EXHIBIT 4.1
FEDERAL DATA CORPORATION,
AS ISSUER,
and
THE SUBSIDIARY GUARANTORS
(DEFINED HEREIN)
and
NORWEST BANK, MINNESOTA, NATIONAL ASSOCIATION,
AS TRUSTEE
-------------------
INDENTURE
Dated as of July 15, 1997
-------------------
up to $175,000,000
10 1/8% Senior Subordinated Notes due 2005
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
---------- ---------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10; 12.02
(c). . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a). . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c). . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a). . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
313(a). . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 12.02
(d). . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a). . . . . . . . . . . . . . . . . . . . . . . . . . 4.06; 4.08; 12.02
(b). . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d). . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e). . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f). . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a). . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 12.02
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d). . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e). . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 9.05
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a). . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
______________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
------------------
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.. . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of TIA.. . . . . . . . 24
SECTION 1.03. Rules of Construction.. . . . . . . . . . . . . . 24
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.. . . . . . . . . . . . . . . . . 25
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount. . . . . . . . . . . . . . . . 26
SECTION 2.03. Registrar and Paying Agent. . . . . . . . . . . . 27
SECTION 2.04. Paying Agent To Hold Assets in Trust. . . . . . . 28
SECTION 2.05. Noteholder Lists. . . . . . . . . . . . . . . . . 28
SECTION 2.06. Transfer and Exchange.. . . . . . . . . . . . . . 28
SECTION 2.07. Replacement Notes.. . . . . . . . . . . . . . . . 29
SECTION 2.08. Outstanding Notes.. . . . . . . . . . . . . . . . 29
SECTION 2.09. Treasury Notes. . . . . . . . . . . . . . . . . . 30
SECTION 2.10. Temporary Notes.. . . . . . . . . . . . . . . . . 30
SECTION 2.11. Cancellation. . . . . . . . . . . . . . . . . . . 31
SECTION 2.12. Defaulted Interest. . . . . . . . . . . . . . . . 31
SECTION 2.13. CUSIP Number. . . . . . . . . . . . . . . . . . . 31
SECTION 2.14. Deposit of Moneys.. . . . . . . . . . . . . . . . 31
SECTION 2.15. Book-Entry Provisions for Global Note.. . . . . . 32
SECTION 2.16. Special Transfer Provisions.. . . . . . . . . . . 33
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee. . . . . . . . . . . . . . . . 35
SECTION 3.02. Selection of Notes To Be Redeemed.. . . . . . . . 35
SECTION 3.03. Notice of Redemption. . . . . . . . . . . . . . . 35
SECTION 3.04. Effect of Notice of Redemption. . . . . . . . . . 36
SECTION 3.05. Deposit of Redemption Price.. . . . . . . . . . . 37
SECTION 3.06. Notes Redeemed in Part. . . . . . . . . . . . . . 37
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. . . . . . . . . . . . . . . . . 37
SECTION 4.02. Maintenance of Office or Agency.. . . . . . . . . 38
SECTION 4.03. Corporate Existence.. . . . . . . . . . . . . . . 38
SECTION 4.04. Payment of Taxes and Other Claims.. . . . . . . . 38
SECTION 4.05. Maintenance of Properties and Insurance.. . . . . 39
SECTION 4.06. Compliance Certificate; Notice of Default.. . . . 39
-i-
Page
----
SECTION 4.07. Compliance with Laws. . . . . . . . . . . . . . . 40
SECTION 4.08. SEC Reports.. . . . . . . . . . . . . . . . . . . 40
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.. . . . . 41
SECTION 4.10. Limitation on Restricted Payments.. . . . . . . . 41
SECTION 4.11. Limitation on Transactions with Affiliates. . . . 44
SECTION 4.12. Limitation on Indebtedness. . . . . . . . . . . . 44
SECTION 4.13. Limitation on Payment Restrictions Affecting
Subsidiaries. . . . . . . . . . . . . . . . . . 48
SECTION 4.14. Limitation on Additional Senior Subordinated
Indebtedness. . . . . . . . . . . . . . . . . . 48
SECTION 4.15. Limitation on Change of Control.. . . . . . . . . 49
SECTION 4.16. Limitation on Asset Sales.. . . . . . . . . . . . 50
SECTION 4.17. Limitation on Capital Stock of Restricted
Subsidiaries. . . . . . . . . . . . . . . . . . 53
SECTION 4.18. Limitation on Liens.. . . . . . . . . . . . . . . 53
SECTION 4.19. Limitation on Transfer of Assets to Certain
Subsidiaries. . . . . . . . . . . . . . . . . . 53
SECTION 4.20. Guarantees of Certain Indebtedness. . . . . . . . 54
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc.. . . . . . . . . . . 54
SECTION 5.02. Successor Corporation Substituted.. . . . . . . . 55
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.. . . . . . . . . . . . . . . . 55
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . 57
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . 58
SECTION 6.04. Waiver of Past Defaults.. . . . . . . . . . . . . 59
SECTION 6.05. Control by Majority.. . . . . . . . . . . . . . . 59
SECTION 6.06. Limitation on Suits.. . . . . . . . . . . . . . . 59
SECTION 6.07. Rights of Holders To Receive Payment. . . . . . . 60
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . 60
SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . 60
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . 61
SECTION 6.11. Undertaking for Costs.. . . . . . . . . . . . . . 61
SECTION 6.12. Restoration of Rights and Remedies. . . . . . . . 62
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.. . . . . . . . . . . . . . . . 62
SECTION 7.02. Rights of Trustee.. . . . . . . . . . . . . . . . 63
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . 64
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . 64
SECTION 7.05. Notice of Default.. . . . . . . . . . . . . . . . 65
SECTION 7.06. Reports by Trustee to Holders.. . . . . . . . . . 65
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . 65
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . 66
SECTION 7.09. Successor Trustee by Merger, Etc. . . . . . . . . 67
SECTION 7.10. Eligibility; Disqualification.. . . . . . . . . . 67
-ii-
Page
----
SECTION 7.11. Preferential Collection of Claims Against
Company.. . . . . . . . . . . . . . . . . . . . 68
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations. . . . . 68
SECTION 8.02. Legal Defeasance and Covenant Defeasance. . . . . 69
SECTION 8.03. Conditions to Legal Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . . . . 71
SECTION 8.04. Application of Trust Money. . . . . . . . . . . . 72
SECTION 8.05. Repayment to the Company or the Subsidiary
Guarantors. . . . . . . . . . . . . . . . . . . 73
SECTION 8.06. Satisfaction and Discharge. . . . . . . . . . . . 73
SECTION 8.07. Reinstatement.. . . . . . . . . . . . . . . . . .
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . 74
SECTION 9.02. With Consent of Holders.. . . . . . . . . . . . . 75
SECTION 9.03. Effect on Senior Indebtedness.. . . . . . . . . . 76
SECTION 9.04. Compliance with TIA.. . . . . . . . . . . . . . . 76
SECTION 9.05. Revocation and Effect of Consents.. . . . . . . . 76
SECTION 9.06. Notation on or Exchange of Notes. . . . . . . . . 77
SECTION 9.07. Trustee To Sign Amendments, Etc.. . . . . . . . . 77
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Indebtedness.. . . . 78
SECTION 10.02. No Payment on Notes in Certain Circumstances. . . 78
SECTION 10.03. Payment Over of Proceeds Upon Dissolution, Etc.. 80
SECTION 10.04. Payments May Be Paid Prior to Dissolution. . . . 81
SECTION 10.05. Subrogation.. . . . . . . . . . . . . . . . . . . 81
SECTION 10.06. Obligations of the Company Unconditional. . . . . 82
SECTION 10.07. Notice to Trustee.. . . . . . . . . . . . . . . . 82
SECTION 10.08. Reliance on Judicial Order or Certificate
of Liquidating Agent. . . . . . . . . . . . . . 83
SECTION 10.09. Trustee's Relation to Senior Indebtedness.. . . . 83
SECTION 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of
Senior Indebtedness.. . . . . . . . . . . . . . 84
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes. . . . . . . . . . . . . 84
SECTION 10.12. This Article Ten Not To Prevent Events
of Default. . . . . . . . . . . . . . . . . . . 84
SECTION 10.13. Trustee's Compensation Not Prejudiced.. . . . . . 85
ARTICLE ELEVEN
GUARANTEES
SECTION 11.01. Unconditional Guarantee.. . . . . . . . . . . . . 85
SECTION 11.02. Subordination of Guarantee. . . . . . . . . . . . 86
SECTION 11.03. Severability. . . . . . . . . . . . . . . . . . . 86
SECTION 11.04. Release of a Subsidiary Guarantor.. . . . . . . . 86
SECTION 11.05. Limitation of Subsidiary Guarantor's Liability. . 87
-ii-
Page
----
SECTION 11.06. Subsidiary Guarantors May Consolidate, Etc.,
on Certain Terms. . . . . . . . . . . . . . . . 87
SECTION 11.07. Contribution. . . . . . . . . . . . . . . . . . . 88
SECTION 11.08. Waiver of Subrogation.. . . . . . . . . . . . . . 89
SECTION 11.09. Execution of Guarantee. . . . . . . . . . . . . . 89
SECTION 11.10. No Payment on Guarantees in Certain
Circumstances.. . . . . . . . . . . . . . . . . 90
SECTION 11.11. Payment Over of Proceeds Upon Dissolution, Etc. . 91
SECTION 11.12. Payments May Be Paid Prior to Dissolution.. . . . 93
SECTION 11.13. Subrogation.. . . . . . . . . . . . . . . . . . . 93
SECTION 11.14. Obligations of Each Guarantor Unconditional.. . . 94
SECTION 11.15. Notice to Trustee.. . . . . . . . . . . . . . . . 94
SECTION 11.16. Reliance on Judicial Order or Certificate
of Liquidating Agent. . . . . . . . . . . . . . 95
SECTION 11.17. Trustee's Relation to Guarantor Senior
Indebtedness. . . . . . . . . . . . . . . . . . 95
SECTION 11.18. Subordination Rights Not Impaired by Acts or
Omissions of a Subsidiary Guarantor or
Holders of Guarantor Senior Indebtedness. . . . 96
SECTION 11.19. Noteholders Authorize Trustee To Effectuate
Subordination of Guarantees. . . . . . . . . . . 96
SECTION 11.20. This Article Eleven Not To Prevent Events
of Default. . . . . . . . . . . . . . . . . . . 96
SECTION 11.21. Trustee's Compensation Not Prejudiced.. . . . . . 97
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA Controls. . . . . . . . . . . . . . . . . . . 97
SECTION 12.02. Notices.. . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.03. Communications by Holders with Other Holders. . . 99
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent.. . . . . . . . . . . . . . . . . . . 99
SECTION 12.05. Statements Required in Certificate or Opinion.. . 99
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar.. . . . 100
SECTION 12.07. Legal Holidays. . . . . . . . . . . . . . . . . . 100
SECTION 12.08. Governing Law.. . . . . . . . . . . . . . . . . . 100
SECTION 12.09. No Adverse Interpretation of Other Agreements.. . 100
SECTION 12.10. No Recourse Against Others. . . . . . . . . . . . 101
SECTION 12.11. Successors. . . . . . . . . . . . . . . . . . . . 101
SECTION 12.12. Duplicate Originals.. . . . . . . . . . . . . . . 101
SECTION 12.13. Severability. . . . . . . . . . . . . . . . . . . 101
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Exhibit A(1) - Form of Initial Note with Guarantee . . . . . . . . A.1-1
Exhibit A(2) - Form of Exchange Note with Guarantee. . . . . . . . A.2-1
Exhibit B - Form of Legend for Global Notes. . . . . . . . . . . . B-1
Exhibit C - Form of Certificate To Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors . . . . C-1
Exhibit D - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S. . . . . . . . D-1
Note: This Table of Contents shall not, for any purpose, be deemed
to be part of the Indenture.
-ii-
INDENTURE, dated as of July 15, 1997, among Federal Data Corporation, a
Delaware corporation (the "COMPANY"), the Subsidiary Guarantors (as hereinafter
defined) and Norwest Bank, Minnesota, National Association, as Trustee (the
"TRUSTEE").
The Company has duly authorized the creation of an issue of 10 1/8% Senior
Subordinated Notes due 2005 (the "NOTES") and, to provide therefor, the Company
has duly authorized the execution and delivery of this Indenture. All things
necessary to make the Notes, when duly issued and executed by the Company and
authenticated and delivered hereunder, the valid obligations of the Company, and
to make this Indenture a valid and binding agreement of the Company, have been
done.
Each party hereto agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCELERATION NOTICE" has the meaning provided in Section 6.02.
"ACQUIRED INDEBTEDNESS" means (i) with respect to any person that becomes a
Restricted Subsidiary, Indebtedness of such person at the time such person
becomes a Restricted Subsidiary and not incurred in connection with, or in
contemplation of, such person becoming a Restricted Subsidiary, treating for
purposes of this definition as Indebtedness the unused portion of any revolving
loan commitments provided in agreements to which such person is a party as
borrower or guarantor, and (ii) with respect to the Company or any of its
Restricted Subsidiaries, any Indebtedness assumed by the Company or any of its
Restricted Subsidiaries in connection with the acquisition of any assets from
another person (other than the Company or any of its Restricted Subsidiaries),
and which was not incurred by such other person in connection with, or in
contemplation of, such acquisition.
"ACT" means the Securities Act of 1933, as amended.
"ADJUSTED NET ASSETS" of a Subsidiary Guarantor at any date shall mean the
lesser of the amount by which (i) the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such
date and (ii) the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Subsidiary
-101-
Guarantor on its debts (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date and after giving effect to any
collection from any Subsidiary of such Subsidiary Guarantor in respect of the
obligations of such Subsidiary under the Subsidiary Guarantee), excluding debt
in respect of the Subsidiary Guarantee, as they become absolute and matured.
"AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
"AFFILIATE TRANSACTION" has the meaning provided in Section 4.11.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGENT MEMBERS" has the meaning provided in Section 2.15.
"APPLICABLE PREMIUM" means, with respect to a Note at any Redemption Date,
the greater of (i) 1.0% of the principal amount of such Note and (ii) the excess
of (A) the present value at such time of (1) the redemption price of such Note
at August 1, 2001 (such redemption price being described under Paragraph 6 of
the Note) plus (2) all required interest payments due on such Note through
August 1, 2001, computed using a discount rate equal to the Treasury Rate plus
50 basis points, over (B) the principal amount of such Note.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease, assignment or other transfer for value (including any sale and
leaseback transaction) by the Company or any of its Restricted Subsidiaries to
any person other than the Company or any Wholly Owned Restricted Subsidiary of
(i) any Capital Stock of any Restricted Subsidiary; or (ii) any other property
or assets of the Company or any Restricted Subsidiary other than in the ordinary
course of business, in each case, resulting in Net Cash Proceeds to the Company
and its Restricted Subsidiaries of $500,000 or more, provided that the sale,
conveyance, transfer, assignment or other transfer of substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole will be
governed by Article Five; PROVIDED, HOWEVER, an Asset Sale shall not mean (a) a
disposition of Cash Equivalents or Investment Grade Securities or obsolete
equipment in the ordinary course of business; (b) the disposition of all or
substantially all of the assets in a manner permitted pursuant to the provisions
of Article Five or any disposition that constitutes a Change of Control pursuant
to this Indenture; (c) any Restricted Payment that is permitted to be made, and
is made, under the first paragraph of Section 4.10; and (d) any disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Restricted Subsidiary.
-101-
"AUTHENTICATING AGENT" has the meaning provided in Section 2.02.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"BLOCKAGE PERIOD" has the meaning provided in Section 10.02(a).
"BOARD OF DIRECTORS" means, as to any person, the board of directors of
such person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such person
to have been duly adopted by the Board of Directors of such person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means a day that is not a Legal Holiday.
"CAPITAL STOCK" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock, including each class of common stock and preferred stock of such person,
including, without limitation, if such person is a partnership, partnership
interests (whether general or limited) and any other interest or participation
that confers on a person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership.
"CAPITALIZED LEASE OBLIGATION" means obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Indebtedness represented by such obligations shall be
the capitalized amount of such obligations determined in accordance with GAAP.
"CASH EQUIVALENTS" means (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof, or obligations
issued by any agency or instrumentality thereof and backed by the full faith and
credit of the United States of America, (ii) commercial paper rated the highest
grade by ▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S") and Standard & Poor's
Corporation ("S&P") and maturing not more than one year from the date of
creation thereof, (iii) demand and time deposits with, and certificates of
deposit and banker's acceptances issued by, any bank having capital surplus and
undivided profits aggregating at least $250 million and maturing not more than
one year from the date of creation thereof, (iv) repurchase agreements that are
secured by a perfected security interest in an obligation described in clause
(i) and are with any bank described in clause (iii), (v) readily marketable
direct obligations issued by any state of the United States of America or any
political subdivision thereof having one of the two highest rating categories
obtainable from either Moody's or S&P and (vi) investments in money market funds
which invest substantially all of their assets in securities of the types
described in clauses (i) through (v) above.
-101-
"CHANGE OF CONTROL" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any person or group of related persons for purposes of Section
13(d) of the Exchange Act (a "GROUP") together with any Affiliates thereof
(whether or not otherwise in compliance with the provisions of this Indenture);
(ii) the approval by the holders of Capital Stock of the Company of any plan or
proposal for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the provisions of this Indenture); or (iii) the
acquisition in one or more transactions, of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) by (x) any person or Group (other
than a Group the majority in economic interests and voting or similar rights is
owned by Permitted Holders) that either (A) beneficially owns (within the
meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, (I) at
least 30% (or, in the case of a transaction or transactions approved before the
consummation of same by a majority of the directors of the Company, 35%) of the
Company's then outstanding voting securities entitled to vote on a regular basis
for the Board of Directors of the Company and (II) a greater beneficial interest
than the Permitted Holders, or (B) otherwise has the ability to elect, directly
or indirectly, a majority of the members of the Company's Board of Directors,
including without limitation by the acquisition of revocable proxies for the
election of directors.
"CHANGE OF CONTROL DATE" has the meaning provided in Section 4.15.
"CHANGE OF CONTROL OFFER" has the meaning provided in Section 4.15.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning provided in Section 4.15.
"COMPANY" means Federal Data Corporation, a Delaware corporation, and its
successors that become a party to this Indenture in accordance with its terms.
"CONSOLIDATED EBITDA" of the Company means, for any period, the sum
(without duplication) of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, all income taxes of the
Company and its Restricted Subsidiaries paid or accrued in accordance with GAAP
for such period, Consolidated Interest Expense, amortization expense (including
write-off of intangible assets and deferred financing costs), depreciation
expense, and any restructuring reserve or charge recorded during such period in
accordance with GAAP, (iii) LIFO charge (credit) of the Company and its
Restricted Subsidiaries for such period, (iv) other non-cash items reducing
Consolidated Net Income (excluding any such charge which requires an accrual of
or a cash reserve for cash charges for any future period) and (v) cash received
with respect to any non-cash item previously deducted from Consolidated Net
Income pursuant to clause (x) below less (x) other non-cash items increasing
Consolidated Net Income (excluding any reversal of any non-cash item to the
extent such reversed non-cash item previously reduced an addition to
Consolidated EBITDA pursuant to the parenthetical to clause (iv) above) and (y)
the amount of all cash payments
-101-
made by such person or its subsidiaries during such period to the extent that
such cash payment has been provided for in a reserve or charge referred to (and
previously added back to such Consolidated Net Income) in clause (ii) or
(iv) above (and were not otherwise deducted in the computation of Consolidated
Net Income of such person for such period), all as determined on a consolidated
basis for the Company and its Restricted Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" of the Company means the aggregate of
(i) all cash and non-cash interest expense (minus amortization or write-off of
deferred financing costs included in cash or non-cash interest expense and minus
interest income (other than the interest income, if any, attributable to the
assets of the type financed pursuant to clause (m) of the second paragraph of
Section 4.12) and capitalized interest) with respect to all outstanding
Indebtedness of the Company and its Restricted Subsidiaries for such period
(other than Indebtedness of the type permitted to be incurred pursuant to clause
(m) of the second paragraph of Section 4.12) PLUS (ii) the product of (x) the
amount of all cash dividend payments on any series of Preferred Stock of the
Company and its Restricted Subsidiaries (other than to or for the benefit of the
Company or a Restricted Subsidiary); PROVIDED that with respect to any series of
Preferred Stock that is Disqualified Capital Stock (including, without
limitation, Designated Preferred Stock) that has not paid cash dividends during
such period but accrues dividends according to its terms during any period prior
to the maturity date of the Notes, cash dividends shall be deemed to have been
paid with respect to such series of Designated Preferred Stock during such
period for purposes of clause (i) of this definition; times (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local tax rate of the Company
expressed as a decimal.
"CONSOLIDATED NET INCOME" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
PROVIDED that there shall be excluded therefrom (i) gains and losses from Asset
Sales or abandonments or reserves relating thereto and the related tax effects,
(ii) items classified as extraordinary, nonrecurring or unusual gains and
losses, and the related tax effects, each determined in accordance with GAAP,
(iii) the net income of any person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Restricted Subsidiary of the
Company or is merged or consolidated with the Company or any Restricted
Subsidiary, (iv) the net income (or loss) of any Restricted Subsidiary to the
extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income was actually prevented by contract,
operation of law or otherwise, (v) the net income (or loss) of any person, other
than a Restricted Subsidiary, except to the extent of the lesser of (x) cash
dividends or distributions paid to the Company or a Restricted Subsidiary of the
Company by such person and (y) the net income of such person (but in no event
less than zero) and (vi) the cumulative effects of any change in accounting
principles.
-101-
"CONTROLLED SUBSIDIARY" of the Company means a Restricted Subsidiary
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
the Company (directly or through one or more Controlled Subsidiaries of the
Company), and (ii) of which the Company possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies, whether
through the ownership of voting securities, by agreement or otherwise.
"COVENANT DEFEASANCE" has the meaning provided in Section 8.02(c).
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary against fluctuations in currency values.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DEFAULT NOTICE" has the meaning provided in Section 10.02(a).
"DEPOSITORY" means The Depository Trust Company, its nominees and
successors.
"DESIGNATED PREFERRED STOCK" means Preferred Stock of the Company that is
issued for cash (other than to a Restricted Subsidiary) and is so designated as
Designated Preferred Stock, pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of the Company,
on the issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in clause (A) of the first paragraph of Section 4.10.
"DESIGNATED SENIOR INDEBTEDNESS" means any Indebtedness under or in respect
of the Senior Credit Facility or any other Senior Indebtedness designated as
such in an Officers' Certificate delivered to the Trustee, in aggregate
principal amount outstanding of $25.0 million or more.
"DISINTERESTED DIRECTOR" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under this Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions (except arising exclusively as a consequence of such member's
relationship to the Company).
"DISQUALIFIED CAPITAL STOCK" means, with respect to any person, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it
-101-
is exchangeable), or upon the happening of any event (other than an event which
would constitute a Change of Control), matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is exchangeable for
Indebtedness, or is redeemable at the option of the holder thereof (except, in
each case, upon the occurrence of a Change of Control), in whole or in part, on
or prior to the maturity date of the Notes.
"EQUITY INTEREST" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" has the meaning provided in Section 6.01.
"EXCESS NET PROCEEDS" shall mean Net Cash Proceeds of any Asset Sale not
applied in accordance with clause (iii)(x) or (y) of the first paragraph of
Section 4.16.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means the 10 1/8% Senior Subordinated Notes due 2005 to be
issued in exchange for the Initial Notes pursuant to the Registration Rights
Agreement or, with respect to Initial Notes issued under this Indenture
subsequent to the Issue Date pursuant to Section 2.02, a registration rights
agreement substantially identical to the Registration Rights Agreement.
"EXCHANGE OFFER" has the meaning assigned to such term in the Registration
Rights Agreement, dated as of July 25, 1997, by and among the Company, the
Subsidiary Guarantors and BT Securities Corporation and ▇▇▇▇▇▇ Brothers Inc., as
Initial Purchasers (the "REGISTRATION RIGHTS AGREEMENT").
"EXCLUDED CONTRIBUTIONS" means net cash proceeds received by the Company
after the Issue Date from (a) capital contributions and (b) the private sale of
common stock of the Company to Carlyle or its Affiliates, in each case
designated as Excluded Contributions pursuant to an Officers' Certificate
executed by the principal executive officer and the principal financial officer
of the Company on the date such capital contributions are made or the date such
Equity Interests are sold, as the case may be, the cash proceeds of which are
excluded from the calculation set forth in clause (c) of the first paragraph of
Section 4.10.
"FAIR MARKET VALUE" means, with respect to any asset or Property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee (PROVIDED that no
determination shall be required in connection with any Asset Sale of less than
$1,000,000).
-101-
"FLOOR PLAN FINANCING FACILITY" means any facility (including without
limitation the Agreement for Wholesale Financing and the STAR Agreement (Short
Term Accounts Receivable Program) dated as of September 17, 1996 by and between
Deutsche Financial Services Corporation and ▇▇▇▇▇▇▇ Management Systems
Corporation, as amended, extended, renewed, restated, supplemented, replaced or
otherwise modified (in whole or in part, and without limitation as to amount,
terms, conditions, covenants and other provisions) from time to time) entered or
to be entered into by the Company or any Restricted Subsidiary pursuant to which
the Company or such Restricted Subsidiary may (i) borrow funds to purchase
inventory from certain vendors for prompt resale to customers and to finance
related accounts receivable and (ii) grant a security interest in such entity's
assets (including the accounts receivable generated by such resales) to secure
such borrowings.
"FUNDING GUARANTOR" has the meaning provided in Section 11.07.
"GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally
accepted accounting principles in the United States as in effect from time to
time, including, without limitation, those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession.
"GLOBAL NOTE" has the meaning provided in Section 2.01.
"GUARANTEE" means a guarantee, direct or indirect, in any manner of all or
any part of any Indebtedness.
"GUARANTOR BLOCKAGE PERIOD" has the meaning provided in Section 11.10(a).
"GUARANTOR DEFAULT NOTICE" has the meaning provided in Section 11.10(a).
"GUARANTOR SENIOR INDEBTEDNESS" means (i) indebtedness of a Subsidiary
Guarantor for money borrowed and all obligations, whether direct or indirect,
under guarantees, letters of credit, foreign currency or interest rate swaps,
foreign exchange contracts, caps, collars, options, ▇▇▇▇▇▇ or other agreements
or arrangements designed to protect against fluctuations in currency values or
interest rates, other extensions of credit, expenses, fees, reimbursements,
indemnities and all other amounts (including interest at the contract rate
accruing on or after the filing of any petition in bankruptcy or reorganization
relating to such Subsidiary Guarantor whether or not a claim for post-filing
interest is allowed in such proceeding) owed by such Subsidiary Guarantor under,
or with respect to, the Senior Credit Facility, (ii) the principal of and
premium, if any, and accrued and unpaid interest (including interest at the
contract rate accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to a Subsidiary Guarantor whether or not a claim for
post-filing interest is allowed in such proceeding), whether existing on the
date hereof or hereafter incurred, in respect of (A)
-9-
indebtedness of such Subsidiary Guarantor for money borrowed, (B) express
written guarantees by such Subsidiary Guarantor of indebtedness for money
borrowed by any other person, (C) indebtedness evidenced by notes, debentures,
bonds, or other instruments of indebtedness for the payment of which such
Subsidiary Guarantor is responsible or liable, by guarantees or otherwise,
(D) obligations of such Subsidiary Guarantor for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, (E) obligations of such Subsidiary Guarantor under any agreement to
lease, or any lease of, any real or personal property which, in accordance with
GAAP, is classified upon Subsidiary Guarantor's consolidated balance sheet as a
liability, and (F) obligations of such Subsidiary Guarantor under or
guaranteeing interest rate swaps, caps, collars, options and similar
arrangements and foreign currency ▇▇▇▇▇▇ and (iii) modifications, renewals,
extensions, replacements, refinancings, and refundings of any such indebtedness,
obligations or guarantees, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is expressly provided that
such indebtedness, obligations or guarantees, or such modifications, renewals,
extensions, replacements, refinancings, or refundings thereof, are not superior
in right of payment to the Guarantee of such Subsidiary Guarantor; PROVIDED that
Guarantor Senior Indebtedness will not be deemed to include (a) any liability
for Federal, state, local or other taxes owed or owing by a Subsidiary
Guarantor, (b) any accounts payable or other liability to trade creditors
arising in the ordinary course of business, (c) any Indebtedness, guarantee or
obligation of a Subsidiary Guarantor which is expressly subordinate or junior by
its terms in any respect to any other Indebtedness, guarantee or obligations of
such Subsidiary Guarantor, (d) Indebtedness incurred in violation of
Section 4.12 or (e) Indebtedness of a Subsidiary Guarantor which is classified
as nonrecourse in accordance with GAAP or any unsecured claim arising in respect
thereof by reason of the application of section 1111(b)(1) of the Bankruptcy
Law.
"HEDGING OBLIGATIONS" means, with respect to the Company or a Restricted
Subsidiary, (i) the obligations of such person under Interest Rate Agreements,
(ii) the obligations of such person under Currency Agreements and
(iii) obligations under agreements or arrangements designed to protect such
person against fluctuations in the value of commodities entered into in such
person's business.
"HOLDER" or "NOTEHOLDER" means the person in whose name a Note is
registered on the Registrar's books.
"INDEBTEDNESS" of any person means, at any time, without duplication:
(i) the principal of and, if any is due and payable at such time, premium in
respect of (A) indebtedness of such person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds, or other similar
instruments for the payment of which such person is responsible or liable;
(ii) all Capitalized Lease Obligations of such person; (iii) all obligations of
such person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such person and all obligations of such person
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business); (iv) all obligations of such
-10-
person for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations described in
(i) through (iii) above) entered into in the ordinary course of business of such
person; PROVIDED that, for the purpose of determining Events of Default referred
to in clause (4) of Section 6.01, obligations with respect to letters of credit
securing obligations entered into in the ordinary course of business shall be
excluded only to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the third
Business Day following receipt by such person of a demand for reimbursement
following payment on the letter of credit); (v) the principal amount of all
obligations of such person with respect to the redemption, repayment or other
purchase of any Disqualified Capital Stock; (vi) in the case of the Company, any
Preferred Stock of a Restricted Subsidiary, valued at the aggregate liquidation
preference thereof plus accrued and unpaid dividends thereon; (vii) all
obligations of the type referred to in clauses (i) through (vi) above of other
persons and all dividends of other persons the payment of which, in either case,
such person is responsible or liable for as obligor, guarantor or otherwise; and
(viii) all obligations of the type referred to in clauses (i) through (vii) of
other persons secured by a lien, mortgage, pledge or encumbrance of any kind on
any property or asset of such person (whether or not such obligation is assumed
by such person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets or the amount of the obligation so secured;
PROVIDED, HOWEVER, that Indebtedness shall not include any interest, commitment
or other fees.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"INDEPENDENT" means with respect to the Company and its Subsidiaries, any
person who (i) is in fact independent, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company or any of
its Subsidiaries, or in any Affiliate of the Company or any of its Subsidiaries
(other than as a result of holding securities of the Company in trading
accounts) and (iii) is not an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions for the Company or any
of its Subsidiaries or any Affiliate of the Company or any of its Subsidiaries.
"INDEPENDENT FINANCIAL ADVISOR" means a reputable accounting, appraisal or
investment banking firm that is, in the reasonable judgment of the Board of
Directors of the Company, qualified to perform the task for which such firm has
been engaged hereunder and disinterested and independent with respect to the
Company and its Affiliates.
"INITIAL NOTES" means, collectively, (i) the 10 1/8% Senior Subordinated
Notes due 2005 of the Company issued on the Issue Date and (ii) one or more
series of 10 1/8% Senior Subordinated Notes due 2005 that are issued under this
Indenture subsequent to the Issue Date pursuant to Section 2.02, in each case
for so long as such securities constitute Restricted Securities.
-11-
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST PAYMENT DATE" when used with respect to any Note, means the
stated maturity of an installment of interest specified in such Note.
"INTEREST RATE AGREEMENTS" means, with respect to the Company and the
Restricted Subsidiaries, any arrangements with any other person, whereby,
directly or indirectly, such person is entitled to receive from time to time
periodic payments calculated by applying either a floating or a fixed rate of
interest on a stated notional amount in exchange for periodic payments made by
such other person calculated by applying a fixed or a floating rate of interest
on the same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"INVESTMENT" means, with respect to any person, all investments by such
person in other persons (including Affiliates of such person) in the form of
loans, guarantees, advances of assets or capital contributions (excluding
commission, travel and similar advances to, and compensation and benefits of,
officers and employees of such person made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Capital Stock or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with
GAAP. In addition, the fair market value (as determined by the Board of
Directors of the Company in good faith) of the assets of any Subsidiary of
the Company at the time that such Subsidiary is designated as an Unrestricted
Subsidiary shall be deemed to be an Investment made by the Company in such
Unrestricted Subsidiary at such time. "Investment" shall exclude (i)
extensions of trade credit by the Company and the Restricted Subsidiaries on
commercially reasonable terms in the ordinary course of business and (ii)
sales, assignments, transfers, contributions, licenses or other dispositions
of patents, copyrights, applications with respect thereto, and other
trademarks, intellectual property and other technological "know-how"
(collectively, "INTELLECTUAL PROPERTY") to joint ventures in which the
Company or a wholly-owned Restricted Subsidiary owns at least 50% of the
equity interests (PROVIDED that if the equity interest of the Company or such
Restricted Subsidiary, as the case may be, in such joint venture is reduced
below 50%, the Company shall have been deemed to make an Investment in such
joint venture in an amount equal to the fair market value (as determined by
the Board of Directors of the Company in good faith) of such Intellectual
Property).
"INVESTMENT GRADE SECURITIES" means (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or
debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by
▇▇▇▇▇'▇ or the equivalent of such rating by such rating organization, or, if no
rating of S&P or ▇▇▇▇▇'▇ then exists, the equivalent of such rating by any other
nationally recognized securities rating agency, but excluding any debt
securities or instruments constituting loans or advances among the Company and
its
-12-
Subsidiaries, and (iii) investments in any fund that invests exclusively in
investments of the type described in clauses (i) and (ii) which fund may also
hold immaterial amounts of cash pending investment and/or distribution.
"ISSUE" has the meaning provided in Section 4.12.
"ISSUE DATE" means July 25, 1997.
"JUNIOR SECURITIES" means Equity Interests of the Company or debt
securities that are subordinated to all Senior Indebtedness (and any debt
securities issued in exchange for Senior Indebtedness) to substantially the same
extent as, or greater extent than the Notes are subordinated to Senior
Indebtedness pursuant to this Indenture.
"LEGAL DEFEASANCE" has the meaning provided in Section 8.02(b).
"LEGAL HOLIDAY" has the meaning provided in Section 12.07.
"LIEN" means with respect to any property or assets of any person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"MATURITY DATE" means August 1, 2005.
"NET CASH PROCEEDS" means cash payments received (including any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received) from any
sale, lease, transfer or other disposition of Capital Stock of the Company or a
Restricted Subsidiary or property or other assets of the Company or a Restricted
Subsidiary, in each case net of (i) any reserve for adjustment in respect of the
sale price of such asset or assets as required by GAAP (provided, that upon the
payment of such adjustment amount the excess, if any, of the amount so reserved
over the amount so paid shall be deemed "Net Cash Proceeds"), (ii) repayment of
any Purchase Money Indebtedness secured by a Lien on the sold asset or assets
and (iii) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and any taxes payable and reasonably estimated
income taxes, as a consequence of such sale, lease, transfer or other
disposition.
"NET PROCEEDS OFFER" has the meaning provided in Section 4.16.
"NET WORTH" of any person means the total of the amounts shown on the
balance sheet of such person, as of the end of the most recent fiscal quarter of
such person ending at least 45
-13-
days prior to the taking of any action for the purpose of which the
determination is being made, as the sum of (i) par or stated value for all
outstanding Capital Stock of such person plus (ii) paid-in capital or capital
surplus relating to such Capital Stock plus (iii) any retained earnings or
earned surplus less (x) any accumulated deficit and (y) any amounts attributable
to Disqualified Capital Stock.
"NON-U.S. PERSON" means a person who is not a U.S. person, as defined in
Regulation S.
"NOTES" means, collectively, the Initial Notes, the Private Exchange Notes,
if any, and the Unrestricted Notes, treated as a single class of securities, as
amended or supplemented from time to time in accordance with the terms hereof,
that are issued pursuant to this Indenture.
"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under, or with respect to, the documentation governing
any Indebtedness.
"OFFERING" means the issuance and sale of Initial Notes in an aggregate
principal amount of $105,000,000 on the Issue Date.
"OFFICER" means, with respect to any person, the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary of such person, or any
other officer designated by the Board of Directors serving in a similar
capacity.
"OFFICERS' CERTIFICATE" means, with respect to any person, a certificate
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of such person and otherwise complying with the requirements
of Sections 12.04 and 12.05, as they relate to the making of an Officers'
Certificate.
"OFFSHORE PHYSICAL NOTES" has the meaning provided in Section 2.01.
"OPERATING COVERAGE RATIO" means the ratio of Consolidated EBITDA of the
Company and the Restricted Subsidiaries during the four most recent full fiscal
quarters for which financial information is available (the "FOUR QUARTER
PERIOD") ending not more than 135 days prior to the date of the transaction
giving rise to the need to calculate the Operating Coverage Ratio (the
"TRANSACTION DATE") of the Company and the Restricted Subsidiaries for the Four
Quarter Period to Consolidated Interest Expense of the Company and the
Restricted Subsidiaries for the Four Quarter Period. In addition to and without
limitation of the foregoing, for purposes of this definition, "Consolidated
EBITDA" and "Consolidated Interest Expense" shall be calculated after giving
effect on a pro forma basis for the Four Quarter Period to (i) the incurrence or
repayment of any Indebtedness (excluding the incurrence of
-14-
Indebtedness under any revolving credit facility and including repayments of
Indebtedness under any revolving credit facility only to the extent that such
repayment effects, or is accompanied by, a permanent reduction in the
availability thereunder) or the issuance of any Designated Preferred Stock
(and the application of the proceeds of such Indebtedness or Designated
Preferred Stock) of the Company and the Restricted Subsidiaries at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such incurrence or repayment or issuance, as the case
may be (and the application of the proceeds thereof), occurred on the first
day of the Four Quarter Period and (ii) any Asset Sales (and the application
of proceeds thereof) or asset acquisitions (including Capital Stock) outside
the ordinary course of business in excess of $100,000 occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale
(and the application of proceeds thereof) or asset acquisition occurred on
the first day of the Four Quarter Period, without giving effect to the
limitations set forth in clause (iii) of the definition of Consolidated Net
Income. If the Company or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third person (other than the Company
or any of its Restricted Subsidiaries), the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if such person or
any subsidiary (other than an Unrestricted Subsidiary) of such person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Interest Expense," (A) interest on
Indebtedness or dividends on Designated Preferred Stock determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date, (B) if interest on any Indebtedness actually incurred on
the Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate or dividend rate in effect on
the Transaction Date will be deemed to have been in effect during the Four
Quarter Period and (C) notwithstanding clause (A) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest
is covered by Interest Rate Agreements, shall be deemed to accrue at the rate
per annum resulting after giving effect to the operation of such Interest
Rate Agreements. Any such pro forma calculation may include (a) any
adjustments, that would, in the reasonable determination of the Company set
forth in an Officers' Certificate, satisfy the requirements of Rule 11-02(a)
of Regulation S-X as if included in a registration statement filed with the
Commission, and (b) any other operating expense reductions reasonably
expected to result from any acquisition of assets (including any Permitted
Investment provided for in clause (iv) of the definition of such term), if
such expected reductions are (i) set forth in reasonable detail in a plan
approved by or resolutions of the Board of Directors, and (ii) limited to
operating expenses specified in such plan (and, if any such reductions are
set forth as a range, the lowest amount of such range) that would otherwise
have resulted in the payment of cash within twelve months after the date of
consummation of such transaction, net of any operating expenses (other than
extraordinary items, non-recurring or temporary charges and other similar
one-time expenses) reasonably expected to be incurred to implement
-15-
such plan or to obtain goods or services (including without limitation
personnel, occupancy and transportation expenses) in replacement of goods and
services that are being curtailed or eliminated to result in such expected
reductions, and that are to be paid in cash during such twelve-month period, and
such Officers' Certificate so states.
"OPINION OF COUNSEL" means a written opinion from legal counsel, who may be
counsel for the Company and who is reasonably acceptable to the Trustee,
complying with the requirements of Sections 12.04 and 12.05, as they relate to
the giving of an Opinion of Counsel.
"PAYING AGENT" has the meaning provided in Section 2.03.
"PERMITTED HOLDERS" or "CARLYLE" means TC Group, L.L.C., a Delaware limited
liability company, and its Affiliates, and any successors thereof that are
Permitted Holders.
"PERMITTED INVESTMENT" means (i) cash and Cash Equivalents; (ii) any
Investment in the Company or in a Controlled Subsidiary of the Company;
(iii) any Investment by the Company or any Subsidiary existing on the Issue
Date; (iv) any Investment by the Company or any Subsidiary of the Company in a
person, if as a result of such Investment (A) such person becomes a Controlled
Subsidiary of the Company or (B) such person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Controlled Subsidiary of the
Company; (v) advances to employees in an aggregate principal amount not to
exceed $500,000 at any time outstanding; (vi) any Investment acquired by the
Company or any of its Restricted Subsidiaries (a) in exchange for any other
Investment or accounts receivable held by the Company or any such Restricted
Subsidiary in connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of the issuer of such other Investment or
accounts receivable or (b) as a result of a foreclosure by the Company or any of
its Restricted Subsidiaries with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default;
(vii) Hedging Obligations; (viii) loans and advances to officers, directors and
employees for business-related travel expenses, moving expenses and other
similar expenses, in each case incurred in the ordinary course of business;
(ix) Investments the payment for which consists of Equity Interests of the
Company (exclusive of Disqualified Capital Stock); PROVIDED, HOWEVER, that such
Equity Interests will not increase the amount available for Restricted Payments
under clause (c) of the first paragraph of Section 4.10; and (x) additional
Investments having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (x) that are at that time outstanding,
not to exceed $5.0 million at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
effect to subsequent changes in value) (subject in each case to Section 4.12 and
Article Five).
"PERMITTED LIENS" means (i) Liens on property or assets of, or any shares
of stock of or secured debt of, any corporation existing at the time such
corporation becomes a Restricted
-16-
Subsidiary of the Company or at the time such corporation is merged into the
Company or any of its Restricted Subsidiaries, provided that such Liens are not
incurred in connection with, or in contemplation of, such corporation becoming a
Restricted Subsidiary of the Company or merging into the Company or any of its
Restricted Subsidiaries, (ii) Liens securing Refinancing Indebtedness; PROVIDED
that any such Lien does not extend to or cover any Property, shares or debt
other than the Property, shares or debt securing the Indebtedness so refunded,
refinanced or extended, (iii) Liens in favor of the Company or any of its
Restricted Subsidiaries, (iv) Liens securing industrial revenue bonds, (v) Liens
to secure Purchase Money Indebtedness that is otherwise permitted under this
Indenture; PROVIDED that (A) any such Lien is created solely for the purpose of
securing Indebtedness representing, or incurred to finance, refinance or refund,
the cost (including sales and excise taxes, installation and delivery charges
and other direct costs of, and other direct expenses paid or charged in
connection with, such purchase or construction) of such Property, (B) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such costs, and (C) such Lien does not extend to or cover any Property other
than such item of Property and any improvements on such item, (vi) statutory
Liens or landlords', carriers', warehousemen's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business which do not secure any Indebtedness and with respect to amounts not
yet delinquent or being contested in good faith by appropriate proceedings, if a
reserve or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made therefor, (vii) Liens in favor of the
Trustee under this Indenture and any substantially equivalent Lien granted to
any trustee or similar institution under any indenture for Indebtedness
permitted by the terms of this Indenture, (viii) Liens incurred or pledges or
deposits made in the ordinary course of business to secure obligations under
workers' compensation, unemployment insurance or other types of social security
or similar legislation, (ix) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obligations, surety and appeal
bonds, government contracts, performance and return of money bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money), (x) Liens upon
specific items of inventory or other goods and proceeds of any person securing
such person's obligations in respect of bankers' acceptances issued or created
for the account of such person to facilitate the purchase, shipment or storage
of such inventory or other goods in the ordinary course of business, (xi) Liens
securing reimbursement obligations with respect to letters of credit which
encumber documents and other property relating to such letters of credit and the
products and proceeds thereof, (xii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of nondelinquent
customs duties in connection with the importation of goods, (xiii) judgment and
attachment Liens not giving rise to a Default or Event of Default, (xiv) leases
or subleases granted to others not interfering in any material respect with the
business of the Company or any Subsidiary, (xv) Liens encumbering customary
initial deposits and margin deposits, and other Liens incurred in the ordinary
course of business that are within the general parameters customary in the
industry, in each case securing Indebtedness under Hedging Obligations, (xvi)
Liens encumbering deposits made in
-17-
the ordinary course of business to secure nondelinquent obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company or
its Subsidiaries for which a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made, (xvii) Liens arising out of
consignment or similar arrangements for the sale of goods entered into by the
Company or any Subsidiary in the ordinary course of business in accordance with
past practices, (xviii) any interest or title of a lessor in the property
subject to any lease, whether characterized as capitalized or operating other
than any such interest or title resulting from or arising out of a default by
the Company or any Subsidiary of its obligations under such lease, (xix) Liens
arising from filing UCC financing statements for precautionary purposes in
connection with true leases of personal property that are otherwise permitted
under the applicable indenture and under which the Company or any Subsidiary is
lessee, (xx) other Liens securing obligations incurred in the ordinary course of
business which obligations or judgments do not exceed $10.0 million in the
aggregate at any one time outstanding, (xxi) Liens securing Capitalized Lease
Obligations permitted to be incurred; PROVIDED that such Lien does not extend to
any property other than that subject to the underlying lease, (xxii) Liens on
assets or capital stock of Unrestricted Subsidiaries, (xxiii) Liens securing
Indebtedness under the Senior Credit Facility or any Floor Plan Financing
Facility, (xxiv) Liens existing on the Issue Date, (xxv) Liens on assets of the
Company securing Senior Indebtedness and Liens on assets of a Subsidiary
Guarantor securing Guarantor Senior Indebtedness, (xxvi) any extensions,
substitutions, replacements or renewals of the foregoing, (xxvii) Liens for
taxes, assessments or governmental charges that are not delinquent or are being
contested in good faith by appropriate proceedings and (xxviii) easements or
minor defects or irregularities in title and other similar charges or
encumbrances on property not interfering in any material respect with the
Company's use of such property.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"PHYSICAL NOTES" has the meaning provided in Section 2.01.
"PREFERRED STOCK" means any Capital Stock of a person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such person over the holders of other
Capital Stock issued by such person.
"PRINCIPAL" of any Indebtedness (including the Notes) means the principal
amount of such Indebtedness plus the premium, if any, on such Indebtedness.
"PRIVATE EXCHANGE NOTES" has the meaning set forth in the Registration
Rights Agreement.
-18-
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Initial Notes in the form set forth in Exhibit A(1).
"PROCEEDS PURCHASE DATE" has the meaning provided in Section 4.16.
"PRO FORMA" means, except as otherwise provided in the definition of
"Operating Coverage Ratio," with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors or the Chief Financial Officer of the Company in consultation
with its independent public accountants.
"PROPERTY" of any person means all types of real, personal, tangible,
intangible or mixed property owned by such person whether or not included in the
most recent consolidated balance sheet of such person and its Subsidiaries under
GAAP.
"PUBLIC EQUITY OFFERING" means an underwritten equity offering of the
Qualified Capital Stock of the Company, or of any entity of which the Company is
a direct or indirect subsidiary, to the extent the proceeds thereof shall have
been contributed to the Company, pursuant to an effective registration statement
under the Act.
"PURCHASE MONEY INDEBTEDNESS" means any Indebtedness incurred in the
ordinary course of business by a person to finance the cost (including the cost
of construction) of an item of property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and
(ii) reasonable fees and expenses of such person incurred in connection
therewith.
"QUALIFIED CAPITAL STOCK" means, with respect to any person, any Capital
Stock of such person that is not Disqualified Capital Stock.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning specified
in Rule 144A under the Securities Act.
"RECORD DATE" means, with respect to any Note, any of the Record Dates
specified in such Note, whether or not a Legal Holiday.
"REDEMPTION DATE," when used with respect to any Note to be redeemed, means
the date fixed for such redemption pursuant to this Indenture and the Notes.
"REDEMPTION PRICE," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"REFERENCE DATE" has the meaning provided in Section 4.10.
"REFINANCING INDEBTEDNESS" has the meaning provided in Section 4.12.
-19-
"REGISTRAR" has the meaning provided in Section 2.03.
"REGISTRATION RIGHTS AGREEMENT" has the meaning provided in the definition
of "Exchange Offer."
"REGULATION S" means Regulation S under the Securities Act.
"REPRESENTATIVE" means the agent or representative in respect of any
Designated Senior Indebtedness; PROVIDED that if, and for so long as, any
Designated Senior Indebtedness lacks such a representative, then the
Representative for such Designated Senior Indebtedness shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Indebtedness in respect of any Designated Senior
Indebtedness.
"RESTRICTED PAYMENT" has the meaning provided in Section 4.10.
"RESTRICTED SECURITY" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; PROVIDED that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
"RESTRICTED SUBSIDIARY" means any Subsidiary that is not an Unrestricted
Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SELLER NOTES" means the 9% Increasing Rate Subordinated Notes outstanding
on the Issue Date that were issued by the Company to certain present and former
shareholders of the Company and former shareholders of NYMA, Inc. and ▇▇▇▇▇▇▇
Management Systems Corporation, as in effect on the Issue Date.
"SENIOR CREDIT FACILITY" means the Credit Agreement to be entered into by
and among the Company, certain of its Subsidiaries, the lenders referred to
therein and Bankers Trust Company, as Agent, together with the related documents
thereto (including, without limitation, any guarantees and security documents),
as amended, extended, renewed, restated, supplemented or otherwise modified (in
whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time and any agreement (and related
documents) governing Indebtedness incurred to refund or refinance the entirety
of the borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Senior Credit Facility,
whether by the same or any other lender or group of lenders. The Company shall
promptly notify the Trustee of any other lender
-19-
or group of lenders. The Company shall promptly notify the Trustee of any such
refunding or refinancing of the Senior Credit Facility.
"SENIOR INDEBTEDNESS" means (i) indebtedness of the Company for money
borrowed and all obligations, whether direct or indirect, under guarantees,
letters of credit, foreign currency or interest rate swaps, foreign exchange
contracts, caps, collars, options, ▇▇▇▇▇▇ or other agreements or arrangements
designed to protect against fluctuations in currency values or interest rates,
other extensions of credit, expenses, fees, reimbursements, indemnities and all
other amounts (including interest at the contract rate accruing on or after the
filing of any petition in bankruptcy or reorganization relating to the Company
whether or not a claim for post-filing interest is allowed in such proceeding)
owed by the Company under, or with respect to, the Senior Credit Facility, or
any Floor Plan Financing Facility, (ii) the principal of and premium, if any,
and accrued and unpaid interest, whether existing on the date hereof or
hereafter incurred, in respect of (A) indebtedness of the Company for money
borrowed, (B) express written guarantees by the Company of indebtedness for
money borrowed by any other person, (C) indebtedness evidenced by notes,
debentures, bonds, or other instruments of indebtedness for the payment of which
the Company is responsible or liable, by guarantees or otherwise,
(D) obligations of the Company for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction,
(E) obligations of the Company under any agreement to lease, or any lease of,
any real or personal property which, in accordance with GAAP, is classified on
the Company's consolidated balance sheet as a liability, and (F) obligations of
the Company under interest rate swaps, caps, collars, options and similar
arrangements and foreign currency ▇▇▇▇▇▇ and (iii) modifications, renewals,
extensions, replacements, refinancings and refundings of any such indebtedness,
obligations or guarantees, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is expressly provided that
such indebtedness, obligations or guarantees, or such modifications, renewals,
extensions, replacements, refinancings or refundings thereof, are not superior
in right of payment to the Notes; PROVIDED that Senior Indebtedness will not be
deemed to include (a) any obligation of the Company to any Subsidiary (other
than obligations pledged pursuant to the Senior Credit Facility, as security for
the obligations of the Company thereunder), (b) any liability for federal,
state, local or other taxes owed or owing by the Company, (c) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business, (d) any Indebtedness, guarantee or obligation of the Company which is
expressly subordinate or junior by its terms in any respect to any other
Indebtedness, guarantee or obligation of the Company, (e) Indebtedness with
respect to the Seller Notes, (f) that portion of any Indebtedness incurred in
violation of Section 4.12 or (g) Indebtedness of the Company which is classified
as nonrecourse in accordance with GAAP or any unsecured claim arising in respect
thereof by reason of the application of section 1111(b)(1) of the Bankruptcy
Law. Notwithstanding clause (f) of the foregoing proviso, any Indebtedness
incurred pursuant to the Senior Credit Facility in reliance on an Officers'
Certificate with respect to the amount of Indebtedness outstanding pursuant to
the Floor Plan Financing Facility shall be deemed Senior Indebtedness.
-19-
"SIGNIFICANT GUARANTOR SENIOR INDEBTEDNESS" means any Indebtedness of a
Guarantor under or in respect of the Senior Credit Facility or Guarantor Senior
Indebtedness with principal amount due (or accreted value with respect to
Guarantor Senior Indebtedness issued at a discount) in excess of $5.0 million
upon initial issuance thereof.
"SIGNIFICANT SENIOR INDEBTEDNESS" means any Indebtedness under or in
respect of the Senior Credit Facility or Senior Indebtedness with principal
amount due (or accreted value with respect to Senior Indebtedness issued at a
discount) in excess of $5.0 million upon initial issuance thereof.
"SIGNIFICANT STOCKHOLDER" means, with respect to any person, any other
person who is the beneficial owner (within the meaning of Rule l3d-3 under the
Exchange Act) of more than 5% of any class of equity securities of such person
that are entitled to vote on a regular basis for the election of directors of
such person.
"SIGNIFICANT SUBSIDIARY" means each Restricted Subsidiary of the Company
that is a "significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X
under the Securities Act and the Exchange Act (as such regulation is in effect
on the date hereof).
"SIMILAR BUSINESS" means an information technology business the majority of
whose revenues are derived from government contracting or value added reselling
of goods or services or any business or activity that is reasonably similar
thereto or a reasonable extension, development or expansion thereof or ancillary
thereto.
"SUBORDINATED OBLIGATIONS" means any Indebtedness of the Company which is
expressly subordinated or junior in right of payment to the Notes.
"SUBSIDIARY" of any person means (i) a corporation a majority of whose
Capital Stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly, owned by
such person, by one or more subsidiaries of such person or by such person and
one or more subsidiaries of such person, (ii) a partnership in which such person
or a subsidiary of such person is, at the date of determination, a general
partner of such partnership, but only if such person or its subsidiary is
entitled to receive more than fifty percent of the assets of such partnership
upon its dissolution or (iii) any other person (other than a corporation or a
partnership) in which such person, a subsidiary of such person or such person
and one or more subsidiaries of such person, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such person.
"SUBSIDIARY" means any subsidiary of the Company.
-19-
"SUBSIDIARY GUARANTEE" means the Guarantees executed and delivered by any
Subsidiary Guarantor with respect to the Company's obligations under the
Indenture and the Notes.
"SUBSIDIARY GUARANTOR" means (i) each of (a) FDCT Corp., (b) NYMA, Inc.,
(c) ▇▇▇▇▇▇▇ Management Systems Corporation, (d) FDC Technologies Inc.,
(e) DoxSys, Inc. and (f) VAD International, Inc., (ii) each of the Company's
Subsidiaries which becomes a guarantor of the Notes pursuant to the provisions
of Section 4.20, and (iii) each of the Company's Subsidiaries executing a
supplemental indenture in which such Subsidiary agrees to be bound by the terms
of this Indenture; PROVIDED that any person constituting a Subsidiary Guarantor
as described above shall cease to constitute a Subsidiary Guarantor when its
respective Subsidiary Guarantee is released in accordance with the terms
thereof.
"SURVIVING PERSON" has the meaning provided in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended, as in effect on the date of this Indenture,
except as otherwise provided in Section 9.04.
"TOTAL ASSETS" means the total consolidated assets of the Company and its
Restricted Subsidiaries, as shown on the most recent balance sheet of the
Company.
"TRANSACTIONS" means the acquisition by the Company of NYMA, Inc. in
May 1997 and of ▇▇▇▇▇▇▇ Management Systems Corporation in June 1997, prepayment
of certain of the Seller Notes, entry into the Senior Credit Facility, the
offering of Initial Notes in an aggregate principal amount of $105,000,000 on
the Issue Date and the application of the proceeds of such offering.
"TREASURY RATE" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to the
Redemption Date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data)) most nearly equal to the
period from the Redemption Date to August 1, 2001; PROVIDED, HOWEVER, that if
the period from the Redemption Date to August 1, 2001 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to August 1, 2001 is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
-19-
"TRUSTEE" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"TRUST OFFICER" means any officer of the Trustee assigned by the Trustee to
administer this Indenture, or in the case of a successor trustee, an officer
assigned to the department, division or group performing the corporation trust
work of such successor and assigned to administer this Indenture.
"U.S. GOVERNMENT OBLIGATIONS" means non-callable direct obligations of, and
non-callable obligations guaranteed by, the United States of America for the
payment of which the full faith and credit of the United States of America is
pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. PHYSICAL NOTES" has the meaning provided in Section 2.01.
"UNRESTRICTED NOTES" means one or more Notes that do not and are not
required to bear the private placement legend in the form set forth on Exhibit
A(1), including, without limitation, the Exchange Notes in the form set forth as
Exhibit A(2) hereto.
"UNRESTRICTED SUBSIDIARY" of any person means (i) any Subsidiary of such
person that at the time of determination shall be or continue to be designated
an Unrestricted Subsidiary by the Board of Directors of such person in the
manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors may designate any Subsidiary (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
owns any Capital Stock of, or owns or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; PROVIDED that (x) the Company certifies to the
Trustee that such designation complies with Section 4.10 and (y) each Subsidiary
to be so designated and each of its Subsidiaries have not at the time of
designation, and do not thereafter, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable with respect to any Indebtedness
pursuant to which the lender has recourse to any of the assets of the Company or
any of its Restricted Subsidiaries. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary only if (x) immediately
after giving effect to such designation, the Company is able to incur at least
$1.00 of additional Indebtedness under the first paragraph of Section 4.12 and
(y) immediately before and immediately after giving effect to such designation,
no Default or Event of Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complies with the foregoing provisions.
-19-
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total of
the products obtained by, multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of
which all of the outstanding voting securities (other than directors' qualifying
or similar shares required to be held by third parties in accordance with
applicable law, not in any event to exceed 5% of the total outstanding voting
securities) are owned by the Company or any wholly owned Restricted Subsidiary
of the Company.
SECTION 1.02. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in, and made a part of, this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Subsidiary
Guarantors, if any, or any other obligor on the Notes or the Guarantees, if any.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
-19-
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular; and
(5) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING.
The Initial Notes, the notation thereon relating to the Guarantees, if any,
and the Trustee's certificate of authentication shall be substantially in the
form of EXHIBIT A(1) hereto. The Exchange Notes, the notation thereon relating
to the Guarantees, if any, and the Trustee's certificate of authentication shall
be substantially in the form of EXHIBIT A(2) hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance.
The terms and provisions contained in the Notes and the Guarantees, if any,
annexed hereto as EXHIBITS A(1) and A(2), shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Company, the Subsidiary Guarantors, if any, and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and
to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued initially
in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A(1) (the "GLOBAL NOTE"),
deposited with the Trustee, as custodian for the Depository, and shall bear the
legend set forth in EXHIBIT B, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Notes offered and sold in offshore transactions in reliance on Regulation S
shall be issued in the form of permanent certificated Notes in registered form
in substantially the form
-19-
set forth in EXHIBIT A(1) (the "OFFSHORE PHYSICAL NOTES"). Notes offered and
sold in reliance on any other exemption from registration under the Securities
Act other than as described in the preceding paragraph shall be issued, and
Notes offered and sold in reliance on Rule 144A may be issued, in the form of
permanent certificated Notes in registered form, in substantially the form set
forth in EXHIBIT A(1) (the "U.S. PHYSICAL NOTES"). The Offshore Physical Notes
and the U.S. Physical Notes are sometimes collectively herein referred to as the
"PHYSICAL NOTES."
SECTION 2.02. EXECUTION AND AUTHENTICATION;
AGGREGATE PRINCIPAL AMOUNT.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or one
Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature. Each Subsidiary Guarantor, if any, shall execute the Guarantee in
the manner set forth in Section 11.09.
If an Officer or Assistant Secretary whose signature is on a Note was an
Officer or Assistant Secretary at the time of such execution but no longer holds
that office or position at the time the Trustee authenticates the Note, the
Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in the
aggregate principal amount not to exceed $175,000,000 in one or more series,
(ii) Private Exchange Notes from time to time only in exchange for a like
principal amount of Initial Notes and (iii) Unrestricted Notes from time to time
only (x) in exchange for a like principal amount of Initial Notes or (y) in an
aggregate principal amount of not more than the excess of $175,000,000 over the
sum of the aggregate principal amount of (A) Initial Notes then outstanding, (B)
Private Exchange Notes then outstanding and (C) Unrestricted Notes issued in
accordance with (iii)(x) above, in each case upon a written order of the Company
in the form of an Officers' Certificate of the Company. Each such written order
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes,
Private Exchange Notes or Unrestricted Notes and whether the Notes are to be
issued as Physical Notes or Global Notes or such other information as the
Trustee may reasonably request. In addition, with respect to authentication
pursuant to clauses (ii) or (iii) of the first sentence of this paragraph, the
first such written order from the Company shall be accompanied by an Opinion of
Counsel of the Company in a form reasonably satisfactory to the Trustee to the
effect that the issuance of the Private Exchange Notes or the Unrestricted
Notes, as the case may be, does not give rise to an Event of Default, complies
with this Indenture and has been duly authorized by the Company. The
-27-
aggregate principal amount of Notes outstanding at any time may not exceed
$175,000,000, except as provided in Section 2.07.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue Date
pursuant to clauses (i) and (iii) of the first sentence of the immediately
preceding paragraph, the Company shall use its best efforts to obtain the same
"CUSIP" number for such Notes as is printed on the Notes outstanding at such
time; PROVIDED, HOWEVER, that if any series of Notes issued under this Indenture
subsequent to the Issue Date is determined, pursuant to an Opinion of Counsel of
the Company in a form reasonably satisfactory to the Trustee to be a different
class of security than the Notes outstanding at such time for federal income tax
purposes, the Company may obtain a "CUSIP" number for such Notes that is
different than the "CUSIP" number printed on the Notes then outstanding.
Notwithstanding the foregoing, all Notes issued under this Indenture shall vote
and consent together on all matters as one class and no series of Notes will
have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent (the "AUTHENTICATING
AGENT") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without coupons,
in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which shall be located in
the Borough of Manhattan in the City of New York, State of New York) where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("REGISTRAR"), (b) Notes may be presented or surrendered for payment
("PAYING AGENT") and (c) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company, upon
prior written notice to the Trustee, may have one or more co-Registrars and one
or more additional paying agents reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional Paying Agent. Neither the Company nor
any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which agreement shall incorporate the provisions
of the TIA and implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company
-28-
fails to maintain a Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Paying Agent or Registrar may resign upon 30 days prior written notice to the
Company.
SECTION 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that, subject to Articles Ten and Eleven, each Paying Agent shall
hold in trust for the benefit of the Holders or the Trustee all assets held by
the Paying Agent for the payment of principal of, or interest on, the Notes
(whether such assets have been distributed to it by the Company or any other
obligor on the Notes), and the Company and the Paying Agent shall notify the
Trustee in writing of any Default by the Company (or any other obligor on the
Notes) in making any such payment. The Company at any time may require a Paying
Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent shall
have no further liability for such assets.
SECTION 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee as of each Record Date and before
each related Interest Payment Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of Noteholders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. TRANSFER AND EXCHANGE.
Subject to the provisions of Sections 2.15 and 2.16, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transaction are met; PROVIDED, HOWEVER, that the Notes presented or
-29-
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registrations of transfer
and exchanges, the Company shall issue and execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made to a Noteholder for any registration of transfer or
exchange. The Company may require from such Noteholder payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar governmental
charge payable upon exchanges or transfers pursuant to Section 2.10, 3.06, 4.15,
4.16 or 9.06, in which event the Company shall be responsible for the payment of
such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and execute and the Trustee shall authenticate a replacement
Note if the Trustee's requirements are met. If required by the Trustee or the
Company, such Holder must provide an affidavit of lost certificate and an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Note is replaced. The Company may
charge such Holder for its reasonable out-of-pocket expenses in replacing a
Note, including reasonable fees and expenses of the Trustee and counsel and the
Trustee may charge the Company for the Trustee's reasonable out-of-pocket
expenses in replacing such Note. Every replacement Note shall constitute an
additional Obligation of the Company.
SECTION 2.08. OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.09, a Note does not
-30-
cease to be outstanding because the Company, any Subsidiary Guarantor or any of
their respective Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a BONA FIDE
purchaser. A mutilated Note ceases to be outstanding upon surrender of such
Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds U.S.
Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company, any Subsidiary Guarantor or any of their respective Affiliates
shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes which a Trust Officer of the
Trustee actually knows are so owned shall be so considered. The Company shall
notify the Trustee, in writing, when it or any of its Affiliates repurchases or
otherwise acquires Notes, and of the aggregate principal amount of such Notes so
repurchased or otherwise acquired.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon receipt of a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated, and shall direct
the Trustee to authenticate such Notes and certify that all conditions precedent
to the issuance of such Notes contained herein have been complied with.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company and the Trustee consider appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.02 definitive Notes in exchange for temporary Notes.
-31-
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent, and no one else,
shall cancel and, at the written direction of the Company, shall (subject to the
record-retention requirements of the Exchange Act) dispose of all Notes
surrendered for registration of transfer, exchange, payment or cancellation.
Subject to Section 2.07, the Company may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation. If the Company
or any Subsidiary Guarantor shall acquire any of the Notes, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest to the Persons who are Holders on a subsequent special record
date, which date shall be the fifteenth day next preceding the date fixed by the
Company for the payment of defaulted interest or the next succeeding Business
Day if such date is not a Business Day. At least 15 days before the subsequent
special record date, the Company shall mail to each Holder, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Notes may use one or more "CUSIP" numbers, and
if so, the appropriate CUSIP number(s) shall be included in all notices of
redemption or exchange as a convenience to Holders; PROVIDED that any such
notice may state that no representation is made by the Trustee as to the
correctness or accuracy of any CUSIP number(s) printed in the notice or on the
Notes, and that reliance may be placed only on the other identification numbers
printed on the Notes. The Company shall promptly notify the Trustee of any
change in the CUSIP number.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 10:00 a.m, New York City time, on each Interest Payment Date and
on the Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying
-32-
Agent to remit payment to the Holders on such Interest Payment Date or Maturity
Date, as the case may be.
SECTION 2.15. BOOK-ENTRY PROVISIONS FOR
GLOBAL NOTE.
(a) The Global Note initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the Trustee
as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the
Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Note may be
transferred or exchanged for Physical Notes in accordance with the rules and
procedures of the Depository and the provisions of Section 2.16. In
addition, Physical Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in the Global Note if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Global Note and a successor depositary is not appointed by
the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver,
one or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial
-33-
interest in the Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of
Section 2.16, bear the legend regarding transfer restrictions applicable to
the Physical Notes set forth in Exhibit A.
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.16. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS AND NON-U.S.
PERSONS. The following provisions shall apply with respect to the registration
of any proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after July 25,
1999 and the transferor certifies that the Restricted Security was not
acquired from the Company or Affiliate of the Company less than two years
prior to the date of the proposed transfer or (y) (1) in the case of a
transfer to an Institutional Accredited Investor which is not a QIB
(excluding Non-U.S. Persons), the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C hereto or
(2) in the case of a transfer to a Non-U.S. Person, the proposed transferor
has delivered to the Registrar a certificate substantially in the form of
Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures,
whereupon (a) the Registrar shall reflect on its books and records the date
and (if the transfer does not involve a transfer of outstanding Physical Notes)
a decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and amount.
-34-
(b) TRANSFERS TO QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) PRIVATE PLACEMENT LEGEND. Upon the registration of transfer, exchange
or replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
registration of transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar shall deliver only Notes that bear the Private
Placement Legend unless (i) the circumstance contemplated by paragraph (a)(i)(x)
of this Section 2.16 exist or (ii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(d) GENERAL. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.15 or this Section 2.16 for a
period of three
-35-
years. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Paragraph Six of the
Notes, it shall notify both the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the Redemption Date (unless a shorter notice period shall
be satisfactory to the Trustee, as evidenced in a writing signed on behalf of
the Trustee), together with an Officers' Certificate and Opinion of Counsel
stating that such redemption shall comply with the conditions contained herein
and in the Notes.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If fewer than all of the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed on a PRO RATA basis, by lot or in such other fair and
appropriate manner chosen at the discretion of the Trustee and, if the Notes are
listed on any securities exchange, by a method that complies with the
requirements of such exchange; PROVIDED, HOWEVER, that if partial redemption is
made with the proceeds of a Public Equity Offering prior to August 1, 2000,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a PRO RATA basis unless such method is otherwise prohibited.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption by first class
mail, postage prepaid, to
-36-
each Holder whose Notes are to be redeemed, with a copy to the Trustee and any
Paying Agent.
Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any, to be
paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption is
being made;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless (a) the Company defaults in making the redemption payment
or (b) such redemption payment is prohibited pursuant to Article Ten or Eleven
or otherwise, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of such
Notes is to receive payment of the Redemption Price plus accrued interest, if
any, upon surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the principal
amount (equal to $1,000 or any integral multiple thereof) of such Note to be
redeemed and that, on or after the Redemption Date, and upon surrender of such
Note, a new Note or Notes in the aggregate principal amount equal to the
unredeemed portion thereof will be issued; and
(8) if fewer than all the Notes are to be redeemed, the identification of
the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate principal
amount of Notes to be outstanding after such partial redemption.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become due and payable on the Redemption Date and at the
Redemption Price plus accrued interest, if any. Upon surrender to the Trustee
or Paying Agent, such Notes called for redemption, unless prohibited pursuant
to Article Ten or Eleven or otherwise pursuant to this Indenture, shall be paid
at the Redemption Price (which shall include accrued interest thereon to the
Redemption Date), but installments of interest, the maturity of which is
-37-
on or prior to the Redemption Date, shall be payable to Holders of record at the
close of business on the relevant record dates referred to in the Notes.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before the Redemption Date, the Company shall deposit with the Paying
Agent in immediately available funds U.S. Legal Tender sufficient to pay the
Redemption Price plus accrued interest, if any, of all Notes or portions thereof
to be redeemed on that date. The Paying Agent shall promptly return to the
Company any U.S. Legal Tender so deposited which is not required for that
purpose, except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven.
If the Company complies with the preceding paragraph and payment of the
Notes is not prohibited under Article Ten or Eleven or otherwise, then, unless
the Company defaults in the payment of such Redemption Price plus accrued
interest, if any, interest on the Notes to be redeemed will cease to accrue on
and after the applicable Redemption Date, whether or not such Notes are
presented for payment.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part, the Company shall
issue and execute, and the Trustee shall authenticate for the Holder, a new Note
or Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes and in this Indenture. An
installment of principal of or interest on the Notes shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds on that date U.S. Legal Tender designated for
and sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture.
The Company shall pay, to the extent such payments are lawful, interest on
overdue principal and on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the rate borne by the
Notes. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
-38-
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 12.02.
SECTION 4.03. CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, the Company shall do or
cause to be done, at its own cost and expense, all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of the Restricted Subsidiaries in accordance with the
respective organizational documents of each such Restricted Subsidiary and the
material rights (charter and statutory) of the Company and each such Restricted
Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required to
preserve, with respect to itself, any material right and, with respect to any of
its Subsidiaries, any such existence or material right, if the Board of
Directors of the Company shall determine in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole.
SECTION 4.04. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
its Properties or any of its Subsidiaries' Properties and (ii) all material
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon its Properties or any of its Subsidiaries' Properties,
except, in each case, as would not be, in the aggregate, reasonably likely to
have a material adverse effect on the business and financial condition of the
Company and its Restricted Subsidiaries, taken as a whole; PROVIDED, HOWEVER,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.
-39-
SECTION 4.05. MAINTENANCE OF PROPERTIES
AND INSURANCE.
(a) The Company shall, and shall cause each of its Restricted Subsidiaries
to, maintain its Properties in good working order and condition (subject to
ordinary wear and tear) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto and actively conduct and carry
on its business, unless the failure to do so, in each case, would not be, in the
aggregate, reasonably likely to have a material adverse effect on the business
and financial condition of the Company and its Restricted Subsidiaries, taken as
a whole; PROVIDED, HOWEVER, that nothing in this Section 4.05 shall prevent the
Company or any of its Restricted Subsidiaries from discontinuing the operation
and maintenance of any of its Properties if such discontinuance is, in the good
faith judgment of the Board of Directors or other governing body of the Company
or the Restricted Subsidiary concerned, as the case may be, desirable in the
conduct of its businesses and is not disadvantageous in any material respect to
the Holders.
(b) The Company shall maintain insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Company, are adequate and appropriate for the conduct of the
business of the Company and its Restricted Subsidiaries in a prudent manner,
with reputable insurers or with the government of the United States of America
or an agency or instrumentality thereof, in such amounts, with such deductibles,
and by such methods as shall be customary, in the good faith judgment of the
Company, for companies similarly situated in the industry, except for any
omissions thereof which would not be, in the aggregate, reasonably likely to
have a material adverse effect on the business and financial condition of the
Company and its Restricted Subsidiaries, taken as a whole.
SECTION 4.06. COMPLIANCE CERTIFICATE;
NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of the Company's fiscal year, an Officers' Certificate which complies with
TIA Section 314(a)(4) stating that a review of its activities during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its Obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of such Officer's
knowledge the Company during such preceding fiscal year has kept, observed,
performed and fulfilled each and every such covenant and the Obligations
contained in this Indenture and the Notes and no Default or Event of Default
occurred during such year and at the date of such certificate there is no
Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default
-40-
and its status with particularity. The Officers' Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) So long as not contrary to then current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of such
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four or Five or
Section 6.01 insofar as they relate to accounting matters or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any person for any failure to obtain knowledge of any such
violation.
(c) (i) If any Default or Event of Default has occurred and is continuing
or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a
claimed Default under this Indenture or the Notes, the Company shall deliver to
the Trustee, at its address set forth in Section 12.02 hereof, by registered or
certified mail or by telegram, telex or facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action (including any action the Company is taking or
proposes to take in respect thereof) within thirty days of such occurrence.
SECTION 4.07. COMPLIANCE WITH LAWS.
The Company shall, and shall cause each of its Subsidiaries to, comply with
all applicable statutes, rules, regulations, orders and restrictions of the
United States of America, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of its
businesses and the ownership of its properties, except for such noncompliances
as are not in the aggregate reasonably likely to have a material adverse effect
on the business or financial condition of the Company and its Subsidiaries,
taken as a whole.
SECTION 4.08. SEC REPORTS.
(a) The Company shall file with the SEC all information, documents and
reports to be filed with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act, whether or not the Company is subject to such filing requirements so long
as the SEC will accept such filings. The Company (at its own expense) shall
file with the Trustee within 15 days after it files them with the SEC, copies of
the quarterly and annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company files with the SEC pursuant
to Section 13 or
-41-
15(d) of the Exchange Act. Upon qualification of this Indenture under the TIA,
the Company shall also comply with the provisions of TIA Section 314(a).
(b) At the Company's expense, regardless of whether the Company is
required to furnish such reports and other information referred to in
paragraph (a) above to its stockholders pursuant to the Exchange Act, the
Company shall cause such reports and other information to be mailed to the
Holders at their addresses appearing in the register of Notes maintained by the
Registrar within 15 days after it files them with the SEC.
(c) The Company shall provide to any Holder any information reasonably
requested by such Holder concerning the Company (including financial statements)
necessary in order to permit such Holder to sell or transfer Notes in compliance
with Rule 144A under the Securities Act.
SECTION 4.09. WAIVER OF STAY, EXTENSION
OR USURY LAWS.
The Company and each Subsidiary Guarantor covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company or any such Subsidiary Guarantor, as the case may be, from paying all or
any portion of the principal of or interest on the Notes or performing its
Guarantee, as the case may be and as contemplated herein, wherever enacted, now
or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company and each Subsidiary Guarantor, if any, hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.10. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly (i) declare or pay any dividend or make any distribution
in either case on account of the Company's Capital Stock to the holders of the
Company's Capital Stock (except dividends or distributions payable in the
Company's Capital Stock), (ii) purchase, redeem or otherwise acquire or retire
for value any Capital Stock (including any option or warrant to purchase Capital
Stock) of the Company, (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Obligations or the Seller
Notes, or (iv) make any Investment other than a Permitted Investment (any such
dividend, distribution, payment, purchase, redemption, defeasance, other
acquisition or retirement or Investment being
-42-
hereinafter referred to as a "RESTRICTED PAYMENT") if at the time the Company or
such Restricted Subsidiary makes such Restricted Payment: (a) a Default or Event
of Default has occurred and is continuing (or would result therefrom); (b) the
Company is not able to incur $1.00 of additional Indebtedness under the first
paragraph of Section 4.12; or (c) the aggregate amount of such Restricted
Payment and all other Restricted Payments subsequent to the Issue Date would
exceed the sum of (A) the aggregate Net Cash Proceeds received by the Company
from any offering of the Qualified Capital Stock of the Company, or of any
entity of which the Company is a direct or indirect Subsidiary, to the extent
the proceeds thereof shall have been contributed as common equity to the
Company, and the amount of any other capital contributions received by the
Company in cash subsequent to the Issue Date and on or prior to the date the
Restricted Payment occurs (the "REFERENCE DATE"), (B) 50% of the cumulative
Consolidated Net Income of the Company subsequent to the Issue Date and on or
prior to the Reference Date or minus 100% of any cumulative deficit in
Consolidated Net Income during such period, (C) to the extent that any
Investment (other than a Permitted Investment) that was made after the Issue
Date is sold for cash or otherwise liquidated or repaid for cash, or any
Unrestricted Subsidiary which is designated as an Unrestricted Subsidiary
subsequent to the Issue Date is sold or liquidated for cash, the lesser of
(1) the cash return of capital with respect to such Investment (less the cost of
disposition, if any) and (2) the initial amount of such Investment (in each case
to the extent not included in clause (B) above), and (D) $5.0 million.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph will not prevent (i) the declaration and payment of any
dividends paid within 60 days after the date of declaration thereof if, at such
date of declaration, such dividend would have complied with this covenant,
(ii) if no Default or Event of Default shall have occurred and be continuing as
a consequence thereof, any purchase or redemption of Capital Stock or any
Subordinated Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Qualified Capital Stock of the
Company (other than Capital Stock issued or sold to a Restricted Subsidiary),
(iii) if no Default or Event of Default shall have occurred and be continuing as
a consequence thereof, the repurchase, redemption or other repayment of any
Subordinated Obligations in exchange for or solely out of the proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary) of
Subordinated Obligations with a Weighted Average Life to Maturity equal to or
greater than the then remaining Weighted Average Life to Maturity of the
Subordinated Obligations repurchased, redeemed or repaid, (iv) any payment by
the Company or any Restricted Subsidiary of the Company (a) in connection with
repurchases of Equity Interests or Subordinated Obligations of the Company
following the death, disability or termination of employment of members of
management, and (b) of amounts (to the extent such payments would otherwise
constitute Restricted Payments) required to be paid by the Company or any of its
Restricted Subsidiaries to participants in employee benefit plans upon
termination of employment by such participants, as provided in the documents
related thereto, in an aggregate amount (for both clauses (a) and (b)) not to
exceed $2.0 million in any fiscal year; PROVIDED that any unused amounts may be
carried over to any subsequent fiscal year subject to a maximum amount of
-43-
$5.0 million in any fiscal year; PROVIDED, FURTHER, that such amount in any
fiscal year may be increased by an amount not to exceed (i) the cash proceeds
from the sale of Equity Interests of the Company to members of management,
directors or consultants of the Company and its Subsidiaries that occurs after
the Issue Date (to the extent the cash proceeds from the sale of such Equity
Interests have not otherwise been applied to the payment of Restricted Payments
by virtue of subclause (c) of the preceding paragraph) PLUS (ii) the cash
proceeds of key man life insurance policies received by the Company and its
Restricted Subsidiaries after the Issue Date LESS (iii) the amount of any
Restricted Payments previously made pursuant to clauses (i) and (ii); and
PROVIDED, FURTHER, that the cancellation of Indebtedness owing to the Company
from members of management of the Company or any of its Restricted Subsidiaries
in connection with a repurchase of Equity Interests of the Company will not be
deemed to constitute a Restricted Payment for purposes of this covenant or any
other provision of this Indenture, (v) Investments in securities not
constituting cash or Cash Equivalents and received in connection with an Asset
Sale made pursuant to the provisions of Section 4.16 or any other disposition of
assets not constituting an Asset Sale by reason of the $500,000 threshold
contained in the definition thereof, (vi) repurchases of Equity Interests deemed
to occur upon exercise of stock options if such Equity Interests represent a
portion of the exercise of such options, (vii) Investments in Unrestricted
Subsidiaries that are made with Excluded Contributions, (viii) if no Default or
Event of Default shall have occurred and be continuing as a consequence thereof,
the declaration and payment of dividends to holders of any class or series of
Designated Preferred Stock issued after the Issue Date; PROVIDED, HOWEVER, that
for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of issuance of
such Designated Preferred Stock, after giving effect to such issuance on a pro
forma basis, the Company and its Restricted Subsidiaries would have had an
Operating Coverage Ratio greater than (x) 1.75 to 1.0, if the date of such
incurrence is on or prior to August 1, 1999, or (y) 2.00 to 1.0, if the date of
incurrence is after August 1, 1999, (ix) Investments in Unrestricted
Subsidiaries having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (ix) that are at that time
outstanding, not to exceed $5.0 million at the time of such Investment (with the
fair market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value) and (x) prepayment of the Seller
Notes in an amount not to exceed $11.7 million in connection with the
Transactions and, after the Issue Date, additional prepayments of Seller Notes
in an amount not to exceed $2.0 million in any fiscal year; PROVIDED that any
unused amounts may be carried over to any subsequent fiscal year; PROVIDED,
FURTHER, that, for purposes of determining whether Restricted Payments can be
made pursuant to the previous paragraph, all payments made pursuant to clauses
(i), (iv), (viii) and (ix) shall be included and payments made pursuant to all
other clauses specified above shall not be so included.
-44-
SECTION 4.11. LIMITATION ON TRANSACTIONS
WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, following the Issue Date, enter into or permit to exist
any transaction with any Affiliate of the Company or any Significant Stockholder
of the Company (an "AFFILIATE TRANSACTION") unless such transaction is on terms
that are fair and reasonable to the Company or such Subsidiary and no less
favorable to the Company or such Subsidiary than those that could be obtained in
a comparable arm's length transaction with an entity that is not an Affiliate of
the Company or a Significant Stockholder of the Company; PROVIDED that in the
event such transaction or series of related transactions involves aggregate
consideration in excess of $2.0 million, the foregoing determination as to
fairness shall be made by a majority of the Disinterested Directors of the Board
of Directors of the Company as evidenced by a Board Resolution; PROVIDED,
FURTHER, that in the event such transaction or series of related transactions
involves aggregate consideration in excess of $10.0 million, the Company shall,
in addition to obtaining the approval of a majority of the Disinterested
Directors of its Board of Directors, obtain a written opinion of an Independent
Financial Advisor stating that the terms of such transaction are fair and
reasonable to the Company or such Subsidiary from a financial point of view;
PROVIDED, HOWEVER, that (i) reasonable and customary directors' fees,
indemnification and similar arrangements and payments thereunder,
(ii) transactions between or among or for the benefit of the Company and its
Subsidiaries, which are not otherwise prohibited by this Indenture, (iii) any
employment agreement entered into by the Company or any of its Subsidiaries in
the ordinary course of business, (iv) Restricted Payments permitted by the
provisions of Section 4.10, (v) provision of administrative or management
services by the Company or its Subsidiaries or any of their officers to any of
their respective Subsidiaries in the ordinary course of business, (vi) arm's
length transactions entered into in the ordinary course of business between the
Company or any Restricted Subsidiary and any Affiliate of the Company or any
Significant Stockholder of the Company engaged in a Similar Business and (vii)
transactions contemplated by any agreement as in effect as of the Issue Date or
any amendment thereto so long as any such amendment is not disadvantageous to
the Holders of the Notes in any material respect and so long as the amounts paid
by the Company and the Restricted Subsidiaries under any such amended agreement
do not exceed the amounts payable by the Company and the Restricted Subsidiaries
on the Issue Date, in each case, shall not be deemed Affiliate Transactions.
SECTION 4.12. LIMITATION ON INDEBTEDNESS.
The Company shall not create, incur, issue, assume, guarantee or otherwise
become liable for, contingently or otherwise (collectively, "ISSUE"), directly
or indirectly, any Indebtedness, and shall not permit any Restricted Subsidiary
to issue, directly or indirectly, any Indebtedness; PROVIDED that the Company or
a Subsidiary Guarantor may issue Indebtedness if the Operating Coverage Ratio of
the Company is greater than (x) 1.75 to 1.0,
-45-
if the date of such issuance is on or prior to August 1, 1999, or (y) 2.00 to
1.0, if the date of such issuance is after August 1, 1999.
The above limitation will not apply to the issuance of the following
Indebtedness: (a) (1) Indebtedness pursuant to the Senior Credit Facility, in an
aggregate principal amount at any time outstanding not to exceed the greater of
(x) $75.0 million and (y) the sum of 85% of Eligible Accounts Receivable and 60%
of Eligible Inventory, in each case, as defined in the Senior Credit Facility
(but including accounts and inventory in which the lenders under any Floor Plan
Financing Facility have a security interest), as in effect on the Issue Date
(the "BORROWING BASE") LESS, in either case, the aggregate principal amount of
Indebtedness then outstanding pursuant to clause (a)(2) below, permanently
reduced by repayments of term loans or revolving loans out of the Excess Net
Proceeds of Asset Sales actually made (other than temporary reductions of
revolving loan balances pending application as permitted by Section 4.16), and
(2) Indebtedness pursuant to any Floor Plan Financing Facility in an aggregate
principal amount not to exceed the greater of (x) $75.0 million and (y) the
Borrowing Base LESS, in either case, the aggregate principal amount of
Indebtedness then outstanding pursuant to the Senior Credit Facility; (b) the
Notes and the Subsidiary Guarantees issued pursuant to the Offering and the
Exchange Notes or Private Exchange Notes issued in exchange therefor pursuant to
the Registration Rights Agreement and any replacement Note therefor issued
pursuant to Section 2.07; (c) Indebtedness owed to the Company or a Restricted
Subsidiary by the Company or a Restricted Subsidiary; PROVIDED, HOWEVER, that
any transfer of such Indebtedness (excluding a pledge or other transfer thereof
intended to create a security interest therein, but including any enforcement
thereof other than an enforcement that results in the repayment of an obligation
permitted by the terms of this covenant) to a person other than the Company or a
Restricted Subsidiary will be deemed for the purposes of this Section 4.12 to
constitute, in each case, the issuance of such Indebtedness by the issuer
thereof; (d) Indebtedness of the Company or any Restricted Subsidiary (other
than Indebtedness described in clause (a), (b) or (c) above) outstanding as of
the Issue Date, which Indebtedness is not contemplated to be repaid with the
proceeds of the Offering; (e) Indebtedness of the Company or a Restricted
Subsidiary issued in exchange for, or the proceeds of which are used to
refinance, extend, renew, substitute, replace or refund or pay at maturity
(including any mandatory sinking fund payment), any Indebtedness issued pursuant
to the first paragraph of this Section 4.12 or clauses (b) and (d) above and (j)
below (the "REFINANCING INDEBTEDNESS"); PROVIDED that (l) the principal amount
of such Refinancing Indebtedness (or, if such Indebtedness is issued with
original issue discount, the amount equal to the original issue price of such
Indebtedness plus accretion, if any) shall not exceed the principal amount and
accrued interest of the Indebtedness so refinanced (plus the amount of any
premiums required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses incurred by the Company
or such Restricted Subsidiary in connection therewith), (2) the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Indebtedness being refinanced,
(3) if the Indebtedness being refinanced is
-46-
subordinate in right of payment to the Notes or any Guarantee, the Refinancing
Indebtedness shall be subordinated in right of payment to the Notes or any
Guarantee, on terms, considered as a whole, at least as favorable to the holders
of Notes as those contained in the documentation governing the Indebtedness
being refinanced, if any; and (4) if the Indebtedness to be refinanced is
Indebtedness of the Company, such Refinancing Indebtedness will only be
permitted by this clause (e) if it is Indebtedness of the Company;
(f) Indebtedness incurred by the Company or any Restricted Subsidiary under
Hedging Obligations; PROVIDED that (x) in the case of an Interest Rate
Agreement, the notional principal amount thereof does not exceed the principal
amount of the Indebtedness to which such Interest Rate Agreement relates and (y)
in the case of a Currency Agreement, such Currency Agreement does not increase
the Indebtedness of the Company and its Subsidiaries other than as a result of
fluctuations in foreign currency exchange or by reason of fees, indemnities and
compensation payable thereunder; (g) Indebtedness incurred by the Company or any
Restricted Subsidiary under performance bonds, letter of credit obligations to
provide security for worker's compensation claims, payment obligations in
connection with self-insurance or similar requirements and bank overdrafts
incurred in the ordinary course of business; provided that any Obligations
arising in connection with such bank overdraft Indebtedness is extinguished
within five business days; (h) Indebtedness incurred by the Company or any
Restricted Subsidiary and arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, from guarantees or letters
of credit, surety bonds or performance bonds securing any Obligations of the
Company or any Restricted Subsidiary pursuant to such agreements, in any case
incurred in connection with the disposition of any business, assets or
Restricted Subsidiary other than guarantees of Indebtedness incurred by any
person acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition, in a principal amount
not to exceed the gross proceeds (with proceeds other than cash or Cash
Equivalents being valued at the fair market value thereof as determined by the
Board of Directors of the Company in good faith) actually received by the
Company or any Restricted Subsidiary in connection with such dispositions;
(i) Indebtedness of the Company in an aggregate principal amount not to exceed
$5.0 million at any time outstanding in connection with the purchase,
redemption, acquisition, cancellation or other retirement for value of shares of
Capital Stock of the Company or any corporation of which the Company is a
Subsidiary, options on any such shares or related stock appreciation rights or
similar securities held by officers or employees or former officers or employees
of the Company or any Subsidiary of the Company (or their estates or
beneficiaries under their estates) and which were issued pursuant to any stock
option or other equity incentive plan, upon death, disability, retirement,
termination of employment or pursuant to the terms of such stock option or other
equity incentive plan or any other agreement under which such shares of capital
stock, options, related rights or similarly securities were issued; PROVIDED
that (1) such Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to
-47-
which such Indebtedness is issued, is expressly made subordinate in right of
payment to the Notes at least to the extent that the Notes are subordinated in
right of payment to Senior Indebtedness, and (2) such Indebtedness, by its terms
or by the terms of any agreement or instrument pursuant to which such
Indebtedness is issued, provides that no payments of principal of such
Indebtedness by way of sinking fund, mandatory redemption or otherwise
(including defeasance) may be made at any term prior to one year after the
stated maturity of the Notes; (j) Acquired Indebtedness that is without recourse
to the Company or any of its Restricted Subsidiaries or any of their respective
assets (other than the Subsidiary acquired subject to such Acquired Indebtedness
and its assets), and is not guaranteed by any such person; PROVIDED that, with
respect to the incurrence of more than $5.0 million of such Acquired
Indebtedness at any time outstanding, after giving pro forma effect to the
incurrence thereof, the Company could incur at least $1.00 of Indebtedness under
the first paragraph of this Section 4.12; (k) Indebtedness issued as pay-in-kind
interest in lieu of cash interest under the terms of and pursuant to the Seller
Notes or any other Indebtedness that is incurred in accordance with this
Indenture which is expressly subordinated in right of payment to the Notes to at
least the same extent as payment on the Notes is subordinated to payment on
Senior Indebtedness; (l) Indebtedness represented by Capitalized Lease
Obligations and Purchase Money Indebtedness of the Company and Restricted
Subsidiaries, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Restricted Subsidiary,
in aggregate principal amount not to exceed $5.0 million at any time
outstanding; (m) lease financings and notes payable of the Company or its
Restricted Subsidiaries which are classified as nonrecourse in accordance with
GAAP, in each case entered into in the ordinary course of business and
consistent with past practice and secured solely by the equipment, proceeds
therefrom and associated lease payments in an aggregate principal amount at any
time outstanding not to exceed 20% of the Total Assets at the time of issuance
of such Indebtedness; and (n) additional Indebtedness of the Company and
Restricted Subsidiaries, which may, but need not be incurred under the Senior
Credit Facility, in an aggregate principal amount not to exceed $7.5 million at
any time outstanding. Notwithstanding any other provision of this Section 4.12,
a guarantee by a Subsidiary Guarantor or the Company of Indebtedness incurred in
accordance with the terms of this Indenture at the time such Indebtedness was
incurred will not constitute a separate incurrence of Indebtedness.
For purposes of determining compliance with this Section 4.12, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories described in clauses (a) through (n) in the second paragraph of this
Section 4.12 or is entitled to be incurred pursuant to the first paragraph of
this Section 4.12, the Company shall, in its sole discretion, classify such item
of Indebtedness in any manner that complies with this Section 4.12 and such item
of Indebtedness will be treated as having been incurred pursuant to only one of
such clauses or pursuant to the first paragraph hereof; PROVIDED that all
outstanding Indebtedness under the Senior Credit Facility or any Floor Plan
Financing Facility immediately following the Offering shall be deemed to have
been incurred pursuant to clause (a) of the second paragraph of this covenant.
Accrual of interest and the accretion of accreted value will not be deemed to be
an incurrence of Indebtedness for purposes of this Section 4.12.
-48-
SECTION 4.13. LIMITATION ON PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to: (i) pay dividends or make any other distributions on
its Capital Stock or pay any Indebtedness or other obligation owed to the
Company or a Restricted Subsidiary, (ii) make any loans or advances to the
Company or a Restricted Subsidiary or (iii) transfer any of its property or
assets to the Company, except any such encumbrance or restriction under or by
reason of (a) applicable law or any applicable rule, regulation or order,
(b) this Indenture and the Notes, (c) the Senior Credit Facility or any Floor
Plan Financing Facility, (d) secured Indebtedness otherwise permitted to be
incurred pursuant to the provisions of Section 4.18 that limit the right of the
debtor to dispose of the assets securing such Indebtedness, (e) customary net
worth provisions contained in leases and other agreements entered into in the
ordinary course of business, (f) customary restrictions with respect to a
Restricted Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Restricted Subsidiary, (g) provisions with respect to the
disposition or distribution of assets or property in joint venture agreements
and other similar agreements, (h) any other instrument governing Indebtedness
incurred on or after the Issue Date or any refinancing thereof that is incurred
in accordance with this Indenture; PROVIDED that the encumbrance or restriction
contained in any such Indebtedness or any such refinancing thereof is no more
restrictive and no more unfavorable to the holders of the Notes than that
contained in the Senior Credit Facility or any Floor Plan Financing Facility as
in effect on the Issue Date, (i) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of a Restricted
Subsidiary, (j) Acquired Indebtedness; PROVIDED that (x) such restriction is not
applicable to any person, or the properties or assets of any person, other than
the person acquired, and (y) such Indebtedness is otherwise permitted to be
incurred pursuant to Section 4.12 and (k) restrictions on cash or other deposits
or net worth imposed by customers under contracts entered into in the ordinary
course of business.
SECTION 4.14. LIMITATION ON ADDITIONAL SENIOR
SUBORDINATED INDEBTEDNESS.
Neither the Company nor any Subsidiary Guarantor shall incur, create,
issue, assume, guarantee or otherwise become liable for any Indebtedness that is
expressly by its terms subordinate or junior in right of payment to any
Indebtedness of such person and senior in any respect of payment to the Notes or
the Guarantee of such Subsidiary Guarantor, as the case may be.
-49-
SECTION 4.15. LIMITATION ON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder shall have the
right to require the repurchase of such Holder's Notes pursuant to the offer
described in paragraph (b) below (the "CHANGE OF CONTROL OFFER"), at a purchase
price equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (the "REPURCHASE DATE") (subject to
the rights of the holders of record on the relevant record date to receive
interest on the relevant interest payment date). Within 10 days after the date
upon which the Change of Control occurs (the "CHANGE OF CONTROL DATE") requiring
the Company to make a Change of Control Offer pursuant to this Section 4.15, the
Company shall so notify in writing the Trustee.
(b) Within 30 days following any Change of Control Date, if the Company
has not made a redemption offer pursuant to Paragraph 6 of the Notes, the
Company shall send, by first class mail, a notice to each Holder, with a copy to
the Trustee, which notice shall govern the terms of the Change of Control Offer.
The notice to the Holders shall contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Change of Control Offer.
Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed, other than as may be required by
law) (the "CHANGE OF CONTROL PAYMENT DATE");
(3) that any Note not tendered will continue to accrue interest if
interest is then accruing;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to 5:00 p.m., New York City time, on the Business Day prior to the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than 5:00 p.m., New York City time, on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile
-50-
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Note purchased; and
(7) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Notes or portions thereof tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all Notes
or portions thereof so tendered and accepted and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail or deliver to the Holders of Notes so accepted payment in an
amount equal to the purchase price plus accrued interest, if any, and the
Company shall execute and issue, and the Trustee shall promptly authenticate and
mail or deliver to such Holders new Notes equal in principal amount to any
unpurchased portion of the Notes surrendered. Any Notes not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date. For purposes
of this Section 4.15, the Trustee shall act as the Paying Agent.
(c) If the Senior Credit Facility is in effect, or any amounts are owing
thereunder, at the time of the occurrence of a Change of Control, prior to the
mailing of the notice to Holders described in clause (b) above, but in any event
within 30 days following any Change of Control, the Company shall (i) repay in
full all Obligations under the Senior Credit Facility and or offer to repay in
full all Obligations under the Senior Credit Facility and repay the Obligations
under the Senior Credit Facility of each lender who has accepted such offer or
(ii) obtain the requisite consent under the Senior Credit Facility to permit the
repurchase of the Notes as described above. The Company shall first comply with
the covenant described in the preceding sentence before it shall be required to
purchase Notes in the event of a Change of Control; PROVIDED that the Company's
failure to comply with the covenant described in the preceding sentence will
constitute an Event of Default described in Section 6.01(3) if not cured within
30 days after the notice required by such Section.
The Company shall comply with all applicable securities laws in connection
with any Change of Control Offer, including Rule 14e-1 under the Exchange Act.
SECTION 4.16. LIMITATION ON ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
consummate any Asset Sale unless (i) the Company (or the Restricted Subsidiary,
as the case may be) receives consideration at the time of each such Asset Sale
at least equal to the fair market value (as specified in an Officers'
Certificate with respect to any Asset Sale of less than
-51-
$2.0 million and as determined by the Board of Directors of the Company in good
faith with respect to Asset Sales in excess of $2.0 million) of the assets sold;
(ii) not less than 75% (100% in the case of lease payments) of the consideration
received by the Company (or such Restricted Subsidiary, as the case may be) is
in the form of cash; PROVIDED that any note or other obligation received by the
Company (or such Restricted Subsidiary, as the case may be) that is converted
into cash within 30 days after receipt and any liabilities (as shown on the
Company's or such Restricted Subsidiarys' most recent balance sheet) of the
Company or any Restricted Subsidiary (other than Contingent Liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) that are assumed by the transferee of any such assets shall be deemed
to be cash for purposes of this clause (ii); and (iii) the Company within 365
days of such Asset Sale (x) reinvests or causes a Restricted Subsidiary to
reinvest (including by way of acquisitions) the Net Cash Proceeds of any Asset
Sale into one or more of the then existing businesses of the Company and its
Subsidiaries or any Similar Business; or (y) applies or causes to be applied
such Net Cash Proceeds to the permanent reduction of outstanding Senior
Indebtedness or Guarantor Senior Indebtedness; or (z) after such time as the
accumulated Excess Net Proceeds equal or exceed $10.0 million, applies or causes
to be applied such Excess Net Proceeds to the purchase of Notes tendered to the
Company for purchase at a price equal to 100% of the principal amount thereof
plus accrued interest thereon to the date of purchase pursuant to an offer to
purchase by the Company (a "NET PROCEEDS OFFER") as set forth below; PROVIDED,
HOWEVER, that the Company shall have the right to exclude Asset Sales the net
proceeds of which in the aggregate do not exceed $2.0 million annually from the
calculation of accumulated Net Cash Proceeds; PROVIDED, FURTHER, to the extent
Net Cash Proceeds have not been applied pursuant to clause (x), (y) or (z) above
within 325 days of an Asset Sale, such Net Cash Proceeds shall be held in a
segrgated account pending such application. Pending the final application of any
such Net Cash Proceeds, the Company or Restricted Subsidiary, as the case may
be, may temporarily reduce Senior Indebtedness or Guarantor Senior Indebtedness,
as the case may be, or otherwise invest such Net Cash Proceeds in any manner not
prohibited by this Indenture.
Notice of a Net Proceeds Offer pursuant to this Section 4.16 shall be
mailed, by first class mail, by the Company to all Holders at their last
registered addresses not less than 365 nor more than 395 days after the relevant
Asset Sale, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section
4.16 and that all Notes tendered will be accepted for payment; PROVIDED,
HOWEVER, that if the aggregate principal amount of Notes tendered in a Net
Proceeds Offer plus accrued interest at the expiration of such offer
exceeds the aggregate amount of the Net Proceeds Offer, the Company shall
select the Notes to be purchased on a pro rata basis (based on amounts
tendered) (with such adjustments as may be deemed appropriate by
-52-
the Company so that only Notes in denominations of $1,000 or multiples
thereof shall be purchased);
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed, other than as may be required by
law) (the "PROCEEDS PURCHASE DATE");
(3) that any Note not tendered will continue to accrue interest if
interest is then accruing;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Net Proceeds Offer shall cease to
accrue interest after the Proceeds Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to 5:00 p.m., New York City time, on the second Business Day prior to the
Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than 5:00 p.m., New York City time, on the
second Business Day preceding the Proceeds Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Notes the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such
Note purchased; and
(7) that Holders whose Notes were purchased only in part will be
issued new Notes equal to principal amount to the unpurchased portion of
the Notes surrendered.
On or before the Proceeds Purchase Date, the Company shall (i) accept for
payment Notes or portions thereof tendered pursuant to the Net Proceeds Offer
which are to be purchased in accordance with item (b)(1) above, (ii) deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price of
all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the purchase price
plus accrued interest, if any, and the Company shall execute and issue, and the
Trustee shall promptly authenticate and mail or deliver to such Holders new
Notes equal in principal amount to any unpurchased portion of the Notes
surrendered. The Company shall publicly announce the
-53-
results of the Net Proceeds Offer on or as soon as practicable after the
Proceeds Purchase Date. For purposes of this Section 4.16, the Trustee shall
act as the Paying Agent.
If the aggregate purchase price of Notes tendered pursuant to the Net
Proceeds Offer is less than the Net Cash Proceeds allotted to the purchase of
the Notes, the Company may apply the remaining Net Cash Proceeds for general
corporate purposes.
The Company will comply with all applicable securities laws in connection
with any Net Proceeds Offer, including Rule l4e-1 under the Exchange Act.
SECTION 4.17. LIMITATION ON CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES.
The Company shall not, if such action would cause a Subsidiary not to be a
Controlled Subsidiary, (i) sell, pledge, hypothecate or otherwise convey or
dispose of any Capital Stock of a Restricted Subsidiary (other than Liens on
such Capital Stock securing Obligations under Senior Indebtedness or Guarantor
Senior Indebtedness) or (ii) permit any of its Restricted Subsidiaries to issue
any Capital Stock, other, in any such case, than to the Company or a Controlled
Subsidiary. The foregoing restrictions shall not apply to an Asset Sale made in
compliance with Section 4.16 or the issuance of Preferred Stock in compliance
with Section 4.12.
SECTION 4.18. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind (other than Permitted Liens) upon any property
or asset of the Company or any Restricted Subsidiary or any shares of stock or
debt of any Restricted Subsidiary which owns property or assets, now owned or
hereafter acquired, unless (i) if such Lien secures Indebtedness which is PARI
PASSU with the Notes or a Guarantee, then the Notes or such Guarantee, as the
case may be, are secured on an equal and ratable basis with the obligations so
secured until such time as such obligation is no longer secured by a Lien or
(ii) if such Lien secures Indebtedness which is subordinated to the Notes or a
Guarantee, any such Lien shall be subordinated to the Lien granted to the
holders of the Notes or such Guarantee, as the case may be, to the same extent
as such Subordinated Obligations are subordinated to the Notes.
SECTION 4.19. LIMITATION ON TRANSFER OF ASSETS TO
CERTAIN SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of any of
its assets or property to any Subsidiary
-54-
that is not a Controlled Subsidiary of the Company, except as otherwise
permitted pursuant to Sections 4.10 and 4.16.
SECTION 4.20. GUARANTEES OF CERTAIN INDEBTEDNESS
The Company shall not permit any of its Subsidiaries, directly or
indirectly, to incur, guarantee or secure through the granting of Liens the
payment of any Indebtedness under the Senior Credit Facility or any refunding or
refinancing thereof in each case unless such Subsidiary, the Company and the
Trustee execute and deliver a supplemental indenture evidencing such
Subsidiary's Guarantee, such Guarantee to be a senior subordinated unsecured
obligation of such Subsidiary. Neither the Company nor any Subsidiary Guarantor
shall be required to make a notation on the Notes or the Guarantees to reflect
any such subsequent Guarantee. Nothing in this covenant shall be construed to
permit any Subsidiary of the Company to incur Indebtedness otherwise prohibited
by Section 4.12.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC.
(a) The Company, in a single transaction or through a series of related
transactions, shall not consolidate with or merge with or into any other person,
or transfer (by lease, assignment, sale or otherwise) all or substantially all
of its properties and assets unless (i) either the Company shall be the
continuing person, or the person (if other than the Company) formed by such
consolidation or into which the Company is merged or to which all or
substantially all of the properties and assets of the Company are transferred
(the Company or such other person hereinafter referred to as the "SURVIVING
PERSON") shall be a corporation organized and validly existing under the laws of
the United States, any state thereof or the District of Columbia, and if other
than the Company shall expressly assume, by an indenture supplement, all of the
obligations of the Company under the Notes and this Indenture; (ii) immediately
after and giving effect to such transaction and the assumption contemplated by
clause (i) above and the incurrence or anticipated incurrence of any
Indebtedness to be incurred in connection therewith, the Surviving person could
incur at least $1.00 of Indebtedness pursuant to the first paragraph of
Section 4.12; (iii) immediately before and immediately after and giving effect
to such transaction and the assumption of the obligations as set forth in clause
(i) above and the incurrence or anticipated incurrence of any Indebtedness to be
incurred in connection therewith, no Default or Event of Default shall have
occurred and be continuing; and (iv) the Surviving person shall have delivered
to the Trustee an officers' certificate stating that such consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection
-55-
with such transaction, such supplemental indenture comply with this Article
Five and that all conditions precedent herein provided relating to such
transaction have been satisfied.
(b) For purposes of clause (a) above, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company the Capital Stock of 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.
Notwithstanding the foregoing clauses (a)(ii) and (a)(iii) of this Section 5.01,
(a) any Restricted Subsidiary of the Company may consolidate with, merge into or
transfer all or part of its properties and assets to the Company or a Subsidiary
Guarantor and (b) the Company may merge with an Affiliate incorporated solely
for the purpose of reincorporating the Company in another jurisdiction.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with this Article
Five, the surviving entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and the
Notes with the same effect as if such surviving entity had been named as such,
and thereafter the predecessor corporation shall be relieved of all Obligations
and covenants under this Indenture and the Notes; PROVIDED that solely for the
purpose of calculating amounts described in clause (c) of the first paragraph
of Section 4.10, any such Surviving Person shall only be deemed to have
succeeded to and be substituted for the Company with respect to the period
subsequent to the effective time of this transaction (and the Company shall be
deemed to be the "Company" for such purposes for all prior periods).
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of any installment of
interest on any Notes as and when the same becomes due and payable and the
Default continues for a period of 30 days (whether or not prohibited by the
subordination provisions of this Indenture);
-56-
(2) the Company defaults in payment of all or any part of the
principal on any Notes when the same becomes due and payable at maturity,
upon any redemption, by declaration or otherwise (whether or not prohibited
by the subordination provisions of this Indenture);
(3) the Company or any Subsidiary Guarantor fails duly to observe or
perform any of its other covenants or agreements contained in the Notes or
this Indenture and the Default continues for a 30-day period and after the
notice specified below;
(4) there shall be a default under any Indebtedness of the Company or
any of its Restricted Subsidiaries, whether such Indebtedness now exists or
shall hereafter be created, if both (A) such default either (i) results
from the failure to pay principal on Indebtedness at the final maturity of
the respective issue of Indebtedness, and such failure continues for a
period of 10 days or more, or (ii) results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated
maturity and such acceleration has not been rescinded, cancelled or
otherwise cured within 10 days after receipt of notice of acceleration by
the Company and (B) the principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for
failure to pay principal at final maturity or the maturity of which has
been so accelerated, in each case with respect to which the 10-day period
described above has passed, aggregates in excess of $10,000,000 at any one
time;
(5) the Company or any of its Significant Subsidiaries (A) commences
a voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(C) consents to the appointment of a Custodian of it or for substantially
all of its property, (D) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (E) makes a general
assignment for the benefit of its creditors, or (F) takes any corporate
action to authorize or effect any of the foregoing;
(6) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any of its Significant
Subsidiaries in an involuntary case or proceeding under any Bankruptcy Law,
which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any of its Significant Subsidiaries, (B) appoint a Custodian of
the Company or any of its Significant Subsidiaries or for substantially all
of its property or (C) order the winding-up or liquidation of its affairs;
and such judgment, decree or order shall remain unstayed and in effect for
a period of 60 consecutive days;
-57-
(7) any final judgment or order for the payment of money shall be
rendered against the Company or any Significant Subsidiary of the Company
by a court of competent jurisdiction in excess of $10,000,000 individually
or in the aggregate for all such judgments or orders against all such
persons that are not stayed, bonded or discharged and there is a period of
60 consecutive days, after written notice has been given by the Trustee or
the holders of at least 25% in aggregate principal amount of the Notes then
outstanding, during which a stay of enforcement of such judgment or order,
by reason of pending appeal or otherwise, shall not be in effect; or
(8) any Subsidiary Guarantee shall for any reason cease to be in
full force and effect or be declared null and void or any responsible
officer of the Company or any Guarantor denies that it has any further
liability under any Subsidiary Guarantee or gives notice to such effect
(other than by reason of the termination of this Indenture or the release
of any such Subsidiary Guarantee in accordance with this Indenture).
A Default under clause (3) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in principal amount
of the then outstanding Notes notify the Company and the Trustee, of the
Default, and the Company does not cure the Default within 30 days after receipt
of the notice. The notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default." Such notice shall be given
by the Trustee if so requested by the Holders of at least 25% in principal
amount of the Notes then outstanding. Such notice shall be given by registered
or certified mail, return receipt requested.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 6.01(5) or (6) with respect to the Company) occurs and is continuing and
has not been waived pursuant to Section 6.04, either the Trustee or the holders
of at least 25% in aggregate principal amount of the Notes then outstanding, by
notice in writing to the Company and the Trustee specifying the respective Event
of Default and that it is a "notice of acceleration" (the "ACCELERATION
NOTICE"), may declare the entire principal amount of and accrued interest on the
Notes to be due and payable immediately, and the same (i) shall become
immediately due and payable or (ii) if there are any amounts outstanding under
the Senior Credit Facility, shall become due and payable upon the first to occur
of an acceleration under the Senior Credit Facility, or 5 business days after
receipt by the Company and the Representative under the Senior Credit Facility
of such Acceleration Notice, unless all Events of Default specified in such
Acceleration Notice (other than any Event of Default in respect of non-payment
of principal) shall have been cured or waived. In the event of a declaration
because an Event of Default set forth in Section 6.01(4) has occurred and is
continuing, such declaration of acceleration shall be automatically annulled if
the missed payments in respect of such Indebtedness have been paid or if the
holders of the Indebtedness that is subject to acceleration have rescinded their
-58-
declaration of acceleration and the Trustee has received written notice of such
Indebtedness having been repaid in full, in each case within 60 days thereof and
if (i) the annulment of such acceleration would not conflict with any judgment
or decree of a court of competent jurisdiction, (ii) all existing Events of
Default, except non-payment of principal or interest which have become due
solely because of the acceleration, have been cured or waived and (iii) the
Company has delivered an Officer's Certificate to the Trustee to the effect of
clauses (i) and (ii) above. If an Event of Default specified in Section 6.01(5)
or (6) occurs with respect to the Company, the principal amount of and accrued
interest on the Notes shall become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any holder.
The declaration of acceleration is subject to the condition that if, at any
time after the principal of the Notes shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys shall
have been obtained or entered as hereinafter provided, the Company shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured installments
of interest upon all the Notes and the principal of any and all Notes which
shall have become due otherwise than by acceleration (with interest upon such
principal and, to the extent that payment of such interest is unenforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest specified in the Notes, to the date of such payment or
deposit) and such amount as shall be sufficient to cover reasonable compensation
to the Trustee and each predecessor Trustee, their respective agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith, and if any and all Events of Default under this
Indenture, other than the non-payment of the principal of Notes which shall have
become due by acceleration, shall have been cured, waived or otherwise remedied
as provided herein, then and in every such case the holders of a majority in
aggregate principal amount of the Notes then outstanding, by written notice to
the Company and to the Trustee, may waive all defaults and rescind and annul
such declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall impair
any right consequent thereon.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No
-59-
remedy is exclusive of any other remedy. All available remedies are cumulative
to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Notes by notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a Default in
the payment of principal of or interest on any Note as specified in clauses (1)
and (2) of Section 6.01. When a Default or Event of Default is waived, it is
cured and ceases.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 2.09, the Holders of a majority in principal amount of
the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Holder, or that may involve the Trustee in personal liability;
PROVIDED that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or the
Notes unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer of satisfactory indemnity; and
-60-
(5) during such 30-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
The foregoing limitations shall not apply to a suit instituted by a Holder
for the enforcement of the payment of principal and premium, if any, or interest
on such Note on or after the respective due dates set forth in such Note
(including upon acceleration thereof); PROVIDED that upon institution of any
proceeding or exercise of any remedy, such Holders provide the Trustee with
prompt written notice thereof.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Note, on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified in
clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company, any Subsidiary Guarantor, if any, or any other obligor on the Notes
for the whole amount of principal and accrued interest remaining unpaid,
together with interest on overdue principal and, to the extent that payment of
such interest is lawful, interest on overdue installments of interest, in each
case at the rate per annum borne by the Notes, and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such
-61-
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, taxes, disbursements
and advances of the Trustee, its agent and counsel, and any other amounts due
the Trustee under Section 7.07. The Company's payment obligations under this
Section 6.09 shall be secured in accordance with the provisions of Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money or property pursuant to this Article Six,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: subject to Articles Ten and Eleven, to Holders for amounts
due and unpaid on the Notes for interest and premium, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for interest and premium, respectively;
Third: subject to Articles Ten and Eleven, to Holders for amounts due
and unpaid on the Notes for principal, ratably without preference or
priority of any kind, according to the amounts due and payable on the Notes
for principal; and
Fourth: subject to Articles Ten and Eleven, to the Company, the
Subsidiary Guarantors, if any, or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date and
payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does
-62-
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07,
or a suit by a Holder or Holders of more than 10% in principal amount of the
outstanding Notes.
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture or any Note 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 the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
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.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise thereof as a prudent
person would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and the TIA and no others and no
covenants or obligations shall be implied in this Indenture against the
Trustee. To the extent of any conflict between the duties of the Trustee
hereunder and under the TIA, the TIA shall control.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificate or opinion which by any provision
hereof is specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
-63-
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties 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.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, or both, which shall conform to Sections 12.04 and 12.05. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care.
-64-
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with
such request, order or direction.
(g) The Trustee may consult with counsel and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization
and protection from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(h) The Trustee shall not be charged with knowledge of any Defaults
or Events of Default unless either (1) a Trust Officer of the Trustee shall
have actual knowledge of such Default or Event of Default or (2) written
notice of such Default or Event of Default shall have been given to the
Trustee by any Holder or by the Company or any other obligor on the Notes
or any holder of Senior Indebtedness or Guarantor Senior Indebtedness or
any representative thereof.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company, any Subsidiary of the
Company, or their respective Affiliates with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be accountable for the Company's use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication.
-65-
SECTION 7.05. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default becomes known to the Trustee. Except in the case of a Default or an
Event of Default in payment of principal of, or interest on, any Note, the
Trustee may withhold the notice if and so long as its Board of Directors, the
executive committee of its Board of Directors or a committee of its directors
and/or Trust Officers in good faith determines that withholding the notice is in
the interest of the Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Holder a brief report dated as of
such date that complies with TIA Section 313(a). The Trustee also shall comply
with TIA Sections 313(b) and (c).
A copy of each report at the time of its mailing to Holders shall be mailed
to the Company and filed with the SEC and each stock exchange, if any, on which
the Notes are listed.
The Company shall promptly notify the Trustee in writing if the Notes
become listed on any stock exchange and the Trustee shall comply with TIA
Section 313(d).
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it in connection with the performance of its duties under
this Indenture. Such expenses shall include the reasonable fees and expenses of
the Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents, employees,
officers, directors and shareholders for, and hold it harmless against, any
loss, liability or expense incurred by it except for such actions to the extent
caused by any negligence, bad faith or willful misconduct on its part, arising
out of or in connection with the administration of this trust including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its rights, powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. At the Trustee's sole discretion, the Company shall
defend the claim and the Trustee shall provide reasonable cooperation and
-66-
may participate at the Company's expense in the defense. Alternatively, the
Trustee may at its option have separate counsel of its own choosing and the
Company shall pay the reasonable fees and expenses of such counsel; PROVIDED
that the Company will not be required to pay such fees and expenses if it
assumes the Trustee's defense, there is no conflict of interest between the
Company and the Trustee in connection with such defense as reasonably determined
by the Trustee and no Default or Event of Default has occurred and is
continuing. The Company need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld. The Company
need not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The obligations of the Company under this Section 7.07 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's Obligations pursuant to Article Eight or the termination of
this Indenture.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing, such
resignation to be effective upon the appointment of a successor Trustee. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Company and the Trustee in writing and may
appoint a successor Trustee with the Company's consent which consent shall not
be unreasonably withheld. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall notify each Holder of such event
and shall promptly appoint a
-67-
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
national banking association, the resulting, surviving or transferee
corporation without any further act shall, if such resulting, surviving or
transferee corporation is otherwise eligible hereunder, be the successor
Trustee; PROVIDED that such corporation shall be otherwise qualified and
eligible under this Article Seven.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the requirement of
TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the case of a
corporation included in a bank holding company system, the related bank holding
company) shall have a combined capital and surplus of at least $100 million as
set forth in its most recent published annual report of condition. In addition,
if the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA
Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or
-68-
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. TERMINATION OF THE
COMPANY'S OBLIGATIONS.
The Company may terminate its obligations under the Notes and this
Indenture, except those obligations referred to in the penultimate paragraph of
this Section 8.01, if all Notes previously authenticated and delivered (other
than destroyed, lost or stolen Notes which have been replaced or paid or Notes
for whose payment U.S. Legal Tender has theretofore been deposited with the
Trustee or the Paying Agent in trust or segregated and held in trust by the
Company and thereafter repaid to the Company, as provided in Section 8.05) have
been delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Notes under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all Notes
have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, U.S. Legal Tender in such amount as is
sufficient without consideration of reinvestment of such interest, to pay
principal of, premium, if any, and interest on the outstanding Notes to
maturity or redemption; PROVIDED that the Trustee shall have been
irrevocably instructed to apply such U.S. Legal Tender to the payment of
said principal, premium, if any, and interest with respect to the Notes;
and PROVIDED, FURTHER, that from and after the time of
-69-
deposit, the money deposited shall not be subject to the rights of holders
of Senior Debt pursuant to the provisions of Article Ten or Eleven;
(c) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result
in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligations under
the Notes and this Indenture have been complied with. Such Opinion of
Counsel shall also state that such satisfaction and discharge does not
result in a default under the Senior Credit Facility (if then in effect) or
any other agreement or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05 and 8.06 shall survive
until the Notes are no longer outstanding pursuant to the last paragraph of
Section 2.08. After the Notes are no longer outstanding, the Company's
obligations in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Subsidiary
Guarantors' obligations under the Notes, the Guarantees and this Indenture
except for those surviving obligations specified above.
SECTION 8.02. LEGAL DEFEASANCE AND
COVENANT DEFEASANCE.
(a) The Company may, at its option by Board Resolution of the Board of
Directors of the Company, at any time, elect to have either paragraph (b) or (c)
below be applied to all outstanding Notes upon compliance with the conditions
set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (b), the Company and the Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.03,
be deemed to have been discharged from its obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness
-70-
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.04 and the other Sections of
this Indenture referred to in (i) and (ii) below, and to have satisfied all its
other obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Notes and any amounts deposited
under Section 8.03 shall cease to be subject to any obligations to, or the
rights of, any holder of Senior Indebtedness or Guarantor Senior Indebtedness
under Article Ten or Eleven, as the case may be, or otherwise, except for the
following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04, and as more fully set
forth in such Section, payments in respect of the principal of and interest on
such Notes when such payments are due, (ii) the Company's obligations with
respect to such Notes under Article Two and Section 4.02, (iii) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (iv) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.03, be released from its obligations
under the covenants contained in Sections 4.03 through 4.08 and 4.10 through
4.20 and Article Five with respect to the outstanding Notes on and after the
date the conditions set forth below are satisfied (hereinafter, "COVENANT
DEFEASANCE"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes) and Holders of the Notes and any amounts deposited under Section 8.03
shall cease to be subject to any obligations to, or the rights of, any holder of
Senior Indebtedness or Guarantor Senior Indebtedness under Article Ten or Eleven
or otherwise. For this purpose, such Covenant Defeasance means that, with
respect to the outstanding Notes, 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 covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event or Default under
Section 6.01(3), but, except as specified above, the remainder of this Indenture
and such Notes shall be unaffected thereby. In addition, upon the Company's
exercise under paragraph (a) hereof of the option applicable to this paragraph
(c), subject to the satisfaction of the conditions set forth in Section 8.03,
those events described in Section 6.01 (except those events described in Section
6.01(1), (2), (5) and (6)) shall not constitute Events of Default.
-71-
SECTION 8.03. CONDITIONS TO LEGAL DEFEASANCE
OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02(b) or 8.02(c) to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or U.S. Government
Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of and interest on the Notes on
the stated date for payment thereof or on the applicable redemption date,
as the case may be, of such principal or installment of principal of or
interest on the Notes; PROVIDED that the Trustee shall have received an
irrevocable written order from the Company instructing the Trustee to apply
such U.S. Legal Tender or the proceeds of such U.S. Government Obligations
to said payments with respect to the Notes;
(b) in the case of an election under Section 8.02(b), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will
be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance
had not occurred;
(c) in the case of an election under Section 8.02(c), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of
the Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Notes shall have occurred and be continuing on the date of
such deposit (other than a Default or Event of Default resulting from the
incurrence of Indebtedness all or a portion of the proceeds of which will
be used to defease the Notes pursuant to this Article Eight
-72-
concurrently with such incurrence) or insofar as Sections 6.01(5) and
6.01(6) are concerned, at any time in the period ending on the 91st day
after the date of such deposit;
(e) 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;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Indebtedness of the Company other than the Notes,
and (ii) assuming no intervening bankruptcy or insolvency of the Company
between the date of deposit and the 91st day following the deposit and that
no Holder is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law.
SECTION 8.04. APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Article Eight, and shall
apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of and
interest on the Notes. The Trustee shall be under no obligation to invest said
U.S. Legal Tender or U.S. Government Obligations except as it may agree with the
Company.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.03 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.
-73-
Anything in this Article Eight to the contrary not withstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U. S. Government Obligations held by it as
provided in Section 8.03 hereof 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 that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.05. REPAYMENT TO THE COMPANY OR THE
SUBSIDIARY GUARANTORS.
Subject to Article Eight, the Trustee and the Paying Agent shall promptly
pay to the Company, or if deposited with the Trustee by any Subsidiary
Guarantor, to such Subsidiary Guarantor, upon request any excess U.S. Legal
Tender or U.S. Government Obligations held by them at any time and thereupon
shall be relieved from all liability with respect to such money. The Trustee
and the Paying Agent shall pay to the Company, or if deposited with the Trustee
by any Subsidiary Guarantor, to such Subsidiary Guarantor, upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years; PROVIDED that the Trustee or such Paying Agent, before
being required to make any payment, may at the expense of the Company cause to
be published once in a newspaper of general circulation in the City of New York
or mail to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein which shall be at least 30
days from the date of such publication or mailing any unclaimed balance of such
money then remaining will be repaid to the Company or a Subsidiary Guarantor.
After payment to the Company or a Subsidiary Guarantor, as the case may be,
Noteholders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another Person.
SECTION 8.06. SATISFACTION AND DISCHARGE.
This Indenture will be discharged and will cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of the
Notes, as expressly provided for in this Indenture) as to all outstanding Notes
when (i) either (a) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
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) have been delivered to the Trustee for
cancellation or (b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, or are by their terms to become due
and payable within one year or are to be called for redemption within one year
upon delivery of notice under arrangements satisfactory to the Trustee, and the
Company has irrevocably deposited or caused to be deposited with the Trustee
funds in an amount sufficient to pay and discharge the entire Indebtedness on
the Notes not theretofore
-74-
delivered to the Trustee for cancellation, for principal of, premium, if any,
and interest on the Notes to the date of deposit together with irrevocable
instructions from the Company directing the Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be; (ii) the Company
has paid all other sums payable under the Indenture by the Company; and (iii)
the Company has delivered to the Trustee an officers' certificate and an opinion
of counsel stating that all conditions precedent under the Indenture relating to
the satisfaction and discharge of the Indenture have been complied with.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Article Eight by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and each Subsidiary Guarantor's obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Article Eight until such time as the Trustee or
Paying Agent is permitted to apply all such U.S. Legal Tender or U.S. Government
Obligations in accordance with Article Eight; PROVIDED that if the Company or
any Subsidiary Guarantor, as the case may be, has made any payment of interest
on or principal of any Notes because of the reinstatement of its obligations,
the Company or any Subsidiary Guarantor, as the case may be, shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the U.S.
Legal Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture, the Notes or any Guarantee
without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; PROVIDED that
such amendment or supplement does not adversely affect the rights of any
Holder;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
-75-
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(5) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder;
PROVIDED that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate stating that such amendment or supplement complies with
the provisions of this Section 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Notes, may amend or supplement this Indenture, the Notes or any Guarantee
without notice to any other Holders. Subject to Section 6.07, the Holder or
Holders of a majority in aggregate principal amount of the outstanding Notes may
waive compliance by the Company with any provision of this Indenture or the
Notes without notice to any other Holder. No amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, shall, without the consent of each
Holder of each Note affected thereby:
(1) change the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver of any provision of this Indenture,
the Notes or any Guarantee;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(3) reduce the principal amount of any Note;
(4) change the Maturity Date of any Note, or alter the redemption
provisions contained in Article Three or in Paragraph 6 of the Notes in a
manner adverse to any Holder (except that provisions affecting the
requirement to repurchase the Notes following a Change of Control or
certain asset sales may be amended by the Company, the Trustee and the
Holders of not less than a majority in aggregate principal amount of Notes
then outstanding);
(5) make any changes in provisions concerning waivers of Defaults or
Events of Default by Holders of the Notes or the rights of Holders to
recover the principal of, interest on, premium, if any, or redemption
payment with respect to, any Note;
-76-
(6) make the principal of, or the interest on any Note payable with
anything or in any manner other than as provided for in this Indenture and
the Notes as in effect on the date hereof; or
(7) make any change to the subordination provisions of this Indenture
and the Note in a manner that adversely affects the Holders.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. EFFECT ON SENIOR INDEBTEDNESS.
No amendment, supplement or waiver of this Indenture shall adversely affect
the rights of any holder of Senior Indebtedness or Guarantor Senior
Indebtedness, if any (including their rights under Article Ten or Eleven),
without the consent of such holder.
SECTION 9.04. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
SECTION 9.05. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder
of a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by written notice to
the Trustee or the Company received before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the requisite
principal amount of Notes have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record
-77-
date is fixed, then notwithstanding the last sentence of the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1) through
(7) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note; PROVIDED that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
SECTION 9.06. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may, at the written direction of the Company, require the Holder of the
Note to deliver it to the Trustee. The Trustee at the written direction of the
Company may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such
notation or exchange shall be made at the sole cost and expense of the Company.
Failure to make the appropriate notation or issue a new Note shall not affect
the validity and effect of such amendment, supplement or waiver.
SECTION 9.07. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; PROVIDED that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The Trustee
shall be entitled to receive, if requested, an indemnity reasonably satisfactory
to it and to receive, and shall be fully protected in relying upon, an Opinion
of Counsel and an Officers' Certificate each stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture. Such Opinion of Counsel shall not be
an expense of the Trustee.
-78-
ARTICLE TEN
SUBORDINATION
SECTION 10.01. NOTES SUBORDINATED TO SENIOR
INDEBTEDNESS.
The Company covenants and agrees and the Trustee and each Holder of the
Notes, by its acceptance thereof, likewise covenants and agrees, that all Notes
shall be issued subject to the provisions of this Article Ten; and the Trustee
and each person holding any Note, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that the payment of all
Obligations on the Notes by the Company shall, to the extent and in the manner
herein set forth, be subordinated and junior in right of payment to the prior
payment in full in cash or Cash Equivalents of all Obligations on the Senior
Indebtedness; that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Indebtedness, and that each
holder of Senior Indebtedness whether now outstanding or hereinafter created,
incurred, assumed or guaranteed shall be deemed to have acquired Senior
Indebtedness in reliance upon the covenants and provisions contained in this
Indenture and the Notes.
SECTION 10.02. NO PAYMENT ON NOTES IN CERTAIN
CIRCUMSTANCES.
(a) If (i) any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, or other amounts due and owing on, any Significant
Senior Indebtedness or (ii) any default occurs and is continuing with respect to
any Significant Senior Indebtedness resulting in the acceleration of the
maturity of all or any portion of any Significant Senior Indebtedness, no
payment shall be made by or on behalf of the Company or any of its Subsidiaries
or any other person on its or their behalf with respect to any Obligations on
the Notes or to acquire any of the Notes for cash or property or otherwise,
except out of a trust theretofore established pursuant to the provisions of
Article Eight (PROVIDED that payment into such trust was not made during any
period in which payment on the Notes is blocked pursuant to the subordination
provisions of this Indenture) and except by issuance of Junior Securities. In
addition, if any other event of default occurs and is continuing (or if such an
event of default would occur upon any payment with respect to the Notes) with
respect to the Designated Senior Indebtedness, as such event of default is
defined in the instrument creating or evidencing such Designated Senior
Indebtedness permitting the holders of such Designated Senior Indebtedness then
outstanding, or their Representative, to accelerate the maturity thereof and if
the Representative for the Designated Senior Indebtedness gives written notice
of the event of default to the Trustee (a "DEFAULT NOTICE"), then, unless and
until the date, if any, on which all Designated Senior Indebtedness to which
such event of default relates is
-79-
discharged or the Representative for the Designated Senior Indebtedness gives
notice that all events of default have been cured or waived or have ceased to
exist or the Trustee receives written notice from the Representative for the
Designated Senior Indebtedness terminating the Blockage Period (as defined
below), during the 179 days after the delivery of such Default Notice (the
"BLOCKAGE PERIOD"), none of the Company or any of its Subsidiaries or any other
person on its or their behaf shall (x) make any payment with respect to any
Obligations on the Notes or (y) acquire any of the Notes for cash or property or
otherwise. Notwithstanding anything herein to the contrary, in no event will a
Blockage Period extend beyond 179 days from the date the payment on the Notes
was due. Only one such Blockage Period may be commenced within any 360
consecutive days. For all purposes of this Section 10.02(a), no event of default
which existed or was continuing (it being acknowledged that any action of the
Company or its Subsidiaries occurring subsequent to delivery of a Default Notice
that would give rise to any event of default pursuant to any provision under
which an event of default previously existed (or was continuing at the time of
delivery of such Default Notice) shall constitute a new event of default for
this purpose) on the date of the commencement of any Blockage Period with
respect to the Designated Senior Indebtedness shall be, or be made, the basis
for the commencement of a second Blockage Period by the Representative of the
Designated Senior Indebtedness whether or not within a period of 360 consecutive
days, unless such event of default shall have been cured or waived for a period
of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section
10.02(a), such payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of Senior Indebtedness (PRO RATA to such
holders on the basis of the respective amount of Senior Indebtedness held by
such holders) or their respective Representatives, as their respective interests
may appear. The Trustee shall be entitled to rely on information regarding
amounts then due and owing on the Senior Indebtedness, if any, received from the
holders of Senior Indebtedness (or their Representatives) or, if such
information is not received from such holders or their Representatives, from the
Company and only amounts included in the information provided to the Trustee
shall be paid to the holders of Senior Indebtedness.
Nothing contained in this Article Ten shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
PROVIDED that all Senior Indebtedness thereafter due or declared to be due shall
first be paid in full in cash or Cash Equivalents before the Holders are
entitled to receive any payment of any kind or character with respect to the
Obligations on the Notes.
-80-
SECTION 10.03. PAYMENT OVER OF PROCEEDS UPON
DISSOLUTION, ETC.
(a) Upon any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors or marshalling of assets of the Company, or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, whether voluntary or involuntary, all Obligations with
respect to all Senior Indebtedness shall first be paid in full, in cash or Cash
Equivalents, before any payment or distribution of any kind or character is made
on account of any Obligations on the Notes, or for the acquisition of any of the
Notes for cash or property or otherwise; and until all such Obligations with
respect to all Senior Indebtedness are paid in full in cash or Cash Equivalents,
any distribution to which the Holders of the Notes would be entitled but for the
subordination provisions will be made to the holders of Senior Indebtedness as
their interests may appear. Upon any such dissolution, winding-up, liquidation,
reorganization, bankruptcy, insolvency, receivership or similar proceeding or
assignment for the benefit of creditors or marshalling of assets, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Notes or the Trustee under
this Indenture would be entitled, except for the provisions hereof, shall be
paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, or by the
Holders of the Notes or by the Trustee under this Indenture if received by them,
directly to the holders of Senior Indebtedness (PRO RATA to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders) or
their respective Representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of Senior Indebtedness remaining unpaid until all such Senior Indebtedness has
been paid in full in cash or Cash Equivalents after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar person, the Senior Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by Section
-81-
10.03(a), such payment or distribution shall be held in trust for the benefit
of, and shall be paid over or delivered to, the holders of Senior Indebtedness
(PRO RATA to such holders on the basis of the respective amount of Senior
Indebtedness held by such holders) or their respective Representatives, or to
the trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of Senior Indebtedness remaining unpaid until all
such Senior Indebtedness has been paid in full in cash or Cash Equivalents,
after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Indebtedness.
SECTION 10.04. PAYMENTS MAY BE PAID PRIOR TO
DISSOLUTION.
Nothing contained in this Article Ten or elsewhere in this Indenture shall
prevent (i) the Company, except under the conditions described in Sections 10.02
and 10.03, from making payments at any time for the purpose of making payments
of principal of and interest on the Notes, or from depositing with the Trustee
any moneys for such payments, or (ii) in the absence of actual knowledge of the
Trustee that a given payment would be prohibited by Section 10.02 or 10.03, the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Notes to the Holders
entitled thereto unless at least one Business Day prior to the date upon which
such payment would otherwise become due and payable, the Trustee shall have
received the written notice provided for in Section 10.02(a) or in Section 10.07
(PROVIDED that, notwithstanding the foregoing, such application shall otherwise
be subject to the provisions of the first sentence of Section 10.02(a) and
Section 10.03). The Company shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of the Company.
SECTION 10.05. SUBROGATION.
Subject to the payment in full in cash or Cash Equivalents of all Senior
Indebtedness, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders by
virtue of this Article Ten which otherwise would have been made to the Holders
shall, as between the Company and the Holders of the Notes, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Article Ten are and are intended solely
for the purpose of defining the relative rights of the Holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
-82-
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article Ten shall have been
applied, pursuant to the provisions of this Article Ten, to the payment of
amounts payable under the Senior Indebtedness, then the Holders shall be
entitled to receive from the holders of such Senior Indebtedness any payments or
distributions received by such holders of Senior Indebtedness in excess of the
amount sufficient to pay all amounts payable under or in respect of the Senior
Indebtedness in full in cash or Cash Equivalents.
SECTION 10.06. OBLIGATIONS OF THE COMPANY
UNCONDITIONAL.
Nothing any contained in this Article Ten or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Notes the principal of and any interest on the Notes as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Notes and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Holder of any Note or the Trustee
on its behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.
SECTION 10.07. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article Ten.
Regardless of anything to the contrary contained in this Article Ten or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior
Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Indebtedness or a
Representative therefor, and, prior to the receipt of any such written notice,
the Trustee shall be entitled to assume (in the absence of actual knowledge to
the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under
-83-
this Article Ten and, if such evidence is not furnished, the Trustee may defer
any payment to such person pending judicial determination as to the right of
such person to receive such payment.
SECTION 10.08. RELIANCE ON JUDICIAL ORDER OR
CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to in
this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or upon certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or the holders of the Notes, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Ten.
SECTION 10.09. TRUSTEE'S RELATION TO SENIOR
INDEBTEDNESS.
The Trustee and any agent of the Company or the Trustee shall be entitled
to all the rights set forth in this Article Ten with respect to any Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and shall not be liable
to any such holders if the Trustee shall pay over or distribute to or on behalf
of Holders or the Company or any other person money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article,
except if such payment is made as a result of willful misconduct or gross
negligence of the Trustee.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Indebtedness, the distribution may be made and the notice given
to their Representatives, if any.
-84-
SECTION 10.10. SUBORDINATION RIGHTS NOT IMPAIRED BY
ACTS OR OMISSIONS OF THE COMPANY OR
HOLDERS OF SENIOR INDEBTEDNESS.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness, or
otherwise amend or supplement in any manner Senior Indebtedness, or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any
Person liable in any manner for the payment or collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 10.11. NOTEHOLDERS AUTHORIZE TRUSTEE TO
EFFECTUATE SUBORDINATION OF NOTES.
Each Holder of Notes by its acceptance of them authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness and the
Holders of Notes, the subordination provided in this Article Ten, and appoints
the Trustee its attorney-in-fact for such purposes, including, in the event of
any dissolution, winding-up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the business as assets of the Company, the filing
of a claim for the unpaid balance of its or his Notes and accrued interest in
the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Indebtedness or
their Representative are or is hereby authorized to have the right to file and
are or is hereby authorized to file an appropriate claim for and on behalf of
the Holders of said Notes. Nothing herein contained shall be deemed to
authorize
-85-
the Trustee or the holders of Senior Indebtedness or their Representative to
authorize or consent to or accept or adopt on behalf of any Holders any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Indebtedness or their Representative to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 10.12. THIS ARTICLE TEN NOT TO PREVENT
EVENTS OF DEFAULT.
The failure to make a payment on account of principal of or interest on the
Notes by reason of any provision of this Article Ten will not be construed as
preventing the occurrence of an Event of Default.
SECTION 10.13. TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE ELEVEN
GUARANTEES
SECTION 11.01. UNCONDITIONAL GUARANTEE.
Each Subsidiary Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "GUARANTEE") to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, the Notes or the obligations of the Company
hereunder or thereunder, that: (i) the principal of and interest on the Notes
will be promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration or otherwise and interest on the overdue
principal, if any, and interest on any interest, to the extent lawful, of the
Notes and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full, all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any Notes or of any such other obligations, the same will
be promptly paid in full when due in accordance with the terms of the extension
or renewal, subject to any applicable grace period, whether at stated maturity,
by acceleration or otherwise, subject, however, in the case of clauses (i) and
(ii) above, to the limitations set forth in Section 11.05. Each Subsidiary
Guarantor hereby agrees that its Obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
-86-
recovery of any judgment against the Company, any action to enforce the same or
any other circumstances which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Subsidiary Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and in
this Guarantee. If any Noteholder or the Trustee is required by any court or
otherwise to return to the Company, any Subsidiary Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or any Subsidiary Guarantor, any amount paid by the Company or any Subsidiary
Guarantor to the Trustee or such Noteholder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect as to such
amount only. Each Subsidiary Guarantor further agrees that, as between each
Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of this Guarantee.
SECTION 11.02. SUBORDINATION OF GUARANTEE.
Each Subsidiary Guarantor agrees, and each Holder by accepting a Guarantee
agrees, that all Obligations owed under and in respect of such Guarantees are
subordinated in right of payment, to the extent and in the manner provided in
this Article Eleven, to the prior indefeasible payment in full in cash or Cash
Equivalents, of all Guarantor Senior Indebtedness of such Subsidiary Guarantor,
and that the subordination of the Guarantees pursuant to this Article Eleven is
for the benefit of all holders of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor, whether outstanding on the Issue Date or issued
thereafter.
SECTION 11.03. SEVERABILITY.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.04. RELEASE OF A SUBSIDIARY GUARANTOR.
Upon (i) the release by the lenders under the Senior Credit Facility,
related documents and future refinancings thereof of all guarantees of a
Subsidiary Guarantor and all Liens on the property and assets of such Subsidiary
Guarantor relating to such Indebtedness, or (ii) the
-87-
sale or disposition of a Subsidiary Guarantor (or all or substantially all of
its assets) to an entity which is not a Subsidiary of the Company or (iii) the
designation of a Subsidiary Guarantor as an Unrestricted Subsidiary which, in
each case, is otherwise in compliance with this Indenture, such Subsidiary
Guarantor shall be deemed released from all its obligations under this Article
Eleven and its Guarantee; PROVIDED, HOWEVER, that any such termination shall
occur only to the extent that all Obligations of such Subsidiary Guarantor under
the Senior Credit Facility and all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, Indebtedness of the
Company shall also terminate upon such release, sale or transfer. The Trustee
shall deliver an appropriate instrument evidencing such release upon receipt of
a written request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 11.04 and the other provisions
of this Indenture. Any Subsidiary Guarantor not so released remains liable for
the full amount of principal of and interest on the Notes as provided in this
Article Eleven.
SECTION 11.05. LIMITATION OF SUBSIDIARY GUARANTOR'S
LIABILITY.
Each Subsidiary Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Guarantee not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal or state law. To effectuate the foregoing intention, the Holders and
such Subsidiary Guarantor hereby irrevocably agree that the Obligations of such
Subsidiary Guarantor under its Guarantee shall be limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities of
such Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Guarantee or
pursuant to Section 11.07, result in the Obligations of such Subsidiary
Guarantor under its Guarantee not constituting such fraudulent transfer or
conveyance.
SECTION 11.06. SUBSIDIARY GUARANTORS MAY CONSOLIDATE,
ETC., ON CERTAIN TERMS.
(a) Nothing contained in this Indenture or in any of the Notes shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into the
Company or another Subsidiary Guarantor or shall prevent any sale or conveyance
of the assets of a Subsidiary Guarantor to the Company or another Subsidiary
Guarantor. Upon any such consolidation, merger, sale or conveyance, the
Guarantee given by such Subsidiary Guarantor shall no longer have any force or
effect.
(b) Except as set forth in Article Four, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger of a
Subsidiary Guarantor with or into
-88-
a corporation or corporations other than the Company or another Subsidiary
Guarantor (whether or not affiliated with the Subsidiary Guarantor), or
successive consolidations or mergers in which a Subsidiary Guarantor or its
successor or successors shall be a party or parties, or shall prevent any sale
or conveyance of all or substantially all of the assets of a Subsidiary
Guarantor to a corporation other than the Company or another Subsidiary
Guarantor (whether or not affiliated with the Subsidiary Guarantor); PROVIDED,
HOWEVER, that, subject to Sections 11.04 and 11.06(a), either (x) the
transaction is an Asset Sale consummated in accordance with Section 4.16, or
(y) (i) immediately after such transaction, and giving effect thereto, no
Default or Event of Default shall have occurred as a result of such transaction
and be continuing, and (ii) each Subsidiary Guarantor hereby covenants and
agrees that, upon any such consolidation, merger, sale or conveyance, the
Guarantee of such Subsidiary Guarantor set forth in this Article Eleven, and the
due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by such Subsidiary Guarantor, shall
be expressly assumed (in the event that the Subsidiary Guarantor is not the
surviving corporation in such transaction), by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee,
together with an Officers' Certificate of the Company and an Opinion of Counsel
stating that the transaction and such supplemental indenture comply with this
Indenture, by the corporation formed by such consolidation, or into which the
Subsidiary Guarantor shall have merged, or by the corporation that shall have
acquired such property. In the case of any such consolidation, merger, sale or
conveyance that is not an Asset Sale consummated in accordance with Section
4.16, upon the assumption by the successor corporation, by supplemental
indenture executed and delivered to the Trustee and satisfactory in form to the
Trustee of the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Subsidiary Guarantor, such
successor corporation shall succeed to and be substituted for the Subsidiary
Guarantor with the same effect as if it had been named herein as a Subsidiary
Guarantor.
SECTION 11.07. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, INTER SE, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"FUNDING GUARANTOR") under this Guarantee, such Funding Guarantor shall be
entitled to a contribution from all other Subsidiary Guarantors in a PRO RATA
amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including
the Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Notes or any other Subsidiary Guarantor's Obligations with respect to this
Guarantee.
-89-
SECTION 11.08. WAIVER OF SUBROGATION.
Each Subsidiary Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Subsidiary
Guarantor's Obligations under this Guarantee and this Indenture, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Subsidiary Guarantor in violation of the preceding sentence
and the Notes shall not have been paid in full, such amount shall have been
deemed to have been paid to such Subsidiary Guarantor for the benefit of, and
held in trust for the benefit of, the Holders of the Notes, and shall forthwith
be paid to the Trustee for the benefit of such Holders to be credited and
applied upon the Notes, whether matured or unmatured, in accordance with the
terms of this Indenture. Each Subsidiary Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
11.08 is knowingly made in contemplation of such benefits.
SECTION 11.09. EXECUTION OF GUARANTEE.
To evidence their guarantee to the Noteholders specified in Section 11.01,
the Subsidiary Guarantors hereby agree to execute the Guarantee in substantially
the form of Exhibit A recited to be endorsed on each Note ordered to be
authenticated and delivered by the Trustee. Each Subsidiary Guarantor hereby
agrees that its Guarantee set forth in Section 11.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Note a notation of
such Guarantee. Each such Guarantee shall be signed on behalf of each
Subsidiary Guarantor by one Officer (each of whom shall, in each case, have been
duly authorized by all requisite corporate actions) prior to the authentication
of the Note on which it is endorsed, and the delivery of such Note by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of such Guarantee on behalf of such Subsidiary Guarantor. Such
signatures upon the Guarantee may be by manual or facsimile signature of such
officers and may be imprinted or otherwise reproduced on the Guarantee, and in
case any such officer who shall have signed the Guarantee shall cease to be such
officer before the Note on which such Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Note nevertheless may be authenticated and delivered or disposed of as though
the person who signed the Guarantee had not ceased to be such officer of the
Subsidiary Guarantor.
-90-
SECTION 11.10. NO PAYMENT ON GUARANTEES IN CERTAIN CIRCUMSTANCES.
(a) If (i) any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, or other amounts due and owing on, any Significant
Guarantor Senior Indebtedness or any Significant Senior Indebtedness guaranteed
by a Subsidiary Guarantor (which Guarantee constitutes Guarantor Senior
Indebtedness of such Subsidiary Guarantor), or (ii) any default occurs and is
continuing with respect to any Significant Guarantor Senior Indebtedness or any
Significant Senior Indebtedness resulting in the acceleration of the maturity of
all or any portion of such Significant Guarantor Senior Indebtedness or any
Significant Senior Indebtedness, no payment shall be made by or on behalf of the
Subsidiary Guarantor or any other person on its behalf with respect to any
Obligations on the Notes or any of the Obligations of such Subsidiary Guarantor
on its Guarantee, or to acquire any of the Notes for cash or property or
otherwise, except out of a trust theretofore established pursuant to the
provisions of Article Eight (PROVIDED that payment into such trust was not made
during any period in which payment on the Notes is blocked pursuant to the
subordination provisions of this Indenture) and except by issuance of Junior
Securities. In addition, if any other event of default occurs and is continuing
(or if such an event of default would occur upon any payment with respect to the
Notes) with respect to the Designated Senior Indebtedness guaranteed by a
Subsidiary Guarantor (which guarantee constitutes Guarantor Senior Indebtedness
of such Subsidiary Guarantor), as such event of default is defined in the
instrument creating or evidencing such Designated Senior Indebtedness permitting
the holders of such Designated Senior Indebtedness then outstanding, or their
Representative, to accelerate the maturity thereof and if the Representative for
the Designated Senior Indebtedness gives written notice of the event of default
to the Trustee (a "GUARANTOR DEFAULT NOTICE"), then, unless and until the date,
if any, on which all Designated Senior Indebtedness to which such event of
default relates is discharged or the Representative for the Designated Senior
Indebtedness gives notice that all events of default have been cured or waived
or have ceased to exist or the Trustee receives written notice from the
Representative for the Designated Senior Indebtedness terminating the Guarantor
Blockage Period (as defined below), during the 179 days after the delivery of
such Guarantor Default Notice (the "GUARANTOR BLOCKAGE PERIOD"), no Subsidiary
Guarantor or any other Person on its behalf shall (x) make any payment with
respect to any Obligations on the Notes or under its Guarantee or (y) acquire
any of the Notes for cash or property or otherwise. Notwithstanding anything
herein to the contrary, in no event will a Guarantor Blockage Period extend
beyond 179 days from the date the payment on the Notes was due. Only one such
Guarantor Blockage Period may be commenced within any 360 consecutive days. For
all purposes of this Section 11.10(a), no event of default which existed or was
continuing (it being acknowledged that any action of the Company or its
Subsidiaries occurring subsequent to delivery of a Default Notice that would
give rise to any event of default pursuant to any provision under which an event
of default previously existed (or was continuing at the time of delivery of such
Default Notice) shall constitute a new event
-91-
of default for this purpose) on the date of the commencement of any Guarantor
Blockage Period with respect to the Designated Senior Indebtedness shall be, or
be made, the basis for the commencement of a second Guarantor Blockage Period by
the Representative of the Designated Senior Indebtedness whether or not within a
period of 360 consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section
11.10(a), such payment shall be held in trust for the benefit of, shall be paid
over or delivered to, the holders of Guarantor Senior Indebtedness (PRO RATA to
such holders on the basis of the respective amount of Guarantor Senior
Indebtedness held by such holders) or their respective Representatives, as their
respective interests may appear. The Trustee shall be entitled to rely on
information regarding amounts then due and owing on the Guarantor Senior
Indebtedness, if any, received from the holders of Guarantor Senior Indebtedness
(or their Representatives) or, if such information is not received from such
holders or their Representatives, from such Subsidiary Guarantor and only
amounts included in the information provided to the Trustee shall be paid to the
holders of Guarantor Senior Indebtedness.
Nothing contained in this Article Eleven shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; PROVIDED that all Guarantor Senior Indebtedness thereafter due or
declared to be due shall first be paid in full in cash or Cash Equivalents
before the Holders are entitled to receive any payment of any kind or character
with respect to the Obligations on the Notes or on account of any Subsidiary
Guarantor's Guarantee.
SECTION 11.11. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
(a) Upon any payment or distribution of assets of any Subsidiary Guarantor
of any kind or character, whether in cash, property or securities, to creditors
upon any liquidation, dissolution, winding-up, reorganization, assignment for
the benefit of creditors or marshalling of assets of such Subsidiary Guarantor,
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to any Subsidiary Guarantor or its property, whether
voluntary or involuntary, all Obligations with respect to all Guarantor Senior
Indebtedness shall first be paid in full, in cash or Cash Equivalents, before
any payment or distribution of any kind or character is made on account of any
Obligations on the Notes or any of the Obligations of such Subsidiary Guarantor
on its Guarantee, or for the acquisition of any of the Notes for cash or
property or otherwise; and until all such Obligations with respect to all
Guarantor Senior Indebtedness are paid in full in cash or Cash Equivalents, any
distribution to which the Holders of the Notes would be entitled but for the
subordination
-92-
provisions will be made to the holders of Guarantor Senior Indebtedness as their
interests may appear. Upon any such dissolution, winding-up, liquidation,
reorganization, bankruptcy, insolvency, receivership or similar proceeding or
assignment for the benefit of creditors or marshalling of assets, any payment or
distribution of assets of any Subsidiary Guarantor of any kind or character,
whether in cash, property or securities, to which the Holders of the Notes or
the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by such Subsidiary Guarantor or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, or by the Holders of the Notes or by the Trustee under this
Indenture if received by them, directly to the holders of Guarantor Senior
Indebtedness (PRO RATA to such holders on the basis of the respective amounts of
Guarantor Senior Indebtedness held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of Guarantor
Senior Indebtedness remaining unpaid until all such Guarantor Senior
Indebtedness has been paid in full in cash or Cash Equivalents after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of Guarantor Senior Indebtedness.
(b) To the extent any payment of Guarantor Senior Indebtedness (whether by
or on behalf of such Subsidiary Guarantor, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar person, the Guarantor
Senior Indebtedness or part thereof originally intended to be satisfied shall be
deemed to be reinstated and outstanding as if such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of a Subsidiary Guarantor of any kind or character,
whether in cash, property or securities, shall be received by any Holder when
such payment or distribution is prohibited by Section 11.11(a), such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Guarantor Senior Indebtedness (PRO RATA to such
holders on the basis of the respective amount of Guarantor Senior Indebtedness
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of Guarantor Senior Indebtedness remaining unpaid
until all such Guarantor Senior Indebtedness has been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
-93-
SECTION 11.12. PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION.
Nothing contained in this Article Eleven or elsewhere in this Indenture
shall prevent (i) any Subsidiary Guarantor, except under the conditions
described in Sections 11.10 and 11.11, from making payments at any time for the
purpose of making payments of principal of and interest on the Notes, or from
depositing with the Trustee any moneys for such payments, or (ii) in the absence
of actual knowledge by the Trustee that a given payment would be prohibited by
Section 11.10 or 11.11, the application by the Trustee of any moneys deposited
with it for the purpose of making such payments of principal of and interest on
the Notes to the Holders entitled thereto unless at least one Business Day prior
to the date upon which such payment would otherwise become due and payable, the
Trustee shall have received the written notice provided for in Section 11.10(a)
or in Section 11.15 (PROVIDED that, notwithstanding the foregoing, such
application shall otherwise be subject to the provisions of the first sentence
of Section 11.10(a) and Section 11.11). Each Subsidiary Guarantor shall give
prompt written notice to the Trustee of any dissolution, winding-up, liquidation
or reorganization of any Subsidiary Guarantor.
SECTION 11.13. SUBROGATION.
Subject to the payment in full in cash or Cash Equivalents of all Guarantor
Senior Indebtedness, the Holders of the Notes shall be subrogated to the rights
of the holders of Guarantor Senior Indebtedness to receive payments or
distributions of cash, property or securities of such Subsidiary Guarantor
applicable to the Guarantor Senior Indebtedness of such Subsidiary Guarantor
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Guarantor
Senior Indebtedness by or on behalf of such Subsidiary Guarantor or by or on
behalf of the Holders by virtue of this Article Eleven which otherwise would
have been made to the Holders shall, as between the Subsidiary Guarantors and
the Holders of the Notes, be deemed to be a payment by such Subsidiary Guarantor
to or on account of the Guarantor Senior Indebtedness, it being understood that
the provisions of this Article Eleven are and are intended solely for the
purpose of defining the relative rights of the Holders of the Notes, on the one
hand, and the holders of the Guarantor Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article Eleven shall have been
applied, pursuant to the provisions of this Article Eleven, to the payment of
amounts payable under the Guarantor Senior Indebtedness, then the Holders shall
be entitled to receive from the holders of such Guarantor Senior Indebtedness
any payments or distributions received by such holders of Guarantor Senior
Indebtedness in excess of the amount sufficient to pay all amounts payable under
or in respect of the Guarantor Senior Indebtedness in full in cash or Cash
Equivalents.
-94-
SECTION 11.14. OBLIGATIONS OF EACH GUARANTOR UNCONDITIONAL.
Nothing contained in this Article Eleven or elsewhere in this Indenture or
in the Notes or the Guarantees is intended to or shall impair, as among any
Subsidiary Guarantor, its creditors other than the holders of Guarantor Senior
Indebtedness, and the Holders of the Notes, the obligation of such Subsidiary
Guarantor, which is absolute and unconditional, to pay to the Holders of the
Notes the principal of and any interest on the Notes as and when the same shall
become due and payable in accordance with the terms of the Guarantees, or is
intended to or shall affect the relative rights of the Holders of the Notes and
creditors of any Subsidiary Guarantor other than the holders of Guarantor Senior
Indebtedness, nor shall anything herein or therein prevent the Holder of any
Note or the Trustee on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, in respect of cash, property or securities of any Subsidiary
Guarantor received upon the exercise of any such remedy.
SECTION 11.15. NOTICE TO TRUSTEE.
The Company or any Subsidiary Guarantor shall give prompt written notice to
the Trustee of any fact known to the Company or any such Subsidiary Guarantor
which would prohibit the making of any payment to or by the Trustee in respect
of the Guarantees pursuant to the provisions of this Article Eleven. Regardless
of anything to the contrary contained in this Article Eleven or elsewhere in
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any default or event of default with respect to any Guarantor
Senior Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company or a Subsidiary Guarantor, or from a holder
of Guarantor Senior Indebtedness or a Representative therefor, and, prior to the
receipt of any such written notice, the Trustee shall be entitled to assume (in
the absence of actual knowledge to the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Eleven, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Guarantor Senior
Indebtedness held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article Eleven, and if such evidence is not
furnished the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.
-95-
SECTION 11.16. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of any Subsidiary Guarantor
referred to in this Article Eleven, the Trustee, subject to the provisions of
Article Seven hereof, and the Holders of the Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings
are pending, or upon certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
delivered to the Trustee or the holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Guarantor Senior Indebtedness and other Indebtedness of such
Subsidiary Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article Eleven.
SECTION 11.17. TRUSTEE'S RELATION TO GUARANTOR SENIOR INDEBTEDNESS.
The Trustee and any agent of any Subsidiary Guarantor or the Trustee shall
be entitled to all the rights set forth in this Article Eleven with respect to
any Guarantor Senior Indebtedness which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Guarantor Senior Indebtedness and nothing in this Indenture shall deprive the
Trustee or any such agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eleven, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Guarantor Senior Indebtedness
and shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or any such Subsidiary Guarantor or any
other person money or assets to which any holders of Guarantor Senior
Indebtedness shall be entitled by virtue of this Article, except if such payment
is made as a result of willful misconduct or gross negligence of the Trustee.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Indebtedness, the distribution may be made and the
notice given to their Representatives, if any.
-96-
SECTION 11.18. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF A
SUBSIDIARY GUARANTOR OR HOLDERS OF GUARANTOR SENIOR
INDEBTEDNESS.
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Subsidiary Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by such Subsidiary Guarantor with the terms
of this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Guarantor Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Eleven or the
obligations hereunder of the Holders of the Notes to the holders of the
Guarantor Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Guarantor Senior Indebtedness, or otherwise amend or supplement in any
manner Guarantor Senior Indebtedness, or any instrument evidencing the same or
any agreement under which Guarantor Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Guarantor Senior Indebtedness; (iii) release any
person liable in any manner for the payment or collection of Guarantor Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
such Subsidiary Guarantor and any other person.
SECTION 11.19. NOTEHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
GUARANTEES.
Each Holder of Notes by its acceptance of them authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Guarantor Senior
Indebtedness and the Holders of Notes, the subordination provided in this
Article Eleven, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Subsidiary Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business as assets of such Subsidiary Guarantor, the filing of a claim for the
unpaid balance of its or his Notes and accrued interest in the form required in
those proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Guarantor Senior
Indebtedness or their Representative are or is hereby
-97-
authorized to have the right to file and are or is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Notes. Nothing
herein contained shall be deemed to authorize the Trustee or the holders of
Guarantor Senior Indebtedness or their Representative to authorize or consent to
or accept or adopt on behalf of any Holders any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee or the holders of Guarantor Senior
Indebtedness or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 11.20. THIS ARTICLE ELEVEN NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of or interest on the
Notes by reason of any provision of this Article Eleven will not be construed as
preventing the occurrence of an Event of Default.
SECTION 11.21. TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article Eleven will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 12.02. NOTICES.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
private courier service guaranteeing next day delivery, by telex, by telecopier
or registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
-98-
if to the Company or the Subsidiary Guarantors, if any:
Federal Data Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
Norwest Bank, Minnesota, N.A.
Corporate Trust Services
6th and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Norwest Bank, Minnesota, N.A.
c/o The Depository Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Norwest Window
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Each of the Company, the Subsidiary Guarantors, if any, and the Trustee by
written notice to each other such Person may designate additional or different
addresses for notices to such Person. Any notice or communication to the
Company, the Guarantors, if any, or the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered or delivered
by private courier service guaranteeing next day delivery; when answered back,
if telexed; when receipt is acknowledged, if faxed; and five (5) calendar days
after mailing if sent by registered or certified mail, postage prepaid (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to such
Holder by first class mail or other equivalent means at such Holder's address as
it appears on the registration books of the Registrar and shall be sufficiently
given to such Holder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
-99-
SECTION 12.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Guarantors, if any, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee upon
request:
(1) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with;
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(3) where applicable, a certificate or opinion by an independent
certified public accountant reasonably satisfactory to the Trustee that
complies with TIA Section 314(c).
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to
express an
-100-
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 12.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 12.07. LEGAL HOLIDAYS.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 12.08. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE.
SECTION 12.09. NO AdVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
-101-
SECTION 12.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such, of the
Company, the Subsidiary Guarantors, if any, or of the Trustee shall not have any
liability for any obligations of the Company under the Notes or this Indenture.
Each Holder by accepting a Note waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of the Notes.
This provision does not affect any possible claims under federal securities
laws.
SECTION 12.11. SUCCESSORS.
All agreements of the Company and the Subsidiary Guarantors, if any, in
this Indenture, the Notes and the Guarantees, if any, shall bind their
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 12.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
SECTION 12.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the Notes
or in the Guarantees, if any, shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
-102-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
FEDERAL DATA CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
FDCT CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
NYMA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ MANAGEMENT SYSTEMS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
FDC TECHNOLOGIES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
-103-
DOXSYS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
VAD INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
NORWEST BANK, MINNESOTA, N.A.,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A(1)
[FORM OF INITIAL NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501 (A)(1), (2), (3) OR (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇,
(▇) ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER)
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE
PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE ACT.
CUSIP No.: [ ]
FEDERAL DATA CORPORATION
10 1/8% SENIOR SUBORDINATED NOTE DUE 2005
No. [ ] $[ ]
FEDERAL DATA CORPORATION, a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to [ ]
or registered assigns, the principal sum of [ ] Dollars, on August 1, 2005.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
FEDERAL DATA CORPORATION
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Dated: [ ], 1997 Title:
Certificate of Authentication
This is one of the 10 1/8% Senior Subordinated Notes due 2005 referred to
in the within-mentioned Indenture.
NORWEST BANK, MINNESOTA, N.A.,
as Trustee
By:
---------------------------------------
Authorized Signatory
A.1-2
(REVERSE OF SECURITY)
10 1/8% SENIOR SUBORDINATED NOTE DUE 2005
1. INTEREST. FEDERAL DATA CORPORATION, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from July 25, 1997. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing February 1, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are canceled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by its check payable in such U.S. Legal Tender.
The Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, Norwest Bank, Minnesota, N.A.
(the "Trustee") will act as Paying Agent and Registrar. The Company may change
any Paying Agent, Registrar or co-Registrar without notice to the Holders.
4. INDENTURE. The Company issued the Notes under an Indenture, dated as
of July 15, 1997 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Note is one of a duly authorized issue of Initial Notes of
the Company designated as its 10 1/8% Senior Subordinated Notes due 2005 (the
"Initial Notes"). The Notes include the Initial Notes, the Private Exchange
Notes and the Unrestricted Notes issued in exchange for the Initial Notes
pursuant to the Registration Rights Agreement or, with respect to Initial Notes
issued under the Indenture subsequent to the Issue Date, a registration rights
agreement substantially identical to the Registration Rights Agreement. The
Initial Notes and the Unrestricted Notes are treated as a single class of
securities under the Indenture. The terms of the Notes include those stated in
this Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and said Act for a statement of
A.1-3
them. The Notes are general unsecured obligations of the Company limited in
aggregate principal amount to $175,000,000. Under certain circumstances as
provided for in Article Eleven of the Indenture, the payment on each Note may be
guaranteed on a senior subordinated basis by the Subsidiary Guarantors. Each
Holder, by accepting a Note, agrees to be bound by all of the terms and
provisions of the Indenture, as the same may be amended from time to time.
5. SUBORDINATION. The Notes are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Senior Indebtedness of the Company,
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. The Guarantees in respect of the Notes will be
subordinated in right of payment, in the manner and to the extent set forth in
the Indenture, to the prior payment in full in cash or Cash Equivalents of all
Guarantor Senior Indebtedness of each Subsidiary Guarantor, whether outstanding
on the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by its acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on its behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee its
attorney-in-fact for such purposes.
6. REDEMPTION PROVISIONS. Except as provided below, the Notes may not be
redeemed prior to August 1, 2001.
(a) OPTIONAL REDEMPTION. On or after such date, the Notes may be redeemed
at the option of the Company, at any time as a whole, or from time to time in
part, on not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of principal amount), plus accrued
and unpaid interest (if any) to the date of redemption (subject to the rights of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
commencing August 1:
REDEMPTION
PRICE
-----
2001 . . . . . . . . . . . . . . . . . . . . 105.063%
2002 . . . . . . . . . . . . . . . . . . . . 103.375%
2003 . . . . . . . . . . . . . . . . . . . . 101.688%
2004 and thereafter. . . . . . . . . . . . . 100.000%
A.1-4
(b) Notwithstanding the foregoing, at any time prior to August 1, 2000,
the Company may redeem, in part and from time to time, with the net proceeds of
one or more Public Equity Offerings, up to 35% aggregate principal amount of the
Notes originally issued in the Offering at a redemption price equal to 110.125%
of the aggregate principal amount thereof plus accrued and unpaid interest
thereon, if any, to the redemption date; PROVIDED that at least 65% of the
aggregate principal amount of the Notes originally issued in the Offering remain
outstanding immediately after the occurrence of any such redemption and that any
such redemption occurs within 90 days following the closing of any such Public
Equity Offering.
(c) At any time on or prior to August 1, 2001, the Notes may also be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days prior notice (but in no
event more than 90 days after the occurrence of such Change of Control), at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued and unpaid interest, if any, to, the date
of redemption (the "REDEMPTION DATE") (subject to the right of holders of record
on the relevant record date to receive interest due on the relevant interest
payment date). The Company may not redeem Notes pursuant to this paragraph if it
has made a Change of Control Offer (as defined) pursuant to Section 4.15 of the
Indenture with respect to such Change of Control.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. OFFERS TO PURCHASE. Section 4.15 of the Indenture provides that, upon
a Change of Control if the Company does not redeem the Notes, each holder will
have the right, subject to certain conditions set forth in the Indenture, to
require the Company to repurchase such holder's Notes at a price equal to 101%
of the principal amount thereof plus accrued interest to the date of repurchase.
Section 4.16 of the Indenture provides that, after certain Asset Sales, and
subject to further limitations contained therein, the Company will make an offer
to purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer
A.1-5
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange of any Notes or portions thereof
selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any time
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions, the
Indenture, the Notes or the Guarantee, if any, may be amended or supplemented
with the written consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding, and any existing Default or
Event of Default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, make payments in respect of its
Capital Stock or Subordinated Obligations, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, incur Indebtedness that is, by its terms, subordinated or junior
to any other Indebtedness and senior to the Notes, merge or consolidate with any
other Person, sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of its assets or adopt a plan of liquidation and sell
Capital Stock of a Restricted Subsidiary. Such limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
A.1-6
16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture. Each Holder of
a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. The laws of the State of New York shall govern this
Note and the Indenture, without regard to principles of conflict of laws.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be used
in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants
in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. INDENTURE. Each Holder, by accepting a Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may
A.1-7
be made to: Federal Data Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attn: Chief Financial Officer.
A.1-8
SENIOR SUBORDINATED GUARANTEE
FDCT Corp., NYMA, Inc., ▇▇▇▇▇▇▇ Management Systems Corporation, FDC
Technologies Inc., DoxSys, Inc. and VAD International, Inc. (the "Subsidiary
Guarantors") have unconditionally guaranteed on a senior subordinated basis
(such guarantee by each Guarantor being referred to herein as the "Guarantee")
(i) the due and punctual payment of the principal of and interest on the Notes,
whether at maturity, by acceleration or otherwise and the due and punctual
payment of interest on the overdue principal and interest, if any, on the Notes,
to the extent lawful, all in accordance with the terms set forth in Article
Eleven of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth and
are expressly subordinated and subject in right of payment to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor, to the extent and in the manner provided, in Article
Eleven of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Guarantee therein made. This Guarantee is limited under
the Indenture to the extent necessary not to constitute a fraudulent conveyance.
No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any of the Subsidiary Guarantors shall have any
liability under the Guarantee by reason of such person's status as stockholder,
officer, director, employee or incorporator. Each holder of a Note by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Guarantees.
A.1-9
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
FDCT CORP.
By:
-------------------------------------
Name:
Title:
NYMA, INC.
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ MANAGEMENT SYSTEMS CORPORATION
By:
-------------------------------------
Name:
Title:
FDC TECHNOLOGIES INC.
By:
-------------------------------------
Name:
Title:
DOXSYS, INC.
By:
-------------------------------------
Name:
Title:
A.1-10
VAD INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
A.1-11
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ___________________________ agent to transfer this Note
on the books of the Company. The agent may substitute another to act for him.
Date: _______________________ Signed: ____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:_____________________________________________
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) July 25, 1999, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
[Check One]
(1) _____ to the Company or a subsidiary thereof; or
(2) _____ pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) _____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) _____ outside the United states to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act; or
A.1-12
(5) _____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
(6) _____ pursuant to an effective registration statement under the
Securities Act; or
(7) _____ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; PROVIDED that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall
not be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Date: _______________________ Signed: ____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:___________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Date: _______________________ Signed: ____________________________
NOTICE: To be executed by
an executive officer
A.1-13
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$_________________________
Dated: ____________________________ ___________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: ____________________________________________________
A.1-14
EXHIBIT A(2)
[FORM OF EXCHANGE NOTE]
CUSIP No.:[ ]
FEDERAL DATA CORPORATION
10 1/8% SENIOR SUBORDINATED NOTE DUE 2005
No.[ ] $[ ]
FEDERAL DATA CORPORATION, a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
[ ] or registered assigns, the principal sum of [ ]
Dollars, on August 1, 2005.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
FEDERAL DATA CORPORATION
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Dated: [ ], 1997 Title:
Certificate of Authentication
This is one of the 10 1/8% Senior Subordinated Notes due 2005 referred to
in the within-mentioned Indenture.
NORWEST BANK, MINNESOTA, N.A.,
as Trustee
By:
-----------------------------------
Authorized Signatory
(REVERSE OF SECURITY)
10 1/8% SENIOR SUBORDINATED NOTE DUE 2005
1. INTEREST. FEDERAL DATA CORPORATION, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from July 25, 1997. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing February 1, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are canceled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by its check payable in such U.S. Legal Tender.
The Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, Norwest Bank, Minnesota, N.A.
(the "Trustee") will act as Paying Agent and Registrar. The Company may change
any Paying Agent, Registrar or co-Registrar without notice to the Holders.
4. INDENTURE. The Company issued the Notes under an Indenture, dated as
of July 15, 1997 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Note is one of a duly authorized issue of Unrestricted
Notes of the Company designated as its 10 1/8% Senior Subordinated Notes due
2005 (the "Unrestricted Notes"). The Notes include the Initial Notes, the
Private Exchange Notes and the Unrestricted Notes issued in exchange for the
Initial Notes pursuant to the Registration Rights Agreement or, with respect to
Initial Notes issued under the Indenture subsequent to the Issue Date, a
registration rights agreement substantially identical to the Registration Rights
Agreement. The Initial Notes and the Unrestricted Notes are treated as a single
class of securities under the Indenture. The terms of the Notes include those
stated in this Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and said Act for a statement of
A.2-2
them. The Notes are general unsecured obligations of the Company limited in
aggregate principal amount to $175,000,000. Under certain circumstances as
provided for in Article Eleven of the Indenture, the payment on each Note may be
guaranteed on a senior subordinated basis by the Subsidiary Guarantors. Each
Holder, by accepting a Note, agrees to be bound by all of the terms and
provisions of the Indenture, as the same may be amended from time to time.
5. SUBORDINATION. The Notes are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Senior Indebtedness of the Company,
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. The Guarantees in respect of the Notes will be
subordinated in right of payment, in the manner and to the extent set forth in
the Indenture, to the prior payment in full in cash or Cash Equivalents of all
Guarantor Senior Indebtedness of each Subsidiary Guarantor, whether outstanding
on the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by its acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on its behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee its
attorney-in-fact for such purposes.
6. REDEMPTION PROVISIONS. Except as provided below, the Notes may not be
redeemed prior to August 1, 2001.
(a) OPTIONAL REDEMPTION. On or after such date, the Notes may be redeemed
at the option of the Company, at any time as a whole, or from time to time in
part, on not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of principal amount), plus accrued
and unpaid interest (if any) to the date of redemption (subject to the rights of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
commencing August 1:
REDEMPTION
PRICE
-----
2001. . . . . . . . . . . . . . . . . . . . . . . 105.063%
2002. . . . . . . . . . . . . . . . . . . . . . . 103.375%
2003. . . . . . . . . . . . . . . . . . . . . . . 101.688%
2004 and thereafter . . . . . . . . . . . . . . . 100.000%
A.2-3
(b) Notwithstanding the foregoing, at any time prior to August 1, 2000,
the Company may redeem, in part and from time to time, with the net proceeds of
one or more Public Equity Offerings, up to 35% aggregate principal amount of the
Notes originally issued in the Offering at a redemption price equal to 110.125%
of the aggregate principal amount thereof plus accrued and unpaid interest
thereon, if any, to the redemption date; PROVIDED that at least 65% of the
aggregate principal amount of the Notes originally issued in the Offering remain
outstanding immediately after the occurrence of any such redemption and that any
such redemption occurs within 90 days following the closing of any such Public
Equity Offering.
(c) At any time on or prior to August 1, 2001, the Notes may also be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days prior notice (but in no
event more than 90 days after the occurrence of such Change of Control), at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued and unpaid interest, if any, to, the date
of redemption (the "REDEMPTION DATE") (subject to the right of holders of record
on the relevant record date to receive interest due on the relevant interest
payment date). The Company may not redeem Notes pursuant to this paragraph if it
has made a Change of Control Offer (as defined) pursuant to Section 4.15 of the
Indenture with respect to such Change of Control.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. OFFERS TO PURCHASE. Section 4.15 of the Indenture provides that, upon
a Change of Control if the Company does not redeem the Notes, each holder will
have the right, subject to certain conditions set forth in the Indenture, to
require the Company to repurchase such holder's Notes at a price equal to 101%
of the principal amount thereof plus accrued interest to the date of repurchase.
Section 4.16 of the Indenture provides that, after certain Asset Sales, and
subject to further limitations contained therein, the Company will make an offer
to purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of or exchange Notes in accordance with the
Indenture. The Registrar may
A.2-4
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange of any Notes or portions
thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any time
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions, the
Indenture, the Notes or the Guarantee, if any, may be amended or supplemented
with the written consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding, and any existing Default or
Event of Default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, make payments in respect of its
Capital Stock or Subordinated Obligations, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, incur additional Indebtedness that is by its terms subordinated or
junior to any other Indebtedness and senior to the Notes, merge or consolidate
with any other Person, sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets or adopt a plan of liquidation
and sell Capital Stock of a Restricted Subsidiary. Such limitations are subject
to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
A.2-5
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture. Each Holder of
a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
19. AUTHENTICATION. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. The laws of the State of New York shall govern this
Note and the Indenture, without regard to principles of conflict of laws.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be used
in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants
in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
A.2-6
23. INDENTURE. Each Holder, by accepting a Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Federal Data Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Chief Financial Officer.
A.2-7
SENIOR SUBORDINATED GUARANTEE
FDCT Corp., NYMA, Inc., ▇▇▇▇▇▇▇ Management Systems Corporation, FDC
Technologies Inc., DoxSys, Inc. and VAD International, Inc. (the "Subsidiary
Guarantors") have unconditionally guaranteed on a senior subordinated basis
(such guarantee by each Guarantor being referred to herein as the "Guarantee")
(i) the due and punctual payment of the principal of and interest on the Notes,
whether at maturity, by acceleration or otherwise and the due and punctual
payment of interest on the overdue principal and interest, if any, on the Notes,
to the extent lawful, all in accordance with the terms set forth in Article
Eleven of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth and
are expressly subordinated and subject in right of payment to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor, to the extent and in the manner provided, in Article
Eleven of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Guarantee therein made. This Guarantee is limited under
the Indenture to the extent necessary not to constitute a fraudulent conveyance.
No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any of the Subsidiary Guarantors shall have any
liability under the Guarantee by reason of such person's status as stockholder,
officer, director, employee or incorporator. Each holder of a Note by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Guarantees.
A.2-8
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
FDCT CORP.
By:
-----------------------------------
Name:
Title:
NYMA, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇▇ MANAGEMENT SYSTEMS CORPORATION
By:
-----------------------------------
Name:
Title:
FDC TECHNOLOGIES INC.
By:
-----------------------------------
Name:
Title:
DOXSYS, INC.
By:
----------------------------------
Name:
Title:
A.2-9
VAD INTERNATIONAL, INC.
By:
-----------------------------------
Name:
Title:
A.2-10
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ______________________ agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
Date:___________________________ Signed: ____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: ________________________________________
A.2-11
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$___________________________
Dated:_____________________________ ___________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:________________________________________________
A.2-12
EXHIBIT B
FORM OF LEGEND FOR GLOBAL NOTES
Any Global Note authenticated and delivered hereunder shall bear a legend
(which would be in addition to any other legends required in the case of a
Restricted Security) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR
A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF
THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR
BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF
THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
EXHIBIT C
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
___________, ____
Norwest Bank, Minnesota, N.A.
Corporate Trust Services
6th and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust
Re: FEDERAL DATA CORPORATION
(the "Company")
10 1/8% Senior Subordinated
Notes due 2005 (the "Notes")
----------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $_______ aggregate principal
amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated July 18, 1997, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated on pages
(i)-(iii) of the Offering Memorandum and in the section entitled "Transfer
Restrictions" of the Offering Memorandum, including the restrictions on
duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture dated as of
July 15, 1997 relating to the Notes (the "Indenture") and the undersigned agrees
to be bound by, and not to resell, pledge or otherwise transfer the Notes except
in compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
Persons except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell or otherwise transfer any Notes we will do so
only (i) to the Company or any subsidiary thereof, (ii) inside the United States
in accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act),
(iii) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you a signed letter
containing certain representatives and agreements relating to the restrictions
on transfer of the Notes, substantially in the form of this letter, (iv) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (v) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974), except as permitted in the
section entitled "Transfer Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certification, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
You, the Company and the Initial Purchasers (as defined in the Offering
Memorandum) are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------------
Authorized Signature
C-2
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulations
______________, ____
Norwest Bank, Minnesota, N.A.
Corporate Trust Services
6th and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust
Re: FEDERAL DATA CORPORATION
(the "Company") 10 1/8% Senior Subordinated
Notes due 2005 (the "Notes")
----------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
1. the offer of the Notes was not made to a person in the United
States;
2. either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person acting on our behalf
knows that the transaction has been pre-arranged with a buyer in the United
States;
3. no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
4. the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
5. we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative
or legal proceedings or official inquiry with respect to the matters covered
hereby. Terms used in this certificate have the meanings set forth in
Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------
Authorized Signature
D-2