1
EXHIBIT 4.4
--------------------------------------------------------------------------------
BIG 5 HOLDINGS CORP.
TO
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
-------------
Indenture
Dated as of November 13, 1997
-------------
$48,225,000
Senior Discount Notes due 2008
--------------------------------------------------------------------------------
2
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of November 13, 1997
Trust Indenture Indenture
Act Section Section
-------------------------- -------------
Section 310 (a)(1) ............................................ 609
(a)(2) 609
(a)(3) ............................................ Not
Applicable
(a)(4) ............................................ Not
Applicable
(b) ............................................ 608
610
Section 311 (a) ............................................ 613 (a)
(b) ............................................ 613 (b)
(b)(2) ............................................ 703 (a) (2)
703 (b)
Section 312 (a) ............................................ 701
702 (a)
(b) ............................................ 702 (b)
(c) ............................................ 702 (c)
Section 313 (a) ............................................ 703 (a)
(b) ............................................ 703 (b)
(c) ............................................ 703 (a)
703 (b)
(d) ............................................ 703 (c)
Section 314 (a) ............................................ 704
(b) ............................................ Not
Applicable
(c)(1) ............................................ 102
(c)(2) ............................................ 102
(c)(3) ............................................ Not
Applicable
(d) ............................................ Not
Applicable
(e) ............................................ 102
Section 315 (a) ............................................ 601 (a)
(b) ............................................ 602
703 (a) (6)
(c) ............................................ 601 (b)
(d) ............................................ 601 (c)
(d)(1) ............................................ 601 (a) (1)
(d)(2) ............................................ 601 (c) (2)
(d)(3) ............................................ 601 (c) (3)
(e) ............................................ 514
3
Trust Indenture Indenture
Act Section Section
-------------------------- -------------
Section 316 (a) ............................................ 101
(a)(1)(A) ............................................ 502
512
(a)(1)(B) ............................................ 513
(a)(2) ............................................ Not
Applicable
(b) ............................................ 508
Section 317 (a)(1) ............................................ 503
(a)(2) ............................................ 504
(b) ............................................ 1003
Section 318 (a) ............................................ 107
---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
4
TABLE OF CONTENTS
Page
----
ARTICLE ONE
Definitions and Other Provisions
of General Application..................................................... 1
SECTION 101. Definitions.............................................. 1
SECTION 102. Compliance Certificates and Opinions..................... 31
SECTION 103. Form of Documents Delivered to Trustee................... 32
SECTION 104. Acts of Holders; Record Date............................. 32
SECTION 105. Notices, Etc., to Trustee and Company.................... 34
SECTION 106. Notice to Holders; Waiver................................ 34
SECTION 107. Conflict with Trust Indenture Act........................ 35
SECTION 108. Effect of Headings and Table of Contents................. 35
SECTION 109. Successors and Assigns................................... 35
SECTION 110. Separability Clause...................................... 35
SECTION 111. Benefits of Indenture.................................... 36
SECTION 112. Governing Law............................................ 36
SECTION 113. Legal Holidays........................................... 36
SECTION 114. No Personal Liability of Partners,
Stockholders, Officers, Directors........................ 36
ARTICLE TWO
Note Forms ......................................................... 37
SECTION 201. Forms Generally.......................................... 37
SECTION 202. Form of Face of Note..................................... 37
SECTION 203. Form of Trustee's Certificate of Authentication.......... 40
SECTION 204. Form of Reverse of Note.................................. 40
ARTICLE THREE
The Notes ......................................................... 45
SECTION 301. Title and Terms.......................................... 46
SECTION 302. Denominations............................................ 47
SECTION 303. Execution, Authentication, Delivery and Dating........... 47
SECTION 304. Temporary Notes.......................................... 48
SECTION 305. Registration, Registration of Transfer and Exchange...... 48
-i-
5
Page
----
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.............. 50
SECTION 307. Payment of Interest; Interest Rights Preserved........... 51
SECTION 308. Persons Deemed Owners.................................... 53
SECTION 309. Cancellation............................................. 53
SECTION 310. Computation of Interest.................................. 53
ARTICLE FOUR
Satisfaction and Discharge................................................. 54
SECTION 401. Satisfaction and Discharge of Indenture.................. 54
SECTION 402. Application of Trust Money............................... 55
ARTICLE FIVE
Remedies ......................................................... 55
SECTION 501. Events of Default........................................ 55
SECTION 502. Acceleration of Maturity; Rescission and Annulment....... 58
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.................................................. 59
SECTION 504. Trustee May File Proofs of Claim......................... 60
SECTION 505. Trustee May Enforce Claims Without Possession of Notes... 61
SECTION 506. Application of Money Collected........................... 61
SECTION 507. Limitation on Suits...................................... 62
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest..................................... 63
SECTION 509. Restoration of Rights and Remedies....................... 63
SECTION 510. Rights and Remedies Cumulative........................... 63
SECTION 511. Delay or Omission Not Waiver............................. 64
SECTION 512. Control By Holders....................................... 64
SECTION 513. Waiver of Past Defaults.................................. 64
SECTION 514. Undertaking for Costs.................................... 65
SECTION 515. Waiver of Stay or Extension Laws......................... 65
ARTICLE SIX
The Trustee ......................................................... 66
SECTION 601. Certain Duties and Responsibilities...................... 66
SECTION 602. Notice of Defaults....................................... 66
-ii-
6
Page
----
SECTION 603. Certain Rights of Trustee................................ 66
SECTION 604. Not Responsible for Recitals or
Issuance of Notes ....................................... 68
SECTION 605. May Hold Notes........................................... 68
SECTION 606. Money Held in Trust...................................... 68
SECTION 607. Compensation and Reimbursement........................... 69
SECTION 608. Disqualification; Conflicting Interests.................. 69
SECTION 609. Corporate Trustee Required; Eligibility.................. 69
SECTION 610. Resignation and Removal; Appointment
of Successor............................................. 70
SECTION 611. Acceptance of Appointment by Successor................... 72
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business................................................. 72
SECTION 613. Preferential Collection of Claims Against Company........ 73
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company.......................... 73
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders..................................... 73
SECTION 702. Preservation of Information; Communications
to Holders............................................... 73
SECTION 703. Reports by Trustee....................................... 74
SECTION 704. Reports by Company....................................... 74
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease....................... 75
SECTION 801. Limitation on Merger, Sale or Consolidation.............. 75
SECTION 802. Successor Substituted.................................... 76
SECTION 803. Transfer of Subsidiary Assets............................ 76
ARTICLE NINE
Supplemental Indentures.................................................... 77
SECTION 901. Supplemental Indentures Without
Consent of Holders....................................... 77
SECTION 902. Supplemental Indentures with Consent
of Holders............................................... 78
-iii-
7
Page
----
SECTION 903. Execution of Supplemental Indentures..................... 79
SECTION 904. Effect of Supplemental Indentures........................ 79
SECTION 905. Conformity with Trust Indenture Act...................... 79
SECTION 906. Reference in Notes to Supplemental Indentures............ 80
ARTICLE TEN
Covenants ......................................................... 80
SECTION 1001. Payment of Principal, Premium and Interest............... 80
SECTION 1002. Maintenance of Office or Agency.......................... 80
SECTION 1003. Money for Note Payments to be Held in Trust.............. 81
SECTION 1004. Existence................................................ 83
SECTION 1005. Maintenance of Properties................................ 83
SECTION 1006. Payment of Taxes and Other Claims........................ 83
SECTION 1007. Maintenance of Insurance................................. 84
SECTION 1008. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock............................... 84
SECTION 1009. Limitation on Restricted Payments........................ 86
SECTION 1010. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries................................... 88
SECTION 1011. Limitation on Liens...................................... 90
SECTION 1012. Limitation on Transactions with Affiliates............... 90
SECTION 1013. Limitation on Certain Sales of Capital Stock of
Subsidiaries and Certain Assets.......................... 91
SECTION 1014. Limitation on Issuances and Sales of Capital Stock of
Wholly Owned Subsidiaries................................ 96
SECTION 1015. Change of Control........................................ 96
SECTION 1016. Reserved................................................. 99
SECTION 1017. Investment Company....................................... 99
SECTION 1018. Statement by Officers as to Default; Compliance
Certificates............................................. 100
SECTION 1019. Waiver of Certain Covenants.............................. 100
-iv-
8
Page
----
ARTICLE ELEVEN
Redemption of Notes........................................................ 101
SECTION 1101. Right of Redemption...................................... 101
SECTION 1102. Applicability of Article................................. 101
SECTION 1103. Election to Redeem; Notice to Trustee.................... 102
SECTION 1104. Selection by Trustee of Notes to Be Redeemed............. 102
SECTION 1105. Notice of Redemption..................................... 102
SECTION 1106. Deposit of Redemption Price.............................. 103
SECTION 1107. Notes Payable on Redemption Date......................... 103
SECTION 1108. Notes Redeemed in Part................................... 104
ARTICLE TWELVE
Defeasance and Covenant Defeasance......................................... 104
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasance............................................... 104
SECTION 1202. Defeasance and Discharge................................. 104
SECTION 1203. Covenant Defeasance...................................... 105
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.......... 106
SECTION 1205. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions............ 108
SECTION 1206. Reinstatement............................................ 109
-v-
9
INDENTURE, dated as of November 13, 1997, between Big 5 Holdings Corp.,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at ▇▇▇▇ ▇.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and First Trust National
Association, a national banking association duly organized and existing under
the laws of the United States of America, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its Senior
Discount Notes due November 30, 2008 (the "Notes") of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the Company and
authenticated and delivered hereunder and duly issued by the Company, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
10
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(4) unless otherwise specifically set forth herein, all calculations or
determinations of a Person shall be performed or made on a consolidated
basis in accordance with generally accepted accounting principles; and
(5) 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.
Certain terms, used principally in Article Six, are defined in that
Article.
"Accreted Value" has the meaning set forth in Section 502.
"Accrual Period" means the semi-annual periods ending on May 31 and
November 30 in each year through and including November 30, 2002.
"Acquired Indebtedness" means Indebtedness or Disqualified Capital Stock
of any person existing at the time such person becomes a Subsidiary of the
Company, including by designation, or is merged or consolidated into or with the
Company or one of its Subsidiaries.
"Acquisition" means the purchase or other acquisition of any person
(including, without limitation, the acquisition of more than 50% of the Equity
Interests of any person) or all or substantially all the assets of any person by
any other person, whether by purchase, stock purchase, merger, consolidation, or
other transfer, and whether or not for consideration.
-2-
11
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Adjusted Issue Price" means (i) at the beginning of the first Accrual
Period, the Issue Price, and (ii) thereafter, the Issue Price increased each day
by the daily portion of Original Issue Discount.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, provided, that, with respect to ownership interest in the Company
and its Subsidiaries, a Beneficial Owner of 10% or more of the total voting
power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
"Asset Sale" has the meaning set forth in Section 1013.
"Asset Sale Offer" has the meaning set forth in Section 1013.
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products (a) of the number of months from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Beneficial Owner" or "beneficial owner" for purposes of the definition
of Change of Control and Affiliate has the meaning attributed to it in Rules
13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether
or not applicable.
"Board of Directors" means, with respect to any person, the board of
directors of such person or any committee of the Board of Directors of such
person
-3-
12
authorized, with respect to any particular matter, to exercise the power of the
board of directors of such person.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"Capital Contribution" means a contribution of cash, Cash Equivalents or
property (tangible or intangible) to the consolidated stockholder's equity of
the Company solely in exchange for, if anything, shares of the Company's capital
stock other than Disqualified Capital Stock.
"Capitalized Lease Obligation" means, as to any person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not itself otherwise capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
"Cash Equivalent" means (a) securities issued or directly and fully
guaranteed or insured by the United States Government, or any agency or
instrumentality thereof, having maturates of not more than one year from the
date of acquisition; (b) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either standard & Poor's Ratings Group or ▇▇▇▇▇'▇
Investors Service, Inc.;
-4-
13
(c) certificates of deposit, time deposits, Eurodollar time deposits, overnight
bank deposits or bankers' acceptances having maturities of not more than one
year from the date of acquisition thereof of any domestic commercial bank, the
long-term debt of which is rated at the time of acquisition thereof at least A
or the equivalent thereof by Standard & Poor's Ratings Group, or A or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and having capital and
surplus in excess of $500,000,000; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(a), (b) and (c) above entered into with any bank meeting the qualifications
specified in clause (c) above; (e) commercial paper rated at the time of
acquisition thereof at least A-2 or the equivalent thereof by Standard & Poor's
Ratings Group or P-2 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service,
Inc., or carrying an equivalent rating by a nationally recognized rating agency,
if both of the two named rating agencies cease publishing ratings of
investments, and in either case maturing within 270 days after the date of
acquisition thereof; and (f) interests in any investment company which invests
solely in instruments of the type specified in clauses (a) through (e) above.
"Change of Control" has the meaning specified in Section 1015.
"CIT Credit Facility" means the financing agreement, dated March 8,
1996, between Principal Subsidiary, as borrower, the CIT Group/Business Credit,
Inc., as agent and lender, and the other lenders thereunder, as amended through
the date hereof.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
-5-
14
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Consolidated Coverage Ratio" of any person on any date of determination
(the "Transaction Date") means the ratio, on a pro forma basis, of (a) the
aggregate amount of consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, that for purposes of
calculating Consolidated EBITDA and Consolidated Fixed Charges for this
definition, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of the Reference Period, (ii)
transactions giving rise to the need to calculate the Consolidated Coverage
Ratio shall be assumed to have occurred on the first day of the Reference
Period, (iii) the incurrence of any Indebtedness or issuance of any Disqualified
Capital Stock during the Reference Period or subsequent to the Reference Period
and on or prior to the Transaction Date (and the application of the proceeds
therefrom to the extent used to refinance or retire other Indebtedness) shall be
assumed to have occurred on the first day of the Reference period, and (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the
average rate in
-6-
15
effect from the beginning of the Reference Period to the Transaction Date had
been the applicable rate for the entire period, unless such Person or any of its
Subsidiaries is a party to an Interest Swap or Hedging Obligation (which shall
remain in effect for the 12-month period immediately following the Transaction
Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be used.
"Consolidated EBITDA" means, with respect to any person, for any period,
the Consolidated Net Income of such person for such period adjusted to add
thereto (to the extent deducted from net revenues in determining Consolidated
Net Income), without duplication, the sum of (i) Consolidated income tax
expense, (ii) Consolidated depreciation and amortization expense (including
amortization of debt discount and deferred financing costs in connection with
any Indebtedness of such person and its Subsidiaries), (iii) Consolidated Fixed
Charges and (iv) all other non-cash charges; provided that Consolidated income
tax expense, depreciation and amortization expense of a Subsidiary of such
person that is less than wholly owned shall only be added to the extent of the
equity interest of such person in such Subsidiary.
"Consolidated Fixed Charges" of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expensed or capitalized, paid, accrued, or scheduled
to be paid or accrued (including, in accordance with the following sentence,
interest attributable to Capitalized Lease Obligations) of such person and its
Consolidated Subsidiaries during such period, excluding amortization of debt
issuance costs incurred in connection with the Principal Subsidiary Notes or the
Credit Agreement but including (1) original issue discount and non-cash interest
payments or accruals on any, Indebtedness, (ii) the interest portion of all
deferred payment obligations, and (iii) all commissions, discounts and other
fees and charges owed with respect to bankers' acceptances and letters of credit
financings and currency and Interest Swap and Hedging Obligations, in each case
to the extent attributable to such period, and (b) the amount of cash dividends
paid by such person or any of its Consolidated Subsidiaries in respect of
Preferred Stock (other than by Subsidiaries of such person to such person or
such persons wholly owned Subsidiaries).
-7-
16
For purposes of this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by the
Company to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP and (y) to the extent such expense would result in a
liability upon the consolidated balance sheet of such person in accordance with
GAAP, interest expense attributable to any Indebtedness represented by the
guaranty by such person or a Subsidiary of such person of an obligation of
another person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed. Notwithstanding the foregoing, Consolidated Fixed
Charges shall not include (A) costs, fees and expenses incurred in connection
with the Recapitalization, (B) interest expense on the Old Principal Subsidiary
Notes incurred after the Issue Date, provided that on the Issue Date Principal
Subsidiary's obligations under the Old Principal Subsidiary Notes shall have
been released to the extent provided in Article Nine of the indenture governing
the Old Principal Subsidiary Notes, and within 45 days after the Issue Date the
Old Principal Subsidiary Notes are redeemed or otherwise acquired by the Company
in compliance with the Old Principal Subsidiary Note indenture and the
Indenture, and (C) any one-time non-cash charge or expense associated with the
write-off of deferred debt issuance costs associated with the Credit Agreement
or the Principal subsidiary Notes or the Notes.
"Consolidated Net Income" means, with respect to any person for any
period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication): (a) all gains and losses which
are either extraordinary (as determined in accordance with GAAP) or are either
unusual or nonrecurring (including any gain from the sale or other disposition
of assets outside the ordinary course of business or from the issuance or sale
of any capital stock), (b) the net income, if positive, of any person, other
than a Consolidated Subsidiary, in which such person or any of its Consolidated
Subsidiaries has an interest, except to the extent of the amount of any
dividends or distributions actually paid in cash to such person or a
Consolidated Subsidiary of such person during such period, but in any case (i)
not in excess of such person's pro rata share of such person's net income for
such
-8-
17
period and (ii) excluding any such payments made to any Subsidiary pursuant to
clause (a) of the definition of Permitted Payments, (c) the net income or loss
of any person acquired in a pooling of interests transaction for any period
prior to the date of such acquisition, (d) the net income, if positive, of any
of such person's Consolidated Subsidiaries in the event and solely to the extent
that the declaration or payment of dividends or similar distributions is not at
the time permitted by operation of the terms of its charter or bylaws or any
other agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Consolidated Subsidiary, (e) the
effects of changes in accounting principles, (f) any non-cash compensation
expense in connection with the exercise of, grant to or repurchase from
officers, directors and employees of stock, stock options or stock equivalents,
(g) any one-time non-cash charge or expense associated with the write-off of
deferred debt issuance costs associated with the Credit Agreement or the
Principal Subsidiary Notes or the Notes, (h) costs, fees and expenses incurred
in connection with the Recapitalization, (i) interest expense on the Old
Principal Subsidiary Notes incurred after the Issue Date, provided that on the
Issue Date Principal Subsidiary's obligations under the Old Principal Subsidiary
Notes shall have been released to the extent provided in Article Nine of the
indenture governing the Old Principal Subsidiary Notes, and within 45 days after
the Issue Date the Old Principal Subsidiary Notes are redeemed or otherwise
acquired by the Company in compliance with the Old Principal Subsidiary Note
indenture and the Principal Subsidiary Indenture, and (j) interest expense on
the Notes and Exchange Notes.
"Consolidated Net Worth" of any person at any date means the aggregate
consolidated stockholders' equity of such person (plus amounts of equity
attributable to preferred stock) and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such person prepared in accordance
with GAAP, adjusted to exclude (to the extent included in calculating such
equity), (a) the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such person and its Consolidated
Subsidiaries, (b) all upward revaluations and other write-ups in the book value
of any asset of such person or a Consolidated Subsidiary of such person
subsequent to the Issue Date, and (c) all investments
-9-
18
in subsidiaries that are not Consolidated Subsidiaries and in persons that are
not Subsidiaries.
"Consolidated Subsidiary" means, for any person, each Subsidiary of such
person (whether now existing or hereafter created or acquired) the financial
statements of which are consolidated for financial statement reporting purposes
with the financial statements of such person in accordance with GAAP.
"Consolidation" means, with respect to the Company, the consolidation of
the accounts of its Subsidiaries with those of the Company, all in accordance
with GAAP; provided that "consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary with the accounts of the Company. The
term "Consolidated" has a correlative meaning to the foregoing.
"Corporate Trust Office" means the principal office of the Trustee in
St. ▇▇▇▇, Minnesota at which at any particular time its corporate trust business
shall be administered.
"corporation" means a corporation, association, company, joint-stock
company, partnership or business trust.
"Credit Agreement" means the one or more credit agreements (including,
without limitation, the CIT Credit Facility) entered into by and among the
Company, Principal Subsidiary, certain of its subsidiaries (if any) and certain
financial institutions, which provide for in the aggregate one or more term
loans and/or revolving credit facilities, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such credit agreement and/or related documents may be
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "Credit Agreement" shall
include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to any such credit agreement and all
refundings, refinancings and replacements of any such credit agreement,
including any agreement (i) extending the maturity of any Indebtedness incurred
-10-
19
thereunder or contemplated thereby, (ii) adding or deleting borrowers or
guarantors thereunder, so long as borrowers and issuers include one or more of
the Company and its Subsidiaries and their respective successors and assigns,
(iii) increasing the amount of Indebtedness incurred thereunder or available to
be borrowed thereunder, provided that on the date such Indebtedness is incurred
it would not be prohibited by Section 1008 or (iv) otherwise altering the terms
and conditions thereof in a manner not prohibited by the terms hereof.
"Debt Incurrence Ratio" has the meaning set forth in Section 1008.
"Default Amount" has the meaning set forth in Section 502.
"Disqualified Capital Stock" means (a) except as set forth in (b) , with
respect to any person, Equity Interests of such person that, by its terms or by
the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time or
both would be, required to be redeemed or repurchased (including at the option
of the holder thereof) by such person or any of its Subsidiaries, in whole or in
part, on or prior to the Stated Maturity of the Notes and (b) with respect to
any Subsidiary of such person (including with respect to any Subsidiary of the
Company), any Equity Interests other than any common equity with no preference,
privileges, or redemption or repayment provisions.
"Equity Interest" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership or membership interests in, such Person.
"Event of Default" has the meaning specified in Section 501.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
-11-
20
"Exchange Act" refers to the Securities Exchange Act of 1934 as it may
be amended and any successor act thereto.
"Exchange Notes" means those certain Exchange Notes issued pursuant to
an indenture in the form of the Indenture affixed as an exhibit to that certain
Certificate of Designations governing the Company's Series A 13.45% Senior
Exchangeable Preferred Stock filed with the Delaware Secretary of State on
November 13, 1997 as such Indenture is amended from time to time with the
content of Holders of a majority in aggregate principal amount of Notes, such
consent not to be unreasonably withheld.
"Excluded Person" means Green Equity Investors, L.P., ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and their respective Related Parties.
"Exempted Affiliate Transaction" means (a) compensation, indemnification
and other benefits paid or made available (x) pursuant to the employment
agreements between the Company or a Subsidiary of the Company and members of its
senior management, or (y) for or in connection with services actually rendered
and comparable to those generally paid or made available by entities engaged in
the same or similar businesses (including reimbursement or advancement of
reasonable out-of-pocket expenses, loans to officers, directors and employees in
the ordinary course of business consistent with past practice and directors' and
officers' liability insurance), (b) transactions, expenses and payments in
connection with the Recapitalization, (c) any Restricted Payments or other
payments or transactions expressly permitted under Section 1009, (d) payments to
LGA for management services under the Management Services Agreement in an amount
not to exceed $1.0 million in any fiscal year, plus reimbursement of reasonable
out-of-pocket costs and expenses, (e) payments to LGA for reasonable and
customary fees and expenses for financial advisory and investment banking
services provided to the Company in connection with major financial
transactions, and (f) transactions between or among the Company and its
Subsidiaries or between or among Subsidiaries of the Company, provided that any
ownership interest in any such Subsidiary which is not beneficially owned
directly or indirectly by the Company or any of its Subsidiaries is not
beneficially owned by an Affiliate of the Company other than by virtue of the
direct or indirect ownership interest in
-12-
21
such Subsidiary held (in the aggregate) by the Company and/or one or more of its
Subsidiaries.
"GAAP" means United States 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 approved by a significant segment of the
accounting profession in the United States as in effect on the Issue Date.
"Holder" means a Person in whose name a Note is registered in the Note
Register.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such any person, to the
extent such liabilities and obligations would appear as a liability upon the
consolidated balance sheet of such person in accordance with GAAP, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors; (b) all liabilities
and obligations, contingent or otherwise, of such person (i) evidenced by
bankers' acceptances or similar installments issued or accepted by banks, (ii)
relating to any Capitalized Lease Obligation, or (iii) evidenced by a letter of
credit or a reimbursement obligation of such person with respect to any letter
of credit; (c) all net obligations of such person under Interest Swap and
Hedging Obligations; (d) all liabilities and obligations of others of the kind
described in the preceding clauses (a), (b) or (c) that such person has
guaranteed or that is otherwise its legal liability or which are secured by one
or more Liens on any assets or property of such person; provided that if the
liabilities or obligations which are secured by a Lien have not been assumed in
full by such person or are not such person's legal liability in full, the amount
of such Indebtedness for the purposes of this definition shall be limited to the
lesser of the amount of such Indebtedness secured by such Lien or the fair
market value of the assets
-13-
22
or property securing such Lien; (e) any and all deferrals, renewals, extensions,
refinancing and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties; and (f) all Disqualified Capital Stock of
such Person (measured at the greater of its voluntary or involuntary maximum
fixed repurchase price plus accrued and unpaid dividends). For purposes hereof,
the "maximum fixed repurchase price" of any Disqualified Capital Stock which
does not have a fixed repurchase price shall be calculated in accordance with
the terms of such Disqualified Capital Stock as if such Disqualified Capital
Stock were purchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture, and if such price is based upon, or
measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair
Market Value to be determined in good faith by the board of directors of the
issuer (or managing general partner of the issuer) of such Disqualified Capital
Stock.
"Incurrence Date" has the meaning set forth in Section 1008.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means each May 31 and November 30, commencing
May 31, 2003.
"Interest Swap and Hedging Obligation" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
-14-
23
"Investment" by any person in any other person means (without
duplication) (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other person or any agreement to make any such acquisition; (b) the making
by such person of any deposit with, or advance, loan or other extension of
credit to, such other person (including the purchase of property from another
person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such other person) or any commitment to make any such
advance, loan or extension (but excluding accounts receivable, endorsements for
collection or deposits arising in the ordinary course of business) ; (c) other
than guarantees of Indebtedness of the Company or any Subsidiary to the extent
permitted by the Section 1008, the entering into by such person of any guarantee
of, or other credit support or contingent obligation with respect to,
Indebtedness or other liability of such other person; (d) the making of any
capital contribution by such person to such other person; and (e) the
designation by the Board of Directors of the Company of any person to be an
Unrestricted Subsidiary. The Company shall be deemed to make an Investment in an
amount equal to the fair market value of the net assets of any subsidiary (or,
if neither the Company nor any of its Subsidiaries has theretofore made an
Investment in such subsidiary, in an amount equal to the Investments being
made), at the time that such subsidiary is designated an Unrestricted
Subsidiary, and any property transferred to an Unrestricted Subsidiary from the
Company or a Subsidiary of the Company shall be deemed an Investment valued at
its fair market value at the time of such transfer. The amount of any such
Investment shall be reduced by any liabilities or obligations of the Company or
any of its Subsidiaries to be assumed or discharged in connection with such
Investment by an entity other than the Company or any of its Subsidiaries. For
purposes of clarification and greater certainty, the designation of a newly
formed subsidiary as an Unrestricted Subsidiary and the initial capitalization
thereof under clause (b) of the definition of Permitted Payment shall not
constitute an Investment.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
-15-
24
"Issue Price" means $25,000,000.
"LGA" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, L.P., a Delaware limited
partnership.
"LGP" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P., a Delaware limited
partnership.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Maturity", when used with respect to any Note, means the date on which
the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Management Services Agreement" means the management services agreement,
dated as of the Issue Date, between the Company and Principal Subsidiary on one
hand and LGA on the other hand substantially as in effect on the Issue Date.
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale of Qualified Capital
Stock and by the Company and its Subsidiaries in respect of an Asset Sale plus,
in the case of an issuance of Qualified Capital Stock upon any exercise,
exchange or conversion of securities (including options, warrants, rights
and.convertible or exchangeable debt) of the Company that were issued for cash
on or after the Issue Date, the amount of cash originally received by the
Company upon the issuance of such securities (including options, warrants,
rights and convertible or exchangeable debt) less, in each case, the sum of all
payments, fees, commissions and (in the case of Asset Sales, reasonable and
customary) expenses (including, without limitation, the fees and expenses of
legal counsel and investment banking fees and expenses) incurred in connection
with such Asset Sale or sale of Qualified Capital Stock, and, in the case of an
Asset Sale only, less (i) the amount (estimated reasonably and in good faith by
the Company) of income, franchise, sales and other applicable taxes required to
be paid by the Company or any of its respective Subsidiaries in connection
-16-
25
with such Asset Sale, (ii) the amounts of any repayments of Indebtedness
secured, directly or indirectly, by Liens on the assets which are the subject of
such Asset Sale or Indebtedness associated with such assets which is due by
reason of such Asset Sale (i.e., such disposition is permitted by the terms of
the instruments evidencing or applicable to such Indebtedness, or by the terms
of a consent granted thereunder, on the condition that the proceeds (or portion
thereof) of such disposition be applied to such Indebtedness) , and other fees,
expenses and other expenditures, in each case, reasonably incurred as a
consequence of such repayment of Indebtedness (whether or not such fees,
expenses or expenditures are then due and payable or made, as the case may be) ;
(iii) all amounts deemed appropriate by the Company (as evidenced by a signed
certificate of the Chief Financial Officer of the Company delivered to the
Trustee) to be provided as a reserve, in accordance with GAAP, against any
liabilities associated with such assets which are the subject of such Asset
Sale; and (iv) with respect to Asset Sales by Subsidiaries of the Company, the
portion of such cash payments attributable to Persons holding a minority
interest in such Subsidiary.
"Notes" means securities designated in the first paragraph of the
RECITALS OF THE COMPANY.
"Note Register" and "Notes Registrar" have the respective meanings
specified in Section 305.
"Offering Memorandum" means the offering memorandum, dated November 8,
1997, relating to the offering of Principal Subsidiary Notes.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, a Vice President or the Chief Financial Officer, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee.
"Old Principal Subsidiary Notes" means those certain 13 5/8% Senior
Subordinated Notes due 2002.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
-17-
26
"Original Issue Discount", as applied to an Accrual Period, means the
product of the Adjusted Issue Price at the beginning of the Accrual Period and
the Yield to Maturity for such Accrual Period. The daily portions of Original
Issue Discount are determined by allocating to each day in an Accrual Period the
ratable portion of the Original Issue Discount allocable to the Accrual Period.
"Outstanding", when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders
of such Notes; provided that, if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(iii) Notes which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Notes are held by a bona fide purchaser in whose hands such Notes are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes which the Trustee knows to be so owned shall be so
disregarded. Notes
-18-
27
so owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or of such
other obligor.
"pari passu", when used with respect to the ranking of any Indebtedness
of any Person in relation to other Indebtedness of such Person, means that each
such Indebtedness (a) either (i) is not subordinated in right of payment to any
other Indebtedness of such Person or (ii) is subordinate in right of payment to
the same Indebtedness of such Person as is the other and is so subordinate to
the same extent and (b) is not subordinate in right of payment to the other or
to any Indebtedness of such Person as to which the other is not so subordinate.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Notes on behalf of the
Company.
"Permitted Indebtedness" means any of the following:
(a) that the Company and the Subsidiaries may incur Indebtedness
evidenced by the Notes and the Principal Subsidiary Notes and represented by
this Indenture or the principal Subsidiary Indenture up to the amounts
specified therein as of the date thereof;
(b) that the Company and the Subsidiaries, as applicable, may incur
Refinancing Indebtedness with respect to any Indebtedness or Disqualified
Capital Stock, as applicable, that was permitted by this Indenture to be
incurred and any Indebtedness of Principal Subsidiary outstanding on the
Issue Date (except the Old Principal Subsidiary Notes) after giving effect
to the Recapitalization;
(c) the Company and the Subsidiaries may incur Indebtedness solely in
respect of bankers' acceptances and letters of credit (in addition to any
such Indebtedness incurred under the Credit Agreement in accordance with the
Indenture) (to the extent that such incurrence does not result in the
incurrence of any obligation to repay any obligation relating to borrowed
-19-
28
money of others), all in the ordinary course of business in accordance with
customary industry practices, in amounts and for the purposes customary in
the Company's industry; provided, that the aggregate principal amount
outstanding of such Indebtedness (including any Indebtedness issued to
refinance, refund or replace such Indebtedness) shall not exceed $5.0
million;
(d) the Company and the Subsidiaries may incur Indebtedness arising from
tender, bid, performance or government contract bonds, other obligations of
like nature, or warranty or contractual service obligations of like nature,
in any case, incurred by the Company or the Subsidiaries in the ordinary
course of business;
(e) the Company and the Subsidiaries may incur Interest Swap and Hedging
Obligations that are incurred for the purpose of fixing or hedging interest
rate or currency risk with respect to any fixed or floating rate
Indebtedness that is permitted by the Indenture to be outstanding or any
receivable or liability the payment of which is determined by reference to a
foreign currency; provided, that the notional amount of any such Interest
Swap and Hedging Obligation does not exceed the principal amount of
Indebtedness to which such Interest Swap and Hedging Obligation relates; and
(f) the Company may incur Indebtedness to any Subsidiary, and any
Subsidiary may incur Indebtedness to any other Subsidiary or to the Company;
provided, that, in the case of Indebtedness of the Company, such obligations
shall be unsecured and subordinated in all respects to the Company's
obligations pursuant to the Notes and the date of any event that causes such
Subsidiary no longer to be a Subsidiary shall be an Incurrence Date.
"Permitted Investment" means Investments in (a) any of the Principal
Subsidiary Notes or the Notes; (b) Cash Equivalents; (c) intercompany notes to
the extent permitted under clause (f) of the definition of "Permitted
Indebtedness," provided that Indebtedness under any such notes of a Subsidiary
shall be deemed to be a Restricted Investment if such person ceases to be a
Subsidiary; (d) Investments in the form of promissory notes of members of the
Company's or Principal Subsidiary's management not to
-20-
29
exceed $2.0 million in principal amount at any time outstanding solely in
consideration of the purchase by such persons of Qualified Capital Stock of the
Company; (e) Investments by the Company or any Subsidiary in any person that is
or immediately after such Investment becomes a Subsidiary, or immediately after
such Investment merges or consolidates into the Company or any Subsidiary in
compliance with the terms of the Indenture, provided that such Person is engaged
in all material respects in a Related Business; (f) Investments in the Company
by any Subsidiary, provided that in the case of Indebtedness of the Company
constituting any such Investment, such Indebtedness shall be unsecured and
subordinated in all respects to the Company's obligations under the Notes; (g)
Investments in securities of trade creditors or customers received in settlement
of obligations that arose in the ordinary course of business or pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency
of such trade creditors or customers; (h) Investments by the Company or
Principal Subsidiary outstanding on the Issue Date; (i) transactions or
arrangements with officers or directors of the Company or any Subsidiary entered
into in the ordinary course of business (including compensation or employee
benefit arrangements with any officer or director of the Company or any
Subsidiary permitted under Section 1012; (j) Investments in Persons (other than
Affiliates of the Company) received as consideration from Asset Sales to the
extent not prohibited by Section 1013; and (k) additional Investments at any
time outstanding not to exceed the sum of (i) $4.0 million and (ii) the
cumulative gain (net of taxes and all payments, fees, commissions and expenses
incurred in such sale or disposition) realized by the Company and Subsidiaries
in cash or Cash Equivalents on the sale or other disposition after the Issue
Date of Investments (including Permitted Investments and Restricted Investments)
made after the Issue Date in accordance with this Indenture (but only to the
extent that such gain is excluded from the net income of the Company and the
Consolidated Subsidiaries by the definition of Consolidated Net Income).
"Permitted Lien" means (a) Liens existing on the Issue Date; (b) Liens
imposed by governmental authorities for taxes, assessments or other charges not
yet subject to penalty or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP; (c) statutory
liens of carriers,
-21-
30
warehousemen, mechanics, materialmen, landlords, repairmen or other like Liens
arising by operation of law in the ordinary course of business provided that (i)
the underlying obligations are not overdue for a period of more than 60 days, or
(ii) such Liens are being contested in good faith and by appropriate proceedings
and adequate reserves with respect thereto are maintained on the books of the
Company in accordance with GAAP; (d) Liens securing the performance of bids,
trade contracts (other than borrowed money) , leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business; (e) easements,
rights-of-way, zoning, similar restrictions and other similar encumbrances or
title defects which, singly or in the aggregate, do not in any case materially
detract from the value of the property subject thereto (as such property is used
by the Company or any of its Subsidiaries) or interfere with the ordinary
conduct of the business of the Company or any of its Subsidiaries; (f) Liens
arising by operation of law in connection with judgments, only to the extent,
for an amount and for a period not resulting in an Event of Default with respect
thereto; (g) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security legislation; (h) Liens securing the Notes or the Principal
Subsidiary Notes; (i) Liens securing Indebtedness of a Person existing at the
time such Person becomes a Subsidiary or is merged with or into the Company or a
Subsidiary or Liens securing Indebtedness incurred in connection with an
Acquisition, provided that such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets; (j) Liens arising from Purchase
Money Indebtedness permitted to be incurred under paragraph (a) of section 1008
provided such Liens relate solely to the property which is subject to such
Purchase Money Indebtedness; (k) leases or subleases granted to other persons in
the ordinary course of business not materially interfering with the conduct of
the business of the Company or any of its Subsidiaries or materially detracting
from the value of the relative assets of the Company or any Subsidiary; (1)
Liens arising from precautionary Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company or any of its
Subsidiaries in the ordinary course of business; (m) Liens securing Refinancing
Indebtedness incurred to refinance any
-22-
31
Indebtedness that was previously so secured in accordance with the Indenture;
(n) Liens securing Indebtedness incurred under the Credit Agreement in
accordance with the Indenture; (o) Liens securing Indebtedness incurred under
paragraph (b) of Section 1008; and (p) any interest or title of a lessor under
any lease, whether or not characterized as capital or operating, provided that
such Liens do not extend to any property or assets which is not leased property
subject to such lease.
"Permitted Payments" means, without duplication, (a) payments by the
Company made concurrently with and in an amount equal to or less than payments
to the Company (directly or indirectly through one or more Subsidiaries) by an
Unrestricted Subsidiary, provided that in each case the Company distributes the
same property as that so received by the Company from such Unrestricted
Subsidiary; (b) payments to an Unrestricted Subsidiary by the Company (directly
or indirectly through one or more Subsidiaries) made concurrently with and in an
amount equal to or less than Capital Contributions to the Company, provided that
in each case the Company distributes the same property as that so received by
the Company as such Capital Contribution; (c) payments to redeem or otherwise
acquire the Old Principal Subsidiary Notes after the Issue Date solely with
funds used to defease the Old Principal Subsidiary Notes on the Issue Date in
connection with the Recapitalization; (d) payments by the Company directly of
the payments provided for by clauses (a), (d) and (e) of the definition of
"Exempted Affiliated Transaction"; (e) repurchases of common stock, stock
options and stock equivalents of the Company held by former directors, officers
or employees of Thrifty, the Company or any Subsidiaries of the Company, in an
aggregate amount not to exceed in any fiscal year $1,000,000 plus (x) the
cumulative amount by which (1) the product of $1,000,000 times the number of
preceding fiscal years subsequent to the Issue Date exceeds (2) the aggregate
amount of such payments made during such fiscal years, plus (y) the aggregate
net cash consideration received by the Company, after the Issue Date (excluding
any such consideration received by the Company in connection with the
Recapitalization) and prior to or substantially concurrently with the date of
such repurchase, from the sale or issuance of common stock of the Company to
directors, officers and employees of the Company and the Subsidiaries
(including, to the extent not otherwise included in the amount of such cash
consideration, cash repayments of principal received by the Company on loans
-23-
32
made to such persons to enable them to purchase such stock); and (f) Restricted
Payments in an aggregate amount not to exceed $4.0 million; provided that
following a Default or Event of Default for so long as such Default or Event of
Default is continuing, (a), (e), and (f) shall not be Permitted Payments if made
by the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"Principal Subsidiary" means Big 5 Corp., a Delaware corporation.
"Principal Subsidiary Indenture" means the Indenture, dated November 13,
1997, between Principal Subsidiary and First Trust National Association, as
amended from time to time, and any indenture in connection with any Refinancing
Indebtedness incurred in connection with the Principal Subsidiary Notes.
"Principal Subsidiary Notes" means the 10 7/8% Senior Notes due 2007 of
Principal Subsidiary and any Refinancing Indebtedness incurred in connection
with such Principal Subsidiary Notes.
"Public Equity Offering" means an underwritten offering of common stock
of the Company for cash pursuant to an effective registration statement under
the Securities
-24-
33
Act, provided at the time of or upon consummation of such offering, such common
stock of the Company is listed on a national securities exchange or quoted on
the national market system of the Nasdaq Stock Market.
"Purchase Date" means the settlement date specified by the Company in an
Asset Sale Offer or Change of Control Offer, which shall be within three
business days of the expiration date specified in such offer.
"Purchase Money Indebtedness"' of any person means any Indebtedness of
such person to any seller or other person incurred to finance the acquisition or
construction (including in the case of a Capitalized Lease Obligation, the
lease) of any business or real or personal tangible property (or, in each case,
any interest therein) acquired or constructed after the Issue Date which, in the
reasonable good faith judgment of the Board of Directors of the Company, is
related to a Related Business of the Company and which is incurred concurrently
with, or within 180 days of, such acquisition or the completion of such
construction and, if secured, is secured only by the assets so financed.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Exchange" means any legal defeasance, redemption, retirement,
repurchase or other acquisition of Capital Stock or Indebtedness of the Company
issued on or after the Issue Date with the Net Cash Proceeds received by the
Company from the substantially concurrent sale of its Qualified Capital Stock or
any exchange of Qualified Capital Stock of the Company for any Capital Stock or
Indebtedness of the Company issued on or after the Issue Date.
"Recapitalization" has the meaning set forth in the Offering Memorandum.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
-25-
34
"Reference Period" with regard to any person means the four full fiscal
quarters (or such lesser period during which such person has been in existence)
ended immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Notes or the Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital
Stock (a) issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of (a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of the amount of fees, consents, premiums, prepayment penalties and
reasonable expenses incurred in connection with such Refinancing) the lesser of
(i) the principal amount or, in the case of Disqualified Capital Stock,
liquidation preference, of the Indebtedness or Disqualified Capital Stock so
Refinanced and (ii) if such Indebtedness being Refinanced was issued with an
original issue discount, the accreted value thereof (as determined in accordance
with GAAP) at the time of such Refinancing; provided, that (A) such Refinancing
Indebtedness of any Subsidiary of the Company shall only be used to Refinance
outstanding Indebtedness or Disqualified Capital Stock of such Subsidiary, (B)
such Refinancing Indebtedness shall (x) not have an Average Life shorter than
the Indebtedness or Disqualified Capital Stock to be so refinanced at the time
of such Refinancing and (y) in all respects, be no less subordinated or junior,
if applicable, to the rights of Holders of the Notes than was the Indebtedness
or Disqualified Capital Stock to be refinanced, (C) such Refinancing
Indebtedness shall have a final stated maturity or redemption date, as
applicable, no earlier than the final stated maturity or redemption date, as
applicable, of the Indebtedness or Disqualified Capital Stock to be so
refinanced, (D) such Refinancing Indebtedness shall be secured (if secured) in a
manner no more adverse to the Holders of the Notes than the terms of the Liens
(if any) securing such refinanced Indebtedness, including, without limitation,
the amount of Indebtedness secured shall not be increased (except by the amount
of fees, consents, premiums, prepayment penalties and reasonable expenses
incurred in
-26-
35
connection with such Refinancing) , and (E) such Refinancing Indebtedness shall
permit the payment of dividends to the Company to pay interest on the Notes on
and after May 31, 2003. For purposes of clarification and greater certainty, if
Indebtedness permitted by the terms of this Indenture (including clauses (a) ,
(b) and (c) of the second paragraph of Section 1008) is repaid, redeemed,
defeased, refunded, refinanced, discharged or otherwise retired for value from
the proceeds of Refinancing Indebtedness, the maximum amount of such Refinancing
Indebtedness shall be determined in accordance with the provisions of this
definition, and the amount of such Refinancing Indebtedness in excess of the
amount of such Indebtedness (as permitted by this definition) shall not reduce
the amount of Indebtedness permitted by the terms of this Indenture (including,
without limitation, not reducing or counting towards the amounts set forth in
such clauses (a), (b) and (c).
"Regular Record Date" means each May 15 and November 15.
"Related Business" means the business conducted (or proposed to be
conducted, including the activities referred to as being contemplated by the
Company, as described or referred to in the Offering Memorandum) by the Company
as of the Issue Date and any and all businesses that in the good faith judgment
of the Board of Directors of the Company are reasonably related businesses,
including reasonably related extensions thereof.
"Related Parties" means (i) with respect to any Excluded Person, (A) any
controlling stockholder, 80% or more owned Subsidiary, partner, or spouse or
immediate family member (in the case of an individual) of or in any such
Excluded Person or (B) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or persons beneficially holding an
80% or more controlling interest of which consist of such Excluded Person and/or
such other persons referred to in the immediately preceding clause (A), and (ii)
only with respect to Green Equity Investors, L.P. (and in addition to the
persons described in the foregoing clause (i)) any partnership or corporation
which is managed by or controlled by LGP or any affiliate thereof.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the
-27-
36
board of directors, the chairman or any vice-chairman of the executive committee
of the board of directors, the chairman of the trust committee, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means, in one or a series of related
transactions, any Investment, other than investments in Cash Equivalents and
other Permitted Investments; provided, however, that a merger of another person
with or into the Company or a Subsidiary in accordance with the terms of this
Indenture shall not be deemed to be a Restricted Investment so long as the
surviving entity is the Company or a direct wholly owned Subsidiary.
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Equity Interests of such person, (b) any payment on account of the purchase,
redemption or other acquisition or retirement for value of Equity Interests of
such person, (c) other than with the proceeds from the substantially concurrent
sale of, or in exchange for, Refinancing Indebtedness, any purchase, redemption,
or other acquisition or retirement for value of, any payment in respect of any
amendment of the terms of or any defeasance of, any Subordinated Indebtedness,
directly or indirectly, by the Company prior to the scheduled maturity, any
scheduled repayment of principal, or scheduled sinking fund payment, as the case
may be, of such Indebtedness and (d) any Restricted Investment by such person;
provided, however, that the term "Restricted Payment" does not include (i) any
dividend, distribution or other payment on or with respect to Equity Interests
of the Company to the extent payable solely in shares of Qualified Capital Stock
of the Company; (ii) any dividend, distribution or other payment to the Company,
or to any of the Subsidiaries, by any of its Subsidiaries; (iii) payments made
pursuant to the Recapitalization (including, without limitation, bonuses not to
exceed $750,000 in the aggregate
-28-
37
payable to certain members of the Company's senior management at the time of or
promptly after the Recapitalization); (iv) Permitted Investments; or (v) pro
rata dividends and other distributions on Equity Interests of any Subsidiary by
such Subsidiary.
"Sale and Leaseback Transaction" means any transaction by which the
Company or a Subsidiary, directly or indirectly, becomes liable as a lessee or
as a guarantor or other surety with respect to any lease of any property
(whether real or personal or mixed), whether now owned or hereafter acquired
that the Company or any Subsidiary has sold or transferred or is to sell or
transfer to any other Person in a substantially concurrent transaction with such
assumption of liability.
"Series A Preferred Stock" means the Company's Series A 13.45% Senior
Exchangeable Preferred Stock issued pursuant to that certain Certificate of
Designations filed with the Delaware Secretary of State on November 13, 1997 as
such Certificate is amended from time to time with the consent of Holders of a
majority in aggregate principal amount of Notes, such consent not to be
unreasonably withheld.
"Significant Subsidiary" shall have the meaning provided under
Regulation S-X of the Securities Act, as in effect on the Issue Date.
"Stated Maturity," when used with respect to any Note or any installment
of interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subordinated Indebtedness" means Indebtedness of the Company that is
subordinated in right of payment by its terms or the terms of any document or
instrument or instrument relating thereto to the Notes in any respect or has a
final stated maturity after the Stated Maturity.
"Subsidiary," with respect to any person, means (i) a corporation a
majority of whose Equity Interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such person, by such person and one or more Subsidiaries of such person or by
one or more Subsidiaries of such person,
-29-
38
(ii) any other person (other than a corporation) in which such person, one or
more Subsidiaries of such person, or such person and one or more Subsidiaries of
such person, directly or indirectly, at the date of determination thereof has at
least majority ownership interest, or (iii) a partnership in which such person
or a Subsidiary of such person is, at the time, a general partner.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a
Subsidiary of the Company or of any Subsidiary of the Company. Unless the
context requires otherwise, Subsidiary means each direct and indirect Subsidiary
of the Company.
"Thrifty" means Thrifty Corporation.
"Transaction Date" has the meaning set forth in the definition of
"Consolidated Coverage Ratio."
"Trustee" means the person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, except as provided in
Section 905; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"U.S. Government Obligations" has the meaning specified in Section 1204.
"Unrestricted Subsidiary" means any subsidiary of the Company that does
not own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); provided, that (i) such subsidiary shall not
engage, to any substantial extent, in any line or lines of business activity
other than a Related Business, (ii) neither immediately prior thereto nor after
giving pro forma effect to such designation would there exist a Default or Event
of Default and (iii) immediately after giving pro forma effect thereto, the
Company could incur at least $1.00 of
-30-
39
Indebtedness pursuant to the Debt Incurrence Ratio of Section 1008 (provided,
however, that this clause (iii) will not apply in the case of a newly formed
subsidiary being designated an Unrestricted Subsidiary, with the initial
capitalization thereof to be effected under clause (b) of the definition of
Permitted Payments). The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Subsidiary, provided that (i) no Default or
Event of Default is existing or will occur as a consequence thereof and (ii)
immediately after giving effect to such designation, on a pro forma basis, the
Company could incur at least $1.00 of Indebtedness pursuant to the Debt
Incurrence Ratio of Section 1008. Each such designation shall be evidenced by
filing with the Trustee a certified copy of the resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"U.S. Government Obligations" means direct noncallable obligations of,
or noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Yield to Maturity" equals 13.45% per annum (6.725% for each Accrual
Period).
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
-31-
40
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he 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 complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an
-32-
41
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Date.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be
-33-
42
proved in any other manner which the Trustee deems sufficient.
c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.
d) The ownership of Notes shall be proved by the Note Register.
e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office, or
-34-
43
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company addressed
to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Note Register, not later than
the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any
-35-
44
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or to
be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders of Notes, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
-36-
45
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date or Purchase
Date, or at the Stated Maturity, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Purchase Date
or Stated Maturity, as the case may be.
SECTION 114. No Personal Liability of Partners,
Stockholders, Officers, Directors.
No direct or indirect stockholder, employee, officer or director, as
such, past, present or future of the Company, the Subsidiaries or any successor
entity shall have any personal liability in connection with this Indenture or
the Notes solely by reason of his or its status as such stockholder, employee,
officer or director. Each Holder of Notes by accepting a Note waives and
releases all such liability, acknowledges and consents to the transactions
constituting the Recapitalization and further acknowledges the waiver and
release are part of the consideration for the issuance of the Notes.
ARTICLE TWO
Note Forms
SECTION 201. Forms Generally.
The Notes and the Trustee's certificates of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers
-37-
46
executing such Notes, as evidenced by their execution of the Notes.
The definitive Notes shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
on which the Notes may be listed, all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
SECTION 202. Form of Face of Note.
FOR PURPOSES OF SECTIONS 1272, 1273 and ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND PURSUANT TO SECTION 1.1275-3(b),
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, THE ISSUE PRICE OF THIS NOTE
IS 50.18% OF ITS PRINCIPAL AMOUNT, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS
NOTE IS $1,305.17 PER $1,000 OF STATED FACE AMOUNT, THE ISSUE DATE IS NOVEMBER
13, 1997 AND THE YIELD TO MATURITY IS 13.82%.*
THESE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS
(i) A REGISTRATION STATEMENT UNDER THE ACT SHALL HAVE BECOME EFFECTIVE WITH
RESPECT THERETO AND ALL APPLICABLE QUALIFICATIONS UNDER STATE SECURITIES LAWS
SHALL HAVE BEEN OBTAINED WITH RESPECT THERETO; OR (ii) A WRITTEN OPINION FROM
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE COMPANY HAS BEEN OBTAINED
STATING THAT NO SUCH REGISTRATION OR QUALIFICATION IS REQUIRED.
----------------------
* Company and each Holder hereby agree to amend this legend within sixty
(60) days following the date of this Indenture to reflect adjustments in
the number of warrants originally issued in connection with the Notes.
-38-
47
SENIOR DISCOUNT NOTES DUE 2008
No. $48,225,000
Big 5 Holdings Corp., a corporation duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to) , for value
received, hereby promises to pay to ______________________, or registered
assigns, the principal sum of Forty Eight Two Hundred Twenty Five Thousand
Dollars on November 30, 2008, and to pay interest thereon from November 30, 2002
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on May 31 and November 30 in each year,
commencing May 31, 2003, at 13.45% until the principal hereof is paid or made
available for payment, and (to the extent that the payment of such interest
shall be legally enforceable) at the rate of 15.45% per annum on any overdue
principal and premium] and on any overdue installment of interest until paid as
specified on the reverse hereof.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the May 15 or November 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Notes not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
The principal of this Note shall not accrue interest until November 30,
2002, except in the case of a default in payment of principal upon acceleration
or
-39-
48
redemption and, in such case, the interest payable pursuant to the preceding
paragraph on the overdue principal as specified on the reverse hereof shall be
payable on demand and, if not so paid on demand, such interest shall itself bear
interest at the rate of 15.45% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest or unpaid interest shall also be payable on
demand.
Payment of the principal of (and premium, if any) and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, 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; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Note
Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
-40-
49
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
BIG 5 HOLDINGS CORP.
[Seal]
By
----------------------------------
Title:
Attest:
-------------------------------
Title:
SECTION 203. Form of Trustee's Certificate of Authentication.
This is one of the Notes referred to in the within-mentioned Indenture.
Dated:
----------------------------------
as Trustee
By
----------------------------------
Authorized Officer
SECTION 204. Form of Reverse of Note.
This Note is one of a duly authorized issue of Notes of the Company
designated as its Senior Discount Notes due 2008 (herein called the "Notes"),
limited in aggregate principal amount to $48,225,000, issued and to be issued
under an Indenture, dated as of November 13, 1997 (herein called the
"Indenture"), between the Company and First Trust National Association, as
Trustee (herein called the
-41-
50
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all Indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered.
The Notes are subject to redemption upon not less than 30 nor more than
60 days' notice by mail, at any time on or after November 30, 2002, as a whole
or in part, at the election of the Company, at a Redemption Price which, if
during the twelve month period beginning November 30, 2002 is equal to 110% of
the principal amount of this Note; if during the twelve month period beginning
November 30, 2003 is equal to 106.67% of the principal amount of this Note; if
during the twelve month period beginning November 30, 2004 is equal to 103.33%
of the principal amount of this Note; and thereafter is equal to 100% of the
principal amount of this Note, in each case plus interest thereon accruing from
November 30, 2002 or the most recent Interest Payment Date to which interest has
been paid or duly provided for, at the rate of 13.45% per annum, provided that
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
Notwithstanding the foregoing, at any time prior to November 30, 2002,
the Company may give notice of redemption for all, but not less than all, of
this Note at a Redemption Price equal to 113.45% of the Accreted Value of this
Note promptly upon (and in no event later than 10 days after) the Company's
receipt of cash from the Net Cash Proceeds to the Company of any Public Equity
Offering. In such event, the Note shall be redeemed on a date not less than 30
days nor more than 60 days after the date of such notice.
The Notes do not have the benefit of any sinking fund obligations.
In the event of redemption or purchase pursuant to an Asset Sale Offer
or Change of Control Offer of this Note in part only, a new Note or Notes for
the unredeemed portion
-42-
51
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the Default Amount of the Securities, in the manner and
with the effect provided in the Indenture. Until and including November 30,
2002, the Default Amount in respect of this Note as of any particular date of
acceleration shall equal the Accreted Value of this Note. For this purpose,
Accreted Value means the Adjusted Issue Price as of the first day of the Accrual
Period in which the date of acceleration occurs increased by the daily portion
of the Original Issue Discount for each day in such Accrual Period ending on the
date of acceleration. Such Default Amount shall bear interest at the rate of
15.45% per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of acceleration to the
date payment has been made or duly provided for. On and after November 30, 2002,
the Default Amount in respect of this Note shall equal 100% of the principal
amount of this Note. Such Default Amount shall bear interest at the rate of
15.45% per annum from November 30, 2002 or the most recent Interest Payment Date
to which interest has been paid or duly provided for. Upon payment of (i) the
Default Amount so declared due and payable and any overdue installment of
interest, (ii) interest on the Default Amount and (iii) as provided on the face
hereof, interest on any overdue installment of interest or, if acceleration
occurs prior to November 30, 2002, on the interest referred to in the third
preceding sentence (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest on the Notes shall terminate.
The Indenture provides that, subject to certain conditions, if (i)
certain Net Cash Proceeds are available to the Company as a result of Asset
Sales or (ii) a Change of Control occurs, the Company shall be required to make
an Asset Sale Offer or Change of Control Offer, respectively, for all of the
Notes.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this Note or (ii) certain restrictive covenants and
Events of Default with respect to this Note, in each case upon compliance with
certain conditions set forth therein.
-43-
52
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes at the time Outstanding,
on behalf of the Holders of all the Notes, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in the Borough of Manhattan, The City of New York and at any other
office or agency maintained by the Company for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes
-44-
53
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Accrual Periods and interest on this Note shall be computed on the basis
of a 360-day year of twelve 30-day months.
No direct or indirect stockholder, employee, officer or director, as
such, past, present or future of the Company, the Subsidiaries or any successor
entity shall have any personal liability in connection with this Note solely by
reason of his or its status as such stockholder, employee, officer or director.
Each Holder by accepting this Note waives and releases all such liability,
acknowledges and consents to the transactions constituting the Recapitalization
and further acknowledges the waiver and release are part of the consideration
for the issuance of this Note.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.
-45-
54
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased in its entirety by the
Company pursuant to Section 1013 or 1015 of the Indenture, check the box:
[ ]
If you want to elect to have only a part of this Note purchased by the
Company pursuant to Section 1013 or 1015 of the Indenture, state the amount: $
Dated: Your Signature:
--------------------------
(Sign exactly as name appears
on the other side of this Note)
Signature Guarantee:
---------------------------------------
(Signature must be guaranteed by a member firm of the
New York Stock Exchange or a commercial bank or trust
company)
ARTICLE THREE
The Notes
SECTION 301. Title and Terms.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $48,225,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1108
or in connection with an Asset Sale Offer or Change of Control Offer pursuant to
Sections 1013 or 1015.
The Notes shall be known and designated as the "Senior Discount Notes
due 2008" of the Company. Their Stated Maturity shall be November 30, 2008 and
they shall bear interest at 13.45% from November 30, 2002 or from the most
recent Interest Payment Date to which interest has been
-46-
55
paid or duly provided for, as the case may be, payable semiannually on May 31
and November 30, commencing May 31, 2003, until the principal thereof is paid or
made available for payment.
The principal of (and premium, if any) and interest on the Notes shall
be payable at the office or agency of the Company in the Borough of Manhattan,
The City of New York maintained for such purpose and at any other office or
agency maintained by the Company for such purpose; provided, however, that at
the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Note
Register.
The Notes shall be subject to repurchase by the Company pursuant to an
Asset Sale Offer or Change of Control Offer, respectively, as provided in
Sections 1013 and 1015.
The Notes shall be subject to defeasance at the option of the Company as
provided in Article Twelve.
SECTION 302. Denominations.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Company by its Chairman of
the Board, its President or one of its Vice Presidents, reproduced thereon and
may be attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
-47-
56
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Notes; and the Trustee in accordance with such Company
Order shall authenticate and deliver such Notes as in this Indenture provided
and not otherwise.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
SECTION 304. Temporary Notes.
Pending the preparation of definitive Notes, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at any office or agency of the Company
designated pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Notes of authorized denominations. Until so
exchanged the
-48-
57
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Trustee is hereby appointed
"Note Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided.
Upon surrender for registration of transfer of any Note at an office or
agency of the Company designated pursuant to Section 1002 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Note Registrar duly
-49-
58
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 304, 906 or 1108 or in accordance with any Asset Sale Offer
or Change of Control Offer pursuant to Section 1013 or 1015 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 1104 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
All Notes originally issued hereunder shall bear the following legend:
"THESE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS
(i) A REGISTRATION STATEMENT UNDER THE ACT SHALL HAVE BECOME EFFECTIVE WITH
RESPECT THERETO AND ALL APPLICABLE QUALIFICATIONS UNDER STATE SECURITIES LAWS
SHALL HAVE BEEN OBTAINED WITH RESPECT THERETO; OR (ii) A WRITTEN OPINION FROM
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE COMPANY HAS BEEN OBTAINED
STATING THAT NO SUCH REGISTRATION OR QUALIFICATION IS REQUIRED."
All Notes issued upon transfer or exchange or replacement thereof shall
bear such legend unless the Company shall have delivered to the Trustee (and the
Note Register, if other than the Trustee) a Company Order which states that the
Note may be issued without such legend thereon.
-50-
59
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
If any mutilated Note is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Note and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
-51-
60
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date immediately preceding such Interest Payment
Date.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be
-52-
61
mailed, first-class postage prepaid, to each Holder at his address as it
appears in the Note Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Notes (or their
respective Predecessor Notes) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of (and premium, if any) and (subject
to Section 307) interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. Cancellation.
All Notes surrendered for payment, redemption, registration of transfer
or exchange or any Asset Sale Offer or Change of Control Offer pursuant to
Section 1013 or 1015
-53-
62
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly canceled by the
Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Notes held by the Trustee shall be disposed of as
directed by a Company Order.
SECTION 310. Computation of Interest.
Accrual Periods and interest on the Notes shall be computed on the basis
of a year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Notes herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee for
cancellation
-54-
63
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest to the date of such deposit (in
the case of Notes which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article Four, the obligations of the Company to the Trustee under Section
607 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
-55-
64
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) the failure by the Company to pay any installment of interest on the
Notes as and when the same becomes due and payable and the continuance of
any such failure for 30 days;
(2) the failure by the Company to pay all or any part of the principal,
or premium, if any, on the Notes when and as the same becomes due and
payable at maturity, redemption, by acceleration or otherwise, including,
without limitation, payment of the Change of Control Purchase Price or the
Asset Sale Offer Price, or otherwise;
(3) the failure by the Company or any Subsidiary of the Company to
observe or perform any other covenant or agreement contained in the Notes or
the Indenture and, subject to certain exceptions, the continuance of such
failure for a period of 30 days after written notice is given to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Notes outstanding, specifying such
Default;
(4) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in
-56-
65
respect of the Company or any Subsidiary of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company or any such Subsidiary a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any such
Subsidiary under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any such Subsidiary or of any substantial
part of the property of the Company or any such Subsidiary, or ordering the
winding up or liquidation of the affairs of the Company or any such
Subsidiary, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of 60
consecutive days;
(5) the commencement by the Company or any Subsidiary of the Company of
a voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by the Company or any such Subsidiary to the entry of a decree or order for
relief in respect of the Company or any Subsidiary of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or any Subsidiary of the Company, or the filing by the Company or
any such Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by the Company or any such Subsidiary to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or any Subsidiary of the Company or of any substantial part of the
property of the Company or any Subsidiary of the Company, or the making by
the Company or any Subsidiary of the Company of an assignment for the
benefit of creditors, or the admission by the Company or any such Subsidiary
in writing of its
-57-
66
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company or any such Subsidiary in furtherance of any
such action;
(6) a default in any indebtedness of the Company or its Subsidiaries,
with an aggregate principal in excess of $15 million (a) resulting from the
failure to pay principal at maturity or (b) as a result of which the
maturity of such indebtedness has been accelerated prior to its stated
maturity; or
(7) a final judgment or final judgments not covered by insurance for the
payment of money are entered against the Company or any Subsidiary of the
Company in an aggregate amount in excess of $15 million by a court or courts
of competent jurisdiction, which judgments remain undischarged or unbonded
for a period (during which execution shall not be effectively stayed) of 60
days after the right to appeal all such judgments has expired.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(4) or (5)) occurs and is continuing, then and in every such case
unless the principal of all of the Notes shall already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding may declare the Default Amount of all the
Notes to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), and upon any such declaration such
Default Amount and any accrued interest shall become immediately due and
payable. If an Event of Default specified in section 501(4) or (5) occurs, the
Default Amount of and any accrued interest on the Notes then Outstanding shall
ipso facto become immediately due and payable without any declaration or other
Act on the part of the Trustee or any Holder.
Until and including November 30, 2002, the "Default Amount" in respect
of any particular Note as of any particular date of acceleration shall equal the
Accreted
-58-
67
Value of the Note. For this purpose, "Accreted Value" means the Adjusted Issue
Price as of the first day of the Accrual Period in which the date of
acceleration occurs increased by the daily portion of the Original Issue
Discount for each day in such Accrual Period ending on the date of acceleration.
On and after November 30, 2002, the "Default Amount" in respect of any
particular Note shall equal 100% of the principal amount of the Note.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all overdue interest on all Notes,
(B) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration (including
any Notes required to have been purchased on the pursuant to an Asset
Sale Offer or Change of Control Offer made by the Company) and, to the
extent that payment of such interest is lawful, interest thereon at the
rate provided by the Notes,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate provided by the Notes, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the nonpayment of the principal or
premium, if any, and interest on the Notes which have become due solely by
-59-
68
such declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Note when such
interest becomes due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Note at the Maturity thereof or, with respect to any Note
required to have been purchased pursuant to an Asset Sale Offer or Change of
Control Offer made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Notes, the whole amount then due and payable on such Notes for
principal (and premium, if any) and interest, and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any) and on any overdue interest, at the rate provided by the
Notes, and, in addition thereto, 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.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes, wherever situated.
-60-
69
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Notes), its property or its creditors, the Trustee shall be
entitled and empowered, by intervention in such proceeding or otherwise, to take
any and all actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official 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 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 607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the
-61-
70
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Notes in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal (and premium, if
any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Note shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default:
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to
institute proceedings in
-62-
71
respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Note on the respective Stated Maturities expressed in such Note
(or, in the case of redemption, on the Redemption Date or in the case of an
Asset Sale Offer or Change of Control Offer made by the Company and required to
be accepted as to such Note, on the purchase Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
-63-
72
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
-64-
73
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Notes
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Notes may on behalf of the Holders of all the Notes waive any
past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or interest
on any Note (including any Note which is required to have been purchased
pursuant to an Asset Sale Offer or Change of Control Offer which has been
made by the Company), or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Note 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 514. 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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit
-65-
74
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act; provided, that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
-66-
75
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in
-67-
76
it by this Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Notes. The Trustee shall not be accountable for the use or application by
the Company of Notes or the proceeds thereof.
-68-
77
SECTION 605. May Hold Notes.
The Trustee, any Paying Agent, any Note Registrar or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of Notes and, subject to Sections 608 and 613, may otherwise deal with
the Company with the same rights it would have if it were not Trustee, Paying
Agent, Note Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending
-69-
78
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and a Corporate Trust
Office in the Borough of Manhattan, The City of New York. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may
-70-
79
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Notes, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property of affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Notes delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
-71-
80
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
-72-
81
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each May 15 and November
15, commencing May 15, 2003, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of such
date, and
-73-
82
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such
list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Note Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Note Registrar.
The Trustee may destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Notes and the corresponding
rights and duties of the Trustee, shall be provided by the Trust Indenture Act.
(c) Every Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to the names and addresses of Holders made pursuant
to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Notes are listed,
-74-
83
with the Commission and with the Company. The Company will notify the Trustee
when the Notes are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall deliver to the Trustee within 15 days after it is or
would have been (if it were subject to such reporting obligations) required to
file such with the Commission, annual and quarterly financial statements
substantially equivalent to financial statements that would have been included
in reports field with the Commission, if the Company were subject to the
requirements of Section 13 or 15(d) of the Exchange Act, including, with respect
to annual information only, a report thereon by the Company's certified
independent public accountants as such would be required in such reports to the
Commission.
-75-
84
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Limitation on Merger, Sale or Consolidation.
The Company and its Subsidiaries shall not consolidate with or merge
with or into another Person or, directly or indirectly, sell, lease, convey or
transfer all or substantially all of its assets (computed on a consolidated
basis) , whether in a single transaction or a series of related transactions, to
another Person or group of affiliated Persons or adopt a plan of liquidation,
unless:
(1) either (a) the Company is the continuing entity or (b) the
resulting, surviving or transferee entity or, in the case of a plan of
liquidation, the entity which receives the greatest value from such plan of
liquidation is a corporation organized under the laws of the United States,
any state thereof or the District of Columbia and expressly assumes by
supplemental indenture all of the obligations of the Company in connection
with the Notes and this Indenture;
(2) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction;
(3) immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth of the consolidated surviving or
transferee entity or, in the case of a plan of liquidation, the entity which
receives the greatest value from such plan of liquidation is at least equal
to the Consolidated Net Worth of the Company immediately prior to such
transaction;
(4) immediately after giving effect to such transaction on a pro forma
basis, the consolidated resulting, surviving or transferee entity or, in the
case of a plan of liquidation, the entity which receives the greatest value
from such plan of liquidation would immediately thereafter be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Debt
Incurrence Ratio set forth in Section 1008; and
-76-
85
(5) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer, lease or acquisition and, if a supplemental indenture
is required in connection with such transaction, such supplemental
indenture, complies with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with,
and, with respect to such Officer's Certificate, setting forth the manner of
determination of the Consolidated Net Worth and the ability to Incur
Indebtedness in accordance with Clause (4) of Section 801, the Company or,
if applicable, of the Successor Company as required pursuant to the
foregoing.
SECTION 802. Successor Substituted.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company or consummation of a plan of liquidation in
accordance with the foregoing, the successor corporation formed by such
consolidation or into which the Company is merged or to which such transfer is
made or, in the case of a plan of liquidation, the entity which receives the
greatest value from such plan of liquidation shall succeed to and (except in the
case of a lease) be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named therein as the Company, and (except in the case of a
lease) the Company shall be released from the obligations under the Notes and
the Indenture except with respect to any obligations that arise from, or are
related to, such transaction.
SECTION 803. Transfer of Subsidiary Assets.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Company's interest in which constitutes all or
substantially all of the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
-77-
86
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and
in the Notes; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to secure the Notes pursuant to the requirements of Section 1011 or
otherwise; or
(4) to comply with any requirements of the Commission in order to effect
and maintain the qualification of this Indenture under the Trust Indenture
Act; or
(5) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such action pursuant to this Clause (5) shall not
adversely affect the interests of the Holders in any material respect.
-78-
87
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes at the time outstanding, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of amending or supplementing this
Indenture or any supplemental indenture or modifying the rights of the Holders;
provided, however, that no such modification may, without the consent of Holders
of at least 50% in aggregate principal amount of Notes at the time outstanding,
modify the provisions (including the defined terms used therein) of Section 1015
in a manner adverse to the Holders; and provided that no such modification may,
without the consent of each Holder thereby:
(1) change the Stated Maturity on any Note, or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest
thereon or any premium payable upon the redemption at the option of the
Company thereof, or change the place of payment where, or the coin or
currency in which, any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption at the option of the Company, on or after the Redemption Date),
or reduce the Change of Control Purchase Price or the Asset Sale Offer Price
of alter the provisions (including the defined terms used therein) regarding
the right of the Company to redeem the Notes at its option in a manner
adverse to the Holders, or
(2) reduce the percentage in principal amount of the outstanding Notes,
the consent of whose Holders is required for any such amendment,
supplemental indenture or waiver provided for in this Indenture, or
(3) modify any of the waiver provisions of this Section, Section 513 or
Section 1019 except to increase any required percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Note affected thereby,
or
-79-
88
(4) cause the Notes to become subordinate in right of payment to any
other Indebtedness, or
(5) following the mailing of an Asset Sale Offer or Change of Control
Offer pursuant to Sections 1013 or 1015, modify the provisions of this
Indenture with respect to such offer in a manner adverse to such Holder.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
-80-
89
SECTION 906. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and premium,
if any) and any interest on the Notes in accordance with the terms of the Notes
and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
-81-
90
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
SECTION 1003. Money for Note Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any) or interest
on any of the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Notes, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium or interest,
and (unless such Paying Agent is the Trustee) the Company will, promptly notify
the Trustee of its action or failure so to act.
The Company will, cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium. if any) or interest on Notes in trust for the benefit of the
Persons entitled
-82-
91
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any payment of principal (and
premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
-83-
92
SECTION 1004. Existence.
Subject to Article Eight and Section 1013, the Company and its
Subsidiaries will do or cause to be done all things necessary to preserve and
keep in full force and effect their existence, rights (charter and statutory)
and franchises; provided, however, that the Company and its Subsidiaries shall
not be required to preserve any such right or franchise if the Board of
Directors in good faith shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company or its
Subsidiaries and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary of the Company to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, as determined by the Board of Directors in good faith,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
its Subsidiaries, and (2) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Company or
any of its Subsidiaries; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or
-84-
93
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1007. Maintenance of Insurance.
The Company shall, and shall cause its Subsidiaries to, keep at all
times all of their properties which are of an insurable nature insured against
loss or damage with insurers believed by the Company to be responsible to the
extent that property of similar character is usually so insured by corporations
similarly situated and owning like properties in accordance with good business
practice. The Company shall, and shall cause its Subsidiaries to, use the
proceeds from any such insurance policy to repair, replace or otherwise restore
the property to which such proceeds relate.
SECTION 1008. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, issue, assume, guaranty, incur, become directly or
indirectly liable with respect to (including as a result of an Acquisition) or
otherwise become responsible for, contingently or otherwise (individually and
collectively, to "incur" or, as appropriate an "incurrence"), any Indebtedness
or any Disqualified Capital Stock (including Acquired Indebtedness) other than
permitted Indebtedness.
Notwithstanding the foregoing, if (i) no Default or Event of Default
shall have occurred and be continuing at the time of, or would occur after
giving effect on pro forma basis to, such incurrence of Indebtedness (including,
without duplication, guarantees of Indebtedness of Principal Subsidiary
otherwise permitted by this Indenture) or Disqualified Capital Stock and (ii) on
the date of such incurrence (the "Incurrence Date"), the Consolidated Coverage
Ratio of the Company for the Reference Period immediately preceding the
Incurrence Date, after giving effect on a pro forma basis to such incurrence of
such Indebtedness (without duplication) or Disqualified Capital Stock and, to
the extent set forth in the definition of
-85-
94
Consolidated Coverage Ratio, the use of proceeds thereof would be at least 2.0
to 1 (the "Debt Incurrence Ratio") (it being understood that for purposes of
determining such Debt Incurrence Ratio, the Notes, the Exchange Notes, and all
interest thereon shall not be included), then the Company may incur such
Indebtedness or Disqualified Capital Stock and the Subsidiaries may incur such
Indebtedness other than Disqualified Capital Stock.
In addition, the foregoing limitations will not apply to:
(a) the incurrence by the Company or any Subsidiary of Purchase
Money Indebtedness on or after the Issue Date, provided, that (1) the
aggregate principal amount of such Indebtedness incurred on or after the
Issue Date and outstanding at any time pursuant to this paragraph (a)
(including any Indebtedness issued to refinance, replace or refund such
Indebtedness) shall not exceed $20.0 million, and (ii) in each case, such
Indebtedness as originally incurred shall not constitute more than 100% of
the cost (determined in accordance with GAAP) to Principal Subsidiary or
such Subsidiary, as applicable, of the property so purchased or leased;
(b) the incurrence by the Company or any Subsidiary of Indebtedness
in an aggregate principal amount outstanding at any time (including
Indebtedness incurred to refinance, replace, or refund such Indebtedness) of
up to $15.0 million (which may be incurred pursuant to the Credit
Agreement);
(c) the incurrence by the Company or any Subsidiary of Indebtedness
pursuant to the Credit Agreement up to an aggregate principal amount
outstanding at any time (including any Indebtedness incurred to refinance,
replace or refund such Indebtedness) of $125.0 million, minus the amount of
any such Indebtedness retired with the Net Cash Proceeds from any Asset Sale
or assumed by a transferee in an Asset Sale; and
(d) the incurrence by the Company of Indebtedness represented by
Exchange Notes; provided, however, that at any time the Company could not
(except by reason of this clause (d)) incur the Indebtedness represented by
-86-
95
the Exchange Notes under this Section 1008, any interest payment thereon
shall be counted as a payment under clause (B)(ii) of the penultimate
paragraph of Section 1009.
Indebtedness or Disqualified Capital Stock of any Person which is
outstanding at the time such Person becomes a Subsidiary of the Company
(including upon designation of any subsidiary or other person as a Subsidiary)
or is merged with or into or consolidated with the Company or a Subsidiary of
the Company shall be deemed to have been incurred at the time such Person
becomes such a Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Subsidiary of the Company, as applicable.
Notwithstanding anything to the contrary contained in this Indenture,
(i) the Subsidiaries each may guaranty Indebtedness of the Company or any other
Subsidiary that is permitted to be incurred under the Indenture, at the time the
Company or such other Subsidiary incurs such Indebtedness, and (ii) the Company
may guaranty Indebtedness of any Subsidiary permitted to be incurred under this
Indenture.
Notwithstanding anything to the contrary contained in this Indenture,
the Company shall not incur any Indebtedness that is contractually subordinate
to any other Indebtedness of the Company unless such Indebtedness is at least as
subordinate to the Notes.
SECTION 1009. Limitation on Restricted Payments.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make any Restricted Payment if, after giving effect to
such Restricted Payment on a pro forma basis:
(1) a Default or an Event of Default shall have occurred and be
continuing,
(2) Principal Subsidiary is not permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt Incurrence Ratio in Section
1008,
-87-
96
(3) in the case of Principal Subsidiary and its Subsidiaries, the
aggregate amount of all Restricted Payments made by Principal Subsidiary and
its Subsidiaries, including after giving effect to such proposed Restricted
Payment, from and after the Issue Date, would exceed the sum of:
(a) 50% of the aggregate Consolidated Net Income of Principal Subsidiary
for the period (taken as one accounting period), commencing on the
first day after the Issue Date, to and including the last day of the
fiscal quarter ended immediately prior to the date of each such
calculation (or, in the event Consolidated Net Income for such
period is a deficit, then minus 100% of such deficit), plus
(b) the aggregate Net Cash Proceeds received by Principal Subsidiary
from the sale of Principal Subsidiary's Qualified Capital Stock
(other than in each case (i) to a Subsidiary of Principal
Subsidiary, and (ii) to the extent applied in connection with a
Qualified Exchange,) or
(4) in the case of the Company, the aggregate amount of all Restricted
Payments made by the Company and its Subsidiaries, including after giving
effect to such proposed Restricted Payment, from and after the Issue Date,
would exceed the sum of:
(a) 50% of the aggregate Consolidated Net Income of the Company for the
period (taken as one accounting period), commencing on the first day
after the Issue Date, to and including the last day of the fiscal
quarter ended immediately prior to the date of each such calculation
(or, in the event Consolidated Net Income for such period is a
deficit, then minus 100% of such deficit), plus
(b) the aggregate Net Cash Proceeds received by the Company from the
sale of the Company's Qualified Capital Stock (other than in each
case (i) to a Subsidiary of the Company, (ii) to the extent applied
in connection with a
-88-
97
Qualified Exchange and (iii) to the extent applied to repurchase
Capital Stock pursuant to clause (e) of the definition of Permitted
Payments).
The provisions of the immediately preceding paragraph will not prohibit
or be violated by reason of (A) a Qualified Exchange; (B) (i) the payment or
making of any Restricted Payment within 60 days after the date of declaration
thereof or the making of any binding commitment in respect thereof, if at said
date of declaration or commitment, such restricted payment would have complied
with the provisions contained in clauses (1), (2), (3) and (4), as applicable,
of the immediately preceding paragraph, and (ii) the making of any cash dividend
payment on or after December 1, 2004 on the Company's Series A Preferred Stock,
if at said date of declaration or commitment, such Restricted Payment would have
complied with the provisions contained in clause (1) of the immediately
preceding paragraph; and (C) Permitted Payments. The full amount of any
Restricted Payment made pursuant to the foregoing clause (B) (but not pursuant
to clauses (A) or (C) ) of the immediately preceding sentence, however, will be
deducted in the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (4) of the immediately preceding
paragraph.
For purposes of this covenant, the amount of any Restricted Payment, if
other than in cash, shall be the fair market value thereof, as determined in the
good faith reasonable judgment of the Board of Directors of the Company.
SECTION 1010. Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, assume or suffer to exist any consensual
encumbrance or restriction on the ability of any Subsidiary of the Company (i)
to pay, directly or indirectly, dividends or make any other distributions in
respect of its Capital Stock or pay any Indebtedness or other obligation owed to
the Company or any other Subsidiary of the Company; (ii) to make or pay loans or
advances to the or in behalf of Company or any Subsidiary
-89-
98
of the Company; or (iii) to transfer any of its property or assets to or in
behalf of the Company or any Subsidiary of the Company, except:
(a) restrictions imposed by the Notes or this Indenture or by other
indebtedness of the Company ranking pari passu with the Notes, provided such
restrictions are not materially more restrictive than those imposed by this
Indenture and the Notes,
(b) restrictions imposed by applicable law,
(c) existing restrictions under Indebtedness outstanding on the
Issue Date, including the Principal Subsidiary Notes, or under other
indebtedness of a Subsidiary ranking pari passu with the Principal
Subsidiary Notes or a guarantee thereof, provided such restrictions are not
materially more restrictive than those imposed by the Principal Subsidiary
Indenture and the Principal Subsidiary Notes,
(d) restrictions under any Acquired Indebtedness not incurred in
violation of this Indenture or any agreement relating to any property,
asset, or business acquired by the Company or any of its Subsidiaries, which
restrictions in each case existed at the time of acquisition, were not put
in place in connection with or in anticipation of such acquisition and are
not applicable to any person, other than the person acquired, or to any
property, asset or business, other than the property, assets and business so
acquired,
(e) any such restriction or requirement imposed by Indebtedness
incurred under the Credit Agreement in accordance with this Indenture,
provided such restriction or requirement is not materially more restrictive
than that imposed by the CIT Credit Facility as of the Issue Date,
(f) restrictions with respect solely to a Subsidiary of the Company
imposed pursuant to a binding agreement which has been entered into for the
sale or disposition of all or substantially all of the Equity Interests or
assets of such Subsidiary, provided such restrictions apply solely to the
Equity Interests or assets of such Subsidiary which are being sold,
-90-
99
(g) restrictions on transfer contained in Purchase Money
Indebtedness incurred pursuant to paragraph (a) of Section 1008, provided
such restrictions relate only to the transfer of the property acquired with
the proceeds of such Purchase Money Indebtedness, and
(h) in connection with and pursuant to permitted Refinancings,
replacements of restrictions imposed pursuant to clauses (a), (c), (d), (e),
or (g) of this section that are not materially more restrictive than those
being replaced and do not apply to any other person or assets than those
that would have been covered by the restrictions in the Indebtedness so
refinanced.
Notwithstanding the foregoing, neither (a) customary provisions
restricting subletting or assignment of any lease entered into in the ordinary
course of business, consistent with industry practice, nor (b) Liens permitted
under the terms of this Indenture shall in and of themselves be considered a
restriction on the ability of the applicable Subsidiary to transfer such
agreement or assets, as the case may be.
SECTION 1011. Limitation on Liens.
The Company will not create, incur, assume or suffer to exist, to secure
any Indebtedness, any Lien of any kind, other than permitted Liens, upon any of
its assets now owned or acquired on or after the date of this Indenture or upon
any income or profits therefrom unless the Company provides that the Notes are
equally and ratably so secured for so long as such Indebtedness so secured
remains outstanding; provided that, if such Indebtedness is Subordinated
Indebtedness, the Lien securing such Subordinated Indebtedness shall be
subordinate and junior to the Lien securing the Notes with the same relative
priority as such Subordinated Indebtedness shall have with respect to the Notes.
SECTION 1012. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly enter into any contract, agreement, arrangement or
transaction with any
-91-
100
Affiliate (an "Affiliate Transaction") , or any series of related Affiliate
Transactions (other than Exempted Affiliate Transactions) , unless the terms of
such Affiliate Transaction are fair and reasonable to the Company or such
Subsidiary, as the case may be, and are at least as favorable as the terms which
could reasonably be expected to be obtained by the Company or such Subsidiary,
as the case may be, in a comparable transaction made on an arm's length basis
with persons who are not Affiliates.
Without limiting the foregoing, in connection with any Affiliate
Transaction or series of related Affiliate Transactions (other than Exempted
Affiliate Transactions) (1) involving consideration to either party in excess of
$1.0 million, the Company must deliver an Officers' Certificate to the Trustee,
stating that the terms of such Affiliate Transaction are fair and reasonable to
the Company, and no less favorable to the Company than could reasonably be
expected to have been obtained in an arm's length transaction with a
non-Affiliate, and (2) involving consideration to either party in excess of $5.0
million, the Company must also, prior to the consummation thereof, obtain a
favorable written opinion as to the fairness of such transaction to the Company
from a financial point of view from an independent investment banking firm of
national reputation or, if pertaining to a matter for which such investment
banking firms do not customarily render such opinions, an appraisal or valuation
firm of national reputation; provided, however, that this sentence shall not
apply to the sale or purchase of products by the Company or its Subsidiaries to
or from any Affiliate of LGP or any Related Party thereof, which sale or
purchase is in the ordinary course of business and in accordance with industry
practice.
SECTION 1013. Limitation on Certain Sales of Capital Stock of Subsidiaries and
Certain Assets.
The Company shall not, and shall not permit any of its Subsidiaries to,
in one or a series of related transactions, convey, sell, transfer, assign or
otherwise dispose of, directly or indirectly, any of its property, business or
assets (other than cash or Cash Equivalents) including by merger or
consolidation (in the case of a Subsidiary), and including any sale or other
transfer or issuance of any Equity Interests (other than directors
-92-
101
qualifying shares) of any Subsidiary of the Company, whether by the Company or a
Subsidiary of the Company, and including (except as provided in clause (vi) of
the third paragraph of this section) any Sale and Leaseback Transaction (any of
the foregoing, an "Asset Sale"), unless:
(1) (a) within 390 days after the date of such Asset Sale, the Net
Cash Proceeds therefrom (the "Asset Sale Offer Amount") are applied to the
optional redemption of the Notes in accordance with the terms of this
Indenture and other Indebtedness of the Company ranking on a parity with the
Notes from time to time outstanding with similar provisions requiring the
Company to make an offer to purchase or redeem such Indebtedness with the
proceeds of asset sales, pro rata in proportion to the respective principal
amounts (or accreted values in the case of Indebtedness issued with an
original issue discount) of the Notes and such other Indebtedness then
outstanding or to the repurchase of the Notes and such other Indebtedness
pursuant to a cash offer (subject only to conditions required by applicable
law, if any) (pro rata in proportion to the respective principal amounts (or
accreted values in the case of Indebtedness issued with an original issue
discount) of the Notes and such other Indebtedness then outstanding) (the
"Asset Sale Offer") at a purchase price of 100% of the principal amount
thereof (or the Accreted Value thereof, in the case of Indebtedness issued
with an original issue discount) (the "Asset Sale Offer Price") together
with accrued and unpaid interest, if any, to the date of payment, made
within 370 days of such Asset Sale, or
(b) within 390 days following such Asset Sale, the Asset Sale Offer
Amount is used (i) to make one or more Acquisitions or invested in assets
and property (other than notes, bonds, obligations and securities) which in
the good faith reasonable judgment of the Board of Directors of the Company
will constitute or be a part of a Related Business of the Company or such
Subsidiary (if it continues to be a Subsidiary) immediately following such
transaction or (ii) to retire permanently principal Subsidiary Notes and
Indebtedness incurred under the Credit Agreement pursuant to paragraph (c)
of Section 1008 (including that in the case of a revolver or similar
arrangement
-93-
102
that makes credit available, such commitment is so permanently reduced by
such amount),
(2) at least 75% of the consideration for such Asset Sale or series
of related Asset Sales consists of cash or Cash Equivalents, provided,
however, that (x) the amount of any liabilities (as shown on the Company's
most recent consolidated balance sheet) of the Company or any Subsidiary
(other than Subordinated Indebtedness) that are assumed by the transferee in
such Asset Sale (provided, however, that the Company and its Subsidiaries
are released from all obligations in respect thereof) and (y) any notes or
other obligations received by the Company or any such Subsidiary from such
transferee that are promptly (but in no event more than 90 days after
receipt) converted by the Company or such Subsidiary into cash or Cash
Equivalents (to the extent of the cash or Cash Equivalents, as the case may
be, received) , shall be deemed to be cash or Cash Equivalents, as the case
may be, for purposes of this provision, and such cash and Cash Equivalents
shall be deemed to be Net Cash Proceeds received from the Asset Sale of the
related property sold for such notes or other obligations, for purposes of
this covenant, and, provided, further, this clause (2) shall not apply to
the sale or disposition of assets as a result of a foreclosure (or a secured
party taking ownership of such assets in lieu of foreclosure) or as a result
of an involuntary proceeding in which the Company cannot, directly or
through its Subsidiaries, direct the type of proceeds received, and
(3) with respect to any Asset Sale or series of related Asset Sales,
the Net Cash Proceeds of which exceed $500,000, the Board of Directors of
the Company determines in good faith that the Company or such Subsidiary, as
applicable, receives fair market value for such Asset Sale.
An acquisition of Notes pursuant to an Asset Sale Offer may be deferred
until the accumulated Net Cash Proceeds from Asset Sales not applied to the uses
set forth in Clause (1) (b) above (the "Excess Proceeds") exceeds $10 million
and that each Asset Sale Offer shall remain open for 20 Business Days following
its commencement (the "Asset Sale Offer Period"). Upon expiration of the Asset
Sale Offer Period, the Company shall apply the Asset Sale Offer Amount
-94-
103
plus an amount equal to accrued and unpaid interest, if any, to the purchase of
all Indebtedness properly tendered (on a pro rata basis if the Asset Sale Offer
Amount is insufficient to purchase all Indebtedness so tendered) at the Asset
Sale Offer Price (together with accrued interest, if any). To the extent that
the aggregate amount of Indebtedness tendered pursuant to an Asset Sale Offer is
less than the Asset Sale Offer Amount, the Company may use any remaining Net
Cash Proceeds for general corporate purposes as otherwise permitted by the
Indenture and following each Asset Sale Offer the Excess Proceeds amount shall
be reset to zero.
Notwithstanding the foregoing provisions of this covenant, the following
transactions shall not be deemed Asset Sales:
(i) the Company and its Subsidiaries may, in the ordinary course of
business, convey, sell, lease, transfer, assign or otherwise dispose of
property in the ordinary course of business;
(ii) the Company and its Subsidiaries may (x) convey, sell, lease,
transfer, assign or otherwise dispose of assets pursuant to and in
accordance with the limitation on mergers, sales or consolidations
provisions in the Indenture, (y) make Restricted Payments permitted by
Section 1009 and (z) engage in Exempted Affiliate Transactions;
(iii) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets or issue Capital Stock to the Company
or any of the Subsidiaries;
(iv) the Company and its Subsidiaries may sell or dispose of
damaged, worn out or other obsolete property in the ordinary course of
business so long as such property is no longer necessary for the proper
conduct of the business of the Company or such Subsidiary, as applicable;
(v) the Company and its Subsidiaries may exchange assets held by the
Company or a Subsidiary for assets held by any person or entity; provided
that (i) the assets received by the Company or a Subsidiary in any such
exchange in the good faith reasonable judgment of
-95-
104
the Board of Directors of the Company will immediately constitute, be a part
of, or be used in, a Related Business, (ii) the Board of Directors of the
Company has determined that the terms of any exchange are fair and
reasonable, and (iii) any such exchange shall be deemed to be an Asset Sale
to the extent that the Company or any subsidiary receive cash or Cash
Equivalents in such exchange;
(vi) the company and each Subsidiary may engage in Sale and
Leaseback Transactions with respect to property acquired after the Issue
Date (other than property acquired in exchange for or with the proceeds from
the sale or other disposition of property held by the Company or any
Subsidiary on the Issue Date);
(vii) the Company and each Subsidiary may liquidate Cash Equivalents
in the ordinary course of business;
(viii) the Company and each Subsidiary may create or assume Liens
(or permit any foreclosure thereon) not prohibited by the Indenture;
(ix) the Company and each Subsidiary may surrender or waive contract
rights or the settlement, release or surrender of contract, tort or other
claims of any kind; and
(x) the Company and its Subsidiaries, collectively, may convey,
sell, transfer, assign or otherwise dispose of assets having an aggregate
fair market value not exceeding $2.0 million in any fiscal year.
All Net Cash Proceeds from an Event of Loss (other than the proceeds of
any business interruption insurance) shall be invested or otherwise used as
provided in Clause (1) of the first paragraph of this Section, all within 19
months from the occurrence of such Event of Loss.
Any Asset Sale Offer will be made in compliance with all applicable
laws, rules and regulations, including, if applicable, Regulation 14E under the
Exchange Act and the rules thereunder and all other applicable Federal and state
securities laws and any provisions of the Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.
-96-
105
If the payment date in connection with an Asset Sale Offer hereunder is
on or after an interest payment Record Date and on or before the associated
Interest Payment Date, any accrued and unpaid interest will be paid to the
person in whose name a Note is registered at the close of business on such
Record Date, and such interest will not be payable to Holders who tender Notes
pursuant to such Asset Sale Offer.
The Company and the Trustee shall perform their respective obligations
specified in the Asset Sale Offer. On or prior to the Purchase Date, the Company
shall (i) accept for payment (on a pro rata basis, if necessary) Notes or
portions thereof tendered pursuant to the Offer, (ii) deposit with the paying
agent (or, if the Company is acting as its own paying agent, segregate and hold
in trust as provided in Section 1003) money sufficient to pay the purchase price
of all Notes or portions thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all Notes so accepted together with an Officers'
Certificate stating the Notes or portions thereof accepted for payment by the
Company. The paying agent (or the Company, if so acting) shall promptly mail or
deliver to Holders of Notes so accepted payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and mail or deliver
to such Holders a new Note equal in principal amount to any unpurchased portion
of the Note surrendered. Any Note not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof.
SECTION 1014. Limitation on Issuances and Sales of Capital Stock of Wholly Owned
Subsidiaries.
The Company will not sell, and its Subsidiaries will not issue or sell,
any shares of Capital Stock (other than directors qualifying shares) of any
Subsidiary of the Company to any person other than the Company or a wholly owned
Subsidiary of the Company, except for shares of common stock with no preferences
or special rights or privileges and with no redemption or prepayment provisions.
Notwithstanding the foregoing, (a) the Company and the Subsidiaries may
consummate an Asset Sale of all of the Capital Stock owned by the Company and
the Subsidiaries of any Subsidiary and (b) the Company or any Subsidiary may
pledge, hypothecate or otherwise ▇▇▇▇▇ ▇ ▇▇▇▇ on any Capital
-97-
106
Stock of any Subsidiary to the extent not prohibited under Section 1011 or
Section 1016.
SECTION 1015. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right, at such Holder's option, pursuant to an offer (subject only
to conditions required by applicable law, if any) by the Company (the "Change of
Control Offer") , to require the Company to repurchase all or any part of such
holder's Notes (provided, that the principal amount of such Notes must be $1,000
or an integral multiple thereof) on a date (the "Change of Control Purchase
Date") that is no later than 120 days after the occurrence of such Change of
Control, at a cash price equal to the applicable Redemption Price set forth in
the Note (assuming the Notes were redeemed on the Change of Control Purchase
Date) (the "Change of Control Purchase Price") together with accrued and unpaid
interest, if any, to the Change of Control Purchase Date. The Change of Control
Offer shall be made within 90 days following a Change of Control and shall
remain open for 20 Business Days following its commencement (the "Change of
Control Offer Period"). Upon expiration of the Change of Control Offer Period,
the Company promptly shall purchase all Notes properly tendered in response to
the Change of Control Offer.
(b) As used herein, a "Change of Control" means:
(i) any merger or consolidation of the Company or Principal Subsidiary
with or into any person or any sale, transfer or other conveyance, whether
direct or indirect, of all or substantially all of the assets of the Company
or Principal Subsidiary on a consolidated basis, in one transaction or a
series of related transactions, if, immediately after giving effect to such
transaction(s), any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable),
other than any Excluded Person or Excluded Persons or (in the case of
Principal Subsidiary) the Company, is or becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the total voting power in the
aggregate normally entitled to vote in the election of directors, managers,
or trustees, as applicable, of the transferee(s) or surviving entity or
entities,
-98-
107
(ii) any "person" or "group," other than any Excluded Person or Excluded
Persons or (in the case of Principal Subsidiary) the Company, is or becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the total
voting power in the aggregate of all classes of Capital Stock of the Company
or the Principal Subsidiary then outstanding normally entitled to vote in
elections of directors, provided, however, that any "person" or "group" will
be deemed to be the Beneficial Owner of any Capital Stock of Principal
Subsidiary held by the Company so long as such person or group is the
Beneficial Owner of, directly or indirectly, in the aggregate a majority of
the Capital Stock of the Company then outstanding normally entitled to vote
in elections of directors,
(iii) during any period of 12 consecutive months after the Issue Date,
individuals who at the beginning of any such 12-month period constituted the
Board of Directors of either the Company or Principal Subsidiary, (together,
in each case, with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company or Principal Subsidiary was approved by LGP or a Related Party of
LGP or by the Excluded Persons or by a vote of a majority of the directors
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company or Principal Subsidiary then in office, as
applicable, or
(iv) at any time after the Issue Date, Principal Subsidiary no longer
continues, for Federal income tax purposes, to be a member of the affiliated
group of the Company under circumstances that would accelerate the
unrealized gain in respect of the Company's investment account in Principal
Subsidiary.
(c) On or before the Change of Control Purchase Date, the Company will
(i) accept for payment Notes or portions thereof properly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent cash sufficient
to pay the Change of Control Purchase Price (together with accrued and unpaid
interest, if any), of all Notes so tendered and (iii) deliver to the Trustee
Notes so
-99-
108
accepted together with an Officers' Certificate listing the Notes or portions
thereof being purchased by the Company. The Paying Agent (or the Company, if so
acting) promptly will pay the Holders of Notes so accepted an amount equal to
the Change of Control Purchase Price (together with accrued and unpaid interest,
if any), and the Trustee promptly will authenticate and deliver to such Holders
a new Note equal in principal amount to any unpurchased portion of the Note
surrendered. Any Notes not so accepted will be delivered promptly by the Company
to the Holder thereof. The Company publicly will announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Purchase Date.
(d) Any Change of Control Offer will be made in compliance with all
applicable laws, rules and regulations, including, if applicable, Regulation 14E
under the Exchange Act and the rules thereunder and all other applicable Federal
and state securities laws and any provisions of the Indenture which conflict
with such laws shall be deemed to be superseded by the provisions of such laws.
(e) If the Change of Control Purchase Date hereunder is on or after an
interest payment Record Date and on or before the associated Interest Payment
Date, any accrued and unpaid interest will be paid to the person in whose name a
Note is registered at the close of business on such Record Date, and such
interest will not be payable to Holders who tender the Notes pursuant to the
Change of Control Offer.
(f) Prior to making a Change of Control Offer pursuant to paragraph (a),
but in any event within 90 days following such Change of Control, the Company
will (i) obtain any required consents under the Credit Agreement and the
Principal Subsidiary Notes to permit the making of the Change of Control Offer
and the purchase of Notes pursuant to this Section 1015, or (ii) repay all or a
portion of the outstanding Indebtedness of its Subsidiaries to the extent
necessary (including, if necessary, payment in full of such Indebtedness and
payment of any prepayment premiums, fees, expenses or penalties) to permit the
making of the Change of Control Offer and the purchase of Notes pursuant to this
Section 1015 without such consent.
-100-
109
SECTION 1016. Reserved.
SECTION 1017. Investment Company.
The Company will not, and will not permit any of its Subsidiaries to, be
required to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
registration under the Investment Company Act.
SECTION 1018. Statement by Officers as to Default; Compliance Certificates.
(a) The Company will deliver to the Trustee, within 90 days after the
end of each fiscal year, and within 60 days after the end of each fiscal quarter
(other than the fourth fiscal quarter), of the Company ending after the date
hereof an Officers' Certificate, stating whether or not to the best knowledge of
the signers thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions of Section 801 or Sections 1004
to 1017, inclusive, and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible and in
any event within 10 days after the Company becomes aware or should reasonably
become aware of the occurrence of an Event of Default or an event which, with
notice by the Trustee or Holders or the lapse of time or both, would constitute
an Event of Default, an Officers' Certificate setting forth the details of such
Event of Default or default, and the action which the Company proposes to take
with respect thereto.
(c) The Company shall deliver to the Trustee within 90 days after the
end of each fiscal year a written statement by the Company's independent public
accountants stating (A) that their audit examination has included a review of
the terms of this Indenture and the Notes as they relate to accounting matters,
and (B) whether, in connection with their audit examination, any event which,
with notice or the lapse of time or both, would constitute an Event of Default
has come to their attention and, if such a default
-101-
110
has come to their attention, specifying the nature and period of the existence
thereof.
SECTION 1019. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 801 and Sections 1004 to 1017, if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Notes shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect; provided, however, with respect to an Asset Sale Offer and
Change of Control Offer has been mailed, no such waiver may be made or shall be
effective against any Holder tendering Notes pursuant to such offer, and the
Company may not omit to comply with the terms of such offer as to such Holder.
ARTICLE ELEVEN
Redemption of Notes
SECTION 1101. Right of Redemption.
The Notes may be redeemed at the election of the Company, as a whole or
from time to time in part, at any time on or after November 30, 2002, at the
Redemption Prices specified in the form of Note hereinbefore set forth together
with any applicable accrued interest to the Redemption Date. All, but not less
than all, of the Notes may be redeemed at the election of the Company, for which
notice of redemption may be given at any time prior to November 30, 2002, at a
Redemption Price equal to 113.45% of the Accreted Value of the Notes promptly
upon (and in no event later than 10 days after) the Company's receipt of cash
from the Net Cash Proceeds to the Company of any Public Equity Offering; in such
event, the Notes shall be redeemed on a date not less than 30 days nor more than
60 days after the date of such notice.
-102-
111
SECTION 1102. Applicability of Article.
Redemption of Notes at the election of the Company, as permitted by any
provision of this Indenture, shall be made in accordance with such provision and
this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes pursuant to Section 1101
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Notes, the Company shall, at least
30 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee) , notify the Trustee of such
Redemption Date and of the principal amount of Notes to be redeemed.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the particular Notes to
be redeemed shall be selected not more than 30 days prior to the Redemption Date
by the Trustee, from the outstanding Notes not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to $1,000 or any
integral multiple thereof) of the principal amount of Notes of a denomination
larger than $1,000.
The Trustee shall, if requested, promptly notify the Company and each
Note Registrar in writing of the Notes selected for redemption and, in the case
of any Notes selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.
-103-
112
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Notes to be redeemed, at his address appearing in the
Note Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts)
of the particular Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note to be redeemed, and
(5) the place or places where such Notes are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and any applicable accrued interest
on, all the Notes which are to be redeemed on that date.
SECTION 1107. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption
-104-
113
Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the
Redemption Price any applicable accrued interest) such Notes shall not bear
interest. Upon surrender of any such Note for redemption in accordance with said
notice, such Note shall be paid by the Company at the Redemption Price, together
with any applicable accrued interest to the Redemption Date; provided, however,
that instalments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Notes, or one or more
Predecessor Notes, registered as such at the close of business on the relevant
Record Dates according to their terms and the provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate provided by the Note.
SECTION 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be surrendered at an
office or agency of the Company designated for that purpose pursuant to Section
1002 (with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Note without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may at its option by Board Resolution, at any time, elect to
have its obligations discharged with
-105-
114
respect to the Outstanding Notes upon compliance with the conditions set forth
below in this Article Twelve.
SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, the Company shall be deemed to have paid and
discharged the entire indebtedness represented, and this Indenture shall cease
to be of further effect as to all outstanding Notes ("Legal Defeasance"), except
as to(i) rights of Holders to receive payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due from the
trust funds; (ii) the Company's obligations with respect to such Notes
concerning issuing temporary Notes, registration of Notes, mutilated, destroyed,
lost or stolen Notes, and the maintenance of an office or agency for payment and
money for security payments held in trust; (iii) the rights, powers, trust,
duties, and immunities of the Trustee, and the Company's obligations in
connection therewith; and (iv) the Legal Defeasance provisions of this Article
Twelve, all of which shall survive until otherwise terminated or discharged
hereunder. Subject to compliance with this Article Twelve, the Company may
exercise its option under this Section 1202 notwithstanding the prior exercise
of its option under Section 1203.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, the Company may, at its option and at any time,
elect to have the obligations of the Company released with respect to its (i)
obligations under Sections 1005 through 1017, inclusive, and Clauses (3), (4)
and (5) of Section 801 and (ii) the occurrence of an event specified in Sections
501(3), (with respect to any of Sections 1005 through 1017, inclusive), 501(6)
and 501(7) shall not be deemed to be an Event of Default on and after the date
the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"). For this purpose, such covenant defeasance means that the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or Clause, whether
directly or indirectly by reason of any reference elsewhere herein to any such
-106-
115
Section or Clause or by reason of any reference in any such Section or Clause to
any other provision herein or in any other document, but the remainder of this
Indenture and such Notes shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
1202 or Section 1203 to the then Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 609 who shall agree to comply with the provisions of this Article
Twelve applicable to it) as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Notes, (A) U.S. legal tender
in an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, 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 and discharge, and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge, the principal of (, premium,
if any,) and each instalment of interest on the Notes on the Stated Maturity
of such principal or instalment of interest in accordance with the terms of
this Indenture and of such Notes. The Holders of Notes must have a valid,
perfected, exclusive security interest in such trust. For this purpose,
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America, which, in
either case, are
-107-
116
not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank (as defined in Section
3(a) (2) of the Securities Act of 1933, as amended) as custodian with
respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make
any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on
the U.S. Government Obligation evidenced by such depository receipt.
(2) In the case of an election of Legal Defeasance under Section 1202,
before the date that is one year prior to the Stated Maturity, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x)
the Company has received from, or there has been published by the Internal
Revenue Service a ruling, or (y) 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 shall confirm that, the
Holders of the Outstanding Notes will not recognize gain or loss for Federal
income tax purposes as a result of such deposit, defeasance and discharge
and will be subject to Federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred.
(3) In the case of an election of Covenant Defeasance under Section
1203, before the date that is one year prior to the Stated Maturity, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States, reasonably acceptable to such Trustee, to the effect that the
Holders of the Outstanding Notes will not recognize gain or loss for Federal
income tax purposes as a result of such deposit and Covenant Defeasance and
will be subject to Federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such deposit and
covenant defeasance had not occurred.
-108-
117
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that the Notes, if then listed on any Notes
exchange, will not be delisted as a result of such deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee
to have a conflicting interest as defined in Section 608 and for purposes of
the Trust Indenture Act with respect to any Notes of the Company.
(6) No Default or Event of Default which with notice or lapse of time or
both would become an Event of Default shall have occurred and be continuing
on the date of such deposit.
(7) Such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
interest of preferring the Holders of such Notes over any other creditors of
the Company or with the intent of defeating, hindering, or delaying or
defrauding any other creditors of the Company or others.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under Section
1202 or the Covenant Defeasance under Section 1203 (as the case may be) have
been complied with.
(10) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as
defined in the Investment Company Act of 1940, as amended, or such trust
shall be qualified under such act or exempt from regulation thereunder.
-109-
118
SECTION 1205. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee -- collectively, for purposes of
this Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own 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 (and premium, if any) and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1204 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 Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1204 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
SECTION 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1202 or 1203 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, or if a Default from a bankruptcy or insolvency event occurs
at any time during the period ending
-110-
119
on the 91st day after the date of a deposit by the Company hereunder, then the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to this Article Twelve
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 1202 or 1203; provided, however, that if the
Company makes any payment of principal of (and premium, if any) or interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or the Paying Agent.
----------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
BIG 5 HOLDINGS CORP.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Attest:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
FIRST TRUST NATIONAL ASSOCIATION
By /s/ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Attest:
/s/ illegible
----------------------
-111-