requirements of this
Indenture and the applicable Security Documents and that, upon the
basis of such application, the Trustee is permitted by the terms
hereof and of the Security Documents to execute and deliver the
release requested, and that all conditions precedent herein and in
the Security Documents provided for relating to such release have
been complied with.
In any proceedings for the Taking of any part of the Collateral, the
Trustee may be represented by counsel who may be counsel for the Company.
All cash or Marketable Securities received by the Trustee pursuant to this
Section 10.05 shall be held by the Trustee as Trust Monies under Article 12
subject to application as therein provided. All purchase money and other
obligations received by the Trustee pursuant to this Section 10.05 shall be held
by the Trustee as Collateral subject to application as provided in Section
10.10.
SECTION 10.06. TRUST INDENTURE ACT REQUIREMENTS.
The release of any Collateral, whether pursuant to Article 10 or 12, from
the Lien of any of the Security Documents or the release of, in whole or in
part, the Liens created by any of the Security Documents will not be deemed to
impair the Security Interests in contravention of the provisions hereof if and
to the extent the Collateral or Liens are released pursuant to the applicable
Security Documents and pursuant to the terms hereof. The Trustee and each of the
Holders of the Notes acknowledge that a release of Collateral or Liens strictly
in accordance with the terms of the Security Documents and the terms hereof will
not be deemed for any purpose to be an impairment of the Security Interests in
contravention of the terms of this Indenture. To the extent applicable, without
limitation, the Pledgors and each obligor on the Notes shall cause TIA Section
314(d) relating to the release of property or securities from the Liens hereof
and of the Security Documents to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by an Officer of the appropriate
Pledgor, except in cases in which TIA Section 314(d) requires that such
certificate or opinion be made by an independent Person.
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SECTION 10.07. SUITS TO PROTECT THE COLLATERAL.
Subject to the provisions of the Security Documents, the Trustee shall
have power to institute and to maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Collateral by any acts which may
be unlawful or in violation of any of the Security Documents or this Indenture,
and such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Trustee and the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the Security Interests or be prejudicial to the interests of the
Holders or the Trustee).
SECTION 10.08. PURCHASER PROTECTED.
In no event shall any purchaser in good faith of any property purported to
be released hereunder be bound to ascertain the authority of the Trustee to
execute the release or to inquire as to the satisfaction of any conditions
required by the provisions hereof for the exercise of such authority or to see
to the application of any consideration given by such purchaser or other
transferee; nor shall any purchaser or other transferee of any property or
rights permitted by this Article 10 to be sold be under obligation to ascertain
or inquire into the authority of the Company or any other Pledgor, as
applicable, to make any such sale or other transfer.
SECTION 10.09. POWERS EXERCISABLE BY RECEIVER OR TRUSTEE.
In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article 10 upon the
Company or any other Pledgor, as applicable, with respect to the release, sale
or other disposition of such property may be exercised by such receiver or
trustee, and an instrument signed by such receiver or trustee shall be deemed
the equivalent of any similar instrument of the Company or any other Pledgor, as
applicable, or of any officer or officers thereof required by the provisions of
this Article 10.
SECTION 10.10. DISPOSITION OF OBLIGATIONS RECEIVED.
All purchase money or other obligations received by the Trustee under this
Article 10 shall be held by the Trustee as a part of the Collateral. Upon
payment in cash or Marketable Securities by or on behalf of the Company or the
obligor thereof to the Trustee of the entire unpaid principal amount of any such
obligation, the Trustee shall promptly release and transfer such obligation and
any mortgage securing the same upon receipt of any documentation that the
Trustee may reasonably require. Any cash or Marketable Securities received by
the Trustee in respect of the principal of any such obligations shall be held by
the Trustee as Trust Monies under Article 12 subject to application as therein
provided. Unless and until the Notes are accelerated, pursuant to Section 6.02,
all interest and other income on any such obligations, when received by the
Trustee, shall be paid to the Company from time to time in accordance with
Section 12.08. If the Notes have been accelerated pursuant to Section 6.02, any
such interest or other income not theretofore paid, when collected by the
Trustee, shall be applied by the Trustee in accordance with Section 6.10.
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SECTION 10.11. DETERMINATIONS RELATING TO COLLATERAL.
In the event (i) the Trustee shall receive any written request from the
Company or any other Pledgor under any Security Document for consent or approval
with respect to any matter or thing relating to any Collateral or the Company's
or any other Pledgor's obligations with respect thereto; or (ii) there shall be
required from the Trustee under the provisions of any Security Document any
performance or the delivery of any instrument or (iii) a Responsible Officer of
the Trustee shall become aware of any nonperformance by the Company or any other
Pledgor of any covenant or any breach of any representation or warranty of the
Company or any other Pledgor set forth in any Security Document, and, in the
case of clause (i), (ii) or (iii) above, the Trustee's response or action is not
otherwise specifically contemplated hereunder then, in each such event, the
Trustee shall, within seven Business Days, advise the Holders, in writing and at
the Company's expense, of the matter or thing as to which consent has been
requested or the performance or instrument required to be delivered or the
nonperformance or breach of which the Trustee has become aware. The Holders of
not less than a majority in aggregate principal amount of the outstanding Notes
pursuant to Section 6.05 shall have the exclusive authority to direct the
Trustee's response to any of the circumstances contemplated in clauses (i), (ii)
and (iii) above. In the event the Trustee shall be required to respond to any of
the circumstances contemplated in this Section 10.11, the Trustee shall not be
required so to respond unless it shall have received written authority by not
less than a majority in aggregate principal amount of the outstanding Notes;
PROVIDED that the Trustee shall be entitled to hire experts, consultants, agents
and attorneys to advise the Trustee on the manner in which the Trustee should
respond to such request or render any requested performance or response to such
nonperformance or breach (the expenses of which shall be reimbursed to the
Trustee pursuant to Section 7.07). The Trustee shall be fully protected in the
taking of any action recommended or approved by any such expert, consultant,
agent or attorney or agreed to by a majority of Holders of the Notes pursuant to
Section 6.05.
SECTION 10.12. RELEASE UPON TERMINATION OF THE COMPANY'S OBLIGATIONS.
In the event that the Company delivers an Officers' Certificate certifying
that its obligations under this Indenture have been satisfied and discharged by
complying with the provisions of Article 8 and such other documents and/or funds
as are required to be delivered or paid pursuant to Article 8, the Trustee shall
(i) execute and deliver, in each case without recourse, representation or
warranty such releases, termination statements and other instruments (in
recordable form, appropriate) as the Company or any other Pledgor, as
applicable, may reasonably request evidencing the termination of the Security
Interests created by the Security Documents and (ii) not be deemed to hold the
Security Interests for the benefit of the Trustee and the Holders.
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ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.01. NOTE GUARANTEE.
Subject to Section 11.06 hereof, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes and
the Obligations of the Company hereunder and thereunder, that: (a) the principal
of, premium, if any, interest and Liquidated Damages, if any, on the Notes will
be promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal, premium, if any, (to the extent permitted by law)
interest on any interest, if any, and Liquidated Damages, if any, on the Notes,
and all other payment Obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full and performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other Obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration, redemption or otherwise. Failing
payment when so due of any amount so guaranteed or any performance so guaranteed
for whatever reason the Guarantors will be jointly and severally obligated to
pay the same immediately. An Event of Default under this Indenture or the Notes
shall constitute an event of default under the Note Guarantees, and shall
entitle the Holders to accelerate the Obligations of the Guarantors hereunder in
the same manner and to the same extent as the Obligations of the Company. The
Guarantors hereby agree that their Obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that this Note
Guarantee will not be discharged except by complete performance of the
Obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, the
Guarantors, or any Note Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors, any amount paid by
either to the Trustee or such Holder, this Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it shall not be entitled to, and hereby waives, any right
of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article 6 for the purposes of this Note Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Obligations as provided in Article 6 hereof,
such
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Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Note Guarantees.
SECTION 11.02. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 11.01, each Guarantor
hereby agrees that a notation of such Note Guarantee substantially in the form
of EXHIBIT E shall be endorsed by an Officer of such Guarantor on each Note
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Guarantor, by manual or facsimile signature, by an
Officer of such Guarantor.
Each Guarantor hereby agrees that its Note Guarantee set forth in Section
11.01 shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.
SECTION 11.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture shall prohibit a merger between a Guarantor and another Guarantor
or a merger between a Guarantor and the Company.
(b) Except as provided in Section 11.03(a) hereof or in a transaction
referred to in Section 11.04 hereof, no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Guarantor, or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to another corporation, Person or entity unless
it complies with Article 5.
SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any sale of assets (including, if applicable, all of the
Capital Stock of any Guarantor), any Liens in favor of the Trustee in the assets
sold thereby shall be released; PROVIDED that, in the event of an Asset Sale,
the Net Proceeds from such sale or other disposition are treated in accordance
with the provisions of Section 4.10 hereof. If the assets sold in such sale or
other disposition include all or substantially all of the assets of any
Guarantor or all of the Capital Stock of any Guarantor, then such Guarantor (in
the event of a sale or other disposition of all of the Capital Stock of such
Guarantor) or the Person acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of a Guarantor) shall be
released from and relieved of its Obliga-
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tions under its Note Guarantee or Section 11.03 hereof, as the case may be;
PROVIDED that (i) in the event of an Asset Sale, the Net Proceeds from such
sale or other disposition are treated in accordance with the provisions of
Section 4.10 hereof and (ii) the Company is in compliance with all other
provisions of this Indenture applicable to such disposition. Upon delivery by
the Company to the Trustee of an Officers' Certificate to the effect of the
foregoing, the Trustee shall execute any documents reasonably required in
order to evidence the release of any Guarantor from its Obligation under its
Note Guarantee. Any Guarantor not released from its Obligations under its
Note Guarantee shall remain liable for the full amount of principal of,
premium, if any, interest and Liquidated Damages, if any, on the Notes and
for the other Obligations of such Guarantor under this Indenture as provided
in this Article 11.
SECTION 11.05. ADDITIONAL GUARANTORS.
Any Person that was not a Guarantor on the date of this Indenture may
become a Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture and (b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such Person and constitutes
the legal, valid, binding and enforceable obligation of such Person (subject to
such customary exceptions concerning creditors rights', fraudulent transfers,
public policy and equitable principles as may be acceptable to the Trustee in
its discretion).
SECTION 11.06. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the United
States Bankruptcy Code and in the Debtor and Creditor Law of the State of New
York) or (B) left such Guarantor with unreasonably small capital at the time its
Note Guarantee of the Notes was entered into; PROVIDED that, it will be a
presumption in any lawsuit or other proceeding in which a Guarantor is a party
that the amount guaranteed pursuant to the Note Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of creditors of
such Guarantor, or debtor in possession or trustee in bankruptcy of the
Guarantor, otherwise proves in such a lawsuit that the aggregate liability of
the Guarantor is the amount set forth in clause (ii) above. In making any
determination as to solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantor to
contribution from other Guarantors, and any other rights such Guarantor may
have, contractual or otherwise, shall be taken into account.
SECTION 11.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in each case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 11 in place of the Trustee.
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ARTICLE 12
APPLICATION OF TRUST MONIES
SECTION 12.01. TRUST MONIES.
All Trust Monies shall be held by or delivered to the Trustee, for its
benefit and the benefit of the Holders as a part of the Collateral in accordance
with the provisions of this Indenture and the applicable Security Documents and,
upon any entry upon or sale or other disposition of the Collateral or any part
thereof by the Trustee after an Event of Default pursuant to any of the Security
Documents, said Trust Monies shall be applied in accordance with Section 6.10;
but, prior to any such entry, sale or other disposition, all or any part of the
Trust Monies may be withdrawn, and shall be released, paid or applied by the
Trustee, from time to time as provided in Sections 12.02 through 12.08,
inclusive.
On the Issue Date there shall be established and, at all times hereafter
until this Indenture shall have terminated, there shall be maintained with the
Trustee an account which shall be entitled the "Collateral Account" (the
"COLLATERAL ACCOUNT"). The Collateral Account shall be established and
maintained by the Trustee at its corporate trust offices located in New York.
All Trust Monies that are received by the Trustee shall be held, applied and/or
disbursed by the Trustee in accordance with the provisions of this Article 12.
SECTION 12.02. RETIREMENT OF NOTES.
The Trustee shall apply Trust Monies from time to time to the payment of
the principal amount of any Notes when due or to the redemption thereof or the
purchase thereof upon tender pursuant to a Net Proceeds Offer or Section 4.14,
as the Company shall request in writing, upon receipt by the Trustee of the
following:
(a) Board Resolutions directing the application pursuant to this
Section 12.02 of a specified amount of Trust Monies and, in case any such
monies are to be applied to the payment of Notes, designating the Notes so
to be paid and, in case any such monies are to be applied to the purchase
or redemption of Notes, prescribing the method of purchase or redemption,
the price or prices to be paid and the maximum principal amount of Notes
to be purchased or redeemed and any other provisions of this Indenture
governing such purchase or redemption;
(b) U.S. legal tender in the maximum amount of the accrued
interest, if any, required to be paid in connection with any such
purchase, which cash shall be held by the Trustee in trust for such
purpose;
(c) an Officers' Certificate, dated not more than five
Business Days prior to the date of the relevant application stating
(i) that no Default or Event of Default exists unless
such Default or Event of Default would be cured thereby; and
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(ii) that all conditions precedent and covenants herein
provided for relating to such application of Trust Monies have been
complied with; and
(d) an Opinion of Counsel stating that the documents and the cash or
Marketable Securities, if any, which have been or are therewith delivered
to and deposited with the Trustee conform to the requirements of this
Indenture and that all conditions precedent herein provided for relating
to such application of Trust Monies have been complied with.
Upon compliance with the foregoing provisions of this Section, the Trustee
shall apply Trust Monies as directed and specified by such Board Resolution, up
to, but not exceeding, the principal amount of the Notes so paid or purchased,
using the U.S. legal tender deposited pursuant to paragraph (b) of this Section
12.02, to the extent necessary, to pay any accrued interest required in
connection with such purchase.
A Board Resolution expressed to be irrevocable directing the application
of Trust Monies under this Section 12.02 to the payment of the principal of
particular Notes shall for all purposes of this Indenture be deemed the
equivalent of the deposit of money with the Trustee in trust for such purpose.
Such Trust Monies and any U.S. legal tender deposited with the Trustee pursuant
to paragraph (b) of this Section 12.02 for the payment of accrued interest shall
not, after compliance with the foregoing provisions of this Section, be deemed
to be part of the Collateral or Trust Monies.
SECTION 12.03. WITHDRAWALS OF NET INSURANCE PROCEEDS.
If the Company or any Guarantor receives a payment of Net Insurance
Proceeds relating to the Destruction or Taking of any part of the Collateral,
the amount of such payment (i) if greater than $500,000, shall be treated as
Trust Monies and deposited in the Collateral Account and (ii) if below $500,000,
shall not be considered Trust Monies and shall not be required to be deposited
in the Collateral Account if such Net Insurance Proceeds are used to repair,
rebuild or replace the Collateral so Destroyed or Taken. To the extent that any
Trust Monies consist of either (a) the proceeds of insurance relating to the
Destruction of any part of the Collateral or (b) any award or payment relating
to the Taking of any of the Collateral, such Trust Monies may be withdrawn by
the Company or any Pledgor, as applicable, and shall be paid by the Trustee upon
a request by the Company or the applicable Pledgor by the proper officer or
officers of the Company or the applicable Pledgor to reimburse the Company or
the applicable Pledgor for expenditures made, or to pay costs incurred, by the
Company or the applicable Pledgor to repair, rebuild or replace the Collateral
destroyed or Taken, upon receipt by the Trustee of the following:
(a) an Officers' Certificate of the Company or the applicable
Pledgor dated not more than 30 days prior to the date of the application
for the withdrawal and payment of such Trust Monies and (if required by
the TIA) signed also, in the case of the following clauses (i) and (v), by
a Financial Advisor, setting forth:
(i) expenditures have been made, or costs incurred, by the
Company or the applicable Pledgor in a specified amount for the
purpose of making certain repairs, rebuildings and replacements of
the Collateral, which shall be briefly described,
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and stating the Fair Market Value thereof to the Company or the
applicable Pledgor at the date of the acquisition thereof by the
Company or the applicable Pledgor, except that it shall not be
necessary under this clause (i) to state the Fair Market Value of
any such repairs, rebuildings or replacements that are separately
described pursuant to clause (vi) of this paragraph (a) and whose
Fair Market Value is stated in the Financial Advisor's certificate
under paragraph (b) of this Section 12.03;
(ii) that no part of such expenditures in any previous or then
pending application, has been or is being made the basis for the
withdrawal of any Trust Monies pursuant to this Section 12.03;
(iii) that there is no outstanding Indebtedness, other than
costs for which payment is being requested, known to the Company or
the applicable Pledgor, after due inquiry, for the purchase price or
construction of such repairs, rebuildings or replacements, or for
labor, wages, materials or supplies in connection with the making
thereof, which, if unpaid, might become the basis of a vendor's,
mechanics', laborers', materialmen's, statutory or other similar
Lien upon any of such repairs, rebuildings or replacement, which
Lien might, in the opinion of the signers of such certificate,
materially impair the security afforded by such repairs, rebuildings
or replacement;
(iv) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of either the Company's or the
applicable Pledgor's business;
(v) whether any part of such repairs, rebuildings or
replacements within six months before the date of acquisition
thereof by the Company or the applicable Pledgor, has been used or
operated by Persons other than the Company or the applicable Pledgor
in a business similar to that in which such property has been or is
to be used or operated by the Company or the applicable Pledgor, and
whether the Fair Market Value to the Company or the applicable
Pledgor, at the date of such acquisition, of such part of such
repairs, rebuildings or replacement is at least $25,000 and at least
1% of the principal amount of the outstanding Notes; and, if all of
such facts are present, such part of said repairs, rebuildings or
replacements shall be separately described, and it shall be stated
that an Financial Advisor's certificate as to the Fair Market Value
to the Company or the applicable Pledgor of such separately
described repairs, rebuildings or replacements will be furnished
under paragraph (b) of this Section 12.03;
(vi) that no Default or Event of Default shall have
occurred and be continuing; and
(vii) that all condition's precedent herein provided for
relating to such withdrawal and payment have been complied with.
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(b) In case any part of such repairs, rebuildings or replacements is
separately described pursuant to the foregoing clause (v) of paragraph (a)
of this Section 12.03, a certificate of a Financial Advisor (if required
by the TIA) stating the Fair Market Value to the Company or the applicable
Pledgor, in such Financial Advisor's opinion, of such separately described
repairs, rebuildings or replacements at the date of the acquisition
thereof by the Company or the applicable Pledgor.
(c) (i) In case any part of such repairs, rebuildings or
replacements constitutes owned Real Property:
(1) with respect to any such repairs, rebuildings or replacements
that are not encompassed within or are not erected upon
Mortgaged Property, an instrument or instruments in recordable
form sufficient for the Lien of this Indenture and any
Mortgage to cover such repairs, rebuildings or replacements
which, if such repairs, rebuildings or replacements include
leasehold or easement interests, shall include normal and
customary provisions with respect thereto and evidence of the
filing of all such documents as may be necessary to perfect
such Liens;
(2) an Opinion of Counsel in form and substance acceptable to the
Trustee, substantially to the effect that the Lien of this
Indenture and any Mortgage constitutes a valid and perfected
mortgage Lien on such repairs, rebuildings or replacements
(subject to no Prior Liens other than Prior Liens which were
permitted with respect to the Collateral repaired, rebuilt or
replaced);
(3) in the event such repairs, rebuildings or replacements have a
Fair Market Value in excess of $500,000, a Survey with respect
thereto; and
(4) evidence of payment or a closing statement indicating payments
to be made by the Company or the applicable Pledgor of all
recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and disbursements of
counsel for the Trustee (and any foreign counsel), that may be
incurred to validly and effectively subject such repairs,
rebuildings or replacements to the Lien of any applicable
Security Document and to perfect such Lien; and
(ii) in case any part of such repairs, rebuildings or replacements
constitutes personal property interests:
(1) an instrument in recordable form sufficient for the Lien of
any applicable Security Document to cover such repairs,
rebuildings or replacements; and
(2) evidence of payment or a closing statement indicating payments
to be made by the Company or the applicable Pledgor of all
filing fees, recording charges, transfer taxes and other costs
and expenses, including reasonable le-
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gal fees and disbursements of counsel for the Trustee (and
any foreign counsel), that may be incurred to validly and
effectively subject such repairs, rebuildings or replacements
to the Lien of any Security Document and to perfect such
Liens.
(d) An Opinion of Counsel to the effect:
(i) that the instruments that have been or are therewith delivered
to the Trustee conform in all material respects to the requirements of
this Indenture and any other applicable Security Document, and that, upon
the basis of such request of the Company or the applicable Pledgor and the
accompanying documents specified in this Section 12.03, all conditions
precedent herein provided for relating to such withdrawal and payment have
been complied with, and the Trust Monies whose withdrawal is then
requested may be lawfully paid over under this Section 12.03; and
(ii) that all of the Company's or the applicable Pledgor's right,
title and interest in and to said repairs, rebuildings or replacements, or
combination thereof, are then subject to the Lien of any of the Security
Documents.
Upon compliance with the foregoing provisions of this Section 12.03, the
Trustee shall pay on the written request of the Company an amount of Trust
Monies of the character aforesaid equal to the amount of the expenditures or
costs stated in the Officers' Certificate required by clause (i) of paragraph
(a) of this Section 12.03, or the Fair Market Value to the Company of such
repairs, rebuildings and replacements stated in such Officers' Certificate (and
in such Financial Advisor's certificate, if required by paragraph (b) of this
Section 12.03), whichever is less.
SECTION 12.04. WITHDRAWAL OF TRUST MONIES FOR REINVESTMENT.
To the extent that any Trust Monies consist of Net Proceeds received by
the Trustee pursuant to Section 4.10 hereof or in the case of a Transfer of
Collateral not involving an Asset Sale, other proceeds (net of costs and
expenses of the type described in the definition of "NET PROCEEDS") and the
Company or any Pledgor, as applicable, intends to reinvest such Net Proceeds to
acquire Replacement Assets, such Trust Monies may be withdrawn by the Company or
any Pledgor, as applicable, and shall be paid by the Trustee upon a written
request by the Company by the proper Officer or Officers of the Company or any
Pledgor, as applicable, to reimburse the Company or any Pledgor, as applicable,
for expenditures made or to pay costs incurred by the Company or any Pledgor, as
applicable, to acquire Replacement Assets, upon receipt by the Trustee of the
following:
(a) An Officers' Certificate, dated not more than 30 days prior to
the date of the application for the withdrawal and payment of such Trust
Monies, stating in substance as follows:
(i) that the Trust Monies to be released constitute
Net Proceeds from an Asset Sale;
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(ii) setting forth with particularity the investment or
acquisition to be made with such Trust Monies;
(iii) that the release of the Trust Monies complies with
all applicable terms of this Indenture;
(iv) that there is no Default or Event of Default (both before
and after giving effect to the acquisition of such Replacement
Assets) continuing; and
(v) that all conditions precedent herein provided for relating
to the release of the Trust Monies in question have been provided.
(b) If the Replacement Asset to be acquired is an investment in
owned Real Property, the Company shall also deliver to the Trustee:
(i) an instrument or instruments in recordable form sufficient
for the Lien of this Indenture and any Mortgage to cover such Real
Property and evidence of the filing of all such financing statements
and other instruments as may be necessary to perfect such Liens;
(ii) a title insurance policy (or commitment) or an Opinion of
Counsel in form and substance acceptable to the Trustee,
substantially to the effect that the Lien of this Indenture and any
mortgage constitutes a direct and valid and perfected mortgage Lien
on such Real Property (subject to no Prior Liens other than Prior
Liens which were permitted with respect to the Collateral which was
the subject of the Asset Sale);
(iii) in the event the Fair Market Value of the Real
Property is in excess of $500,000, a Survey with respect
thereto; and
(iv) evidence of payment or a closing statement indicating
payments to be made by the Company or the appropriate Pledgor of all
recording charges, transfer taxes and other costs and expenses,
including reasonable legal fees and disbursements of one counsel for
the Trustee (and any foreign counsel), that may be incurred to
validly and effectively subject the Real Property to the Lien of any
applicable Security Document and to perfect such Lien.
(c) If the Replacement Asset constitutes a personal property
interest, the Company or the appropriate Pledgor shall deliver to the
Trustee:
(i) an instrument in recordable form, if necessary, sufficient
for the Lien of any applicable Security Document to cover such
personal property interest; and
(ii) evidence of payment or a closing statement indicating
payments to be made by the Company or the appropriate Pledgor of all
filing fees, recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and dis-
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bursements of one counsel for the Trustee (and any foreign counsel),
that may be incurred to validly and effectively subject the
Permitted Investment to the Lien of any Security Document and to
perfect such Lien.
(d) An Opinion of Counsel stating that (i) all of the Company's or
the applicable Pledgor's right, title and interest in and to such personal
property are then subject to the Lien of the Security Documents and (ii)
the documents that have been or are therewith delivered to the Trustee
conform to the requirements of this Indenture and that all conditions
precedent herein and in the Security Documents relating to such
application of Trust Monies have been complied with.
SECTION 12.05. POWERS EXERCISABLE NOTWITHSTANDING EVENT OF
DEFAULT.
In case an Event of Default shall have occurred and shall be continuing,
the Company or any Pledgor, as applicable, while in possession of Collateral
(other than cash, Marketable Securities, securities and other personal property
held by, or required to be deposited or pledged with, the Trustee hereunder or
under the Security Documents or with the trustee, mortgagee or other holder of a
Prior Lien), may do any of the things enumerated in Sections 12.02, 12.03 and
12.04 if the Holders of a majority in principal amount of the Notes outstanding,
by appropriate action of such Holders, shall consent to such action. This
Section 12.05 shall not apply, however, during the continuance of an Event of
Default of the type specified in Section 6.01(i) or (ii).
SECTION 12.06. POWERS EXERCISABLE BY TRUSTEE OR RECEIVER.
In case the Collateral (other than any cash, Marketable Securities,
securities and other personal property held by, or required to be deposited or
pledged with, the Trustee hereunder or under the Security Documents or with the
trustee, mortgagee or other holder of a Prior Lien) shall be in the possession
of a receiver or trustee lawfully appointed, the powers hereinbefore in this
Article 12 conferred upon the Company and any Pledgor, as applicable, with
respect to the withdrawal or application of Trust Monies may be exercised by
such receiver or trustee, in which case a certificate signed by such receiver or
trustee shall be deemed the equivalent of any Officers' Certificate required by
this Article 12. If the Trustee shall be in possession of any of the Collateral
hereunder or under any of the Security Documents, such powers may be exercised
by the Trustee, in its discretion.
SECTION 12.07. DISPOSITION OF NOTES RETIRED.
All Notes received by the Trustee and for whose purchase Trust Monies are
applied under this Article 12, if not otherwise canceled, shall be promptly
cancelled and destroyed by the Trustee in accordance with Section 2.11 unless
the Trustee shall be otherwise directed in writing by the Company. Upon
destruction of any Notes, the Trustee shall issue a certificate of destruction
to the Company.
SECTION 12.08. INVESTMENT OF TRUST MONIES.
All or any part of any Trust Monies held by the Trustee hereunder (except
such as may be held for the account of any particular Notes) shall from time to
time be invested or reinvested by the
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Trustee in any Marketable Securities pursuant to the written direction of the
Company which shall specify the Marketable Securities in which such Trust
Monies shall be invested. Unless an Event of Default occurs and is
continuing, any interest on such Marketable Securities (in excess of any
accrued interest paid at the time of purchase) which may be received by the
Trustee shall be forthwith paid to the Company. Such Marketable Securities
shall be held by the Trustee as a part of the Collateral, subject to the same
provisions hereof as the cash used by it to purchase such Marketable
Securities.
The Trustee shall not be liable or responsible for any loss resulting from
such investments or sales except only for its own grossly negligent action, its
own grossly negligent failure to act or its own willful misconduct in complying
with this Section 12.08.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 13.02. NOTICES.
Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
ALARIS Medical Systems, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Vice President and General Counsel
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, Esq.
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If to the Trustee:
HSBC Bank USA
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Issuer Services
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish, at the request of the
Trustee, to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
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(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 13.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor as such shall have any liability for any obligations of the
Company under the Notes or this Indenture, the Registration Rights Agreement or
of any Guarantor under its Note Guarantee or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes and the Note Guarantees.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTE GUARANTEES AND THE NOTES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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SECTION 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 13.10. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 13.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes 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 13.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURES
Dated as of October 16, 2001 ALARIS MEDICAL SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and
General Counsel
Dated as of October 16, 2001 HSBC BANK USA
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
S-1
EXHIBIT A
(Face of Note)
11 5/8% Series A/B Senior Secured Notes due 2006
No. $______________
CUSIP NO. _____________
ALARIS MEDICAL SYSTEMS, INC.
promises to pay to _____________________________________ or registered
assigns, the principal sum of ___________ Dollars
$________, as increased or decreased as set forth on the schedule hereto,
on December 1, 2006.
Interest Payment Dates: June 1 and December 1, of each year, commencing
June 1, 2002.
Record Dates: May 15 and November 15
Dated: __________, 2001
ALARIS MEDICAL SYSTEMS, INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the Notes referred to in the
within-mentioned Indenture:
HSBC BANK USA,
as Trustee
By: _____________________________
Authorized Signatory
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(Back of Note)
11 5/8% Series A/B Senior Secured Notes due 2006
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.(1)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF,
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO (A)
OFFER, SELL, PLEDGE, OR OTHERWISE TRANSFER THIS SECURITY ONLY (1) TO
ALARIS, (2) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (3) TO A PERSON IT REASONABLY BELIEVES
IS A "QUALI-
----------------------------------
(1) This pargraph should be included if the Note is issued in global form.
A-2
FIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (4) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (5) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) or (7) OF RULE 501 UNDER THE SECURITIES ACT IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, OR (6) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED ON AN OPINION
OF COUNSEL IF ALARIS SO REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES
TO APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THAT IT WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. ALARIS Medical Systems, Inc., a Delaware corporation, or its
successor (the "COMPANY"), promises to pay interest on the principal amount of
this Note at the rate of 11 5/8% per annum and shall pay the Liquidated Damages,
if any, payable pursuant to Section 4 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually in arrears on June 1 and December 1, commencing on June 1, 2002
(each, an "INTEREST PAYMENT DATE"). Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; PROVIDED that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date,
except in the case of the original issuance of Notes, in which case interest
shall accrue from the date of issuance. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at the rate
equal to 1.0% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace
periods), from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the May 15 or November 15 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.13 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium and Liquidated Damages, if any, and interest
at the office or agency of the Company maintained for such purpose within the
City and State of New York, or, at the option of the Company,
A-3
payment of interest and Liquidated Damages may be made by check mailed to the
Holders at their respective addresses set forth in the register of Holders of
Notes; PROVIDED that all payments of principal, premium, interest and
Liquidated Damages, if any, with respect to Notes the Holder of which have
given wire transfer instructions to the Company or the Paying Agent at least
15 days prior to the Payment Date will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof.
3. PAYING AGENT AND REGISTRAR. Initially, HSBC Bank USA, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of October 16, 2001 ("INDENTURE") between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code Sections 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $170,000,000 in
aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Paragraph 5, the Notes shall
not be redeemable at the Company's option prior to December 1, 2005. Thereafter,
the Notes shall be subject to redemption at the option of the Company, in whole
or in part, upon not less than 30 nor more than 60 days' notice, at a redemption
price equal to 105.813% of the principal amount thereof, together with accrued
and unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date.
(b) Notwithstanding the foregoing, on or prior to December 1, 2003, the
Company, on one or more occasions, may redeem up to 35% in aggregate principal
amount of Notes issued under the Indenture at a redemption price equal to
111.625% of the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, if any, thereon with the net cash proceeds of
one or more public or private offerings of common stock of Holdings or the
Company; PROVIDED that (1) in the case of an offering by Holdings, Holdings
shall have contributed such net cash proceeds to the Company as a common equity
contribution; (2) at least 65% in aggregate principal amount of the Notes remain
outstanding immediately after the occurrence of each such redemption; and (3)
such redemption occurs within 90 days of the date of the closing of any such
public or private offering.
6. MANDATORY REDEMPTION. Except as set forth in Paragraph 7
below, the Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
▇-▇
▇. ▇▇▇▇▇▇▇▇▇▇ AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to make
an offer (the "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "CHANGE OF CONTROL
PAYMENT"). Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder of Notes setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company consummates any Asset Sales, when the aggregate amount
of Excess Proceeds exceeds $15.0 million, the Company shall commence an offer to
all Holders of Notes (an "ASSET SALE OFFER") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of principal amount thereof, plus accrued and unpaid interest, if
any, thereon to the date of purchase in accordance with the procedures set forth
in the Indenture. To the extent that the aggregate principal amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company or any Restricted Subsidiary may use any remaining Excess Proceeds for
any purpose not prohibited under the Indenture. If the aggregate principal
amount of Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased on a PRO RATA
basis. Holders of the Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form titled "Option
of Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. If any Note
is to be redeemed in part only, the notice of redemption that relates to such
Note shall state the portion of the principal amount thereof to be redeemed.
A new Note in principal amount equal to the unredeemed portion thereof will
be issued in the name of the Holder thereof upon cancellation of the original
Note. On and after the redemption date, interest will cease to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder of Notes to pay any taxes and
fees required by law or permitted by the Indenture. The Company is not
required to transfer or exchange any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company is not required to transfer or exchange any Note for
a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note will
be treated as the owner of it for all purposes.
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11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Notes, any Note Guarantees or the Security Documents may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding voting as a single
class (including, without limitation, consents obtained in connection with a
purchase of, tender offer or exchange offer for the Notes), and, subject to
Sections 6.04 and 6.07 of the Indenture, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of the Indenture, the Notes, any Note Guarantees or the
Security Documents may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including, without limitation, consents obtained in connection with
the purchase of, tender offer or exchange offer for the Notes). Without the
consent of any Holder of Notes, the Indenture, the Notes, any Note Guarantees
or the Security Documents may be amended or supplemented any Note Guarantees
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or a Guarantor's obligations to Holders of the
Notes in case of a merger, transfer of assets or consolidation, to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the TIA or to add any Guarantor to guarantee the Notes. Without the
consent of the Holders of at least two-thirds in principal amount of the
Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, tender offer or exchange offer for the Notes),
no amendment or waiver to this Indenture may make any change in the
provisions of the covenants described under Sections 3.09, 4.10 and 4.14
hereof that adversely affect the rights of any Holders of Notes.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest with respect to the Notes; (ii) default
in payment when due of principal or premium, if any, on the Notes at maturity,
upon redemption or otherwise; (iii) failure by the Company or any Guarantor for
30 days after receipt of notice from the Trustee or Holders of at least 25% in
principal amount of the Notes then outstanding to comply with the provisions
described in Sections 4.07, 4.09, 4.10, 4.13, 4.14, 4.18 or 5.01 of the
Indenture; (iv) failure by the Company or any Guarantor for 60 days after notice
from the Trustee or the Holders of at least 25% in principal amount of the Notes
then outstanding to comply with its other agreements in the Indenture or the
Notes; (v) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is Guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created
after the date of the Indenture, which default (A) (i) is caused by a failure to
pay when due at final stated maturity (giving effect to any grace period related
thereto) principal of such Indebtedness (a "PAYMENT DEFAULT") or (ii) results in
the acceleration of such Indebtedness prior to its express maturity, and (B) in
each case, the principal amount of any such Indebtedness due to be paid,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $10.0 million or more; (vi) failure by the Company or
any of its Restricted Subsidiaries to pay final judgments (to the extent not
covered by insurance and as to which the insurer has not acknowledged coverage
in writing) aggregating in excess of $10.0 million, which judgments are not
paid, fully bonded, discharged or stayed within 60 days after their entry; (vii)
cer-
A-6
tain events of bankruptcy or insolvency with respect to the Company or any
Restricted Subsidiary that is a Significant Subsidiary or group of Restricted
Subsidiaries of the Company that, together, would constitute a Significant
Subsidiary; (viii) any Note Guarantee of any Subsidiary ceases to be in full
force and effect (other than in accordance with the terms of such Note
Guarantee and the Indenture) or is declared null and void and unenforceable
or found to be invalid or any Guarantor denies its liability under its Note
Guarantee (other than by reason of release of a Guarantor from its Note
Guarantee in accordance with the terms of the Indenture and the Note
Guarantee); and (ix) default by the Company or any Guarantor in the
performance of the Security Documents which adversely affects the
enforceability or the validity of the Trustee's Lien on the Collateral or
which adversely affects the condition or value of the Collateral, taken as a
whole, in any material respect, repudiation or disaffirmation by the Company
or any Guarantor or its obligations under the Security Documents or the
determination in a judicial proceeding that the Security Documents are
unenforceable or invalid against the Company or any Guarantor for any reason.
If any Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Notes may declare
all the Notes to be due and payable by notice in writing to the Company and
the Trustee specifying the respective Event of Default and that it is a
"notice of acceleration" (the "ACCELERATION NOTICE") and the same shall
become immediately due and payable. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company, all outstanding Notes will become due
and payable without further action or notice. Holders of the Notes may not
enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Notes may direct the Trustee in its exercise of any
trust or power. The Holders of a majority in aggregate principal amount of
the Notes then outstanding, by notice to the Trustee, may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture, except a continuing Default or
Event of Default in the payment of interest or Liquidated Damages, if any,
on, or principal of, the Notes. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal, interest or
Liquidated Damages, if any) if it determines that withholding notice is in
such Holders' interest. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company
is required upon becoming aware of any Default or Event of Default to deliver
to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, shall
have any liability for any obligations of the Company under the Notes, any Note
Guarantee or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes and any Note Guarantee.
15. SECURITY DOCUMENTS. In order to secure the due and punctual
payment of the principal of and interest on the Notes and all other amounts
payable by the Company and the Guarantors under
A-7
the Indenture and the Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of
the Notes and the Indenture, the Pledgors have granted Liens on the
Collateral to the Trustee for the benefit of the Trustee and the Holders of
Notes pursuant to the Indenture and the Security Documents.
Each Holder, by accepting a Note, agrees to all of the terms and
provisions of the Security Documents as the same may be amended from time to
time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture will
not be deemed for any purpose to be an impairment of the security under the
Indenture.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
the Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of the date hereof, among the Company
and the parties named on the signature pages thereof.
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture or the Registration Rights Agreement.
Requests may be made to:
ALARIS Medical Systems, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Vice President and General Counsel
A-8
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_____________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________________________________ to
transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:_____________________________
(Sign exactly as your name
appears on the face of
this Note)
Signature Guarantee.
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.14 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $
-----------
Date: Your Signature:
------------------------ ----------------------------
(Sign exactly as your name
appears on the Note)
Tax Identification No.:
--------------------
Signature Guarantee.
A-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(2)
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Note authorized officer
Principal Amount of Principal Amount of following such decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Note Custodian
------------------ --------------------- --------------------- ----------------------- ------------------
--------------------
(2) This should be included only if the Note is issued in global form.
A-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
ALARIS Medical Systems, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
HSBC Bank USA
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Issuer Services
Re: 11 5/8% SENIOR SECURED NOTES DUE 2006
Reference is hereby made to the Indenture, dated as of October 16, 2001
(the "INDENTURE"), between ALARIS Medical Systems, Inc., as issuer, and HSBC
Bank USA, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
___________________ (the "TRANSFEROR"), owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in ANNEX A hereto, in the
principal amount of $_______ in such Note[s] or interests (the "TRANSFER"), to
____________ (the "TRANSFEREE"), as further specified in ANNEX A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under
B-1
the Securities Act and, accordingly, the Transferor hereby further certifies
that (i) the Transfer is not being made to a person in the United States and
(x) at the time the buy order was originated, the Transferee was outside the
United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither such Transferor nor
any Person acting on its behalf knows that the transaction was prearranged
with a buyer in the United States, (ii) no directed selling efforts have been
made in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act, (iii) the transaction is not part of a
plan or scheme to evade the registration requirements of the Securities Act
and (iv) if the proposed transfer is being made prior to the expiration of
the Restricted Period, the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial Purchaser).
Upon consummation of the proposed Transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any State of the United
States, and accordingly the Transferor hereby further certifies that (check
one):
(a) / / such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) / / such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
Transferor hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act and
the Transfer complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported by
(1) a certificate executed by the Transferee in the form of EXHIBIT D to the
Indenture and (2) if such Transfer is in respect of a principal amount of
Notes at the time of transfer of less than $250,000, an Opinion
B-2
of Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that (1) such
Transfer is in compliance with the Securities Act and (2) such Transfer
complies with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the IAI Global Note and/or the Definitive
Notes and in the Indenture and the Securities Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BENEFICIAL INTERESTS IN THE
UNRESTRICTED GLOBAL NOTE OR IN DEFINITIVE NOTES THAT DO NOT BEAR THE PRIVATE
PLACEMENT LEGEND.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States, and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.
B-3
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-------------------------------------------
[Insert Name of Transferor]
By:
----------------------------------------
Name:
Title:
Dated: ,
B-4
FORM OF ANNEX A TO CERTIFICATE
OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) or (b)]
(a) / / Beneficial Interests in the
(i) / / 144A Global Note (CUSIP ), or
-----
(ii) / / Regulation S Global Note (CUSIP ), or
-----
(iii) / / IAI Global Note (CUSIP )
-----
(b) / / a Restricted Definitive Note.
2. After the Transfer, the Transferee will hold:
[CHECK ONE]
(a) / / Beneficial Interest in the:
(i) / / 144A Global Note (CUSIP ), or
-----
(ii) / / Regulation S Global Note (CUSIP ), or
-----
(iii) / / IAI Global Note (CUSIP ), or
-----
(iv) / / Unrestricted Global Note (CUSIP ), or
-----
(b) / / Restricted Definitive Note;
(c) / / an Unrestricted Definitive Note in accordance with the
terms of this Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
ALARIS Medical Systems, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
HSBC Bank USA
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Issuer Services
Re: 11 5/8% SENIOR SECURED NOTES DUE 2006
Reference is hereby made to the Indenture, dated as of October 16, 2001
(the "INDENTURE"), between ALARIS Medical Systems, Inc., as issuer (the
"COMPANY"), and HSBC Bank USA, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
____________ (the "OWNER") owns and proposes to exchange the Note[s]or
interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE.
In connection with the Exchange of the Owner's beneficial interest
in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for
the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance
with the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and
(iv) the beneficial interest in an Unrestricted Global Note is
being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection
C-1
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and
(iv) the Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the
United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Owner's Exchange of a Restricted Definitive Note for a
beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any
applicable blue sky securities laws of any state of the United
States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's
Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United
States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In
connection with the Exchange of the Owner's beneficial interest
in a Restricted Global Note for a Restricted Definitive Note
with an equal principal amount, the Owner hereby certifies
that the Restricted Definitive Note is being acquired for the
Owner's own account without transfer. Upon consummation of
the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in
the Private Placement
C-2
Legend printed on the Restricted Definitive Note and in the
Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's Restricted
Definitive Note for a beneficial interest in the [CHECK ONE]
/ / 144A Global Note, / / Regulation S Global Note,
/ / Global Note with an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any
state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed
on the relevant Restricted Global Note and in the Indenture
and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-------------------------------------------
[Insert Name of Transferor
By:
----------------------------------------
Name:
Title:
Dated : ,
------------- -----
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
ALARIS Medical Systems, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
HSBC Bank USA
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Issuer Services
Re: 11 5/8% SENIOR SECURED NOTES DUE 2006
Reference is hereby made to the Indenture, dated as of October 16 , 2001
(the "INDENTURE"), between ALARIS Medical Systems, Inc., as issuer, and HSBC
Bank USA, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
In connection with our proposed purchase of $__________ aggregate
principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance
D-1
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing the Definitive Note or beneficial
interest in a Global Note from us in a transaction meeting the requirements
of clauses (A) through (E) of this paragraph a notice advising such purchaser
that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect. We further understand that any subsequent
transfer by us of the Notes or beneficial interest therein acquired by us must
be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
6. We are not acquiring the Notes with a view to any distribution thereof
that would violate the Securities Act or the securities laws of any State of the
United States.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-------------------------------------------
[Insert Name of Accredited Investor]
By:
----------------------------------------
Name:
Title:
Dated: ,
D-2
EXHIBIT E
SUBSIDIARY GUARANTEE
Subject to Section 11.06 of the Indenture, each Guarantor hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Notes and
the Obligations of the Company under the Notes or under the Indenture, that: (a)
the principal of, premium, if any, interest and Liquidated Damages, if any, on
the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration, redemption or otherwise, and
interest on overdue principal, premium, if any, (to the extent permitted by law)
interest on any interest, if any, and Liquidated Damages, if any, on the Notes
and all other payment Obligations of the Company to the Holders or the Trustee
under the Indenture or under the Notes will be promptly paid in full and
performed, all in accordance with the terms thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
payment Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration,
redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately.
The obligations of the Guarantors to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture, and reference is hereby made to such Indenture for
the precise terms of this Note Guarantee. The terms of Article 11 of the
Indenture are incorporated herein by reference. This Note Guarantee is subject
to release as and to the extent provided in Section 11.04 of the Indenture.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon each Guarantor and its respective successors and
assigns to the extent set forth in the Indenture until full and final payment of
all of the Company's Obligations under the Notes and the Indenture and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This is a Note Guarantee of payment
and not a guarantee of collection.
This Note Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Note Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and the Indenture and (ii) the amount,
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if any, which would not have (A) rendered such Guarantor "insolvent" (as such
term is defined in the United States Bankruptcy Code and in the Debtor and
Creditor Law of the State of New York) or (B) left such Guarantor with
unreasonably small capital at the time its Note Guarantee of the Notes was
entered into; PROVIDED that, it will be a presumption in any lawsuit or other
proceeding in which a Guarantor is a party that the amount guaranteed
pursuant to the Note Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Guarantor, or
debtor in possession or trustee in bankruptcy of such Guarantor, otherwise
proves in such a lawsuit that the aggregate liability of the Guarantor is
limited to the amount set forth in clause (ii) above. The Indenture provides
that, in making any determination as to the solvency or sufficiency of
capital of a Guarantor in accordance with the previous sentence, the right of
such Guarantor to contribution from other Guaranteeing Subsidiaries and any
other rights such Guarantor may have, contractual or otherwise, shall be
taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
[GUARANTOR]
By:
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Name:
Title:
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