Exhibit T3C
-----------
======================================================================
AMF BOWLING WORLDWIDE, INC.
$150,000,000
13.00% SENIOR SUBORDINATED NOTES DUE 2008
----------------
INDENTURE
Dated as of __________, 2002
----------------
WILMINGTON TRUST COMPANY,
TRUSTEE
===================================================================
CROSS-REFERENCE TABLE*
Trust Indenture Indenture Section
Act Section
310 (a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ N.A.
(a)(4)................................................ N.A.
(a)(5)................................................ 7.10
(b)................................................... 7.10
(c)................................................... N.A.
311 (a)................................................... 7.11
(b)................................................... 7.11
(c)................................................... N.A.
312 (a)................................................... 2.05
(b)................................................... 12.03
(c)................................................... 12.03
313 (a)................................................... 7.06
(b)(1)................................................ 11.03
(b)(2)................................................ 7.07
(c)................................................... 7.06; 11.02
(d)................................................... 7.06
314 (a)................................................... 4.3; 12.02
(b)................................................... 11.02
(c)(1)................................................ 12.04
(c)(2)................................................ 12.04
(c)(3)................................................ N.A.
(d)................................................... 11.03, 11.04, 11.05
(e)................................................... 12.05
(f)................................................... N.A.
315 (a)................................................... 7.01
(b)................................................... 7.05, 12.02
(c)................................................... 7.01
(d)................................................... 7.01
(e)................................................... 6.11
316 (a)(last sentence).................................... 2.09
(a)(1)(A)............................................. 6.05
(a)(1)(B)............................................. 6.04
(a)(2)................................................ N.A.
(b)................................................... 6.07
(c)................................................... 2.12
317 (a)(1)................................................ 6.08
(a)(2)................................................ 6.09
(b)................................................... 2.04
318 (a)................................................... 12.01
(b)................................................... N.A.
(c)................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
-2-
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.......................................1
SECTION 1.02. OTHER DEFINITIONS................................20
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
.................................................21
SECTION 1.04. RULES OF CONSTRUCTION............................21
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING..................................22
SECTION 2.02. EXECUTION AND AUTHENTICATION.....................23
SECTION 2.03. REGISTRAR AND PAYING AGENT.......................24
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST..............24
SECTION 2.05. HOLDER LISTS.....................................25
SECTION 2.06. TRANSFER AND EXCHANGE............................25
SECTION 2.07. REPLACEMENT NOTES................................27
SECTION 2.08. OUTSTANDING NOTES................................27
SECTION 2.09. TREASURY NOTES...................................27
SECTION 2.10. TEMPORARY NOTES..................................28
SECTION 2.11. CANCELLATION.....................................28
SECTION 2.12. DEFAULTED INTEREST...............................28
SECTION 2.13. CUSIP NUMBERS....................................29
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE...............................29
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED................29
SECTION 3.03. NOTICE OF REDEMPTION.............................30
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION...................30
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE......................31
SECTION 3.06. NOTES REDEEMED IN PART...........................31
SECTION 3.07. OPTIONAL REDEMPTION..............................31
-i-
TABLE OF CONTENTS
(continued)
Page
SECTION 3.08. MANDATORY REDEMPTION.............................32
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS
PROCEEDS.........................................32
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.................................34
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY..................34
SECTION 4.03. REPORTS..........................................35
SECTION 4.04. COMPLIANCE CERTIFICATE...........................35
SECTION 4.05. TAXES............................................36
SECTION 4.06. STAY, EXTENSION AND USURY LAWS...................36
SECTION 4.07. RESTRICTED PAYMENTS..............................36
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES...........................39
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK..................................39
SECTION 4.10. ASSET SALES......................................41
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.....................43
SECTION 4.12. LIENS............................................44
SECTION 4.13. LINE OF BUSINESS.................................44
SECTION 4.14. CORPORATE EXISTENCE..............................44
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.......44
SECTION 4.16. ANTI-LAYERING....................................45
SECTION 4.17. SALE AND LEASEBACK TRANSACTIONS..................45
SECTION 4.18. LIMITATION ON ISSUANCES AND SALES OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES.................46
SECTION 4.19. PAYMENTS FOR CONSENT.............................46
SECTION 4.20. [ADDITIONAL GUARANTIES...........................46
SECTION 4.21. RATING BY RATING AGENCIES........................47
-ii-
TABLE OF CONTENTS
(continued)
Page
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.........47
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED................48
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT................................48
SECTION 6.02. ACCELERATION.....................................49
SECTION 6.03. OTHER REMEDIES...................................50
SECTION 6.04. WAIVER OF PAST DEFAULTS..........................50
SECTION 6.05. CONTROL BY MAJORITY..............................50
SECTION 6.06. LIMITATION ON SUITS..............................50
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT....51
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.......................51
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.................51
SECTION 6.10. PRIORITIES.......................................52
SECTION 6.11. UNDERTAKING FOR COSTS............................52
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE................................52
SECTION 7.02. RIGHTS OF TRUSTEE................................53
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.....................54
SECTION 7.04. TRUSTEE'S DISCLAIMER.............................54
SECTION 7.05. NOTICE OF DEFAULTS...............................55
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.......55
SECTION 7.07. COMPENSATION AND INDEMNITY.......................55
SECTION 7.08. REPLACEMENT OF TRUSTEE...........................56
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.................57
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION....................57
-iii-
TABLE OF CONTENTS
(continued)
Page
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER
................................................57
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. ......OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.......................................58
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE...................58
SECTION 8.03. COVENANT DEFEASANCE..............................58
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.......59
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS....60
SECTION 8.06. REPAYMENT TO ISSUER..............................60
SECTION 8.07. REINSTATEMENT....................................61
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES..............61
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.................62
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT..............63
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS................63
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.................63
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC..................63
ARTICLE 10.
DISCHARGE OF INDENTURE
SECTION 10.01. TERMINATION OF ISSUER'S OBLIGATIONS.............64
SECTION 10.02. APPLICATION OF TRUST MONEY......................65
SECTION 10.03. REPAYMENT TO ISSUER.............................65
SECTION 10.04. REINSTATEMENT...................................65
ARTICLE 11.
SUBORDINATION
SECTION 11.01. AGREEMENT TO SUBORDINATE........................66
SECTION 11.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY............66
-iv-
TABLE OF CONTENTS
(continued)
Page
SECTION 11.03. DEFAULT ON DESIGNATED SENIOR DEBT...............66
SECTION 11.04. ACCELERATION OF NOTES...........................67
SECTION 11.05. WHEN DISTRIBUTION MUST BE PAID OVER.............67
SECTION 11.06. NOTICE BY THE ISSUER............................68
SECTION 11.07. SUBROGATION.....................................68
SECTION 11.08. RELATIVE RIGHTS.................................68
SECTION 11.09. SUBORDINATION MAY NOT BE IMPAIRED BY
THE ISSUER......................................68
SECTION 11.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE........69
SECTION 11.11. RIGHTS OF TRUSTEE AND PAYING AGENT..............69
SECTION 11.12. AUTHORIZATION TO EFFECT SUBORDINATION...........70
SECTION 11.13. AMENDMENTS......................................70
ARTICLE 12.
GUARANTY OF NOTES
SECTION 12.01. NOTE GUARANTY...................................70
SECTION 12.02. EXECUTION AND DELIVERY OF NOTE GUARANTY.........71
SECTION 12.03. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC.,
ON CERTAIN TERMS................................72
SECTION 12.04. RELEASES FOLLOWING SALE OF ASSETS, MERGER, SALE OF
CAPITAL STOCK, ETC..............................73
SECTION 12.05. ADDITIONAL SUBSIDIARY GUARANTORS................73
SECTION 12.06. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY....73
SECTION 12.07. "TRUSTEE" TO INCLUDE PAYING AGENT...............74
SECTION 13.01. [AGREEMENT TO SUBORDINATE.......................74
SECTION 13.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY............74
SECTION 13.03. DEFAULT ON DESIGNATED SENIOR DEBT...............74
SECTION 13.04. ACCELERATION OF NOTES...........................75
SECTION 13.05. WHEN DISTRIBUTION MUST BE PAID OVER.............75
SECTION 13.06. NOTICE BY SUBSIDIARY GUARANTOR..................76
SECTION 13.07. SUBROGATION.....................................76
SECTION 13.08. RELATIVE RIGHTS.................................76
-v-
TABLE OF CONTENTS
(continued)
Page
SECTION 13.09. ...SUBORDINATION MAY NOT BE IMPAIRED BY SUBSIDIARY
GUARANTOR.......................................77
SECTION 13.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE........77
SECTION 13.11. RIGHTS OF TRUSTEE AND PAYING AGENT..............78
SECTION 13.12. AUTHORIZATION TO EFFECT SUBORDINATION...........78
SECTION 13.13. AMENDMENTS......................................78
ARTICLE 14.
MISCELLANEOUS
SECTION 14.01. TRUST INDENTURE ACT CONTROLS....................78
SECTION 14.02. NOTICES.........................................79
SECTION 14.03. ......COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES................................80
SECTION 14.04. ..........CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.......................................80
SECTION 14.06. RULES BY TRUSTEE AND AGENTS.....................81
SECTION 14.07 .....NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS......................81
SECTION 14.08. GOVERNING LAW...................................81
SECTION 14.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...81
SECTION 14.10. SUCCESSORS......................................81
SECTION 14.11. SEVERABILITY....................................81
SECTION 14.12. COUNTERPART ORIGINALS...........................82
SECTION 14.13. TABLE OF CONTENTS, HEADINGS, ETC................83
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B [FORM OF SUBSIDIARY GUARANTY]
Exhibit C FORM OF SUPPLEMENTAL INDENTURE
-vi-
INDENTURE dated as of _____________________________, 2002 between AMF
Bowling Worldwide, Inc., a Delaware corporation (the "Issuer"),
______________________________, a Delaware corporation ("AMF Guarantor 1"),
__________________, a Delaware corporation [("AMF Guarantor 2")], and Wilmington
Trust Company, a Delaware banking corporation (hereinafter, the "Trustee").
RECITALS
WHEREAS, the Issuer has previously entered into a Fourth Amended and
Restated Credit Agreement dated as of June 14, 1999 (as amended, the
"Pre-Petition Senior Credit Agreement") with a group of banks and other
financial institutions, in connection with which Citibank, N.A. acted as
administrative agent, Citicorp USA, Inc. acted as collateral agent, ▇▇▇▇▇▇▇
▇▇▇▇▇ Credit Partners L.P. and Citicorp Securities, Inc. acted as Arrangers and
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. acted as Syndication Agent, such Agreement
providing for the making of loans to, and the issuance of letters of credit for
the account of, the Issuer;
WHEREAS, on July 2, 2001, AMF Group Holdings Inc., the Issuer and certain
of the Issuer's subsidiaries (collectively, the "Debtors") filed with the Court
(such term and other capitalized terms used in these recitals without definition
having the meanings ascribed to them in Article I of this Indenture) voluntary
petitions for relief under the Bankruptcy Code, such proceedings being jointly
administered under Case No. 01-6119 (DHA) (the "Reorganization Cases");
WHEREAS, the Debtors have proposed a Plan of Reorganization that provides,
inter alia, for the holders of the claims arising in connection with the Senior
Lender Agreements (as defined in the Plan) to receive, in partial satisfaction
of the Senior Lender Claims (as defined in the Plan), Notes of the Issuer with
an aggregate stated initial principal amount of $150,000,000, all as set forth
in the Plan of Reorganization and Disclosure Statement related thereto; and
WHEREAS, the Plan of Reorganization contemplates that such Notes will be
issued pursuant to and governed by an indenture and related documentation;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Issuer, the Subsidiary Guarantors
(as defined below) and the Trustee agree as follows for the benefit of each
other, and for the equal and ratable benefit of the Holders of the 13.00% Senior
Subordinated Notes due 2008 to be initially issued hereunder pursuant to the
Plan of Reorganization (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, 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 to the extent of the fair market value of such asset where
the Indebtedness so secured is not the Indebtedness of such 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.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary that apply to such transfer or exchange.
["Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets (excluding any sale and leaseback transaction, the granting of a
Permitted Lien, and the transfer of cash and Cash Equivalents) other than sales
of inventory, licensing of intellectual property or sales of services, in each
case in the ordinary course of business, but including, however, a Receivables
Transaction (provided, however, that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Issuer and its
Restricted Subsidiaries taken as a whole will be governed by Section 4.15 and/or
Article 5 hereof and not by Section 4.10), and (ii) the issue or sale by the
Issuer or any of its Restricted Subsidiaries of Equity Interests of any of the
Issuer's Restricted Subsidiaries, in the case of either clause (i) or (ii),
whether in a single transaction or a series of related transactions for Net
Proceeds in excess of $[25.0] million. Notwithstanding anything otherwise to the
contrary, none of the following shall be deemed to be an Asset Sale: (i) a
transfer of assets by the Issuer to a Restricted Subsidiary or by a Restricted
Subsidiary to the Issuer or to another Restricted Subsidiary, (ii) an issuance
of Equity Interests by a Restricted Subsidiary to the Issuer or to another
Restricted Subsidiary, (iii) Hedging Obligations; (iv) a Restricted Payment that
is permitted by Section 4.07; (v) any sale of an Equity Interest in, or
Indebtedness or other securities of, an Unrestricted Subsidiary; (vi)
foreclosures on assets; and (vii) any transaction pursuant to the
Reorganization.]
"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 the Bankruptcy Code or any similar federal or state
law for the relief of debtors, as amended from time to time.
"Bankruptcy Code" means Title 11, U.S. Code.
-2-
"Beneficial Owner" means "beneficial owner" as such terms is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act; provided, however, that a
person shall not be deemed to have beneficial ownership of securities subject to
a stock purchase agreement, merger agreement, or similar agreement until the
consummation of the transactions contemplated by such agreement.
"Board of Directors" means the Board of Directors of the Issuer, or any
Subsidiary Guarantor or any authorized committee of the Board of Directors.
"Business Day" means any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the principal corporate trust office of the
Trustee, on which banks are authorized to close.
"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 required to be capitalized on a 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, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
["Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof), (iii) time
deposits and certificates of deposit, including eurodollar time deposits, of any
commercial bank organized in the United States having capital and surplus in
excess of $100,000,000 or a commercial bank organized under the laws of any
other country that is a member of the Organisation for Economic Co-Operation and
Development ("OECD") having total assets in excess of $100,000,000 with a
maturity date not more than one year from the date of acquisition, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (i) and (ii) above entered into
with any bank meeting the qualifications specified in clause (iii) above, (v)
direct obligations issued by any state of the United States of America or any
political subdivision of any state or any public instrumentality thereof
maturing within 90 days after the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc. (or, if at any
time neither Standard & Poor's Corporation nor ▇▇▇▇▇'▇ Investors Service, Inc.
shall be rating such obligations, then from such other nationally recognized
rating service reasonably acceptable to the Trustee), (vi) commercial paper
issued by the parent corporation of any commercial bank organized in the United
States having capital and surplus in excess of $100,000,000 or a commercial bank
organized under the laws of any other country that is a member of the OECD
having total assets in excess of $100,000,000, and commercial paper issued by
others having one of the two highest ratings obtainable from either Standard &
Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc. (or, if at any time
neither Standard & Poor's Corporation nor ▇▇▇▇▇'▇ Investors Service, Inc. shall
be
-3-
rating such obligations, then from such other nationally recognized rating
services reasonably acceptable to the Trustee) and in each case maturing within
one year after the date of acquisition, (vii) overnight bank deposits and
bankers' acceptances at any commercial bank organized in the United States
having capital and surplus in excess of $100,000,000 or a commercial bank
organized under the laws of any other country that is member of the OECD having
total assets in excess of $100,000,000, (viii) deposits available for withdrawal
on demand with commercial banks organized in the United States having capital
and surplus in excess of $50,000,000 or a commercial bank organized under the
laws of any other country that is a member of the OECD having total assets in
excess of $50,000,000 and (ix) investments in money market funds substantially
all of whose assets comprise securities of the types described in clauses (i)
through (viii).]
["Change of Control" means an event whereby (i) any Person or Group (as
such term is defined in Rule 13d-5 of the Exchange Act) of related Persons
(other than a wholly owned Restricted Subsidiary of the Issuer or the Initial
Control Group) acquires all or substantially all of the Issuer's assets; or (ii)
any Person or Group (other than a member of the Initial Control Group) acquires,
by way of merger, consolidation, other business combination or otherwise, in
excess of 50% of the total voting power entitled to vote in the election of
directors, managers, or trustees of the Issuer or such other Person surviving
the transaction; or (iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Issuer [(together with any new directors whose election by such
Board of Directors or whose nomination for election by the shareholders of the
Issuer was approved by a vote of 662/3 percent of the directors then still in
office who were either directors at the beginning of such period or whose
election for nomination was previously so approved or any new directors who were
nominated to serve on behalf of the Initial Control Group)] cease for any reason
to constitute a majority of the Board of Directors of the Issuer then in
office.]
"Commission" or "SEC" means the Securities and Exchange Commission and any
successor agency thereof.
["Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale or discontinued operations (to the extent such losses were deducted
in computing such Consolidated Net Income), plus (ii) provision for taxes based
on income or profits of such Person and its Subsidiaries for such period
(including, to the extent applicable, payments made pursuant to any tax sharing
agreements), to the extent that such provision for taxes was included in
computing such Consolidated Net Income, plus (iii) consolidated interest expense
of such Person and its Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings
(whether or not accounted for by the Issuer and its Subsidiaries as interest
expense), and net payments (if any) pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of goodwill
and other
-4-
intangibles) and other non-cash expenses of such Person and its Subsidiaries for
such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net Income, minus
(v) non-cash items increasing such Consolidated Net Income for such period, in
each case, on a consolidated basis and determined in accordance with GAAP.]
["Consolidated Interest Coverage Ratio" means, at any date, the ratio of
(i) the aggregate amount of EBITDA of the Issuer and its Restricted Subsidiaries
for the four full fiscal quarters for which financial information in respect
thereof is available immediately prior to the Transaction Date to (ii) the
aggregate amount of Consolidated Interest Expense of the Issuer and its
Restricted Subsidiaries for such period; provided, that if the Transaction Date
occurs at a time when financial information in respect of the Issuer and its
Restricted Subsidiaries is not available for four full fiscal quarters beginning
after the consummation of the Reorganization, then EBITDA and the Consolidated
Interest Expense shall be calculated for the number of full fiscal quarters
after the consummation of the Reorganization and prior to the Transaction Date
for which such financial information is available. In addition to and without
limitation of the foregoing, for purposes of this definition, "EBITDA" and
"Consolidated Interest Expense" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence (excluding
any borrowing or reborrowing under the New Credit Facility to the extent the
proceeds of such borrowing or reborrowing are used to finance the operations of
the Issuer and its Restricted Subsidiaries in the ordinary course of business
and not for capital expenditures) of any Indebtedness during the Reference
Period, (ii) the repayment of any Indebtedness during the Reference Period with
the proceeds of any Indebtedness referred to in the immediately preceding clause
(i) or the proceeds from the sale or other disposition of assets referred to in
clause (iv) below, (iii) the acquisition during the Reference Period of any
other Person which, as a result of such acquisition, becomes a Restricted
Subsidiary or a Restricted Subsidiary of a Restricted Subsidiary or the
acquisition of assets during the Reference Period from any Person which
constitutes all or substantially all of an operating unit or business of such
Person and (iv) any sale or other disposition of assets or properties outside
the ordinary course of business occurring during the Reference Period, as if
such incurrence, repayment, acquisition, sale or disposition occurred on the
first day of the Reference Period; provided, that to the extent that this
sentence requires that pro forma effect be given to an acquisition of, or an
acquisition of all or substantially all of an operating unit or business from,
any Person, such pro forma calculation shall be based upon the four full fiscal
quarters of such Person or operating unit or business for which financial
information is available immediately preceding such acquisition.]
["Consolidated Interest Expense" means, for any period, the sum of (i)
interest in respect of Indebtedness of the Issuer and its Restricted
Subsidiaries (including, without limitation, amortization of the issuance cost
of any such Indebtedness other than the Securities, original issue discount on
any such Indebtedness, the interest portion of any deferred payment obligation
in accordance with the effective interest method of accounting, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financings and the net cost associated with Interest Rate
Agreements of the Issuer and its Restricted Subsidiaries, in each case to the
extent attributable to such period) determined on a consolidated basis in
accordance with GAAP (except as set forth herein) and (ii) dividend or other
required periodic payments for such period in respect of Disqualified Stock held
by Persons other than the Issuer or a wholly owned Restricted Subsidiary.
Interest in respect of a Capital Lease Obligation
-5-
shall be deemed to accrue at an interest rate reasonably determined in good
faith by the chief financial officer or the chief accounting officer of the
Issuer to be the rate of interest implicit in such Capital Lease Obligation in
accordance with GAAP (including Statement of Financial Accounting Standards No.
13 of the Financial Accounting Standards Board). Except for purposes of the
definition of "EBITDA," in calculating "Consolidated Interest Expense" (A)
interest on Indebtedness determined on a fluctuating basis as of the Transaction
Date and which will continue to be so determined thereafter shall be deemed to
have been accrued during the Reference Period at a rate per annum equal to the
rate of interest on such Indebtedness in effect on the Transaction Date, (B) if
interest on any Indebtedness incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate
based upon a factor of a prime or similar rate shall be deemed to have been in
effect and (C) notwithstanding clause (A) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by an
Interest Rate Agreement, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreement.
Notwithstanding any of the foregoing, "Consolidated Interest Expense" shall not
include any amounts in respect of Reorganization Expenses or any amortization
thereof.]
["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 (excluding, however, the effect of the Reorganization and of any other
extraordinary transaction in connection with the issuance of the Notes, and the
consummation of the recapitalization of the Issuer in connection therewith);
provided that (i) the Net Income 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 with
respect to current or prior years Net Income (if not previously distributed or
dividended) paid in cash to the referent Person or a Restricted Subsidiary
thereof; (ii) the Net Income of any Restricted Subsidiary that is not a
Subsidiary Guarantor 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; (iii) the cumulative effect of a
change in accounting principles shall be excluded; and (iv) the Net Income (but
not loss) of any Unrestricted Subsidiary shall be excluded, whether or not
distributed to the Issuer or one of its Subsidiaries except as set forth in
(i).]
["Consolidated Net Worth" means, (A) with respect to any partnership, the
common and preferred partnership equity of such partnership and its consolidated
subsidiaries, as determined on a consolidated basis in accordance with GAAP, and
(B) with respect to any other Person as of any date, the sum of (i) the
consolidated equity of the common equity holders of such Person and its
consolidated Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of preferred equity (other than Disqualified Stock) that by its terms is
not entitled to the payment of dividends unless such dividends may be declared
and paid only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person upon
-6-
issuance of such preferred stock, less (x) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets of
a going concern business made within 12 months after the acquisition of such
business) subsequent to the date of this Indenture in the book value of any
asset owned by such Person or a consolidated Subsidiary of such Person, (y) all
investments as of such date in unconsolidated Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted Investments), plus (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.]
["Contributions" means any loans, cash advances, capital contributions,
investments or other transfers of assets for less than fair value by the Issuer
or any of its Restricted Subsidiaries to any Subsidiary or other Affiliate of
the Issuer or any of its Restricted Subsidiaries other than a Subsidiary
Guarantor, other than loans and cash advances to officers and directors made in
the ordinary course of business not to exceed [$5.0] million.]
"Court" shall mean the U.S. Bankruptcy Court for the Eastern District of
Virginia, Richmond Division, in which the Debtors' Chapter 11 Cases were jointly
administered.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 14.02 hereof or such other address as to which the
Trustee may give notice to the Issuer.
"Credit Agent" means ____________ or ______________ in its capacity as
Administrative Agent for the lenders party to the New Credit Facility, or any
successor thereto or any person otherwise appointed.
"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 Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A, that does not include the information called for by
footnote 1.
"Depository" 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
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
["Designated Senior Debt" means (i) any Indebtedness outstanding under the
New Credit Facility and (ii) any other Senior Debt the principal amount of which
is $____ million or more and that has been designated by the Issuer as
Designated Senior Debt.]
["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), 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, on or prior to the date
that is 91 days after the date on which the Notes mature.]
["EBITDA" means, for any period, the sum of Consolidated Net Income for
such period, plus, to the extent otherwise reflected in the calculation of
Consolidated Net Income, without
-7-
duplication, (i) Consolidated Interest Expense for such period, (ii) provision
for taxes, (iii) depreciation and amortization expense for such period and (iv)
to the extent not already included in (i) through (iii) above, Reorganization
Expenses and any amortization thereof, minus (v) all extraordinary gains and
non-recurring gains realized by the Issuer and its Restricted Subsidiaries (to
the extent they exceed extraordinary losses and nonrecurring losses) for such
period, all as determined on a consolidated basis in accordance with GAAP. For
purposes of calculating "Proportionate Interest", EBITDA and each of the other
terms referred to in the definition of EBITDA shall, to the extent applicable,
be deemed to relate to the Restricted Subsidiary and its Restricted
Subsidiaries.]
"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).
"Existing Indebtedness" means up to $___ million in aggregate principal
amount of Indebtedness of the Issuer and its Restricted Subsidiaries (other than
Indebtedness under the New Credit Facility plus Indebtedness subject to the
Reorganization that is not purchased pursuant to such Transactions) in existence
on the date of this Indenture until all such amounts are repaid.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
["Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations, but excluding the
amortization of deferred financing costs) and (ii) the consolidated interest
expense of such Person and its Restricted Subsidiaries that was capitalized
during such period to the extent related to Indebtedness, and (iii) any interest
expense on Indebtedness of another Person (other than such Person's Restricted
Subsidiaries) that is Guarantied by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person's Restricted
Subsidiaries (whether or not such Guaranty or Lien is called upon), but only to
the extent of the interest expense attributable to the lesser of (a) the
principal amount of such Indebtedness, or (b) the fair market value of such
asset and (iv) the product of (a) all dividend payments, whether or not in cash,
on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments to such Person or its Restricted
Subsidiaries and dividends on Equity Interests payable solely in Equity
Interests of the Issuer, 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 and its Restricted Subsidiaries,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.]
["Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Issuer or any of its Restricted Subsidiaries incurs,
-8-
assumes, Guaranties or redeems, repurchases or otherwise retires any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but 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, Guaranty or redemption, repurchase or retirement
of Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. In addition, for purposes of making the computation referred to above,
(i) acquisitions that have been made by the Issuer 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 Consolidated Cash Flow for such reference period shall be calculated
without giving effect to clause (iii) of the proviso set forth in the definition
of Consolidated Net Income, and (ii) the Consolidated Cash Flow 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.]
"Foreign Subsidiary" means any Subsidiary of the Issuer either (a) which is
organized outside of the United States of America, (b) whose principal
activities are conducted outside of the United States of America or (c) whose
only material assets are Equity Interests in Subsidiaries which are Foreign
Subsidiaries.
"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 or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 to the form of Note attached hereto as Exhibit A.
"Guaranty" means a guaranty (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.
"Guarantor Senior Debt" means Senior Debt of a Subsidiary Guarantor.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate or currency swap agreements, interest rate
or currency cap agreements, interest rate or currency collar agreements and (ii)
other agreements or arrangements designed to
-9-
protect such Person against or expose such Person to fluctuations in interest
rates and/or currency exchange rates.
"Holder" means a Person in whose name a Note is registered.
["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 banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit) 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) to the
extent of the fair market value of such asset where the Indebtedness so secured
is not the Indebtedness of such Person and, to the extent not otherwise
included, the Guaranty by such Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, to the extent such Indebtedness does not require current
payments of interest, 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. Notwithstanding anything in this Indenture to the contrary,
Hedging Obligations shall not constitute Indebtedness, except to the extent they
appear on the balance sheet of the Issuer.]
"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 Control Group" means any Person or Group which immediately after
the consummation of the Reorganization beneficially owns at least 10% of the
outstanding common stock of the Issuer, [unless such Person or Group shall be
deemed to be an "adverse party." Any such Person or Group (other than members of
the AMF Creditors' Committee on or prior to______, 2002) shall be deemed to be
an "adverse party" if the Issuer's Board of Directors determines, within 90 days
after the date on which the Notes are authenticated, after reasonable inquiry
and investigation, including consultation with such persons as the Board of
Directors shall deem appropriate, that if a Change of Control event were to be
triggered by such Person or Group (assuming that such Person or Group were not a
member of the Initial Control Group) that such Change of Control would be
reasonably likely to cause a material adverse impact (including, but not limited
to, impairment of relationships with customers, impairment of the Issuer's
ability to maintain its competitive position, impairment of the Issuer's ability
to retain key employees or maintain harmonious relations between labor and
management or impairment of the Issuer's business reputation or ability to deal
with governmental agencies) on the business or prospects of the Issuer or would
be reasonably likely to adversely affect the trading value of the Notes.]]
"Insolvency or Liquidation Proceedings" means (i) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding,
-10-
relative to the Issuer or to the creditors of the Issuer, as such, or to the
assets of the Issuer, or (ii) any liquidation, dissolution, reorganization or
winding up of the Issuer, whether voluntary or involuntary and involving
insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors
or any other marshalling of assets and liabilities of the Issuer.
["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 Guaranties of Indebtedness or other obligations),
advances or capital contributions (excluding 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 items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Issuer or any Restricted Subsidiary of
the Issuer sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Issuer such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Issuer or another Restricted Subsidiary, the Issuer shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of
Section 4.07 hereof. A provision in an agreement relating to the purchase or
sale of any of the Issuer's or its Restricted Subsidiaries' assets containing an
"earn out" or providing for an adjustment to the purchase or sale price based on
a financial statement relating to the assets purchased or sold shall not be
deemed to be an "Investment."]
"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
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
["Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (or loss
in the case of (a)), together with any related provision for taxes [(including
pursuant to the Tax Sharing Agreement)] on such gain (or loss in the case of
(a)), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions and losses)
or (b) the disposition of any securities other than Cash Equivalents by such
Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries and (ii) any
extraordinary or nonrecurring gain (or loss), together with any related
provision for taxes on such extraordinary or nonrecurring gain (or loss),
excluding charges related to hyper-inflationary accounting pursuant to FASB 52
and interpretations by the Commission thereof.]
-11-
"Net Proceeds" means the aggregate cash proceeds received by the Issuer 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, consent fees to facilitate such Asset Sale and
sales commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"New Credit Facility" means that certain [Exit Financing Credit] Facility,
to be entered into, by and among the Issuer and _________________________, as
Credit Agent, providing for up to $____ million of borrowings, including any
related notes, guaranties, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time, and after the
Credit Agent has acknowledged in writing that the New Credit Facility has been
terminated and all then outstanding Indebtedness and obligations thereunder with
respect thereto have been repaid in full in cash and discharged, any successors
to or replacements of such New Credit Facility (as designated by the Board of
Directors as evidenced by a resolution), as such successors or replacements may
be amended, modified, renewed, refunded, replaced or refinanced from time to
time.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Issuer
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default of 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 Issuer 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.
"Note Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, expenses, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"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 Senior Vice President or Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Issuer
by one Officer of the Issuer, who may be the Chief Executive Officer, the Chief
Financial Officer or the Treasurer of the Issuer, that meets the requirements of
Section 14.05 hereof.
-12-
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 14.05 hereof.
The counsel may be an employee of or counsel to the Issuer, any Subsidiary of
the Issuer or the Trustee.
"Pari Passu Debt" means any Indebtedness of the Issuer or any of its
Restricted Subsidiaries which, by its terms is pari passu in right of payment to
the Notes.
"Participant" means, with respect to the Depositary, a Person who has an
account with the Depositary.
"payment in full" (together with any correlative phrases e.g. "paid in
full" and "pay in full") means (i) with respect to any Senior Debt other than
Senior Debt under or in respect of the New Credit Facility, payment in full
thereof or due provision for payment thereof (x) in accordance with the terms of
the agreement or instrument pursuant to which such Senior Debt was issued or is
governed or (y) otherwise to the reasonable satisfaction of the holders of such
Senior Debt, which shall include, in any Insolvency or Liquidation Proceeding,
approval by such holders individually or as a class, of the provision for
payment thereof, and (ii) with respect to Senior Debt under or in respect of the
New Credit Facility, payment in full thereof in cash or Cash Equivalents.
"Permitted Business" means (i) the operation, management, franchising and
ownership or renting of bowling centers, (ii) the manufacture and distribution
of bowling, and bowling center related, products and equipment, billiards
products and equipment and ownership and operation of golf centers and
activities related thereto, (iii) ownership of companies engaged in such
businesses and (iv) other businesses engaged in by the Issuer and its Restricted
Subsidiaries on the date of this Indenture and similar lines of businesses to
those engaged in by the Issuer on the date of this Indenture, including, but not
limited to, the manufacture and distribution of plastics and related products.
["Permitted Investments" means (a) any Investment in the Issuer or in a
Wholly Owned Restricted Subsidiary of the Issuer; (b) any Investment in Cash
Equivalents; (c) any Investment by the Issuer or any Restricted Subsidiary of
the Issuer in a Person, if as a result of such Investment (i) such Person
becomes a Wholly Owned Restricted Subsidiary of the Issuer or such Restricted
Subsidiary is engaged in a Permitted Business or (ii) 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 Issuer or a Restricted
Subsidiary of the Issuer; (d) [any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made in compliance with
Section 4.10 hereof]; (e) any Investment to the extent made in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the Issuer or a
Subsidiary Guarantor; (f) other Investments in any Person having an aggregate
fair market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (f) that are at the time
outstanding, not to exceed the sum of (A) [$25.0] million, and (B) the aggregate
net cash proceeds (or non-cash proceeds when converted into cash) received by
the Issuer and its Restricted Subsidiaries from the sale or disposition of
investments existing as of the date of this Indenture or made pursuant to this
clause (f); (g) securities received in connection with any good faith settlement
or Insolvency or Liquidation Proceeding; (h) Hedging Obligations entered into in
-13-
the ordinary course of business in connection with the operation of the business
of the Issuer and its Restricted Subsidiaries or as required by any Indebtedness
issued in compliance with this Indenture; (i) prepaid expenses and loans or
advances to employees and similar items in the ordinary course of business; (j)
endorsements of negotiable instruments and other similar negotiable documents;
(k) transactions with Affiliates as permitted under this Indenture; (1)
Investments outstanding as of the date of this Indenture, and (m) additional
Investments in, including Contributions to, one or more Foreign Subsidiaries,
provided that the maximum amount of such Investments outstanding at any one time
does not exceed [$50.0] million, plus the cash dividends and distributions
received by the Issuer and its Restricted Subsidiaries with respect to
Investments pursuant to this clause (m).]
"Permitted Liens" means (i) Liens securing Indebtedness under the New
Credit Facility; (ii) Liens in favor of the Issuer or any Subsidiary; (iii)
Liens on property of a Person existing at the time such Person is merged into or
consolidated with the Issuer or any Subsidiary of the Issuer; provided that such
Liens do not extend to any assets other than those of the Person merged into or
consolidated with the Issuer; (iv) Liens on property existing at the time of
acquisition thereof by the Issuer or any Subsidiary of the Issuer; (v) Liens to
secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business; (vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (v) of Section 4.09 hereof covering only the
assets acquired with such Indebtedness; (vii) Liens existing on the date of this
Indenture; (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 on assets of
Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted
Subsidiaries; (x) Liens incurred in the ordinary course of business including,
without limitation, judgment and attachment liens, of the Issuer or any
Subsidiary of the Issuer with respect to obligations that do not exceed [$25.0]
million at any one time outstanding and that are not incurred in connection with
the borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business); (xi) Liens in favor of the Trustee;
(xii) Liens on Receivables in connection with Receivables Transaction; (xiii)
Liens incurred in connection with Permitted Refinancing Indebtedness, but only
if such Liens extend to no more assets than the Liens securing the Indebtedness
being refinanced; (xiv) Liens securing Senior Debt; (xv) statutory Liens of
landlords and carriers', warehousemen's, mechanics', suppliers', materialmen's,
repairmen's, or other like Liens (including contractual landlords' liens)
arising in the ordinary course of business and with respect to amounts not yet
delinquent or being contested in good faith by appropriate proceedings, if a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor; (xvi) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (xvii)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (xviii) Liens to secure Indebtedness of any
Restricted Subsidiary, that is a Foreign Subsidiary provided that such
Indebtedness is used by such Restricted Subsidiary to finance operations of such
Foreign Subsidiary outside the United States and Canada; (xix)
-14-
easements, rights-of-way, restrictions, minor defects or irregularities in title
and other similar charges or encumbrances not interfering in any material
respect with the business of the Issuer or any of its Subsidiaries; and (xx)
Liens arising from filing Uniform Commercial Code financing statements regarding
leases (other than true leases and true consignments).
"Permitted Refinancing Indebtedness" means any Indebtedness of the Issuer
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Issuer or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus prepayment premium and accrued interest
on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date later than 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 extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded 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 extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by
the Issuer or by the Restricted Subsidiary which is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Plan of Reorganization" or "Plan" means the Debtors' Second Amended Joint
Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated November
6, 2001, as the same may be further amended or modified from time to time, and
approved by the Court on_ __, 2001, pursuant to which this Indenture is being
entered into.
"Public Equity Offering" means a public offering of Equity Interests (other
than Disqualified Stock) of the Issuer to the extent the net proceeds thereof
are contributed to the Issuer as a capital contribution, that results in the net
proceeds to the Issuer of at least $[25.0] million.
"Receivables" means, with respect to any Person or entity, all of the
following property and interests in property of such Person or entity, whether
now existing or existing in the future or hereafter acquired or arising: (i)
accounts, (ii) accounts receivable incurred in the ordinary course of business,
including without limitation, all rights to payment created by or arising from
sales of goods, leases of goods or the rendition of services no matter how
evidenced, whether or not earned by performance, (iii) all rights to any goods
or merchandise represented by any of the foregoing after creation of the
foregoing, including, without limitation, returned or repossessed goods, (iv)
all reserves and credit balances with respect to any such accounts receivable or
account debtors, (v) all letters of credit, security, or guarantees for any of
the foregoing, (vi) all
-15-
insurance policies or reports relating to any of the foregoing, (vii) all
collection or deposit accounts relating to any of the foregoing, (viii) all
proceeds of the foregoing and (ix) all books and records relating to any of the
foregoing.
"Receivables Subsidiary" means an Unrestricted Subsidiary exclusively
engaged in Receivables Transactions and activities related thereto.
"Receivables Transaction" means (i) the sale or other disposition to a
third party of Receivables or an interest therein, or (ii) the sale or other
disposition of Receivables or an interest therein to a Receivables Subsidiary
followed by a financing transaction in connection with such sale or disposition
of such Receivables (whether such financing transaction is effected by such
Receivables Subsidiary or by a third party to whom such Receivables Subsidiary
sells such Receivables or interests therein); provided that in each of the
foregoing, the Issuer or their Restricted Subsidiaries receive at least [80%] of
the aggregate principal amount of any Receivables financed in such transaction.
"Reference Period" means, with respect to the Company and its Restricted
Subsidiaries, the period commencing on the first day of the four full fiscal
quarters immediately preceding the Transaction Date for which financial
information in respect thereof is available through and including the
Transaction Date; provided, however, that if the Transaction Date occurs at a
time when the financial information in respect of the Company and its Restricted
Subsidiaries is not available for four full fiscal quarters beginning after the
consummation of the Reorganization, then the Reference Period shall mean the
period commencing on the first day of the first full fiscal quarter after the
consummation of the Reorganization for which such financial information is
available through and including the Transaction Date.
"Reorganization" means the transactions consummated pursuant to the Plan.
["Reorganization Expenses" means, without duplication, (i) all legal,
financial advisory, underwriting, accounting, printing, reproduction and other
fees and expenses incurred by the Issuer and its Subsidiaries which are directly
attributable to the Reorganization, (ii) all debt issuance and other similar
costs and expenses associated with the Reorganization (but only to the extent
that such expenses referred to in the foregoing clauses (i) and (ii) are
reflected in the consolidated financial statements of the Issuer and its
Restricted Subsidiaries after the consummation of the Reorganization and
excluding with respect thereto any use or limitation of net operating loss or
other tax attributes arising out of or in connection with the Reorganization),
and (iii) amortization of all goodwill and other intangible assets arising from
"fresh start" accounting resulting from the implementation of the
Reorganization.]
"Representative" means the trustee, agent or other similar representative
for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the corporate trust department 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
-16-
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means all Indebtedness and other Obligations specified below
payable directly or indirectly by the Issuer or any of its Restricted
Subsidiaries, whether outstanding on the date of this Indenture or thereafter
created, incurred or assumed by the Issuer or any of its Restricted
Subsidiaries: (i) the principal of, interest on and all other Obligations
related to the New Credit Facility (including without limitation all loans,
letters of credit and other extensions of credit under the New Credit Facility,
and all expenses, fees, reimbursements, indemnities and other amounts owing
pursuant to the New Credit Facility); (ii) amounts payable in respect of any
Hedging Obligations; (iii) all Indebtedness not prohibited by Section 4.09
hereof that is not expressly pari passu with or subordinated to the Notes, and
(iv) all permitted renewals, extensions, refundings or refinancings thereof.
Notwithstanding anything to the contrary in the foregoing, Senior Debt will not
include (i) Indebtedness of the Issuer or any of its Restricted Subsidiaries to
any other Restricted Subsidiaries which is not a Subsidiary Guarantor, (ii)
Indebtedness of the Issuer to the Restricted Subsidiaries, (iii) any
Indebtedness which by the express terms of the agreement or instrument creating,
evidencing or governing the same is junior or subordinate in right of payment to
any item of Senior Debt, (iv) any trade payable arising from the purchase of
goods or materials or for services obtained in the ordinary course of business,
or (v) Indebtedness incurred in violation of this Indenture. To the extent any
payment of Senior Debt (whether by or on behalf of the Issuer or any of its
Restricted Subsidiaries, as proceeds or security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside, or
required to be paid to a trustee, receiver or other similar party under any
bankruptcy, insolvency, receivership or similar law, then if such payment is
recovered by or paid over to, such trustee, receiver or other similar party, the
Senior Debt or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred. All Senior
Debt shall be and remain Senior Debt for all purposes of this Indenture, whether
or not subordinated in a bankruptcy, receivership, insolvency or similar
proceeding.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest,
accreted value or principal on any series of Indebtedness, the date on which
such payment of interest or principal is due or is scheduled to be paid in the
original documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest,
accreted value or principal prior to the date originally scheduled for the
payment or accretion thereof.
-17-
"Subsequent Reorganization Securities" means securities distributed to the
Holders of the Notes in an Insolvency or Liquidation Proceeding pursuant to a
plan of reorganization consented to by each class of the Senior Debt, but only
if all of the terms and conditions of such securities (including, without
limitation, term, tenor, interest, amortization, subordination, standstills,
covenants and defaults), are at least as favorable (and provide the same
relative benefits) to the holders of Senior Debt and to the holders of any
security distributed in such Insolvency or Liquidation Proceeding on account of
any such Senior Debt as the terms and conditions of the Notes and this Indenture
are, and provide to the holders of Senior Debt.
"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 shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by 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 of one or more
Subsidiaries of such Person (or any combination thereof).
["Subsidiary Guarantors" means AMF ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇ and those
Restricted Subsidiaries required to execute a Note Guaranty pursuant to Section
4.20 and any other Subsidiary that executes a Note Guaranty, except for a
Subsidiary Guarantor released from its guaranty under Section 12.04 hereof.]
"Tax Notes" means any notes issued pursuant to the Plan in satisfaction of
certain outstanding tax obligations of the Issuer.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇. 77aaa-77bbbb)
as amended and in effect on the date on which this Indenture is qualified under
the TIA, except as provided in Section 9.03 hereof.
"Transaction Date" means the date of the transaction giving rise to the
need to calculate the Consolidated Interest Coverage Ratio; provided, that if
such transaction is related to or in connection with any acquisition of any
Person, the Transaction Date shall be the earliest of (i) the date on which the
Issuer or any Restricted Subsidiary enters into an agreement with such Person to
effect such acquisition, (ii) the date on which the Issuer or any Restricted
Subsidiary first makes a public announcement of such acquisition or any offer or
proposal to effect such acquisition and (iii) the date on which the Issuer or
any Restricted Subsidiary first makes a filing with the SEC, the Federal Trade
Commission or the Department of Justice in connection with such acquisition;
provided, however, that if subsequent to the occurrence of an event described in
clause (i), (ii) or (iii) above the Issuer or any Restricted Subsidiary shall
materially amend the terms of such acquisition with respect to the consideration
payable by the Issuer or any Restricted Subsidiary in connection with such
acquisition, the Transaction Date shall be the earliest of (A) the date on which
the Issuer or any Restricted Subsidiary enters into an agreement with such
Person to effect such acquisition on such amended terms, (B) the date on which
the Issuer or any Restricted Subsidiary makes a public announcement of such
acquisition on such amended terms or any offer or proposal to effect such
acquisition on such amended terms and (C) the date on which the Issuer or any
Restricted Subsidiary first makes a filing disclosing such
-18-
amended terms with the SEC, the Federal Trade Commission or the Department of
Justice in connection with such acquisition and; provided, further, however,
that if such acquisition has not been consummated within six months after the
occurrence of an event described in clause (i), (ii) or (iii) above, then the
Transaction Date shall be the date of the consummation of such acquisition.
"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.
"United States Government Obligations" means direct obligations of the
United States of America, or any agency or instrumentality thereof the payment
of which the full faith and credit of the United States of America is pledged.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors of the Issuer as an Unrestricted Subsidiary pursuant to a
resolution of the Board of Directors; but only to the extent that such
Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) on the
date of such designation is not party to any agreement, contract, arrangement or
understanding with the Issuer or any Restricted Subsidiary of the Issuer unless
the terms of any such agreement, contract, arrangement or understanding are no
less favorable to such Issuer or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of such
Issuer; (c) is a Person with respect to which neither the Issuer nor any of its
Restricted Subsidiaries has any direct or indirect obligation (x) to subscribe
for additional Equity Interests or (y) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; and (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Issuer or any of
its Restricted Subsidiaries. Any such designation by the Board of Directors of
the Issuer 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 such
Issuer as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Issuer shall be in
default of such covenant). The Board of Directors of the Issuer 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 such Issuer 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, calculated on a pro forma basis as
if such designation had occurred at the beginning of the four-quarter reference
period, and (ii) no Default or Event of Default would be in existence following
such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
-19-
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each 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, by (ii) the then outstanding principal
amount of such Indebtedness.
"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 and one or more Wholly Owned Restricted Subsidiaries
of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined
Term in Section
---- ----------
"Affiliate Transaction"...................... 4.11
"AMF Guarantor 1"............................ Recitals
"AMF Guarantor 2"............................ Recitals
"Asset Sale Offer"........................... 4.10
"Change of Control Offer".................... 4.15
"Change of Control Payment Date"............. 4.15
"DTC"........................................ 2.03
"Debtors".................................... Recitals
"Event of Default"........................... 6.01
"Excess Proceeds"............................ 4.10
"incur"...................................... 4.09
"Issuer"..................................... Recitals
"Notes"...................................... Recitals
"Paying Agent"............................... 2.03
"Payment Blockage Period".................... 10.03
"Payment Default"............................ 6.01
"Payment Notice"............................. 10.03
"Permitted Consideration".................... 4.10
"Permitted Debt"............................. 4.09
"Registrar".................................. 2.03
"Reorganization Cases"....................... Recitals
"Restricted Payments"........................ 4.07
"Senior Lender Agreements"................... Recitals
-20-
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 each Issuer and Subsidiary 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:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the
singular;
(5) All references in this instrument to designated "Articles", "Sections"
and other subdivisions are to the designated Articles, Sections and
subdivisions of this instrument as originally executed. The words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
(6) provisions apply to successive events and transactions; and
(7) 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 SEC from time to time.
-21-
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, which is hereby
incorporated in and expressly made part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule, custom
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 Issuer, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Form of Note. Notes issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the text referred to in footnote 1
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnote 1 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 of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Note Custodian, at the direction of the Trustee, upon having
received written instructions, in accordance with such instructions given by the
Holder thereof as required by Section 2.06 hereof.
(c) Book-Entry Provisions. This Section 2.01(c) shall only apply to Global
Notes deposited with the Trustee, as custodian for the Depositary. Participants
and Indirect Participants shall have no rights under this Indenture with respect
to any Global Note held on their behalf by the Depositary or by the Trustee as
the custodian for the Depositary or under such Global Note, and the Depositary
shall be created by the Issuer, the Trustee and any agent of the Issuer or the
Trustee as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee or any agent of the Issuer or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Participants or Indirect
Participants, the Applicable Procedures or the operation of customary practices
of the Depositary governing the exercise of the rights of a holder of a
beneficial interest in any Global Note.
(d) Certificated Securities. The Issuer may initially issue the Notes as
Definitive Notes. However, the initial issuance of Definitive Notes does not
preclude the issuance of Global Notes upon the deposit of such Definitive Notes
with the Trustee, as custodian for the
-22-
Depositary. If at any time the Depositary notifies the Issuer that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
shall no longer be eligible under this Section 2.01, the Issuer shall appoint a
successor Depositary. If a successor Depositary is not appointed by the Issuer
within ninety (90) days after the Issuer receives such notice or becomes aware
of such ineligibility, the Issuer's election pursuant to Section 2.02 that the
Notes be represented by Notes in global form shall no longer be effective and
the Issuer will execute, and the Trustee, upon receipt of a written order signed
by an Officer of the Issuer for the authentication and delivery of Definitive
Notes, will authenticate and deliver Notes in definitive form, in authorized
denominations, in an aggregate principal amount and like terms and tenor equal
to the principal amount of the Global Notes in exchange for such Global Notes.
The Issuer may at any time and in its sole discretion determine that Global
Notes shall no longer be represented by such Global Notes. In such event, the
Issuer will execute, and the Trustee, upon receipt of an Issuer order for the
authentication and delivery of definitive Notes of the same terms and tenor,
will authenticate and deliver Notes in definitive form, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Notes in exchange for such Global Notes.
If specified by the Issuer, pursuant to this Section 2.01 with respect to
Global Notes, the Depositary may surrender Global Notes in exchange in whole or
in part for Definitive Notes of like terms and tenor on such terms as are
acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee, upon receipt of an Issuer order for the authentication
and delivery of Definitive Notes, shall authenticate and deliver, without
service charge to the Holders:
(i) to each Person specified by such Depositary a new Definitive Note of
the same tenor, in authorized denominations, in an aggregate principal amount
equal to and in exchange for such Person's beneficial interest in the Global
Note; and
(ii) to such Depositary a new Global Note in a denomination equal to the
difference, if any, between the principal amount of the surrendered Global Note
and the aggregate principal amount of the Definitive Notes delivered to Holders
pursuant to clause (i) above.
Upon the exchange of a Global Note for Definitive Notes, such Global Note
shall be cancelled by the Trustee or an agent of the Issuer or the Trustee.
Definitive Notes in exchange for a Global Note pursuant to this Section 2.01(d)
shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or an agent of the Issuer or the Trustee
in writing. The Trustee or such agent shall deliver such Note to or as directed
by the Persons in whose names such Notes are so registered or to the Depositary.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Notes for the Issuer 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.
-23-
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 Issuer signed by an Officer
thereof, authenticate Notes for original issue up to the aggregate principal
amount stated in paragraph 4 of the Notes. Such order shall specify the
principal amount of the Notes and the date on which the Notes are to be
authenticated.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Issuer 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 Issuer or
an Affiliate of the Issuer.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Issuer shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Issuer 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 Issuer may change any Paying
Agent or Registrar without notice to any Holder. The Issuer shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuer fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Issuer initially appoints The Depository Trust Company ("DTC") to act
as Depository with respect to the Global Notes.
The Issuer 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.
Not later than 10:00 a.m. Eastern Time on each due date of the principal or
interest on any of the Notes, the Issuer shall deposit with the Paying Agent
money in immediately available funds sufficient to pay such principal or
interest so becoming due. The Issuer shall require the 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 interest on the Notes, and shall notify the
Trustee of any default by the Issuer in making any such payment. While any such
default continues, the Trustee may require the Paying Agent to pay all money
held by it to the Trustee. The Issuer at any time may require the 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 Issuer or a Subsidiary) shall have no
further liability for the money. If the Issuer 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
-24-
bankruptcy or reorganization proceedings relating to the Issuer, the Trustee
shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER 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 ss. 312(a). If the Trustee is
not the Registrar, the Issuer and/or the Subsidiary Guarantors 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 Issuer and the Subsidiary Guarantors
shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
[NEED TO DISCUSS TRANSFER RESTRICTED SECURITY CONCEPT]
(a) When Notes are presented to the Registrar with a request to register
the transfer or to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; provided, however, that any Note
presented or surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Registrar and the Trustee duly executed by the Holder thereof or by his attorney
duly authorized in writing. To permit registrations of transfers and exchanges,
the Issuer shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Issuer's order or at the Registrar's request.
(b) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 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 ISSUER."
(c) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or cancelled, all Global Notes shall be returned to or
retained and cancelled 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 Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and
-25-
an endorsement shall be made on such Global Note, by the Trustee or the Notes
Custodian, at the direction of the Trustee, to reflect such reduction.
(d) General Provisions Relating to Transfers and Exchanges.
(a) To permit registrations of transfers and exchanges, the Issuer
shall execute and the Trustee shall authenticate Definitive Notes and Global
Notes upon receipt of a written order signed by an Officer of the Issuer or at
the Registrar's written request.
(b) No service charge shall be made to a holder of a beneficial
interest in a Global Note or a Holder for any registration of transfer or
exchange, but the Issuer 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 solely pursuant to Sections 3.07, 4.10, 4.15 and 9.05
hereto).
(c) The Registrar shall not be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(d) All Definitive Notes and Global Notes issued upon any registration
of transfer or exchange of Definitive Notes or Global Notes shall be the valid
obligations of the Issuer, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Definitive Notes or Global Notes
surrendered upon such registration of transfer or exchange.
(e) The Issuer shall not be required: to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of Notes
under Section 3.02 hereof and ending at the close of business on the day of such
mailing; or 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 to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(f) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuer 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 neither the Trustee, nor any Agent nor the Issuer shall
be affected by notice to the contrary.
(g) The Trustee shall authenticate Definitive Notes and Global Notes in
accordance with the provisions of Section 2.02 hereof.
(h) 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.
Each Holder of a Note agrees to indemnify the Issuer and the Trustee
against any liability that may result from the transfer, exchange or assignment
of such Holder's Note in violation of any provision of this Indenture and/or
applicable United States federal or state securities law.
-26-
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Depository Participants or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by and to do so when expressly required by terms of, this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Issuer and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Issuer shall issue and the Trustee, upon the written order of
the Issuer signed by an Officer of the Issuer, shall authenticate a
replacement Note if the requirements under the Indenture are met. If required by
the Issuer or the Trustee, an indemnity bond must be supplied by the Holder that
is sufficient in the judgment of the Trustee and the Issuer to protect the
Issuer, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Issuer may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuer 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 cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because any Issuer or Subsidiary Guarantor or
an Affiliate of any Issuer or Subsidiary 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 Issuer, 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
Issuer or any Subsidiary
-27-
Guarantor, or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Issuer or any
Subsidiary 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 a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded.
Notes so owned that have been pledged in good faith shall not be disregarded if
the pledgee establishes to the satisfaction of the Trustee, the pledgee's right
to deliver any such direction, waiver, or consent with respect to the Notes and
that the pledgee is not the Issuer, a Subsidiary Guarantor, any other obligor
upon the Notes or any Affiliate of the Issuer or of such other obligor.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Issuer may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Issuer signed by an Officer of the Issuer. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations
that the Issuer considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the
Issuer shall prepare and the Trustee shall 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 Issuer 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 them 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 cancelled Notes in accordance with its customary procedure.
Certification of destruction shall be delivered to the Issuer. The Issuer may
not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuer [or any of the Subsidiary Guarantors] 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
Issuer 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
Issuer 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 Issuer (or, upon the written request of the Issuer,
the Trustee in the name and at the expense of the Issuer) 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.
-28-
SECTION 2.13. CUSIP NUMBERS.
The Issuer in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be effected by any defect in or
omission of such numbers. The Issuer will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuer elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, the Issuer shall furnish to the Trustee, at
least [30] days but not more than [60] days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture 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.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances; provided that no part of a Note that is less
than $1,000 or a whole multiple thereof may be redeemed. 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. Notes called
for redemption become due on the date fixed for redemption. On and
after the redemption date, interest ceases to accrue on Notes or portions of
them called for redemption.
The Trustee shall promptly notify the Issuer 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 amounts 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.
-29-
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Issuer 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.
The notice shall identify the Notes to be redeemed (including
CUSIP numbers, if any) and shall state:
(a) the redemption date;
(b) the redemption price for the Notes and accrued and unpaid interest, 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 Issuer defaults in making such redemption payment,
interest on Notes called for redemption ceases 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) the CUSIP number, if any, of the Notes called for redemption and 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 Issuer's request, the Trustee shall give the notice of redemption
in the Issuer's name and at the Issuer's expense; provided, however, that the
Issuer shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information in such notice required by the
preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price plus accrued and unpaid
interest to such date. A notice of redemption may not be conditional. Upon
surrender to the Paying Agent of any of the Notes called for redemption, those
Notes shall be paid on the redemption date at the redemption price, together
with accrued and unpaid interest to such date.
-30-
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 a.m. (New York City time) on the redemption date, the
Issuer shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in
excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
If the Issuer complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Issuer to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption 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.
Unless the Issuer shall default in the payment of Notes (and accrued and
unpaid interest) called for redemption, interest on such Notes shall cease to
accrue after the redemption date.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuer shall issue
and, upon receipt of a written order signed by an Officer of the Issuer, the
Trustee shall authenticate for the Holder at the expense of the Issuer a new
Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) [The Notes shall not be redeemable at the Issuer's option prior to
_____, 200__.] Thereafter, the Notes shall be redeemable at the option of the
Issuer, in whole or in part, at any time upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on ___________ of the years indicated below:
Year Percentage
200_......................................____%
200_......................................____%
200_......................................____%
200_ and thereafter.......................____%
(b) Notwithstanding the foregoing: (i) at any time prior to__ __, 200_,
the Issuer may on any one or more occasions redeem up to 35 % of the initially
outstanding aggregate
-31-
principal amount of Notes at a redemption price equal to__% of the principal
amount thereof, plus accrued and unpaid interest, if any, thereon to the
redemption date, with the cash proceeds of one or more Public Equity Offerings;
provided that, in each case, at least 65% of the initially outstanding aggregate
principal amount of Notes remains outstanding immediately after the occurrence
of such redemption; and provided, further, that such redemption shall occur
within 45 days of the date of the closing of such Public Equity Offering; and
(ii) at any time, within ______ days after the occurrence of a Change of
Control, the Issuer may, but shall in no event be required to, redeem [100% but
not less than 100%] of the outstanding Notes at a redemption price equal to
110.00% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the redemption date.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Section 4.10 and 4.15 hereof, the Issuer 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.
If the Issuer shall be required to commence an offer to all Holders to
purchase Notes (a "Purchase Offer") pursuant to Section 4.10 hereof, an
"Asset Sale Offer," or pursuant to Section 4.15 hereof, a "Change of Control
Offer," the Issuer shall follow the procedures specified below.
The Purchase Offer shall remain open for a period of 20 Business Days
following its commencement (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the Issuer
shall purchase the principal amount of Notes required to be purchased pursuant
to Section 4.10 hereof, in the case of an Asset Sale Offer, or 4.15 hereof, in
the case of a Change of Control Offer (the "Offer Amount") or, if less than the
Offer Amount has been tendered, all Notes tendered in response to the Purchase
Offer. Payment for any Notes so purchased shall be made in the same manner as
interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest 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 shall be payable to
Holders who tender Notes pursuant to the Purchase Offer.
Upon the commencement of a Purchase Offer, the Issuer shall send, by first
class mail, a notice to the Trustee and each of the Holders, with a copy to the
Trustee. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Purchase Offer. The Purchase
Offer shall be made to all Holders. The notice, which shall govern the terms of
the Purchase Offer, shall state:
(a) that the Purchase Offer is being made pursuant to this Section 3.09
and Section 4.10 or 4.15 hereof, as applicable, and the length of time the
Purchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
-32-
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Issuer default in making such payment, any Note
accepted for payment pursuant to the Purchase Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to a Purchase
Offer may only elect to have all of such Note purchased and may not elect to
have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Purchase Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note duly completed,
or transfer by book-entry transfer, to the Issuer, a depository, if appointed by
the Issuer, or a Paying Agent at the address specified in the notice prior to
the expiration of the Offer Period;
(g) that Holders shall be entitled to withdraw their election if the
Issuer, the depository or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase, the certificate number (in the case of a
Definitive Note) and a statement that such Holder is withdrawing his election to
have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Issuer shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Issuer so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) 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 10:00 a.m. (New York City time) on each Purchase Date, the
Issuer shall irrevocably deposit with the Trustee or Paying Agent in immediately
available funds the aggregate purchase price with respect to a principal
amount of Notes equal to the Offer Amount (or if less the principal amount of
the Notes delivered prior to the expiration of the Offer Period), 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 Issuer 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 Purchase Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, (ii) deliver or cause the Paying Agent or depository, 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 Issuer in accordance with the terms of this
Section 3.09. The Issuer, the Depository or the Paying Agent, as the case may
be, shall promptly (but in any case not later than three 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 Issuer
for purchase, plus any accrued and
-33-
unpaid interest thereon, and the Issuer 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 Issuer to the Holder thereof. The Issuer 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 Purchase
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 3.02 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Issuer 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
this Indenture and in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Issuer or a Subsidiary, holds as of 10:00 a.m. New York City Time on
the due date money deposited by the Issuer in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due and the Paying Agent is not prohibited from paying such money
to Holders on such date pursuant to the terms of this Indenture.
The Issuer shall pay interest 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 on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer 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 Issuer in respect of the Notes and this Indenture may be
served. The Issuer 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 Issuer 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 Issuer 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 Issuer of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes. The Issuer shall give prompt prior 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.
-34-
The Issuer hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Issuer 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 Issuer shall furnish to the Trustee
within 30 days of the time periods specified in the Commission's rules and
regulations for filing reports, 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, as the case may be, if the Issuer 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 Issuer and its consolidated Subsidiaries and, with respect to
the annual information only, a report thereon by the Issuer's certified
independent accountant. In addition, whether or not required by the rules and
regulations of the Commission, the Issuer shall file a copy of all such
documents with the Commission for public availability (unless the Commission
will not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. The Trustee will provide, at
the Issuer's expense, copies of any such documents to any Holders that request
such copies. The Issuer will also comply with the other provisions of TIA
Section 314(a). Delivery of such documents to the Trustee is for
informational purposes only, and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely on Officers' Certificates).
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Issuer shall, so long as any of the Notes are outstanding, deliver
to the Trustee, within 120 days after the end of each fiscal year, an Officers'
Certificate which need not comply with Section 14.05 hereof, stating that a
review of the activities of the Issuer and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Issuer has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
Officer signing such certificate, that to the best of his or her knowledge the
Issuer has kept, observed, performed and fulfilled each covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (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, if any, such
Issuer is taking or proposes to take with respect thereto) and that to the best
of his or her knowledge no event has occurred and remains in existence by reason
of which payments on account of the principal of or interest, if any, on the
Notes is prohibited or if such event has occurred, a description of the
event and what action, if any, the Issuer is taking or proposes to take with
respect thereto.
(b) The Issuer 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 Issuer is taking or proposes to take with respect
thereto.
-35-
SECTION 4.05. TAXES.
The Issuer 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 of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Issuer [and each of the Subsidiary Guarantors] covenants (to the
extent that [it/they] may lawfully do so) that they 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 Issuer [and each of the Subsidiary Guarantors] (to the extent
that they may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that they 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 Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Issuer's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Issuer
(other than cash in lieu of fractional shares)) or to the direct or indirect
holders of the Issuer's or any of its Restricted Subsidiaries' Equity Interests
in its capacity as such (other than dividends or distributions payable (a) in
additional Equity Interests (other than Disqualified Stock) of the Issuer or (in
the case of a dividend, other payment or distribution on account of the Equity
Interest of a Restricted Subsidiary) of such Restricted Subsidiary or (b) to the
Issuer or its Restricted Subsidiaries); (ii) purchase, redeem or otherwise
acquire or retire for value (including without limitation, in connection with
any merger or consolidation involving the Issuer) any Equity Interests of the
Issuer or any direct or indirect parent of the Issuer; (iii) make any
payment on or with respect to, or purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness (other than the Notes) that is pari passu
with or subordinated to the Notes or the Note Guaranties, except a payment of
interest or principal at Stated Maturity; 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 and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(b) the Issuer 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
-36-
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 amount of all
other Restricted Payments made by the Issuer and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted by
clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), of
the next succeeding paragraph), is less than the sum of [(i) 50% of the
Consolidated Net Income of the Issuer for the preceding four-quarter period,
plus (ii) 100% of the aggregate net cash proceeds received by the Issuer from
the issue or sale since the date of this Indenture of Equity Interests of the
Issuer (other than Disqualified Stock) or of Disqualified Stock or debt
securities of the Issuer that have been converted into such Equity Interests
(other than Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Subsidiary of the Issuer and other than Disqualified Stock
or convertible debt securities that have been converted into Disqualified Stock)
or of capital contributions to the Issuer, plus (iii) to the extent that any
Restricted Investment that was made after the date of this Indenture is sold for
cash or otherwise liquidated or repaid for cash (less the cost of disposition,
if any), or the cash return, including, without limitation, any cash dividends
or distributions, with respect to such Restricted Investment or from any
Unrestricted Subsidiary.
The foregoing provisions shall not prohibit (i) the payment of any
dividend or distribution within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have complied with the
provisions of this Indenture; (ii) the redemption, repurchase, retirement,
defeasance or other acquisition of any Pari Passu Debt, or subordinated
Indebtedness or Equity Interests of the Issuer or any Restricted Subsidiary in
exchange for, or out of the net cash proceeds of, the substantially
concurrent sale or issuance (other than to a Restricted Subsidiary of the
Issuer) of Equity Interests of the Issuer or any Restricted Subsidiary (other
than any Disqualified Stock); provided that the amount of any such net cash
proceeds that is utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (ii) of the
preceding paragraph; (iii) the defeasance, redemption,
repurchase or other acquisition of Pari Passu Debt or subordinated Indebtedness
with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness; (iv) the payment of any dividend or distribution
by a Restricted Subsidiary of the Issuer to the holders of its Equity
Interests on a pro rata basis; (v) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Issuer, any
Restricted Subsidiary of the Issuer, or any direct or indirect parent of the
Issuer or its Restricted Subsidiaries held by any member of the Issuer's (or any
of its Restricted Subsidiaries') management pursuant to any management equity
subscription agreement or stock option agreement either (a) in effect as of the
date of this Indenture; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
[$5.0 million] in any twelve-month period and no Default or Event of Default
shall have occurred and be continuing immediately after such
transaction or (b) upon the termination of such person's employment;
(vi) additional payments in an aggregate amount not to exceed [$25.0] million;
(vii) Contributions to a Restricted Subsidiary if such Subsidiary (a) executes
and delivers to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall
Guaranty all of the Obligations of the Issuer with respect to this Indenture and
the Notes and (b) delivers to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee to the effect that such supplemental indenture, has
been duly executed and delivered by such Restricted
-37-
Subsidiary and is in compliance with the terms of this Indenture;
(viii) Investments received by the Issuer or any of their Restricted
Subsidiaries as non-cash consideration from Asset Sales to the extent
permitted by Section 4.10; (ix) any transaction pursuant to the
Reorganization; (x) transactions contemplated by the Plan;
and (xi) any Restricted Payment authorized or required under the New Credit
Facility.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if such designation would not cause a Default;
provided that in no event shall the business currently operated by any
Subsidiary Guarantor be transferred to or held by an Unrestricted
Subsidiary. For purposes of making such determination, all outstanding
Investments by the Issuer and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated shall be deemed to be
Restricted Payments at the time of such designation and shall be included for
purposes of calculating the aggregate amount of Restricted Payments
under clause (c) of first paragraph of this Section 4.07. All such outstanding
Investments shall be deemed to constitute Investments in an amount equal to the
fair market value of such Investments at the time of such designation. Such
designation shall only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Issuer or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any individual or series of related non-cash Restricted Payments
(other than in the Reorganization) shall be determined by the Board of Directors
whose resolution with respect thereto shall be delivered to the Trustee, such
determination to be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing, as applicable, if
such fair market value exceeds $10.0 million. In connection with each Restricted
Payment, the Issuer shall deliver to the Trustee, prior to or within 60 days of
the making of such Restricted Payment, 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, together with
a copy of any fairness opinion or appraisal required by this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Issuer 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 restriction on the ability of any
Restricted Subsidiary that is not a Subsidiary Guarantor to (i)(a) pay dividends
or make any other distributions to the Issuer or any of its Restricted
Subsidiaries on its Capital Stock, or (b) pay any indebtedness owed to the
Issuer or any of its Restricted Subsidiaries, (ii) make loans or advances to
the Issuer or any of its Restricted Subsidiaries or (iii) transfer
any of its properties or assets to the Issuer or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the date of this
Indenture, (b) the New Credit Facility as in effect as of the date of this
Indenture, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof,
provided that such
-38-
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive with respect
to such dividend and other payment restrictions than those contained in the New
Credit Facility as in effect on the date of this Indenture, (c) this Indenture
and the Notes, (d) applicable law, (e) any instrument governing Indebtedness
or Capital Stock of a Person acquired by the Issuer or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person and its
Subsidiaries, or the property or assets of the Person and its Subsidiaries, so
acquired, (f) by reason of customary non-assignment or net worth provisions in
leases entered into in the ordinary course of business and consistent with past
practices, (g) purchase money obligations for property acquired that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (h) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced, (i) any instrument or agreement
governing Indebtedness permitted to be incurred under this Indenture, which
is secured by a Lien permitted to be incurred under this Indenture, which
encumbrance or restriction is not applicable to any property or assets other
than the property or assets subject to such Lien, (j) restrictions
applicable to a Receivables Subsidiary arising from a Receivables
Transaction or (k) customary provisions in joint venture agreements or
other similar agreements.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Issuer shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guaranty or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and the
Issuer and the Restricted Subsidiaries shall not issue any Disqualified
Stock or shares of preferred stock; provided, however, that the Issuer
and its Subsidiaries may incur Indebtedness (including Acquired Debt and
Indebtedness under the New Credit Facility) or issue shares of Disqualified
Stock or preferred stock if:
(i) no Default or Event of Default shall have occurred and be continuing
at the time of or after giving effect to such incurrence;
(ii) in the case of the incurrence of Subordinated
Indebtedness by the Issuer, after giving effect to such incurrence
(including the pro forma application of the net proceeds therefrom), the
Consolidated Interest Coverage Ratio is greater than [2.0 to 1.0]; provided,
that so long as any Indebtedness incurred pursuant to clause (iii) of this
Section 4.09 shall remain outstanding, such Consolidated
Interest Coverage Ratio shall be greater than [2.5 to 1.0]; and
(iii) in the case of the incurrence of any Indebtedness other than
Subordinated Indebtedness by the Issuer or the incurrence of any Indebtedness by
a Restricted Subsidiary, after giving effect to such incurrence (including the
pro forma application of the net proceeds thereof), the Consolidated Interest
Coverage Ratio is greater than [2.5 to 1.0]; provided, that no incurrence of
Indebtedness shall be permitted pursuant to this clause (iii) prior to
_________,___ and
-39-
provided, further, that the aggregate principal amount of Indebtedness
permitted to be incurred pursuant to this clause (iii) shall not exceed
[$200,000,000] at any one time outstanding.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following items of Indebtedness, which shall be
permitted notwithstanding anything otherwise to the contrary (collectively,
"Permitted Debt"):
(i) the incurrence by the Issuer or any of its Subsidiaries of
Indebtedness under the New Credit Facility and the issuance of letters of credit
thereunder;
(ii) the incurrence by the Issuer and its Subsidiaries of the
Existing Indebtedness;
(iii) the incurrence by the Issuer and the Subsidiary Guarantors of
Indebtedness represented by the Notes;
(iv) the incurrence by the Issuer or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of financing
all or any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Issuer or such
Subsidiary, in an aggregate principal amount not to exceed $______ million at
any time outstanding;
(v) the incurrence by the Issuer or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance or replace Indebtedness that was permitted by this
Indenture to be incurred;
(vi) Indebtedness incurred by the Issuer or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to surety bonds
or letters of credit issued in the ordinary course of business, including,
without limitation, surety bonds or letters of credit in respect of workers'
compensation claims or self-insurance, or other Indebtedness with respect to
reimbursement type obligations regarding workers' compensation claims;
(vii) the incurrence by the Issuer or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Issuer and any of
its Restricted Subsidiaries; provided, however, that (i) if the Issuer is the
obligor on such Indebtedness and the payee is not a Subsidiary Guarantor, such
Indebtedness is expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being held by
a Person other than the Issuer or a Restricted Subsidiary and (B) any sale or
other transfer of any such Indebtedness to a Person that is not either the
Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause (vii);
(viii) the incurrence by the Issuer or any of its Subsidiaries of
Hedging Obligations;
(ix) Indebtedness incurred pursuant to the terms and provisions, and
in connection with the implementation of the Plan;
-40-
(x) the Guaranty by the Issuer or any of its Subsidiaries of
Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was
permitted by this Indenture to be incurred;
(xi) the incurrence of Non-Recourse Debt and the issuance of preferred
stock by the Issuer's Unrestricted Subsidiaries, provided, however, 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 Issuer;
(xii) the incurrence by the Issuer or any of its Subsidiaries of
additional Indebtedness, in an aggregate principal amount (or accreted value,
as applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other Indebtedness
incurred pursuant to this clause (xi), not to exceed $____ million;
(xiii) Acquired Debt of a Subsidiary in existence at the time of the
acquisition of such Subsidiary, if such Acquired Debt was not incurred in
contemplation of such acquisition and such Acquired Debt is Non-Recourse Debt
(except with respect to such acquired Subsidiary and its Subsidiaries); and
(xiv) Asset Sales in the form of Receivables Transactions.
For purposes of determining compliance with this covenant, if an item of
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (i) through (xii) above or is entitled to be incurred
pursuant to the first paragraph of this Section 4.09, the Issuer shall, in its
sole discretion, classify such item of Indebtedness in any manner that complies
with this covenant and such item of Indebtedness will be treated as having been
incurred pursuant to only one of such clauses or pursuant to the first paragraph
hereof. Neither the accrual of interest, nor the accretion of accreted value
will be deemed to be an incurrence of Indebtedness for purposes of this Section
4.09.
SECTION 4.10. ASSET SALES.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Issuer (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by an
Officers' Certificate delivered to the Trustee and a resolution of the Board of
Directors) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 80% of the consideration therefor received by the
Issuer or such Restricted Subsidiary is in the form of (A) cash, (B) assets
useful in a Permitted Business not to exceed $[50.0] million in the aggregate
over the life of the Notes, and/or (C) Equity Interests
representing a controlling interest in a Permitted Business not to exceed
$[50.0] million in the aggregate over the life of the Notes (collectively, the
"Permitted Consideration"); provided that the amount of (x) any liabilities
(as shown on the Issuer's or such Restricted Subsidiary's most recent balance
sheet), of the Issuer or any Restricted Subsidiary (other than contingent
liabilities (except to the extent reflected (or reserved for) on a balance sheet
of the Issuer or any Restricted Subsidiary as of the date prior to the date of
consummation of such transaction) and liabilities that are by their terms
subordinated to the Notes or the Note Guaranties that are assumed by the
transferee of any such assets and (y) any securities, notes or other obligations
received by the Issuer or any such
-41-
Restricted Subsidiary from such transferee that are converted within 90 days
by the Issuer or such Restricted Subsidiary into Permitted Consideration
(to the extent so received), shall be deemed to be Permitted Consideration
for purposes of this provision; and provided further, that the 80% limitation
referred to above shall not apply to any Asset Sale in which the Permitted
Consideration portion of the consideration received therefor is equal to or
greater than what the net after-tax proceeds would have been had such Asset
Sale complied with the aforementioned 80% limitation.
Within [730] days after the receipt of any Net Proceeds from an Asset
Sale, the Issuer may apply such Net Proceeds at their option, (a) to repay
Senior Debt, (b) to secured letter of credit obligations, (c) to the acquisition
of assets to be used in a Permitted Business (d) to an investment in properties
or assets that replace the properties and assets that are the subject of such
Asset Sale and/or (e) in the case of a sale of a bowling center or bowling
centers, deem such Net Proceeds to have been applied pursuant to the immediately
preceding clause (d) to the extent of any expenditures made to acquire or
construct one or more bowling centers in the general vicinity of the bowling
centers(s) sold within [730] days preceding the date of the Asset Sale. Pending
the final application of any such Net Proceeds, the Issuer may temporarily
reduce the New Credit Facility or otherwise invest such Net Proceeds in any
manner that is not prohibited by this Indenture. Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the first sentence of this
paragraph will be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $[15.0] million, the Issuer shall be required
to make an offer to all Holders of Notes (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, if any, thereon to the date of
purchase, in accordance with the procedures set forth in Section 4.15. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess
Proceeds for general corporate purposes. 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; provided
however, that the Issuer shall not be obligated to purchase Notes in
denominations other than integral multiples of $1,000 or less if the purchase
constitutes the remaining portion of the Notes. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or Guaranty with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Issuer or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by the Issuer or such Subsidiary
with an unrelated Person and (ii) the Issuer delivers to the Trustee (a) with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $[5.0] million, a
resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause
(i) above and
-42-
that such Affiliate Transaction has been approved by a majority of the
members of the Board of Directors and (b) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $[10.0] million, an opinion as to the fairness to
the Holders of such Affiliate Transaction from a financial point of view issued
by an accounting, appraisal or investment banking firm of national standing;
provided that the following shall not be deemed Affiliate Transactions:
(i) prepaid expenses and loans or advances to employees and similar items
in the ordinary course of business;
(ii) purchases (and sales) of inventory and services in the ordinary
course of business on terms that are customary in the industry or consistent
with past practices;
(iii) fees, compensation or employee benefit arrangements (including
any grants of securities under employee benefit or option plans) paid to, and
indemnity provided on behalf of, directors, officers or employees of the Issuer
or any Restricted Subsidiary of the Issuer after the date of this Indenture;
(iv) transactions pursuant to agreements in effect on the date of
original issuance of the Notes, including amendments thereto after the issue
date, provided that the terms of any such amendment are not, in the aggregate,
less favorable to the Issuer than the terms of such agreement prior to such
amendment;
(v) any employment agreement (including customary benefits thereunder)
entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary
course of business and consistent with the current market practice or the past
practice of the Issuer or such Restricted Subsidiary
(vi) transactions between or among the Issuer and/or its wholly owned
subsidiaries and Restricted Subsidiaries; and
(vii) Restricted Payments that are permitted by the provisions of
Section 4.07.
SECTION 4.12. LIENS.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist or become effective any Lien on any asset now owned or hereafter acquired
by the Issuer or that Restricted Subsidiary, or any income or profits therefrom
or assign or convey any right to receive income therefrom, except Permitted
Liens.
SECTION 4.13. LINE OF BUSINESS.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Issuer and its Restricted
Subsidiaries taken as a whole.
-43-
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 and Article 13 hereof, the Issuer and the Subsidiary
Guarantors shall do or cause to be done all things necessary to preserve and
keep in full force and effect (i) its corporate existences, and the corporate,
partnership or other existence of each of its Restricted Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Issuer or any such Restricted Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Issuer
and its Restricted Subsidiaries; provided, however, that the Issuer shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Restricted
Subsidiaries, if the Issuer shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Issuer and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes. Notwithstanding the foregoing, the
loss of licenses shall not be deemed a default under this Section 4.14 provided
that such loss is not adverse in any material respect to the Holders of the
Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Issuer 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 to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Issuer shall mail a notice to each Holder describing the
transaction or transactions that constituted the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than [the fifth Business Day preceding the
last day of the fiscal quarter] of the Issuer next following the Change of
Control date (the "Change of Control Payment Date"), pursuant to the procedures
required by this Indenture and described in such notice. The Issuer 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 as a
result of a Change of Control.
On the Change of Control Payment Date, the Issuer shall, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Issuer. 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 or less if the total
unpurchased amount of the Notes surrendered is less than $1,000. Prior to
complying with the provisions of this covenant, but in any event prior to the
Change of Control Payment Date, the Issuer shall either repay all outstanding
Senior Debt or obtain the requisite consents, if any, under all agreements
governing
-44-
outstanding Senior Debt to permit the repurchase of Notes
required by this covenant. The Issuer shall 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 in this Section 4.15 shall be
applicable notwithstanding any other provisions of this Indenture.
The Issuer shall 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 Issuer and
purchases all Senior Subordinated Notes validly tendered and not withdrawn under
such Change of Control Offer.
SECTION 4.16. ANTI-LAYERING.
The Issuer shall not incur, create, issue, assume, Guaranty or otherwise
become liable for any Indebtedness that is both (a) subordinate or junior in
right of payment to any Senior Debt and (b) senior in any respect in right of
payment to the Notes. No Subsidiary Guarantor shall incur, create, issue,
assume, Guaranty or otherwise become liable for any Indebtedness that is both
(a) subordinate or junior in right of payment to its Senior Debt and (b) senior
in right of payment to its Note Guaranty.
SECTION 4.17. SALE AND LEASEBACK TRANSACTIONS
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Issuer may enter into a sale and leaseback transaction if (i) the Issuer
could have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 4.09 and (b)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12 and (ii)
the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (in the case of gross cash proceeds in excess of
$[5.0] million as determined in good faith by the Board of Directors and set
forth in an Officers' Certificate delivered to the Trustee) of the property that
is the subject of such sale and leaseback transaction.
SECTION 4.18. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES.
The Issuer (i) shall not, and shall not permit any Restricted
Subsidiary of the Issuer to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Restricted Subsidiary of the Issuer to any Person
(other than the Issuer or a Restricted Subsidiary of the Issuer), unless (a)
such transfer, conveyance, sale, lease or other disposition is of all the
Capital Stock of such Restricted Subsidiary and (b) the cash Net Proceeds from
such transfer, conveyance, sale, lease or other disposition are applied in
accordance with Section 4.10, and (ii) shall not permit any Restricted
Subsidiary of the Issuer 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 Issuer or a Restricted Subsidiary of the
Issuer; provided, however, the foregoing restrictions shall not apply
to: (A) Investments in the entities described under clause (m) of the
definition of Permitted Investments; or (B) transfers, conveyances, sales,
leases
-45-
or other dispositions (collectively "dispositions") of any Capital Stock
of any Restricted Subsidiary that have a fair market value at the time of such
disposition of less than $[5.0] million.
SECTION 4.19. PAYMENTS FOR CONSENT.
Neither the Issuer nor any of its Restricted Subsidiaries shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.20. [ADDITIONAL GUARANTIES.
(i) If the Issuer or any of its Restricted Subsidiaries shall, after the
date of this Indenture, transfer or cause to be transferred, including by way of
any Investment, in one or a series of transactions (whether or not related), any
assets, businesses, divisions, real property or equipment having an aggregate
fair market value (as determined in good faith by the Board of Directors) in
excess of $[5.0] million to any Restricted Subsidiary that is not a Subsidiary
Guarantor or a Foreign Subsidiary, or (ii) if the Issuer or any of its
Restricted Subsidiaries shall acquire another Restricted Subsidiary other than a
Foreign Subsidiary having total assets with a fair market value (as determined
in good faith by the Board of Directors) in excess of $[5.0] million, or (iii)
if any Restricted Subsidiary other than a Foreign Subsidiary shall incur
Acquired Debt in excess of $[5.0] million, then the Issuer shall, at the time of
such transfer, acquisition or incurrence, (i) cause such transferee, acquired
Restricted Subsidiary or Restricted Subsidiary incurring Acquired Debt (if not
then a Subsidiary Guarantor) to execute a Note Guaranty of the Obligations of
the Issuer under the Notes in the form set forth in this Indenture and (ii)
deliver to the Trustee an Opinion of Counsel, in form reasonably satisfactory to
the Trustee, that such Note Guaranty is a valid, binding and enforceable
obligation of such transferee, acquired Restricted Subsidiary or Restricted
Subsidiary incurring Acquired Debt, subject to customary exceptions for
bankruptcy, fraudulent conveyance and equitable principles. Notwithstanding the
foregoing, the Issuer or any of its Restricted Subsidiaries may make a
Restricted Investment in any Wholly Owned Restricted Subsidiary of the Issuer
without compliance with this covenant provided that such Restricted Investment
is permitted by Section 4.07.]
SECTION 4.21. RATING BY RATING AGENCIES.
The Issuer will use its reasonable best efforts to obtain a rating of the
Notes from Moody's Investor's Service, Inc. or Standard & Poor's Corporation
(or, if at any time neither Moody's Investor's Service, Inc. nor Standard &
Poor's Corporation shall be rating such obligations, then from
another nationally recognized rating agency, reasonably acceptable to the
Trustee) within 90 days from the date of this Indenture.
-46-
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Issuer shall not consolidate or merge with or into (whether or not the
Issuer is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another Person unless (i) the Issuer is the
surviving corporation or the entity or the Person formed by or surviving any
such consolidation or merger (if other than the Issuer) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is organized and existing under the laws of the United States, any state
thereof or the District of Columbia; (ii) the entity or Person formed by or
surviving any such consolidation or merger (if other than such Issuer), or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made, assumes all the obligations of such Issuer
under the Notes and this Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the case
of a merger of the Issuer with or into one of its Wholly Owned Restricted
Subsidiaries, the Issuer or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Issuer), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made shall, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, (A) 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 (B) have a Consolidated
Net Worth in an amount which is not less than the Consolidated Net Worth of the
Issuer immediately prior to such transaction. Notwithstanding the foregoing
clauses (iii) and (iv), (a) any Restricted Subsidiary may consolidate with,
merge into or transfer all or part of its properties and assets to the Issuer
and (b) the Issuer may merge with an Affiliate incorporated
solely for the purpose of reincorporating the Issuer in another jurisdiction. In
the case of a sale, assignment, lease, transfer, conveyance or other
disposition of all or substantially all of the assets of the Issuer,
upon the assumption provided for in clause (ii) above, the Issuer shall be
discharged from all further liability and obligation under this Indenture.
Prior to the proposed transaction, the Issuer shall deliver to the Trustee
an Officers' Certificate and an Opinion of Counsel each of which shall state
that such consolidation, merger or transfer and such supplemental
indenture comply with this Article 5 and that all conditions precedent
herein provided for relating to such transaction have been complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Issuer in accordance with Section 5.01 hereof, the successor
Person formed by such consolidation or into or with which the Issuer is merged
or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Issuer" shall
refer instead to such successor and not to the Issuer), and
-47-
may exercise every right and power of the Issuer under this Indenture with the
same effect as if such successor Person had been named as the Issuer herein;
provided, however, that the predecessor Issuer shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the
case of a sale of all or substantially all of the Issuer's assets as provided
in the last sentence of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuer defaults for 30 days in the payment when due of interest on
the Notes (whether or not prohibited by the subordination provisions of this
Indenture);
(b) the Issuer defaults in payment when due of the principal of or
premium, if any, on the Notes (whether or not prohibited by the subordination
provisions of this Indenture);
(c) the Issuer fails to comply for 30 days with Section 4.15, or to
consummate a mandatory Asset Sale Offer pursuant to Section 4.10 or to comply
with Article 5;
(d) the Issuer fails for 60 days after notice to comply with any of its
other agreements in this Indenture or the Notes;
(e) the Issuer defaults 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 Issuer or any of its Restricted
Subsidiaries (or the payment of which is Guarantied by the Issuer or any of its
Restricted Subsidiaries) whether such Indebtedness or Guaranty now exists, or is
created after the date of this Indenture, which default (i) is caused by a
failure to pay principal at final maturity or (ii) results in the acceleration
of such Indebtedness prior to its Stated Maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness the Stated Maturity of which has been so
accelerated, aggregates $[25.0] million or more;
(f) the Issuer or any of its Significant Subsidiaries, or a group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
fails to pay final judgments aggregating in excess of $[25.0] million, which
judgments are not paid, discharged or stayed for a period of 60 days after entry
thereof;
(g) the Issuer or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
-48-
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) admits in writing its inability to pay its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Issuer or any of its Significant Subsidiaries
or any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Issuer or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Issuer or any of their Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary;
or
(iii) orders the liquidation of the Issuer or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for
60 consecutive days.
SECTION 6.02. ACCELERATION.
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 immediately; provided, however, that
in the event of an acceleration based upon an Event of Default set forth in
Section 6.01(e) above, such declaration of acceleration shall be
automatically annulled if the holders of Indebtedness which is the subject of
acceleration have rescinded their declaration of acceleration in respect of such
Indebtedness. Notwithstanding the foregoing, in the case of an Event of Default
as described in (g) and (h) of Section 6.01 hereof all outstanding Notes will
become due and payable without further action or notice. Holders of the Notes
may not enforce this Indenture or the Notes except as provided in this
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
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,
and interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
-49-
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by written notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except (i) a continuing Default or Event of
Default in the payment of the principal of or premium or interest on the Notes
(provided that the Holders of at least a majority in aggregate principal
amount of the Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration) and (ii) a default with respect to a provision that under Section
9.02 cannot be amended without the consent of each Holder affected. Upon any
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes, or that may involve the
Trustee in personal liability and may take any other action it deems
proper that is not inconsistent with any such direction received from the
Holders of the Notes. In addition, prior to taking any action hereunder, Trustee
shall be entitled to indemnification from the Holders on terms reasonably
satisfactory to Trustee in its sole discretion against all losses and expenses
arising from taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note 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 of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
-50-
(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 of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and interest on the
Notes, on or after the respective due dates expressed in the Notes (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(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuer for the whole amount of principal
of, premium and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuer
(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,
-51-
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
Second: to holders of Senior Debt to the extent required by
Article 11 or Article 13 hereof;
Third: to Holders of Notes for amounts due and unpaid on
the Notes for principal, premium and interest, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Notes for principal, premium and interest,
respectively; and
Fourth: to the Issuer 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 and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise of such rights and powers
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
-52-
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and
(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, on certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall be under a duty to examine any such certificates or opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(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;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless the Trustee was negligent in
ascertaining the pertinent facts; and
(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.
(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), (c) and (e) of this Section 7.01 and Section 7.02.
(e) No provision of this Indenture 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 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 Issuer. 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 any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee 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. The Trustee may consult with
counsel of its selection and the advice of such counselor or any Opinion of
Counsel shall be full and complete authorization and protection from liability
-53-
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 by it 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 the rights or
powers conferred upon it by this Indenture; provided that the Trustee's conduct
does not constitute willful misconduct or negligence.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuer or the Subsidiary Guarantors shall
be sufficient if signed by an Officer of any Issuer or any Subsidiary 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 against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event that is in fact such a default is
received by the Trustee, and such notice references the Notes and this
Indenture.
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 Issuer, the Subsidiary
Guarantors or any Affiliate of the Issuer or the Subsidiary Guarantors with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign, if
necessary. 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 or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes or any money
paid to the Issuer or upon the Issuer'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.
-54-
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and is known to
the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default
or Event of Default within 30 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that
withholding the notice is in the interest of the Holders of the Notes.
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 ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required
by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Issuer and filed with the SEC and each stock exchange, if
any, on which the Notes are listed in accordance with TIA ss. 313(d).
The Issuer shall promptly notify the Trustee when the Notes are listed on
any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuer shall pay to the Trustee from time to time such compensation as
the Trustee and the Issuer and shall from time to time agree in writing for its
acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer 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 Issuer shall indemnify each of the Trustee and any predecessor Trustee
against any and all losses, liabilities, damages, claims or expenses (including
reasonable attorneys' fees or taxes (other than taxes based on the income of the
Trustee)) incurred by it arising out of or in connection with the
acceptance or administration of the Indenture and the performance of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Issuer (including this Section 7.07) and defending
itself against any claim (whether asserted by the Issuer, 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
negligence, willful misconduct or bad faith. The Trustee shall notify the Issuer
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuer shall not relieve the Issuer of its obligations hereunder.
The Issuer shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Issuer shall pay the
reasonable fees and expenses of such counsel. The Issuer need not pay for any
settlement made without its consent, which consent shall not be
-55-
unreasonably withheld. The Issuer need not reimburse any expense or indemnify
against any loss liability or expense incurred by the Trustee through the
Trustee's own willful misconduct, negligence or bad faith.
The obligations of the Issuer under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the payment obligations of the Issuer in this Section, the
Trustee shall have a Lien prior to the claims of Holders of the Notes on all
money or property held or collected by the Trustee, except that held in trust to
pay principal and interest on particular Notes. Such Lien shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) 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 ss. 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 at any time and be discharged from the trust hereby
created by so notifying the Issuer in writing. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuer in writing. The Issuer may remove the
Trustee without prior notice and without liability to the Issuer by notifying
the Trustee in writing 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 Issuer 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 Issuer.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, or the
Holders of Notes of at least 10% in
-56-
principal amount of the then outstanding Notes may petition, at the expense of
the Issuer, any court of competent jurisdiction for the appointment of a
successor Trustee.
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,
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 Issuer. 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
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, if 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 Issuer'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.
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 that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
-57-
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The Issuer may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuer's exercise under Section 8.10 hereof of the option
applicable to this Section 8.02, the Issuer and the Subsidiary Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Issuer and the Subsidiary Guarantors shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, 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 their other obligations under such Notes and
this Indenture (and the Trustee, on demand of and at the expense of the Issuer
and the Subsidiary Guarantors, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder or until the Notes have been
paid in full: (a) the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.05 hereof, and as more fully set
forth in such Section, payments in respect of the principal of, premium, if any,
and interest on such Notes when such payments are due, (b) the Issuer's and the
Subsidiary Guarantors' obligations with respect to such Notes under Article 2
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Issuer's and the Subsidiary Guarantors'
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Issuer 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 Issuer's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuer and the Subsidiary Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from their obligations under the covenants set forth in Article 4
hereof except for Sections 4.01 and 4.02, and, with respect to the outstanding
Notes on and after the date the conditions set forth in Section 8.04 are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes 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 such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Issuer and the Subsidiary
-58-
Guarantors 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 shall be unaffected thereby. In addition, upon the
Issuer'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(c) through (h) 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. In order to exercise either Legal
Defeasance or Covenant Defeasance:
(a) the Issuer must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in United States dollars, non-callable United
States Government Obligations, or 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 date for payment thereof or
on the applicable redemption date, as the case may be, and the Issuer 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 Issuer
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Issuer has received
from, or there has been published by, the Internal Revenue Service a ruling or
(B) since the date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
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 times 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 Issuer
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 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 occur under Sections 6.01(g) or
6.01(h) hereof at any time in the period ending on the 91st day after the date
of deposit;
(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
-59-
Indenture) to which the Issuer or any of its Restricted Subsidiaries is a
party or by which the Issuer or any of its Restricted Subsidiaries is bound;
(f) on the 123rd day following the deposit, the trust funds shall not be
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally;
(g) the Issuer shall have delivered to the Trustee an Officers'
Certificate stating that (a) the deposit will not be subject to any rights of
the holders of Senior Debt and (b) that the deposit was not made by the Issuer
with the intent of preferring the Holders over any other creditors of the Issuer
or with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Issuer; and
(h) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and United States Government
Obligations (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 Issuer 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, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuer from time to time upon the request of the
Issuer any money or 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 __ 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 ISSUER.
The Trustee and the Paying Agent shall promptly pay to the Issuer upon
written request any excess money or securities held by them at any time.
-60-
The Trustee and the Paying Agent shall pay to the Issuer upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, however, that the Issuer shall have either caused
notice of such payment to be mailed to each Holder of the Notes entitled thereto
no less than 30 days prior to such repayment or within such period shall have
published such notice in a financial newspaper of widespread circulation
published in the City of New York including, without limitation, The Wall Street
Journal. After payment to the Issuer, Holders of the Notes entitled to the money
must look to the Issuer for payment as general creditors unless an applicable
abandoned property law designates another person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or United
States Government Obligations in accordance with Sections 8.02 or 8.03,
as the case may be, by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Issuer's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Sections 8.02 or 8.03, as the case
may be, until such time as the Trustee or Paying Agent is permitted to apply all
such money or United States Government Obligations in accordance with Sections
8.02 or 8.03, as the case may be; provided, however, that if the Issuer has made
any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
United States Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding the provisions of Section 9.02 hereof, the Issuer and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes in a manner that does not materially adversely affect any
Holder;
(c) to provide for the assumption of the Issuer's
obligations to the Holders by a successor to the Issuer pursuant
to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights
hereunder of any Holder;
(e) [to provide for the issuance of Additional Notes in
accordance with the provisions set forth in this Indenture;] or
-61-
(f) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA.
Upon the request of the Issuer accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Issuer 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, Section 11.13 or Section
13.13, the Issuer and the Trustee may amend or supplement this Indenture and the
Notes may be amended or supplemented with the consent of the Holders of at least
a majority in principal amount of the Notes including Additional Notes, if any,
then outstanding voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes[, including Additional Notes, if any,] voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes).
Upon the request of the Issuer 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 as aforesaid, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Issuer in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture directly affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuer shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Issuer 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 6.04 and 6.07 hereof, the Holders of a majority
in aggregate principal amount of the Notes, including Additional Notes, if any,
then outstanding voting as a single class may waive compliance in a particular
instance by the Issuer with any
-62-
provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes 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 of or change the fixed maturity of
any Note or alter or waive any of the provisions with respect to
the redemption of the Notes;
(c) reduce the rate of or extend the time for payment of
interest, including default interest, on any Note;
(d) make any Note payable in money other than that stated
in the Notes; or
(e) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders to receive payments of
principal of or interest on the 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 is a continuing consent by the Holder and every subsequent Holder
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 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 Issuer in exchange for all Notes may issue and the Trustee shall, upon
receipt of written instructions signed by an Officer of the Issuer, 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.
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 Issuer may not sign an amendment or supplemental
-63-
Indenture until the Board of Directors approves it. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive [indemnity
reasonably satisfactory to it] and (subject to Section 7.01 hereof) shall be
fully protected in relying upon an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
DISCHARGE OF INDENTURE
SECTION 10.01. TERMINATION OF ISSUER'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Issuer's and the Subsidiary Guarantors' obligations under Section 7.07 and 10.04
and the Issuer's, Trustee's and Paying Agent's obligations under Section 10.03
shall survive) when all outstanding Notes theretofore authenticated and issued
have been delivered (other than destroyed, lost or stolen Notes that have been
replaced or paid) to the Trustee for cancellation and the Issuer has
paid all sums payable by the Issuer hereunder. In addition, the Issuer may
terminate all of its obligations under this Indenture if:
(1) the Issuer irrevocably deposits in trust with the Trustee or at the
option of the Trustee, with a trustee reasonably satisfactory to the
Trustee and the Issuer under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee, money or United States Government
Obligations sufficient (as certified by an independent public accountant
designated by the Issuer) to pay principal and interest on the Notes to
maturity or redemption, as the case may be, and to pay all other sums payable by
them hereunder, provided that (i) the trustee of the irrevocable trust shall
have been irrevocably instructed to pay such money or the proceeds of such
United States Government Obligations to the Trustee and (ii) the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such United States Government Obligations to the payment of said
principal and interest with respect to the Notes;
(2) the Issuer and the Subsidiary Guarantors deliver to the Trustee an
Officers' Certificate stating that all conditions precedent to satisfaction and
discharge of this Indenture have been complied with, and an Opinion of Counsel
to the same effect; and
(3) no Event of Default or event (including such deposit) which, with
notice or lapse of time, or both, would become an Event of Default with respect
to the Notes shall have occurred and be continuing on the date of such deposit.
Then, this Indenture shall cease to be of further effect (except as provided
this paragraph), and the Trustee, on demand of the Issuer, shall execute
proper instruments acknowledging confirmation of and discharge under
this Indenture. The Issuer may make the deposit only if Article 10 hereof does
not prohibit such payment. However, the Issuer's obligations in Sections
2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 7.07, 7.08, 10.03 and 10.04, and the
Trustee's and Paying Agent's obligations in Section 10.03 shall survive
until the Notes are no longer outstanding. Thereafter, only the Issuer's,
Trustee's and Paying Agents' obligations in Section 10.03 shall survive.
-64-
After such irrevocable deposit made pursuant to this Section 10.01 and
satisfaction of the other conditions set forth herein, the Trustee upon request
shall acknowledge in writing the discharge of the Issuer's and the
Subsidiary Guarantors' obligations under this Indenture except for those
surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Notes, the United States Government Obligations shall be payable
as to principal or interest at least one Business Day before such payment date
in such amounts as will provide the necessary money.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 10.01 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 outstanding Notes.
SECTION 10.02. APPLICATION OF TRUST MONEY.
The Trustee or a trustee satisfactory to the Trustee and the Issuer shall
hold in trust money or United States Government Obligations deposited with it
pursuant to Section 10.01. It shall apply the deposited money and the money from
United States Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal and interest on the Notes.
SECTION 10.03. REPAYMENT TO ISSUER.
The Trustee and the Paying Agent shall promptly pay to the Issuer upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Issuer upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, however, that the Issuer shall have either caused
notice of such payment to be mailed to each Holder of the Notes entitled thereto
no less than 30 days prior to such repayment or within such period shall have
published such notice in a financial newspaper of widespread circulation
published in the City of New York including, without limitation, The Wall Street
Journal. After payment to the Issuer, Holders of the Notes entitled to the money
must look to the Issuer for payment as general creditors unless an applicable
abandoned property law designates another person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
SECTION 10.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or United
States Government Obligations in accordance with Section 10.02 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Issuer's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
10.01 until such time as the Trustee or Paying Agent is permitted to apply all
such money or United States Government Obligations in accordance with Section
10.02; provided, however,
-65-
that if the Issuer has made any payment of interest on or principal of any
Notes because of the reinstatement of its obligations, the Issuer shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or United States Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 11.
SUBORDINATION
SECTION 11.01. AGREEMENT TO SUBORDINATE.
The Issuer and each Holder of Notes by accepting a Note, agree that the
Indebtedness evidenced by the Note is subordinated in right of payment, to the
extent and in the manner provided in this Article, to the prior payment in full
of all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt.
SECTION 11.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets of the Issuer of any kind or
character, whether in cash, property or securities, to creditors in any
Insolvency or Liquidation Proceeding with respect to the Issuer, all amounts due
or to become due under or with respect to all Senior Debt shall first be paid in
full before any payment is made on account of the Notes, except that the Holders
of Notes may receive Subsequent Reorganization Securities. Upon any such
Insolvency or Liquidation Proceeding, any payment or distribution of assets of
the Issuer of any kind or character, whether in cash, property or securities
(other than Subsequent Reorganization Securities), to which the Holders of the
Notes or the Trustee would be entitled shall be paid by the Issuer or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, or by the Holders of the
Notes or by the Trustee if received by them, directly to the holders of Senior
Debt (pro rata to such holders on the basis of the amounts of Senior Debt held
by such holders) or their Representative or Representatives, as their interests
may appear, for application to the payment of the Senior Debt remaining unpaid
until all such Senior Debt has been paid in full, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
Senior Debt.
SECTION 11.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) In the event of and during the continuation of any default in the
payment of principal of, interest or premium, if any, on any Senior Debt, or any
Obligation owing from time to time under or in respect of Senior Debt, or if any
event of default (other than a payment default) with respect to any Senior Debt
shall have occurred and be continuing and shall have resulted in such Senior
Debt becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, or (b) if any event of default
other than as described in clause (a) above with respect to any Designated
Senior Debt shall have occurred and be continuing permitting the holders of such
Designated Senior Debt (or their Representative or Representatives) to declare
such Designated Senior Debt due and payable prior to the date on which it would
otherwise have become due and payable, then no payment shall be made by or on
behalf of the Issuer on account of the Notes (other than payments in the form of
Subsequent
-66-
Reorganization Securities) (x) in case of any payment or nonpayment
default specified in (a), unless and until such default shall have been cured or
waived in writing in accordance with the instruments governing such Senior Debt
or such acceleration shall have been rescinded or annulled, or (y) in case of
any nonpayment event of default specified in (b), during the period (a "Payment
Blockage Period") commencing on the date the Issuer or the Trustee receive
written notice (a "Payment Notice") of such event of default (which notice shall
be binding on the Trustee and the Holders of Notes as to the occurrence of such
a payment default or nonpayment event of default) from the Credit Agent (or
other holders of Designated Senior Debt or their Representative or
Representatives) and ending on the earliest of (A) 179 days after such date, (B)
the date, if any, on which such Designated Senior Debt to which such default
relates is paid in full or such default is cured or waived in writing in
accordance with the instruments governing such Designated Senior Debt by the
holders of such Designated Senior Debt and (C) the date on which the Trustee
receives written notice from the Credit Agent (or other holders of Designated
Senior Debt or their Representative or Representatives), as the case may be,
terminating the Payment Blockage Period. During any consecutive 360-day
period, the aggregate of all Payment Blockage Periods shall not exceed 179 days
and there shall be a period of at least 181 consecutive days in each consecutive
360-day period when no Payment Blockage Period is in effect. No event of default
that existed or was continuing with respect to the Senior Debt to which notice
commencing a Payment Blockage Period was given on the date such Payment Blockage
Period commenced shall be, or be made the basis for, the commencement of any
subsequent Payment Blockage Period unless such event of default is cured or
waived for a period of not less than 90 consecutive days.
SECTION 11.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default, the
Issuer shall promptly notify holders of Senior Debt of the acceleration.
SECTION 11.05. WHEN DISTRIBUTION MUST BE PAID OVER.
If the Trustee or any Holder of a Note receives any payment of any
Obligations with respect to the Notes at a time when such payment is prohibited
by Section 11.03 hereof, such payment shall be held by the Trustee or such
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as its
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 11, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of the Notes or
the Issuer or any other Person money or
-67-
assets to which any holders of Senior Debt shall be entitled by virtue of this
Article 11, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.
SECTION 11.06. NOTICE BY THE ISSUER.
The Issuer shall promptly notify the Trustee and the Paying Agent of any
facts known to the Issuer that would cause a payment of any Obligations with
respect to the Notes to violate this Article 11, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Debt as provided
in this Article.
SECTION 11.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of the Notes shall be subrogated (equally and ratably with all
other Pari Passu Debt) to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of the Notes have been applied to the payment
of Senior Debt. A distribution made under this Article to holders of Senior Debt
that otherwise would have been made to Holders of the Notes is not, as between
the Issuer and Holders of the Notes, a payment by the Issuer on the Notes.
SECTION 11.08. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Issuer and Holders of the Notes, the
obligations of the Issuer, which are absolute and
unconditional, to pay principal of and interest on the Notes in accordance with
their terms;
(2) affect the relative rights of Holders of the Notes and creditors of
the Issuer other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of the Notes from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of the Notes.
If the Issuer fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 11.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE ISSUER.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Issuer or any Holder or by the failure of the Issuer or any Holder to
comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt, or any of them, may, at any time and from time to time,
without the consent of or notice to the Holders of the Notes, without incurring
any liabilities to any Holder of any Notes
-68-
and without impairing or releasing the subordination and other benefits
provided in this Indenture or the obligations of the Holders of the Notes to
the holders of the Senior Debt, even if any right of reimbursement or
subrogation or other right or remedy of any Holder of Notes is affected,
impaired or extinguished thereby, do any one or more of the following:
(1) change the manner, place or terms of payment or change or extend the
time of payment of, or renew, exchange, amend, increase or alter, the terms of
any Senior Debt, any security therefor or guaranty thereof or any liability of
any obligor thereon (including any guarantor) to such holder, or any
liability incurred directly or indirectly in respect thereof or otherwise amend,
renew, exchange, extend, modify, increase or supplement in any manner any Senior
Debt or any instrument that evidences or guaranties or secures the same or any
agreement under which Senior Debt is outstanding;
(2) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Senior Debt or any liability of any obligor
thereon, to such holder, or any liability incurred directly or indirectly in
respect thereof;
(3) settle or compromise any Senior Debt or any other liability of any
obligor of the Senior Debt to such holder or any security therefor or any
liability incurred directly or indirectly in respect thereof and
apply any sums by whomsoever paid and however realized to any liability
(including, without limitation, Senior Debt) in any manner or order; and
(4) fail to take or to record or to otherwise perfect, for any reason or
for no reason, any lien or security interest securing Senior Debt by whomsoever
granted, exercise or delay in or refrain from exercising any right or remedy
against any obligor or any guarantor or any other person, elect any remedy and
otherwise deal freely with any obligor and any security for the Senior Debt or
any liability of any obligor to such holder or any liability incurred directly
or indirectly in respect thereof.
SECTION 11.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Issuer referred to in
this Article 11, the Trustee and the Holders of the Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of the Notes for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt and other Indebtedness of
the Issuer, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 11.
SECTION 11.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 11 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit
-69-
the making of any payment or distribution by the Trustee, and the Trustee and
the Paying Agent may continue to make payments on the Notes, unless the
Trustee shall have received at its Corporate Trust Office at least three
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to
violate this Article 11; and, prior to the receipt of any such written notice,
the Trustee shall be entitled to assume that no such facts exist; provided,
however, that if the Trustee shall not have received such written notice prior
to the date upon which by the terms hereof any money may become payable for
any purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Note or other Obligations under this
Indenture), then, anything herein contained to the contrary notwithstanding,
but without limiting the rights and remedies of the holders of Senior Debt or
any trustee, fiduciary or agent thereof, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the
contrary which may be received by it after such date, nor shall the Trustee be
charged with knowledge of the curing of any such default or the elimination of
the act or condition preventing any such payment unless and until the Trustee
shall have received an Officers' Certificate to such effect. Only the Issuer
or a Representative may give the notice. Nothing in this Article 11 shall
impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
SECTION 11.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes, including without limitation the timely filing of a
claim for the unpaid balance of the Notes held by such Holder in the form
required in any Insolvency or Liquidation Proceeding and causing such claim to
be approved. If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in Section 6.09 hereof
at least 30 days before the expiration of the time of such claim, the
Representatives of the Designated Senior Debt, including the Credit Agent, are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Notes.
SECTION 11.13. AMENDMENTS.
Any amendment to the provisions of this Article 11 shall require the
consent of the Holders of at least [__%] in aggregate amount of Notes then
outstanding if such amendment would adversely affect the rights of the
Holders of Notes.
ARTICLE 12.
GUARANTY OF NOTES
SECTION 12.01. NOTE GUARANTY.
Subject to Section 12.06 hereof, each of the Subsidiary Guarantors hereby,
jointly and severally, unconditionally guaranties to each Holder of a Note
authenticated and delivered by the
-70-
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 Issuer hereunder and thereunder, that: (a) the principal of, premium, if
any, interest 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, on the Notes, and all
other payment Obligations of the Issuer 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 for whatever reason the Subsidiary 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 Guaranties, and shall entitle the Holders to accelerate the
Obligations of the Subsidiary Guarantors hereunder in the same manner and to the
same extent as the Obligations of the Issuer. The Subsidiary 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 Issuer, any action to enforce the same or any other circumstance
that might otherwise constitute a legal or equitable discharge or defense of a
Subsidiary Guarantor. Each Subsidiary Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Issuer, any right to require a proceeding first
against the Issuer, protest, notice and all demands whatsoever and covenants
that this Note Guaranty 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 Issuer, the
Subsidiary Guarantors, or any Note Custodian, Trustee, liquidator or other
similar official acting in relation to either the Issuer or the Subsidiary
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guaranty, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary 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 Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the Obligations
guarantied hereby may be accelerated as provided in Article 6 for the purposes
of this Note Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article 6 hereof, such Obligations (whether or not due and payable)
shall forthwith become due and payable by the Subsidiary Guarantors for the
purpose of this Note Guaranty. The Subsidiary Guarantors shall have the right to
seek contribution from any non-paying Subsidiary Guarantor so long as the
exercise of such right does not impair the rights of the Holders under the Note
Guaranties.
-71-
SECTION 12.02. EXECUTION AND DELIVERY OF NOTE GUARANTY.
To evidence its Note Guaranty set forth in Section 12.01, each Subsidiary
Guarantor hereby agrees that a notation of such Note Guaranty substantially in
the form of Exhibit C shall be endorsed by an Officer of such Subsidiary
Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Subsidiary
Guarantor, by manual or facsimile signature, by an Officer of such Subsidiary
Guarantor.
Each Subsidiary Guarantor hereby agrees that its Note Guaranty set
forth in Section 12.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guaranty.
If an Officer whose signature is on this Indenture or on the Note Guaranty
no longer holds that office at the time the Trustee authenticates the Note on
which a Note Guaranty is endorsed, the Note Guaranty shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guaranty set forth
in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 12.03. SUBSIDIARY 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 Subsidiary Guarantor and
another Subsidiary Guarantor or a merger between a Subsidiary Guarantor and the
Issuer.
(b) Except as provided in Section 12.03(a) hereof or in a transaction
referred to in Section 12.04 hereof, no Subsidiary Guarantor may consolidate
with or merge with or into (whether or not such Subsidiary Guarantor is the
surviving Person), another corporation, Person or entity whether or not
affiliated with such Subsidiary Guarantor unless, subject to the provisions of
the following paragraph, (i) the Person formed by or surviving any such
consolidation or merger (if other than such Subsidiary Guarantor) assumes all
the obligations of such Subsidiary Guarantor pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee, under
the Notes and the Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; (iii) the Issuer would be
permitted by virtue of the Issuer's pro forma Fixed Charge Coverage Ratio,
immediately after giving effect to such transaction, 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. The requirements of clause (iii)
of this paragraph will not apply in the case of a consolidation with or merger
with or into any other Person if the acquisition of all of the Equity Interests
in such Person would have complied with the provisions of Sections 4.07 and 4.09
hereof.
(c) In the case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and substantially in the form of Exhibit C hereto,
of the Note Guaranty endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Subsidiary Guarantor, such successor Person shall succeed to
-72-
and be substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary Guarantor. Such successor Person thereupon
may cause to be signed any or all of the Note Guaranties to be endorsed upon all
of the Notes issuable hereunder which theretofore shall not have been signed by
the Issuer and delivered to the Trustee. All of the Note Guaranties so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Note Guaranties theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Note Guaranties had been issued at
the date of the execution hereof.
SECTION 12.04. RELEASES FOLLOWING SALE OF ASSETS,
MERGER, SALE OF CAPITAL STOCK, ETC.
In the event (a) of a sale or other disposition of all of the assets of
any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the capital stock of any Subsidiary
Guarantor, or (b) that the Issuer designates a Subsidiary Guarantor to be an
Unrestricted Subsidiary, or such Subsidiary Guarantor ceases to be a
Subsidiary of the Issuer, then such Subsidiary Guarantor (in the event of a sale
or other disposition, by way of such a merger, consolidation or otherwise, of
all of the capital stock of such Subsidiary Guarantor or any such designation)
or the entity acquiring the property (in the event of a sale or other
disposition of all of the assets of such Subsidiary Guarantor) shall be released
and relieved of any obligations under its Note Guaranty; provided that the Net
Proceeds of such sale or other disposition are applied in accordance with the
provisions of Sections 4.10 and 4.15 hereof. In the case of a sale,
assignment, lease, transfer, conveyance or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor, upon the assumption
provided for in clause (i) of Section 12.03(b) hereof such Subsidiary
Guarantor shall be discharged from all further liability and obligation under
the Indenture. Upon delivery by the Issuer 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 Subsidiary
Guarantor from its Obligation under its Note Guaranty. Any Subsidiary Guarantor
not released from its Obligations under its Note Guaranty shall remain liable
for the full amount of principal of, premium, if any, interest, if any, on the
Notes and for the other Obligations of such Subsidiary Guarantor under
the Indenture as provided in this Article 12.
SECTION 12.05. ADDITIONAL SUBSIDIARY GUARANTORS.
Any Person that was not a Subsidiary Guarantor on the date of this
Indenture may become a Subsidiary Guarantor by executing and delivering to the
Trustee (a) a supplemental indenture in substantially the form of Exhibit C, 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 12.06. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
For purposes hereof, each Subsidiary Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Issuer under the Notes and this Indenture and
-73-
(ii) the amount, if any, which would not have (A) rendered such Subsidiary
Guarantor "insolvent" (as such term is defined in the Bankruptcy Code and in the
Debtor and Creditor Law of the State of New York) or (B) left such Subsidiary
Guarantor with unreasonably small capital at the time its Note Guaranty of the
Notes was entered into; provided that, it will be a presumption in any lawsuit
or other proceeding in which a Subsidiary Guarantor is a party that the amount
guaranteed pursuant to the Note Guaranty is the amount set forth in clause (i)
above unless any creditor, or representative of creditors of such Subsidiary
Guarantor, or debtor-in-possession or trustee-in-bankruptcy of the Subsidiary
Guarantor, otherwise proves in such a lawsuit that the aggregate liability of
the Subsidiary Guarantor is the amount set forth in clause (ii) above. In making
any determination as to solvency or sufficiency of capital of a Subsidiary
Guarantor in accordance with the previous sentence, the right of such Subsidiary
Guarantor to contribution from other Subsidiary Guarantors, and any other rights
such Subsidiary Guarantor may have, contractual or otherwise, shall be taken
into account.
SECTION 12.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Issuer and be then acting hereunder, the term "Trustee" as
used in this Article 12 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 12 in place of the Trustee.
ARTICLE 13.
SUBORDINATION OF NOTE GUARANTY
SECTION 13.01. [AGREEMENT TO SUBORDINATE.
The Subsidiary Guarantors agree, and each Holder by accepting
a Note agrees, that all Guaranty Obligations, shall be subordinated in right of
payment, to the extent and in the manner provided in this Article 13, to the
prior payment in full of all Guarantor Senior Debt, whether outstanding on the
date hereof or thereafter incurred and that the subordination is for the benefit
of the holders of Senior Debt.
SECTION 13.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets of the Subsidiary Guarantors of
any kind or character, whether in cash, property or securities, to creditors in
any Insolvency or Liquidation Proceeding with respect to any Subsidiary
Guarantor all amounts due or to become due under or with respect to all Senior
Debt shall first be paid in full before any payment is made on account of the
Notes, except that the Holders of Notes may receive Subsequent Reorganization
Securities. Upon any such Insolvency or Liquidation Proceeding, any payment or
distribution of assets of any Subsidiary Guarantor of any kind or character,
whether in cash, property or securities (other than Subsequent Reorganization
Securities), to which the Holders of the Notes or the Trustee would be entitled
shall be paid by the Subsidiary Guarantors or by any receiver,
trustee-in-bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, or by the Holders of the Notes or by the Trustee if
received by them, directly to the holders of Senior Debt (pro rata to such
holders on the basis of the amounts of Senior Debt held
-74-
by such holders) or their Representative or Representatives, as their
interests may appear, for application to the payment of the Senior Debt
remaining unpaid until all such Senior Debt has been paid in full, after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of Senior Debt.
SECTION 13.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) In the event of and during the continuation of any default in the
payment of principal of, interest or premium, if any, on any Senior Debt, or any
Obligation owing from time to time under or in respect of Senior Debt, or in the
event that any event of default (other than a payment default) with respect to
any Senior Debt shall have occurred and be continuing and shall have resulted in
such Senior Debt becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, or (b) if any event of
default other than as described in clause (a) above with respect to any
Designated Senior Debt shall have occurred and be continuing permitting the
holders of such Designated Senior Debt (or their Representative or
Representatives) to declare such Designated Senior Debt due and payable prior to
the date on which it would otherwise have become due and payable, then no
payment shall be made by or on behalf of any Subsidiary Guarantor on account of
the Notes (other than payments in the form of Subsequent
Reorganization Securities) (x) in case of any payment or nonpayment default
specified in (a), unless and until such default shall have been cured or waived
in writing in accordance with the instruments governing such Senior Debt or such
acceleration shall have been rescinded or annulled, or (y) in case of any
nonpayment event of default specified in (b), during the period (a "Payment
Blockage Period") commencing on the date the Subsidiary Guarantors or the
Trustee receive written notice (a "Payment Notice") of such event of default
(which notice shall be binding on the Trustee and the Holders of Notes as to the
occurrence of such a payment default or nonpayment event of default) from the
Credit Agent (or other holders of Designated Senior Debt or their Representative
or Representatives) and ending on the earliest of (A) 179 days after such date,
(B) the date, if any, on which such Designated Senior Debt to which such default
relates is paid in full or such default is cured or waived in writing in
accordance with the instruments governing such Designated Senior Debt by the
holders of such Designated Senior Debt and (C) the date on which the Trustee
receives written notice from the Credit Agent (or other holders of Designated
Senior Debt or their Representative or Representatives), as the case may be,
terminating the Payment Blockage Period. During any consecutive 360-day
period, the aggregate of all Payment Blockage Periods shall not exceed 179 days
and there shall be a period of at least 181 consecutive days in each consecutive
360-day period when no Payment Blockage Period is in effect. No event of default
which existed or was continuing with respect to the Senior Debt to which notice
commencing a Payment Blockage Period was given on the date such Payment Blockage
Period commenced shall be or be made the basis for the commencement of any
subsequent Payment Blockage Period unless such event of default is cured or
waived for a period of not less than 90 consecutive days.
SECTION 13.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default, the
Subsidiary Guarantor shall promptly notify such Representatives of Guarantor
Senior Debt of the acceleration.
-75-
SECTION 13.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of a Note receives any payment
of any Obligations with respect to the Notes at a time when such payment is
prohibited by Section 14.03 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as its
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 13, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of the Notes or
the Issuer or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article 13, except if such payment is
made as a result of the willful misconduct or gross negligence of the Trustee.
SECTION 13.06. NOTICE BY SUBSIDIARY GUARANTOR.
The Subsidiary Guarantors shall promptly notify the Trustee and the Paying
Agent of any facts known to the Subsidiary Guarantors that would cause a payment
of any Obligations with respect to the Notes to violate this Article 13, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Debt as provided in this Article 13.
SECTION 13.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of the Notes shall be subrogated (equally and ratably with all
Pari Passu Debt) to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of the Notes have been applied to the payment
of Senior Debt. A distribution made under this Article 13 to holders of
Senior Debt that otherwise would have been made to Holders of the Notes is not,
as between the Subsidiary Guarantors and Holders of the Notes, a payment by the
Subsidiary Guarantors on the Notes.
SECTION 13.08. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Issuer and Holders of the Notes, the
obligations of the Issuer, which are absolute and
unconditional, to pay principal of and interest on the Notes in accordance with
their terms;
-76-
(2) affect the relative rights of Holders of the Notes and creditors of
the Issuer other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of the Notes from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of the Notes.
If the Issuer fails because of this Article 13 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 13.09. SUBORDINATION MAY NOT BE IMPAIRED BY
SUBSIDIARY GUARANTOR.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Issuer or any Holder or by the failure of the Issuer or any Holder to
comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt, or any of them, may, at any time and from time to time,
without the consent of or notice to the Holders of the Notes, without incurring
any liabilities to any Holder of any Notes and without impairing or releasing
the subordination and other benefits provided in this Indenture or the
obligations of the Holders of the Notes to the holders of the Senior Debt, even
if any right of reimbursement or subrogation or other right or remedy of any
Holder of Notes is affected, impaired or extinguished thereby, do any one or
more of the following:
(1) change the manner, place or terms of payment or change or extend the
time of payment of, or renew, exchange, amend, increase or alter, the terms of
any Senior Debt, any security therefor or guaranty thereof or any liability of
any obligor thereon (including any guarantor) to such holder, or any
liability incurred directly or indirectly in respect thereof or otherwise amend,
renew, exchange, extend, modify, increase or supplement in any manner any Senior
Debt or any instrument that evidences or guaranties or secures the same or any
agreement under which Senior Debt is outstanding;
(2) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Senior Debt or any liability of any obligor
thereon, to such holder, or any liability incurred directly or indirectly in
respect thereof;
(3) settle or compromise any Senior Debt or any other liability of any
obligor of the Senior Debt to such holder or any security therefor or any
liability incurred directly or indirectly in respect thereof and
apply any sums by whomsoever paid and however realized to any liability
(including, without limitation, Senior Debt) in any manner or order; and
(4) fail to take or to record or to otherwise perfect, for any reason or
for no reason, any lien or security interest securing Senior Debt by whomsoever
granted, exercise or delay in or refrain from exercising any right or remedy
against any obligor or any guarantor or any other person, elect any remedy and
otherwise deal freely with any obligor and any security for the
-77-
Senior Debt or any liability of any obligor to such holder or any liability
incurred directly or indirectly in respect thereof.
SECTION 13.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Issuer referred to in
this Article 13, the Trustee and the Holders of the Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of the Notes for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt and other Indebtedness of
the Issuer, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 13.
SECTION 13.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 13 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least three Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article; and, prior to the receipt of
any such written notice, the Trustee shall be entitled to assume that no such
facts exist; provided, however, that if the Trustee shall not have received such
written notice prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of, premium, if any, or interest on any Note or other Obligations
under this Indenture), then, anything herein contained to the contrary
notwithstanding, but without limiting the rights and remedies of the
holders of Senior Debt or any trustee, fiduciary or agent thereof, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it after such date, nor
shall the Trustee be charged with knowledge of the curing of any such default or
the elimination of the act or condition preventing any such payment unless and
until the Trustee shall have received an Officers' Certificate to such effect.
Only the Issuer or a Representative may give the notice. Nothing in this
Article 13 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
SECTION 13.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 13, and appoints the Trustee to act as the
-78-
Holder's attorney-in-fact for any and all such purposes, including without
limitation the timely filing of a claim for the unpaid balance of the Notes held
by such Holder in the form required in any Insolvency or Liquidation Proceeding
and causing such claim to be approved. If the Trustee does not file a proper
proof of claim or proof of debt in the form required in any proceeding referred
to in Section 6.09 hereof at least 30 days before the expiration of the time of
such claim, the Representatives of the Designated Senior Debt, including the
Credit Agent, are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
SECTION 13.13. AMENDMENTS.
Any amendment to the provisions of this Article 13 shall require the
consent of the Holders of at least [__%] in aggregate amount of Notes then
outstanding if such amendment would adversely affect the rights of the
Holders of Notes.
ARTICLE 14.
MISCELLANEOUS
SECTION 14.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss. 318(c), the imposed duties shall control.
SECTION 14.02. NOTICES.
Any notice or communication by the Issuer, the Subsidiary Guarantors 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),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Issuer or the Subsidiary Guarantors:
AMF Bowling Worldwide, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: _______________
Attention: Chief Financial Officer
With a copy to:
McGuireWoods LLP
One ▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
-79-
If to the Trustee:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuer, the Subsidiary Guarantors 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 (5) Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier promising next Business Day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail or by overnight air courier promising next Business 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 ss. 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 Issuer mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 14.03. COMMUNICATION BY HOLDERS OF NOTES WITH
OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuer, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
-80-
SECTION 14.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuer or any of the Subsidiary
Guarantors to the Trustee to take any action under this Indenture (other than
the initial issuance of the Notes), such Issuer or Subsidiary Guarantor shall
furnish to the Trustee upon request:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 14.05
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
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 14.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 14.05. 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 ss. 314(a)(4)) shall comply with the provisions of TIA ss.
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 14.06. 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 14.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, partner, incorporator or stockholder of
the Issuer or any of their Restricted Subsidiaries, as such, shall have any
liability for any obligations of the Issuer or any Subsidiary Guarantor under
the Notes, this Indenture, the Note Guaranties or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Notes
-81-
by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
SECTION 14.08. GOVERNING LAW.
The law of the State of New York shall govern and be used to construe this
Indenture, the Notes and the Note Guaranties without giving effect to any
contrary result otherwise required by applicable conflict or choice of law
rules.
SECTION 14.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Issuer or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 14.10. SUCCESSORS.
All covenants and agreements of the Issuer and the Subsidiary
Guarantors in this Indenture, the Notes and the Note Guaranties shall bind its
successors and assigns. All covenants and agreements of the Trustee in this
Indenture shall bind its successors and assigns.
SECTION 14.11. 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
and in lieu of such invalid, illegal or unenforceable provision, a new provision
shall be inserted as similar in terms and commercial effect to such invalid,
illegal or unenforceable provision as may be possible and be valid, legal and
enforceable.
SECTION 14.12. 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.
-82-
SECTION 14.13. 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.
[The next page is the signature page]
-83-
SIGNATURES
AMF BOWLING WORLDWIDE, INC.
By:
--------------------------
Name:.
Title:
[AMF GUARANTOR 1]
By:
--------------------------
Name:
Title:
[AMF GUARANTOR 2]
By:
--------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Trustee
By:
-----------------------
Name:
Title:
EXHIBIT A
(Face of Senior Subordinated Note)
13.00% Senior Subordinated Notes due 2008
No. $
------ -------------
CUSIP NO.--------------
AMF BOWLING
WORLDWIDE, INC.
promises to pay to Cede & Co. or registered assigns, the
principal sum of Dollars on , 2008.
----- -----
Interest Payment Dates: and
------ ------
Record Dates: and
------ ------
Dated:
---------------
AMF BOWLING WORLDWIDE, INC.
By:
---------------------------
Name:
Title:
This is one of the Senior
Subordinated Notes referred to
in the within-mentioned
Indenture:
-------------------------
as Trustee
By:
----------------------
(Authorized Signatory)
EXHIBIT A-1
(Back of Senior Subordinated Note)
13.00% Senior Subordinated Notes due 2008
[Unless and until it is exchanged in whole or in part for Senior Notes in
definitive form, this Senior Note may not be transferred except as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by
the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository. Unless this certificate is presented by an
authorized representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), to the Issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as may be requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede &
Co., has an interest herein.]1
"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 2.06 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 ISSUER."
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. AMF Bowling Worldwide, Inc., a Delaware corporation, or its
successors (the "Issuer"), promises to pay interest on the principal amount
of this Note at the rate of 13.00% per annum. The Issuer will pay interest
in United States dollars (except as otherwise provided herein)
semi-annually in arrears on _____ and _____, commencing on ________, 2002,
or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes shall 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 however, that
if there is no existing Default or Event of 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 authentication. The Issuer 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
--------------------
This paragraph should be included only if the Note is issued in global form.
A-2
installments of interest (without regard to any applicable grace period) at
the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes (except
defaulted interest), if any, to the Persons who are registered Holders of
Notes at the close of business on the ________ or __________ next preceding
the Interest Payment Date, even if such Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The
Notes shall be payable as to principal, premium, if any, interest, if any,
at the office or agency of the Issuer maintained for such purpose within or
without the City and State of New York, or, at the option of the Issuer,
payment of interest, if any, may be made by check mailed to the Holders at
their addresses set forth in the register of Holders; provided that payment
by wire transfer of immediately available funds shall be required with
respect to principal of, and interest, premium, if any, on, all Global
Notes and all other Notes the Holders of which shall have provided written
wire transfer instructions to the Issuer or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially,___________, the Trustee under the
Indenture, shall act as Paying Agent and Registrar. The Issuer may change
any Paying Agent or Registrar without notice to any Holder. The Issuer or
any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Issuer issued the Notes under an Indenture dated as of ____,
2002 (the "Indenture") among the Issuer, the Subsidiary Guarantors 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 ▇▇.▇▇. 77aaa-77bbbb) (the "TIA"). The
Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Notes are general
unsecured Obligations of the Issuer limited to $150,000,000 in aggregate
principal amount, plus amounts, if any, sufficient to pay premium, if any,
interest, if any, on outstanding Notes as set forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION. _ Except as set forth in the next paragraph, [the
Notes shall not be redeemable at the Issuer's option prior to ___, 200_.]
Thereafter, the Notes shall be redeemable at the option of the Issuer, in
whole or in part, at any time upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest, if any, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on __________ of the years indicated below:
Year Percentage
200_................................ _______%
200_................................ _______%
200_................................ _______%
200_ and thereafter................. _______%
A-3
Notwithstanding the foregoing: (a) at any time prior to____, 200_, the
Issuer may on any one or more occasions redeem up to 35 % of the initially
outstanding aggregate principal amount of Notes at a redemption price equal
to _______ % of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the redemption date, with the cash proceeds
of one or more Public Equity Offerings; provided that, in each case, at
least 65% of the initially outstanding aggregate principal amount of Notes
remains outstanding immediately after the occurrence of such redemption;
and provided, further, that such redemption shall occur within 45 days of
the date of the closing of such Public Equity Offering; and (b) at any
time prior to or after ____, 200_, upon the occurrence of a Change of
Control, the Issuer may, but shall in no event be required to, redeem
[100% but not less than 100%] of the outstanding Notes at a redemption
price equal to 110.00% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the redemption date.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 9 below and Sections
4.10 and 4.15 of the Indenture, the Issuer shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date, interest, if any, ceases to accrue on the Notes
or portions thereof called for redemption.
8. SUBORDINATION. The Notes are subordinated to Senior Debt, which is all
Indebtedness and other Obligations specified below payable directly or
indirectly by the Issuer, or any of its Restricted Subsidiaries whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed by the Issuer or any of its Restricted Subsidiaries: (i) the
principal of, interest on and all other Obligations related to the New
Credit Facility (including without limitation all loans, letters of credit
and other extensions of credit under the New Credit Facility, and all
expenses, fees, reimbursements, indemnities and other amounts owing
pursuant to the New Credit Facility); (ii) amounts payable in respect
of any Hedging Obligations; (iii) all Indebtedness not prohibited by
Section 4.09 hereof that is not expressly pari passu with or subordinated
to the Notes, and (iv) all permitted renewals, extensions, refundings
or refinancings thereof. Notwithstanding anything to the contrary in the
foregoing, Senior Debt will not include (i) Indebtedness of the Issuer or
any of its Restricted Subsidiaries to any other Restricted Subsidiaries
which is not a Subsidiary Guarantor, (ii) any Indebtedness which by the
express terms of the agreement or instrument creating, evidencing or
governing the same is junior or subordinate in right of payment to any item
of Senior Debt, (iii) any trade payable arising from the purchase of goods
or materials or for services obtained in the ordinary course of business,
or (iv) Indebtedness incurred in violation of the Indenture. To the
extent provided in the Indenture, Senior Debt must be paid before the Notes
may be paid. The Issuer agree and each Holder of Notes by accepting a Note
consents and agrees to the subordination provided in the Indenture and
authorizes the Trustee to give it effect.
▇-▇
▇. ▇▇▇▇▇▇▇▇▇▇ AT OPTION OF HOLDER.
(a) If there shall at any time or times occur a Change of Control, then
the Issuer shall notify the Holders in writing of such occurrence and shall
make an offer to purchase (the "Change of Control Offer"), not later than
the 30th day after such occurrence (the "Change of Control Payment Date"),
all Notes then outstanding at a purchase price equal to 101% of principal
amount thereof outstanding plus accrued and unpaid interest, if any, to the
Change of Control Payment Date.
(b) The Issuer shall provide the Trustee with notice of the Change of
Control Offer at least 60 days before any such Change of Control Payment
Date and at least 10 days before the notice of any Change of Control Offer
is mailed to Holders. Notice of a Change of Control Offer shall be mailed
by the Issuer not less than 45 days or more than 60 days before the Change
of Control Payment Date to the Holders at their last registered addresses
with a copy to the Trustee and the Paying Agent. The Change of Control
Offer shall remain open from the time of mailing until five days before the
Change of Control Payment Date. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to
the Change of Control Offer, pursuant to the procedures required by the
Indenture.
(b) Holders of the Notes that are the subject of an offer to purchase
will receive a Change of Control Offer from the Issuer 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" appearing below.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in initial denominations of $1,000 and integral multiples of
$1,000. The transfer of the Notes may be registered and the 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 Issuer may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Issuer need not
exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, it need not exchange or register the transfer of
any Notes for a period of 15 days before the mailing of a notice of
redemption of Notes or during the period between a record date and the
corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as
its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following paragraphs, the
Indenture and the Notes may be amended or supplemented with the consent of
the 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 offer for the Notes), and, 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 or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the
then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for the
A-5
Notes). In addition, any amendment to Article 11 or Article 13 of the
Indenture requires the consent of the Holders of at least [75%] in
aggregate principal amount of the Notes then outstanding if such amendment
would adversely affect the rights of the Holders of the Notes.
Without the consent of any Holder of Notes, the Issuer and the Trustee
may amend or supplement the Indenture or the Notes without the consent of
any Holder of a Note: 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 and discharge of the Issuer's and the
Subsidiary Guarantors' obligations to Holders of Notes in the case of a
merger or consolidation pursuant to Article 5 or Article 12 of the
Indenture, as applicable; to make any change that would provide any
additional rights or benefits to the Holders of Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder;
to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the TIA; or to allow any
Subsidiary Guarantor to Guaranty the Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days
in the payment when due of interest on the Notes (whether or not prohibited
by the subordination provisions of the Indenture); (ii) default in payment
when due of the principal of or premium, if any, on the Notes (whether or
not prohibited by the subordination provisions of the Indenture); (iii)
failure to comply with Section 4.15, or to consummate a mandatory Offer to
purchase pursuant to Section 4.10 or to comply with Article 5; (iv) failure
for 60 days after notice to comply with any of their 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 Issuer or any of
its Restricted Subsidiaries (or the payment of which is Guaranteed by the
Issuer or any of its Restricted Subsidiaries) whether such Indebtedness or
Guaranty now exists, or is created after the date of the Indenture, which
default results in the acceleration of such Indebtedness prior to its
Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the Stated
Maturity of which has been so accelerated, aggregates $[25.0] million or
more; (vi) failure by the Issuer of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $[25.0] million, which judgments
are not paid, discharged or stayed for a period of 60 days after entry
thereof; or (vii) certain events of bankruptcy or insolvency with respect
to the Issuer or any of its Restricted Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary.
14. TRUSTEE DEALINGS WITH THE ISSUER. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform
services for the Issuer, the Subsidiary Guarantors or its Affiliates, and
may otherwise deal with the Issuer, the Subsidiary Guarantors or its
Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee, partner,
incorporator or stockholder of the Issuer or any of their Restricted
Subsidiaries, as such, shall have any liability for any obligations of the
Issuer or any Subsidiary Guarantor under the Notes, the Indenture, the Note
Guaranties 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.
A-6
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. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuer 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 Issuer shall furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Telecopy: (_____________) _____ - ______
Attention: Secretary
[Balance of page intentionally remains blank]
A-7
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 Issuer. 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*:
* Signature must be guaranteed by an eligible guarantor institution
within the meaning of Securities and Exchange Commission Rule 17Ad-15
(including banks, stock brokers, savings and loan associations, national
securities exchanges, registered securities associations, clearing agencies
and credit unions) with membership or participation in an approved
signature guarantee medallion program if this Security is to be delivered
other than to, and in the name of, the registered holder.
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to
Section 4.15 of the Indenture, check the following box. [ ]
If you want to elect to have only part of the Note purchased by the Issuer
pursuant to Section 4.15 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.*
* Signature must be guaranteed by an eligible guarantor institution
within the meaning of Securities and Exchange Commission Rule 17Ad-15
(including banks, stock brokers, savings and loan associations, national
securities exchanges, registered securities associations, clearing agencies
and credit unions) with membership or participation in an approved
signature guarantee medallion program if this Security is to be delivered
other than to, and in the name of, the registered holder.
A-9
SCHEDULE OF EXCHANGES OF NOTES2
The following exchanges of a part of this Global Note for
other Notes have been made:
-------------------------------------------------------------------------------
Principal
Amount of
Amount of Amount of this Global
decrease in increase in Note Signature of
Principal Principal following authorized
Amount of Amount of such signatory of
Date of this Global this Global decrease (or Trustee or
Exchange Note Note increase) Note Custodian
--------- ----------- ----------- ------------ --------------
-------------------------------
2 This should only be included if the Note is issued in global form
A-10
[EXHIBIT B
SUBSIDIARY GUARANTY
Subject to Section 12.06 of the Indenture, each Subsidiary Guarantor
hereby, jointly and severally, unconditionally guaranties 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 Issuer
under the Notes or under the Indenture, that: (a) the principal of, premium, if
any, interest, 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, on the Notes and
all other payment Obligations of the Issuer 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 for
whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately.
The obligations of the Subsidiary Guarantor to the Holders and to the
Trustee pursuant to this Subsidiary Guaranty and the Indenture are expressly set
forth in Article 12 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guaranty. The terms of
Article 12 of the Indenture are incorporated herein by reference.
This Subsidiary Guaranty is subject to release as and to the extent provided
in Section 12.04 of the Indenture.
This is a continuing Guaranty and shall remain in full force and effect
and shall be binding upon each Subsidiary Guarantor and its successors and
assigns to the extent set forth in the Indenture until full and final payment of
all of the Issuer'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 Subsidiary Guaranty of
payment and not a guarantee of collection.
This Subsidiary Guaranty shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guaranty 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 Subsidiary Guarantor's liability shall be limited
to the lesser of (i) the aggregate amount of the Obligations of the Issuer under
the Notes and the Indenture and (ii) the amount, if any, which would not have
(A) rendered such Subsidiary Guarantor "insolvent" (as such term is defined in
the Bankruptcy Code and in the Debtor and Creditor Law of the State of New York)
or (B) left such Subsidiary Guarantor with unreasonably small capital at the
time its Subsidiary Guaranty of the Notes was entered into; provided that, it
will be a
B-1
presumption in any lawsuit or other proceeding in which a Subsidiary
Guarantor is a party that the amount guaranteed pursuant to the Subsidiary
Guaranty is the amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Subsidiary Guarantor, or debtor in
possession or trustee in bankruptcy of such Subsidiary Guarantor, otherwise
proves in such a lawsuit that the aggregate liability of the Subsidiary
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 Subsidiary Guarantor in accordance with the previous sentence, the
right of such Subsidiary Guarantors to contribution from other Subsidiary
Guarantors and any other rights such Subsidiary Guarantors 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.
Dated as of , 2001 AMF GUARANTOR 1
----
By:
---------------------------------
Name:
Title:
AMF GUARANTOR 2
By:
---------------------------------
Name:
Title:
B-2
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of _________ ____, 2001 between Subsidiary Guarantor (the "New Subsidiary
Guarantor"), a direct or indirect domestic Restricted Subsidiary of AMF
Bowling Worldwide, Inc. (the "Issuer") and ______________, as trustee
under the indenture referred to below (the "Trustee"). Capitalized terms used
herein and not defined herein shall have the meaning ascribed to them in the
Indenture (as defined below).
WITNESSETH
WHEREAS, the Issuer has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of __________, 2001, providing for the
issuance of an aggregate principal amount of $____________ of 13.00% Senior
Subordinated Notes due 2008 (the "Notes");
WHEREAS, Section 12.05 of the Indenture provides that under certain
circumstances the Issuer may cause, and Section 12.03 of the Indenture provides
that under certain circumstances the Issuer must cause, certain of its
subsidiaries to execute and deliver to the Trustee a supplemental indenture
pursuant to which such subsidiaries shall unconditionally guarantee all of the
Issuer's Obligations under the Notes pursuant to a Note Guaranty on the terms
and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO NOTE GUARANTY. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
guarantee the Issuer's Obligations under the Notes and the Indenture on the
terms and subject to the conditions set forth in Article 12 and Article 13 of
the Indenture and to be bound by all other applicable provisions of the
Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of any Subsidiary
Guarantor, as such, shall have any liability for any obligations of the Issuer
or any Subsidiary Guarantor under the Notes, any Note Guaranties, the Indenture
or this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
D-1
4. NEW YORK LAW TO GOVERN. The law of the State of New York shall govern
and be used to construe this Supplemental Indenture, without giving effect to
any contrary result otherwise required under applicable conflict or
choice-of-law rules.
5. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Subsidiary
Guarantor.
8. EFFECT OF SUPPLEMENTAL INDENTURE. Except as amended by this
Supplemental Indenture, the terms and provisions of the Indenture
shall remain in full force and effect.
D-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.
Dated: [NAME OF NEW SUBSIDIARY GUARANTOR]
----------------------------
By:
---------------------------------
Name:
Title:
-------------,
as Trustee
By:
--------------------------
Name:
Title:
