EXHIBIT 4.1
EXECUTION VERSION
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CONTINENTAL GLOBAL GROUP, INC.
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9% SERIES A SENIOR SECURED NOTES DUE 2008
13% SERIES B SENIOR SECURED NOTES DUE 2008
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INDENTURE
DATED AS OF OCTOBER 4, 2004
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▇▇▇▇▇ FARGO BANK, National Association
Trustee
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Indenture
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1).................................................................................. 7.10
(a)(2).................................................................................. 7.10
(a)(3).................................................................................. N.A.
(a)(4).................................................................................. N.A.
(a)(5).................................................................................. 7.10
(b)..................................................................................... 7.03; 7.10
(c)..................................................................................... N.A.
311 (a)..................................................................................... 7.11
(b)..................................................................................... 7.11
(c)..................................................................................... N.A.
312 (a)..................................................................................... 2.05
(b)..................................................................................... 11.03
(c)..................................................................................... 11.03
313 (a)..................................................................................... 7.06
(b)(1).................................................................................. 7.06
(b)(2).................................................................................. 7.06; 7.07
(c)..................................................................................... 7.06; 11.02
(d)..................................................................................... 7.06
314 (a)..................................................................................... 4.03; 4.04
(b)..................................................................................... 12.02
(c)(1).................................................................................. 11.04
(c)(2).................................................................................. 11.04
(c)(3).................................................................................. N.A.
(d)..................................................................................... 12.03; 12.06
(e)..................................................................................... 11.05
(f)..................................................................................... N.A.
315 (a)..................................................................................... 7.01
(b)..................................................................................... 7.05, 11.02
(c)..................................................................................... 7.01
(d)..................................................................................... 7.01
(e)..................................................................................... 6.11
316 (a)(last sentence)...................................................................... 2.09
(a)(1)(A)............................................................................... 6.05
(a)(1)(B)............................................................................... 6.04
(a)(2).................................................................................. N.A.
(b)..................................................................................... 6.07
(c)..................................................................................... 2.12
317 (a)(1).................................................................................. 6.08
(a)(2).................................................................................. 6.09
(b)..................................................................................... 2.04
318 (a)..................................................................................... 11.01
(b)..................................................................................... N.A.
(c)..................................................................................... 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
Indenture
Indenture, dated as of October 4, 2004, among Continental Global Group,
Inc., a Delaware corporation (the "Company"), Continental Conveyor & Equipment
Company, a Delaware corporation ("Continental"), ▇▇▇▇▇▇▇ Conveyor Company, a
Delaware corporation ("▇▇▇▇▇▇▇") (each of Continental and ▇▇▇▇▇▇▇ a "Subsidiary
Guarantor" and together, the "Subsidiary Guarantors") and ▇▇▇▇▇ Fargo Bank,
National Association, as trustee (the "Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
holders of the Company's 9% Series A Senior Secured Notes due 2008 (the "Series
A Senior Notes") and the Company's 13% Series B Senior Secured Notes due 2008
(the "Series B Senior Notes" and, together with the Series A Senior Notes, the
"Senior Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, that in the
case of a joint venture, partnership, association or other business arrangement
with any Person entered into in the ordinary course of business, neither such
Person nor the joint venture, partnership, association or business arrangement
shall be deemed to be an affiliate by reason of the proceeding proviso.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
beneficial interests in a Global Note, the rules and procedures of the
Depository that apply to such transfer and exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
Indenture
its Subsidiaries taken as a whole will be governed by the provisions of Section
4.14 hereof, and/or the provisions of Section 5.01 hereof and not by the
provisions of Section 4.10 hereof), and (ii) the issue or sale by the Company or
any of its Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $1.0 million or (b) for net proceeds in excess of $1.0
million. Notwithstanding the foregoing, the following will not be deemed to be
Asset Sales: (i) a transfer of assets by the Company to a Wholly Owned
Subsidiary or by a Wholly Owned Subsidiary to the Company or to another Wholly
Owned Subsidiary, (ii) an issuance of Equity Interests by a Wholly Owned
Subsidiary to the Company or to another Wholly Owned Subsidiary, (iii) a
Restricted Payment that is permitted by Section 4.07 hereof; (iv) dispositions
of obsolete equipment in the ordinary course of business and consistent with
past practice, and (v) dispositions of non-obsolete equipment in the ordinary
course and the replacement of such equipment with similar new or used equipment;
provided that the difference between the proceeds of such disposition and the
cost of such replacement shall constitute an Investment and shall be subject to
the limits on Investments set forth in Section 4.07 and the definition of
Permitted Investments.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
"Borrowing Base" means, as of any date, an amount equal to the sum of (a)
85% of the face amount of all accounts receivable owned by the Company and its
Subsidiaries (other than Foreign Subsidiaries) as of such date that are not more
than 60 days past due, and (b) 65% of the book value of all inventory owned by
the Company and its Subsidiaries (other than Foreign Subsidiaries) as of such
date, all calculated on a consolidated basis and in accordance with GAAP. To the
extent that information is not available as to the amount of accounts receivable
or inventory as of a specific date, the Company shall utilize the most recent
available information for purposes of calculating the Borrowing Base.
"Capital Expenditure" means, with respect to any Person, all expenditures
(by the expenditure of cash or the incurrence of Indebtedness) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP.
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"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any lender party to the Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500 million and a ▇▇▇▇▇▇▇▇ Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having the highest rating obtainable from
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"Cedel" means Cedel bank, societe anonyme.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Principal or his Related Parties (as defined below), (ii)
the adoption of a plan relating to the liquidation or dissolution of the
Company, (iii) the consummation of the first transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the "beneficial owner" (as defined above),
directly or indirectly, of more of the Voting Stock of the Company (measured by
voting power rather than number of shares) than is at the time "beneficially
owned" (as defined above) by the Principal and his Related Parties in the
aggregate or (iv) the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors.
"Collateral" means, collectively, all of the property and assets
(including, without limitation, Trust Moneys) that are from time to time subject
to, or purported to be subject to, the Lien of the Trustee pursuant to this
Indenture or the Collateral Documents.
"Collateral Account" has the meaning provided in Section 13.01.
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"Collateral Documents" means, collectively, the Security Agreement, the
Mortgages, the Intercreditor Agreement and all other instruments or documents
entered into or delivered in connection with any of the foregoing, as such
agreements, instruments or documents may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Commission" means the Securities and Exchange Commission.
"Company" means Continental Global Group, Inc., a Delaware Corporation.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale to the extent such losses were deducted in computing such
Consolidated Net Income, plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations) to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, less (v) non-cash items increasing such
Consolidated Net Income for such period, in each case, on a consolidated basis
and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent Person or a Wholly Owned Subsidiary thereof, (ii) the Net
Income of any Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the cumulative effect of a change in
accounting principles shall be excluded.
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"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such date, plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date hereof in the book value of any asset
owned by such Person or a consolidated Subsidiary of such Person, (y) all
investments as of such date in unconsolidated Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date hereof or (ii) was nominated for election or elected to
such Board of Directors with the approval of the Principal or a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Credit Facilities" means, with respect to the Company or any of its
Subsidiaries (other than Foreign Subsidiaries), one or more debt facilities
(including, without limitation, the Credit Facility) or other debt securities or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Credit Facility" means that certain Amended and Restated Credit Facility
and Security Agreement, dated as of July 25, 2002, by and among Continental
Conveyor & Equipment Company, ▇▇▇▇▇▇▇ Conveyor Company and the lenders party
thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case,
as amended, amended and restated, modified, renewed, refunded, replaced or
refinanced from time to time (together with any amendment, modification,
renewal, refunding, replacement or refinancing to or of any of the foregoing,
including, without limitation, any agreement modifying the maturity or
amortization schedule of or refinancing or refunding all or any portion of
Indebtedness thereunder or increasing the amount that may be borrowed under such
agreement or any successor agreement, whether or not among the same parties).
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Depository" means, with respect to the Senior Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depository with respect to the Senior Notes, until a successor shall have
been appointed and become such pursuant to Section 2.06 of this Indenture, and,
thereafter, "Depository" shall mean or include such successor.
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"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Senior Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, the Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" means any Indebtedness of the Company or its
Subsidiaries in existence on the date hereof, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Subsidiaries that was capitalized during such period, and (iii)
any interest expense on Indebtedness of another Person that is Guaranteed by
such Person or one of its Subsidiaries or secured by a Lien on assets of such
Person or one of its Subsidiaries (whether or not such Guarantee or Lien is
called upon) and (iv) the product of (a) all dividend payments, whether or not
in cash, on any series of preferred stock of such Person or any of its
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter
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reference period. In addition, for purposes of making the computation referred
to above, (i) acquisitions that have been made by the Company or any of its
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be calculated
without giving effect to clause (iii) of the proviso set forth in the definition
of "Consolidated Net Income," and (ii) the Consolidated Cash Flow attributable
to discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall be
excluded, and (iii) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Subsidiaries following the Calculation Date.
"Foreign Borrowing Base" means, as of any date, an amount equal to the sum
of (a) 85% of the face amount of all accounts receivable owned by Foreign
Subsidiaries of the Company as of such date that are not more than 60 days past
due, and (b) 65% of the book value of all inventory owned by Foreign
Subsidiaries of the Company as of such date, all calculated on a consolidated
basis and in accordance with GAAP. To the extent that information is not
available as to the amount of accounts receivable or inventory as of a specific
date, the Company shall utilize the most recent available information for
purposes of calculating the Foreign Borrowing Base.
"Foreign Credit Facilities" means, with respect to any Foreign Subsidiary
of the Company, one or more debt facilities or other debt securities or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Foreign Subsidiary" means any Subsidiary of the Company, more than 80% of
the sales, earnings or assets (determined on a consolidated basis) of which are
located or derived from operations outside the United States.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date hereof.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar
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agreements, (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates and (iii) agreements entered into
for the purpose of fixing or hedging the risks associated with fluctuations in
foreign currency exchange rates.
"Holder" means a Person in whose name a Senior Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person and
Attributable Debt. The amount of any Indebtedness outstanding as of any date
shall be (i) the accreted value thereof, in the case of any Indebtedness that
does not require current payments of interest, and (ii) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds an interest through a
Participant.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of
the date hereof, by and among the Trustee, Bank One, N.A., Continental and
▇▇▇▇▇▇▇, as amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof or any replacement thereof.
"Investments" means, with respect to any Person, all Capital Expenditures
by such Person and all investments by such Person in other Persons (including
Affiliates) in the forms of direct or indirect loans (including guarantees of
Indebtedness or other obligations), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal corporate
trust office of the Trustee is
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located or at a place of payment are authorized by law, regulation or executive
order to remain closed. If a payment date is a Legal Holiday at a place of
payment, payment shall be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Management Agreement" means that certain Management Agreement between
NESCO, Inc. and the Company dated as of April 1, 1997.
"Mortgages" means the mortgages dated as of the date hereof between the
Company and the Trustee, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Mortgaged Properties" has the meaning assigned to such term in the
Mortgages.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale) or a taking by eminent domain, net of
the direct costs relating to such sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that were
the subject of such sale (other than Indebtedness in respect of Credit
Facilities, Foreign Credit Facilities, the Senior Notes or Permitted Refinancing
Indebtedness in respect of the foregoing) and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP; provided that any such reserve shall become part of the Net Proceeds upon
release thereof.
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"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 10.04 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person who
has an account with DTC, Euroclear or Cedel, respectively (and, with respect to
DTC, shall include Euroclear and Cedel).
"Permitted Businesses" means (i) the materials handling and processing
businesses and other businesses conducted by the Company and its Subsidiaries on
the date hereof, (ii) businesses whose manufacturing, production, sales or
distribution requirements are complementary to such businesses and (iii) any
businesses reasonably related or similar thereto.
"Permitted Investments" means (a) any Investments of the Company or its
Subsidiaries in existence on the date of the New Indenture; (b) any Investment
in the Company or in a Wholly Owned Subsidiary of the Company that is a
Subsidiary Guarantor that is engaged in a Permitted Business; (c) any Investment
in Cash Equivalents; (d) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10 hereof; (e) any acquisition of assets solely
in exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company; (f) any Investments after the date hereof by the Company or its
Subsidiaries in any Foreign Subsidiary of the Company, not to exceed in the
aggregate $1.5 million over the term of this Indenture; (g) consolidated Capital
Expenditures by the Company and its non-Foreign Subsidiaries up to $2.0 million
per calendar year, plus any unused amounts attributable to prior calendar years,
subject to a maximum of $3.0 million in any one calendar year; (h) consolidated
Capital Expenditures by the Company and its non-Foreign Subsidiaries up to
$600,000 per calendar year that are financed with Capital Lease Obligations; (i)
consolidated Capital Expenditures by the Company and its Subsidiaries up to $3.0
million related to the restructuring of the Company and its non-Foreign
Subsidiaries and incurred within two years from the date hereof; and (j)
Investments in Persons that become Wholly Owned Subsidiaries and Subsidiary
Guarantors and that are engaged in a Permitted Business, provided that
Investments pursuant to this clause (j) in excess of $3.0 million shall only be
permitted to the extent that seventy-five percent (75%) of
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such Investment is funded from the proceeds of new equity or Indebtedness that
is contractually subordinated to the Senior Notes on terms reasonably
satisfactory to the Trustee.
"Permitted Liens" means (i) Liens on assets securing Indebtedness under
Credit Facilities and Foreign Credit Facilities that were permitted by the terms
of this Indenture to be incurred; (ii) Liens in favor of the Company; (iii)
Liens on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company, provided that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company; (iv) Liens on property existing at
the time of acquisition thereof by the Company or any Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens to secure Indebtedness
(including Capital Lease Obligations) permitted by clause (v) of the third
paragraph of Section 4.09 hereof covering only the assets acquired or refinanced
with such Indebtedness; (vii) Liens existing on the date hereof; (viii) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (ix) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to obligations that do
not exceed $500,000 at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of the business by the Company or such
Subsidiary; and (x) Liens arising by reason of (1) any attachment, judgment,
decree or order of any court, so long as such Lien is being contested in good
faith and is either adequately bonded or execution thereon has been stayed
pending appeal or review, and any appropriate legal proceedings which may have
been duly initiated for the review of such attachment, judgment, decree or order
shall not have been fully terminated or the period within which such proceedings
may be initiated shall not have expired, (2) security for payment of workers'
compensation or other insurance, (3) security for the performance of tenders,
bids, leases and contracts (other than contracts for the payment of money), (4)
operation of law in favor of carriers, warehousemen, landlords, mechanics,
materialmen, laborers, employees or suppliers, incurred in the ordinary course
of business for sums which are not yet delinquent or are being contested in good
faith by negotiations or by appropriate proceedings which suspend the collection
thereof, (5) any interest or title of a lessor under any lease and (6)
easements, rights-of-way, zoning and similar covenants and restrictions and
other similar encumbrances or title defects which, in the aggregate, are not
substantial in amount and which do not in any case materially interfere with the
ordinary course of business of the Company or any of its Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to refinance, replace, defease or refund other Indebtedness of the
Company or any of its Subsidiaries; provided that, (i) the principal amount (or
accreted value, if applicable) of such Permitted Refinancing Indebtedness does
not exceed the principal amount of (or accreted value, if
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applicable), plus accrued interest on, the Indebtedness so refinanced, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being refinanced, replaced, defeased or refunded; (iii) if
the Indebtedness being refinanced, replaced, defeased or refunded is
subordinated in right of payment to the Senior Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Senior Notes on terms at least
as favorable to the Holders of Senior Notes as those contained in the
documentation governing the Indebtedness being refinanced, replaced, defeased or
refunded; and (iv) such Indebtedness is incurred either by the Company or by the
Subsidiary who is the obligor on the Indebtedness being refinanced, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Principal" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"Prior Liens" has the meaning assigned to such term in the Mortgage.
"Real Property" means any interest in any real property or any portion
thereof owned in fee.
"Real Property Valuation Date" has the meaning provided in Section 12.03.
"Related Party" with respect to the Principal means (A) any 80% (or more)
owned Subsidiary, or spouse or immediate family member (in the case of an
individual) of the Principal; or (B) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of the
Principal and/or such other Persons referred to in the immediately preceding
clause (A); or (C) the estate of the Principal until such estate is distributed
pursuant to his will or applicable state law.
"Released Assets" has the meaning provided in Section 12.03.
"Released Trust Moneys" has the meaning provided in Section 13.04.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement dated as of the date
hereof among the Company, Continental, ▇▇▇▇▇▇▇ and the Trustee, as the same may
be amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms.
"Senior Notes" means the Series A Senior Notes and the Series B Senior
Notes.
"Senior Note Custodian" means the Trustee, as custodian for the Depository
with respect to the Senior Notes in global form, or any successor entity
thereto.
"Series A Senior Notes" means the Company's 9% Series A Senior Secured
Notes due 2008.
"Series B Senior Notes" means the Company's 13% Series B Senior Secured
Notes due 2008.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantor" means each of (i) Continental and ▇▇▇▇▇▇▇ and (ii)
any other Subsidiary that executes a Subsidiary Guarantee in accordance with the
provisions of Section 4.18 hereof, and their respective successors and assigns.
"Tax Payment Agreement" means that certain Tax Payment Agreement among
N.E.S. Investment Co., the Company, Continental and ▇▇▇▇▇▇▇, dated as and in
effect on the date hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb), as amended, as in effect on the date hereof.
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"Trustee" means ▇▇▇▇▇ Fargo Bank, National Association until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter means the successor.
"Trust Moneys" has the meaning provided in Section 13.01.
"Valuation Date" has the meaning provided in Section 12.03.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Acceleration Notice"....................................................................... 6.02
"Affiliate Transaction"..................................................................... 4.11
"Asset Sale Offer".......................................................................... 4.10
"Change of Control Offer"................................................................... 4.14
"Change of Control Payment"................................................................. 4.14
"Change of Control Payment Date"............................................................ 4.14
"Covenant Defeasance"....................................................................... 8.03
"Event of Default".......................................................................... 6.01
"Legal Defeasance".......................................................................... 8.02
"Offer Amount".............................................................................. 3.09
"Offer Period".............................................................................. 3.09
"Paying Agent".............................................................................. 2.03
"Payment Default"........................................................................... 6.01
"Permitted Debt"............................................................................ 4.09
"Purchase Date"............................................................................. 3.09
"Registrar"................................................................................. 2.03
"Repurchase Offer".......................................................................... 3.09
"Restricted Payments"....................................................................... 4.07
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SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Senior Notes;
"indenture security holder" means a Holder of a Senior Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Notes means the Company, each Subsidiary Guarantor
and any successor obligor upon the Senior Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them therein.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement or successor sections or
rules adopted by the Commission from time to time.
ARTICLE 2
THE SENIOR NOTES
SECTION 2.01. FORM AND DATING.
The Series A Senior Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A attached hereto. The Series B
Senior Notes and the Trustee's certificate of authentication shall be
substantially in the form of EXHIBIT B attached
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hereto. The Senior Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Senior Note shall be dated the date of
its authentication.
The terms and provisions contained in the Senior Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company, the
Subsidiary Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Senior Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Senior Note no longer holds that
office at the time a Senior Note is authenticated, the Senior Note shall
nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Senior Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers directing the Trustee to authenticate the Senior Notes and certifying
that all conditions precedent to the issuance of the Senior Notes contained
herein have been complied with, authenticate Senior Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Senior Notes. The
aggregate principal amount of Senior Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.
The Trustee may (at the Company's expense) appoint an authenticating agent
acceptable to the Company to authenticate Senior Notes. An authenticating agent
may authenticate Senior Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Senior Notes may
be presented for registration of transfer or for exchange ("Registrar") and (ii)
an office or agency where Senior Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Senior Notes and of their
transfer and exchange. The Company may appoint one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Senior Note Custodian with respect to the Global
Notes.
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SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Senior Notes, and shall notify
the Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon the occurrence of events specified in
Section 6.01(vii) and 6.01(viii) hereof, the Trustee shall serve as Paying Agent
for the Senior Notes.
SECTION 2.05 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company and/or the Subsidiary Guarantors shall furnish
to the Trustee at least seven (7) Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Senior Notes and the Company and the Subsidiary
Guarantors shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Senior Notes. When Senior Notes are
presented by a Holder to the Registrar with a request to register the transfer
of the Senior Notes or to exchange such Senior Notes for an equal principal
amount of Senior Notes of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested only if the Senior Notes
are presented or surrendered for registration of transfer or exchange, are
endorsed and contain a signature guarantee or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney and contains a signature guarantee, duly
authorized in writing.
(b) General Provisions Relating to Transfers, and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate
Senior Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any stamp or
transfer tax or similar governmental charge payable in
connection therewith (other than any such stamp or
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transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.06, 4.10, 4.14 and
9.05 hereto).
(iii) All Senior Notes issued upon any registration of transfer or
exchange of Senior Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as Senior Notes surrendered
upon such registration of transfer or exchange.
(iv) The Registrar shall not be required: (A) to issue, to register
the transfer of or to exchange Senior Notes during a period
beginning at the opening of fifteen (15) Business Days before
the day of any selection of Senior Notes for redemption under
Section 3.02 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to
exchange any Senior Note so selected for redemption in whole
or in part, except the unredeemed portion of any Senior Note
being redeemed in part, or (C) to register the transfer of or
to exchange a Senior Note between a record date and the next
succeeding interest payment date.
(v) Prior to due presentment for the registration of a transfer of
any Senior Note, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Senior Note is
registered as the absolute owner of such Senior Note for the
purpose of receiving payment of principal of and interest on
such Senior Notes and for all other purposes, and neither the
Trustee, any Agent nor the Company shall be affected by notice
to the contrary.
(vi) The Trustee shall authenticate Senior Notes in accordance with
the provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT SENIOR NOTES.
If any mutilated Senior Note is surrendered to the Trustee, or the Company
and the Trustee receives evidence to their satisfaction of the destruction, loss
or theft of any Senior Note, the Company shall issue and the Trustee, upon the
written order of the Company signed by two Officers of the Company, shall
authenticate a replacement Senior Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Senior Note is replaced. The Company
and the Trustee may charge for their expenses in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Senior Notes duly issued hereunder.
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SECTION 2.08. OUTSTANDING SENIOR NOTES.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Senior Note does not cease to be outstanding because the
Company or any Subsidiary Guarantor or an Affiliate of the Company or any
Subsidiary Guarantor holds the Senior Note.
If a Senior Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Senior Notes payable on that date, then on and after that date such
Senior Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.
SECTION 2.09. TREASURY SENIOR NOTES.
In determining whether the Holders of the required principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company or any Subsidiary Guarantor, or by any Affiliate of the
Company or any Subsidiary Guarantor shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior Notes as to which a Responsible Officer of the Trustee has received
written notice are so owned shall be so considered. Notwithstanding the
foregoing, Senior Notes that are to be acquired by the Company or any Subsidiary
Guarantor or an Affiliate of the Company or any Subsidiary Guarantor pursuant to
an exchange offer, tender offer or other agreement shall not be deemed to be
owned by such entity until legal title to such Senior Notes passes to such
entity.
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SECTION 2.10. CANCELLATION.
The Company at any time may deliver to the Trustee for cancellation any
Senior Notes previously authenticated and delivered hereunder or which the
Company may have acquired in any manner whatsoever, and all Senior Notes so
delivered shall be promptly cancelled by the Trustee. All Senior Notes
surrendered for registration of transfer, exchange or payment, if surrendered to
any Person other than the Trustee, shall be delivered to the Trustee. The
Trustee and no one else shall cancel all Senior Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation.
Subject to Section 2.07 hereof, the Company may not issue new Senior Notes to
replace Senior Notes that it has redeemed or paid or that have been delivered to
the Trustee for cancellation. All cancelled Senior Notes held by the Trustee
shall be destroyed and certification of their destruction delivered to the
Company, unless by a written order, signed by two Officers of the Company, the
Company shall direct that cancelled Senior Notes be returned to it.
SECTION 2.11. DEFAULTED INTEREST.
If the Company or any Subsidiary Guarantor defaults in a payment of
interest on the Senior Notes, it shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to the Persons who are Holders on a subsequent special record date, which date
shall be at the earliest practicable date but in all events at least five (5)
Business Days prior to the payment date, in each case at the rate provided in
the Senior Notes and in Section 4.01 hereof. The Company shall fix or cause to
be fixed each such special record date and payment date, and shall promptly
thereafter, notify the Trustee of any such date. At least fifteen (15) days
before the special record date, the Company (or the Trustee, in the name and at
the expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
SECTION 2.12. RECORD DATE.
The record date for purposes of determining the identity of Holders of the
Senior Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA Section 316 (c).
SECTION 2.13. COMPUTATION OF INTEREST.
Interest on the Senior Notes shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Senior Notes may use "CUSIP" numbers, and if it
does so, the Trustee shall use such CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Senior Notes and that reliance may be
placed only on the other identification numbers printed on the Senior Notes. The
Company shall promptly notify the Trustee of any change in the CUSIP number.
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ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Senior Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date (unless a
shorter period is acceptable to the Trustee) an Officers' Certificate setting
forth (i) the Section of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Senior Notes to
be redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Senior Notes
pursuant to Section 4.10 or 4.14 hereof, it shall furnish to the Trustee, at
least 45 days before the scheduled purchase date, an Officers' Certificate
setting forth (i) the section of this Indenture pursuant to which the offer to
purchase shall occur, (ii) the terms of the offer, (iii) the principal amount of
Senior Notes to be purchased, (iv) the purchase price, (v) the purchase date and
(vi) and further setting forth a statement to the effect that (a) the Company or
one its Subsidiaries has affected an Asset Sale and there are Net Proceeds or
(b) a Change of Control has occurred, as applicable.
SECTION 3.02. SELECTION OF SENIOR NOTES TO BE REDEEMED OR PURCHASED.
If less than all of the Senior Notes are to be redeemed at any time,
selection of the Senior Notes for redemption shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Senior Notes are listed, or, if the Senior Notes are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee deems
fair and appropriate; provided that no Senior Notes with a principal amount of
$1.00 or less shall be redeemed in part.
The Trustee shall promptly notify the Company in writing of the Senior
Notes selected for redemption and, in the case of any Senior Note selected for
partial purchase or redemption, the principal amount thereof to be redeemed.
Senior Notes and portions of Senior Notes selected shall be whole multiples of
$1.00; except that if all of the Senior Notes of a Holder are to be purchased or
redeemed, the entire outstanding amount of Senior Notes held by such Holder
shall be redeemed. Except as provided in the preceding sentence, provisions of
this Indenture that apply to Senior Notes called for redemption also apply to
portions of Senior Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail or cause to be mailed by first class mail, a notice of
redemption to each Holder whose Senior Notes are to be redeemed.
The notice shall identify the Senior Notes to be redeemed and shall state:
(1) the redemption date;
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(2) the redemption price for the Senior Notes and accrued
interest;
(3) if any Senior Note is being redeemed in part, the portion of
the principal amount of such Senior Notes to be redeemed and
that, after the redemption date, upon surrender of such Senior
Note, a new Senior Note or Senior Notes in principal amount
equal to the unredeemed portion shall be issued upon surrender
of the original Senior Note;
(4) the name and address of the Paying Agent;
(5) that Senior Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment and interest on Senior Notes called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Senior Notes and/or Section of this
Indenture pursuant to which the Senior Notes called for
redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or
printed on the Senior Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date (or such shorter period as shall be acceptable to the Trustee),
an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in the notice as provided in the
preceding paragraph. The notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Senior Note shall not affect the validity of the
proceeding for the redemption of any other Senior Note.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Senior Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price plus accrued and unpaid interest to
such date. A notice of redemption may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or before 10:00 a.m. (New York City time) on each redemption date or
the date on which Senior Notes must be accepted for purchase pursuant to Section
4.10 or 4.14, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued and unpaid
interest on all Senior Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent shall promptly return to the Company
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upon its written request any money deposited with the Trustee or the Paying
Agent by the Company in excess of the amounts necessary to pay the redemption
price of (including any applicable premium) and accrued interest on all Senior
Notes to be redeemed or purchased.
If Senior Notes called for redemption or tendered in an Asset Sale Offer
or Change of Control Offer are paid or if the Company has deposited with the
Trustee or Paying Agent money sufficient to pay the redemption or purchase price
of, unpaid and accrued interest on all Senior Notes to be redeemed or purchased,
on and after the redemption or purchase date, interest shall cease to accrue on
the Senior Notes or the portions of Senior Notes called for redemption or
tendered and not withdrawn in an Asset Sale Offer or Change of Control Offer
(regardless of whether certificates for such securities are actually
surrendered). If a Senior Note is redeemed or purchased on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such
Senior Note was registered at the close of business on such record date. If any
Senior Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal from the redemption or
purchase date until such principal is paid, and to the extent lawful, on any
interest not paid on such unpaid principal, in each case, at the rate provided
in the Senior Notes and in Section 4.01 hereof.
SECTION 3.06. SENIOR NOTES REDEEMED IN PART.
Upon surrender of a Senior Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Senior Note
equal in principal amount to the unredeemed portion of the Senior Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Senior Notes shall be subject to redemption at any time at the option
of the Company, in whole or in part, at 100% of the principal amount of the
Senior Notes plus accrued interest.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 3.09, 4.10 and 4.14 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Senior Notes.
SECTION 3.09. REPURCHASE OFFERS.
In the event that the Company shall be required to commence an offer to
all Holders to repurchase Senior Notes (a "Repurchase Offer") pursuant to
Section 4.10 hereof, a "Net Proceeds Offer," or pursuant to Section 4.14 hereof,
a "Change of Control Offer," the Company shall follow the procedures specified
below.
A Repurchase Offer shall commence no later than ten (10) Business Days
after a Change of Control (unless the Company is not required to make such offer
pursuant to Section 4.14(c) hereof) or an Asset Sale, as the case may be, and
remain open for a period of twenty (20)
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Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five (5) Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Senior
Notes required to be purchased pursuant to Section 4.10 hereof, in the case of a
Net Proceeds Offer, or 4.14 hereof, in the case of a Change of Control Offer
(the "Offer Amount") or, if less than the Offer Amount has been tendered, all
Senior Notes tendered in response to the Repurchase Offer. Payment for any
Senior Notes so purchased shall be made in the same manner as interest payments
are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Senior Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Senior Notes pursuant to such
Repurchase Offer. The Repurchase Offer shall be made to all Holders. The notice,
which shall govern the terms of the Repurchase Offer, shall describe the
transaction or transactions that constitute the Change of Control or Asset Sale,
as the case may be and shall state:
(a) that the Repurchase Offer is being made pursuant to this Section 3.09
and Section 4.10 or 4.14 hereof, as the case may be, and the length of
time the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any Senior
Note accepted for payment pursuant to the Repurchase Offer shall cease to
accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Note purchased pursuant to a
Repurchase Offer shall be required to surrender the Senior Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Senior Note, duly completed, or transfer by book-entry transfer, to the
Company, the Depository, or the Paying Agent at the address specified in
the notice not later than the close of business on the last day of the
Offer Period;
(f) that Holders shall be entitled to withdraw their election if the
Company, the Depository or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Senior Note the Holder delivered for purchase and
a statement that such Holder is withdrawing his election to have such
Senior Note purchased;
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(g) that, if the aggregate principal amount of Senior Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Senior
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Senior Notes in integral
multiples of $1.00 shall be purchased); and
(h) that Holders whose Senior Notes were purchased only in part shall be
issued new Senior Notes equal in principal amount to the unpurchased
portion of the Senior Notes surrendered (or transferred by book-entry
transfer).
On or before 10:00 a.m. (New York City time) on each Purchase Date, the
Company shall irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to a
principal amount of Senior Notes equal to the Offer Amount, together with
accrued and unpaid interest thereon, to be held for payment in accordance with
the terms of this Section 3.09. On the Purchase Date, the Company shall, to the
extent lawful, (i) accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Senior Notes or portions thereof tendered
pursuant to the Repurchase Offer, or if less than the Offer Amount has been
tendered, all Senior Notes tendered, (ii) deliver or cause the Paying Agent or
depository, as the case may be, to deliver to the Trustee Senior Notes so
accepted and (iii) deliver to the Trustee an Officers' Certificate stating that
such Senior Notes or portions thereof were accepted for payment by the Company
in accordance with the terms of this Section 3.09. The Company, the Depository
or the Paying Agent, as the case may be, shall promptly (but in any case not
later than three (3) Business Days after the Purchase Date) mail or deliver to
each tendering Holder an amount equal to the purchase price of the Senior Notes
tendered by such Holder and accepted by the Company for purchase, plus any
accrued and unpaid interest thereon, and the Company shall promptly issue a new
Senior Note, and the Trustee, shall authenticate and mail or deliver such new
Senior Note, to such Holder, equal in principal amount to any unpurchased
portion of such Holder's Senior Notes surrendered. Any Senior Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce in a newspaper of general
circulation or in a press release provided to a nationally recognized financial
wire service the results of the Repurchase Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01, 3.02, 3.05 and 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Senior Notes on the dates and in the manner provided in
the Senior Notes. Principal and interest shall be considered paid for all
purposes hereunder on the date the Paying Agent if other than the Company or a
Subsidiary thereof holds, as of 10:00 a.m. (New York City time) money deposited
by the Company in immediately available funds and designated for and sufficient
to pay all such principal.
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The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Senior Notes
to the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee or Registrar) where Senior Notes may be surrendered for
registration or transfer or for exchange and where notices and demands to or
upon the Company in respect of the Senior Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Senior Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03 hereof.
SECTION 4.03. SEC REPORTS.
Whether or not required by the rules and regulations of the Commission, so
long as any Senior Notes are outstanding, the Company shall furnish to the
Holders of Senior Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants and (ii) all current reports
that would be required to be filed with the Commission on Form 8-K if the
Company were required to file such reports. In addition, whether or not required
by the rules and regulations of the Commission, the Company shall file a copy of
all such information and reports with the Commission for public availability
(unless the Commission will not accept such a filing) within the time periods
that would have been applicable had the Company been subject to such rules and
regulations and make such information available to securities analysts and
prospective investors upon request. In addition, the Company has agreed that,
for so long as any Senior Notes remain outstanding, it shall furnish to the
Holders, to securities analysts and prospective investors, upon their request,
the
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information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. The Company shall at all times comply with TIA Section 314(a).
The financial information to be distributed to Holders of Senior Notes
shall be filed with the Trustee and mailed to the Holders at their addresses
appearing in the register of Senior Notes maintained by the Registrar, within 90
days after the end of the Company's fiscal years and within 45 days after the
end of each of the first three quarters of each such fiscal year.
The Company shall provide the Trustee with a sufficient number of copies
of all reports and other documents and information and, if requested by the
Company in writing, the Trustee will deliver such reports to the Holders under
this Section 4.03.
SECTION 4.04. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days after the end of
each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and fulfilled its
obligations under this Indenture (including, with respect to any Restricted
Payments made during such year, the basis upon which the calculations required
by Section 4.07 hereof were computed, which calculations may be based on the
Company's latest available financial statements), and further stating, as to
each such Officer signing such certificate, that, to the best of his or her
knowledge, each entity has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that, to the best of his or her knowledge, no event has occurred and remains in
existence by reason of which payments on account of the principal of, or
interest on the Senior Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, in connection with the
year-end financial statements delivered pursuant to Section 4.03 hereof, the
Company shall use its best efforts to deliver a written statement of the
Company's independent public accountants (who shall be a firm of established
national reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements, nothing
has come to their attention that would lead them to believe that the Company has
violated any provisions of Article Four or Section 5.01 hereof or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation. In the event that such written statement of the Company's independent
public accountants cannot be obtained, the Company shall deliver an Officers'
Certificate certifying that it has used its best efforts to obtain such
statements and was unable to do so.
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The Company shall, so long as any of the Senior Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency all material taxes, assessments and governmental levies,
except such as are contested in good faith and by appropriate proceedings and
with respect to which appropriate reserves have been taken in accordance with
GAAP.
SECTION 4.06. STAY, EXTENSION AND 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, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Subsidiary Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company) or to the direct or indirect holders of the Company's or
any of its Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than Disqualified
Stock) of the Company); (ii) purchase, redeem or otherwise acquire or retire for
value (including without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company or any
direct or indirect parent of the Company; (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness that is pari passu with or subordinated to the Senior
Notes (including Indebtedness pursuant to the Subordinated Notes held by N.E.S.
Investment Co. or any of its Affiliates) or the Subsidiary Guarantees, except a
payment of interest to the extent required by the terms of such Indebtedness or
principal at Stated Maturity; (iv) make any Restricted Investment; or (v) make
any payment under the Management Agreement (all such payments and other actions
set forth in clauses (i) through (v) above being collectively referred to as
"Restricted Payments").
The foregoing provisions shall not prohibit (i) payments on obligations
under the Company's Credit Facilities or payments by Foreign Subsidiaries in
respect of Foreign Credit Facilities; (ii) payments by the Company or any
Subsidiary of the Company, directly or
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indirectly, to N.E.S. Investment Co. in accordance with the Tax Payment
Agreement as in effect on the date hereof; (iii) the accrual (but not the
payment) of fees pursuant to the Management Agreement, as in effect on the date
hereof; (iv) payment of the reasonable out-of-pocket expenses incurred on behalf
of the Company and payable pursuant to the Management Agreement up to $50,000 in
any calendar year; or (v) payment, through dividend or distribution or
otherwise, from a Subsidiary to a Subsidiary Guarantor or to the Company for the
purpose of funding the payment of any Indebtedness or obligation, the incurrence
or payment of which is not prohibited by this Indenture.
SECTION 4.08. DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to
(i)(a) pay dividends or make any other distributions to the Company or any of
its Subsidiaries (1) on its Capital Stock or (2) with respect to any other
interest or participation in, or measured by, its profits, or (b) pay any
indebtedness owed to the Company or any of its Subsidiaries, (ii) make loans or
advances to the Company or any of its Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date hereof, (b) this Indenture, the Senior
Notes and the Subsidiary Guarantees, (c) applicable law, (d) any instrument
governing Indebtedness or Capital Stock of a Person acquired by the Company or
any of its Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms hereof to be
incurred, (e) by reason of customary non-assignment provisions in leases or
contracts entered into in the ordinary course of business and consistent with
past practices, (f) mortgages or other purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so acquired, or (g)
Permitted Refinancing Indebtedness; provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
Except as provided below, the Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and the Company shall not and shall not permit any Subsidiary to
issue any Disqualified Stock.
The Company and any Subsidiary Guarantor shall not incur any Indebtedness
(other than Existing Indebtedness) that is contractually subordinated to any
other Indebtedness of the Company or such Subsidiary Guarantor, respectively,
unless such Indebtedness is also contractually subordinated to the Senior Notes
or the Subsidiary Guarantee of such Subsidiary
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Guarantor, respectively, on substantially identical terms; provided, however,
that no Indebtedness of the Company or any Subsidiary Guarantor shall be deemed
to be contractually subordinated to any other Indebtedness of the Company or
such Subsidiary Guarantor, respectively, solely by virtue of being unsecured.
The provisions of the first paragraph of this covenant shall not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness under the Credit Facilities; provided that the aggregate principal
amount of all Indebtedness (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company and its
Subsidiaries thereunder) outstanding under all Credit Facilities after giving
effect to such incurrence, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (i), does not exceed an amount equal to the greater of
(x) $60.0 million or (y) the Borrowing Base;
(ii) the incurrence by any Foreign Subsidiary of Indebtedness under the
Foreign Credit Facilities; provided that the aggregate principal amount of all
Indebtedness (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of Foreign Subsidiaries thereunder)
outstanding under all Foreign Credit Facilities after giving effect to such
incurrence, including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this clause
(ii), does not exceed an amount equal to the greater of (x) $15.0 million or (y)
the Foreign Borrowing Base, and provided that such Indebtedness shall not be
guaranteed by or secured by any of the assets of the Company or the Subsidiary
Guarantors;
(iii) the incurrence by the Company and its Subsidiaries of the Existing
Indebtedness;
(iv) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the Senior Notes and the Subsidiary Guarantees,
respectively, or represented by the Company's obligation to make an aggregate
cash payment of $17.5 million to holders of the Senior Notes on account of the
prior exchange of the Company's 11% Senior Notes due 2007;
(v) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations, sale and leaseback
transactions, mortgage financings, purchase money obligations, Capital
Expenditures or similar financing transactions, in each case, with respect to
the respective properties, assets and rights of the Company or such Subsidiary
as of the date hereof or hereafter acquired, in an aggregate principal amount
(or accreted value, as applicable), not to exceed $600,000 in any calendar year,
exclusive of Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any other Indebtedness incurred pursuant to this clause (v);
(vi) the incurrence by the Company or any of its Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace any Indebtedness that was permitted by this
Indenture to be incurred;
(vii) the incurrence by the Company or any of the Subsidiary Guarantors of
intercompany Indebtedness between or among the Company and any Subsidiaries that
are
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Subsidiary Guarantors; provided, however, that (i) if the Company or a
Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all Obligations
with respect to the Senior Notes and the Subsidiary Guarantees, respectively,
and (ii)(A) any subsequent issuance or transfer of Equity Interests that results
in any such Indebtedness being held by a Person other than the Company or a
Subsidiary Guarantor and (B) any sale or other transfer of any such Indebtedness
to a Person that is not either the Company or a Subsidiary Guarantor shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by the
Company or such Subsidiary, as the case may be that was not permitted by this
clause (vii);
(viii) the incurrence by the Company or any of its Subsidiaries of Hedging
Obligations in the ordinary course of business of the Company or any of its
Subsidiaries; and
(ix) the incurrence of Indebtedness to N.E.S. Investment Co. (or an
Affiliate thereof) in an original principal amount of up to $12.0 million that
is contractually subordinated to the Senior Notes on terms reasonably
satisfactory to the Trustee.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (viii) above, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this Section 4.09 and such item of Indebtedness will
be treated as having been incurred pursuant to only one of such clauses. Accrual
of interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness (so long as such additional Indebtedness is
unsecured and contractually subordinated to the Senior Notes) will not be deemed
to be an incurrence of Indebtedness for purposes of this Section 4.09.
SECTION 4.10. ASSETS SALES.
The Company shall not, and shall not permit any of its Subsidiaries to,
consummate an Asset Sale unless (i) the Company (or the Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least equal to
the fair market value (evidenced by a resolution of the Board of Directors of
the Company set forth in an Officers' Certificate delivered to the Trustee) of
the assets or Equity Interests issued or sold or otherwise disposed of and (ii)
at least 75% of the consideration therefor received by the Company or such
Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet), of the Company or any Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Senior Notes or such
Subsidiary's Subsidiary Guarantee thereof) that are assumed by the transferee of
any such assets pursuant to a customary novation agreement that releases the
Company or such Subsidiary from further liability and (y) any securities, notes
or other obligations received by the Company or any such Subsidiary from such
transferee that are immediately converted by the Company or such Subsidiary into
cash, shall be deemed to be cash (to the extent of the cash received) for
purposes of this clause (ii).
Within 15 days after the receipt of any Net Proceeds from an Asset Sale,
the Company must apply such Net Proceeds to repay Indebtedness under the Credit
Facility (if Net Proceeds
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are from a sale of assets of the Company or a Subsidiary other than a Foreign
Subsidiary), the Foreign Credit Facilities (if Net Proceeds are from a sale of
assets of a Foreign Subsidiary), the Senior Notes or any Permitted Refinancing
Indebtedness of the foregoing; provided, however, the Company shall not be
obligated to permanently reduce availability under the Credit Facilities or the
Foreign Credit Facilities (or such Permitted Refinancing Indebtedness) in the
event Net Proceeds from an Asset Sale are used to pay-off obligations
thereunder.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make, or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction is
on terms that are no less favorable to the Company or the relevant Subsidiary
than those that would have been obtained in a comparable transaction by the
Company or such Subsidiary with an unrelated Person and (ii) the Company
delivers to the Trustee (a) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$1.0 million, a resolution of the Board of Directors of the Company set forth in
an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors of the Company
and (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing; provided that (A) any employment agreement entered
into by the Company or any of its Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Subsidiary, (B) transactions between or among the Company and/or its
Subsidiaries, (C) Restricted Payments that are permitted by the provisions of
Section 4.07 hereof and (D) the payment by the Company or its Subsidiaries of
reasonable and customary fees to members of their respective Boards of
Directors, in each case, shall not be deemed Affiliate Transactions.
Notwithstanding the foregoing, Affiliate Transactions with NESCO, Inc., N.E.S.
Investment Co., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, C. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, or ▇▇▇▇▇ ▇▇▇▇ (or any entity the beneficial interest in which is 100%
owned by any combination of the foregoing) shall be prohibited; provided,
however, such prohibition on Affiliate Transactions shall not include the
payment of director fees to independent directors or the reimbursement of
ordinary and necessary out-of-pocket expenses incurred on behalf of the Company
by such Affiliates; provided, further, such prohibition shall not apply to the
transactions contemplated pursuant to the Management Agreement or the Tax
Payment Agreement that are otherwise permitted by this Indenture.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired, or any income or profits therefrom or
assign or convey any right to receive income therefrom, except for Permitted
Liens.
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SECTION 4.13. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Company and any
Subsidiary Guarantor may enter into a sale and leaseback transaction if: (i) the
Company or such Subsidiary Guarantor could have (1) incurred Indebtedness
pursuant to clause (v) of the second paragraph of Section 4.09 hereof, and (2)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof;
(ii) the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the Board of
Directors of the Company and set forth in an Officers' Certificate delivered to
the Trustee) of the property that is the subject of such sale and leaseback
transaction; and (iii) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company or the applicable Subsidiary
Guarantor applies the proceeds of such transaction in compliance with, Section
4.10 hereof.
SECTION 4.14. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of Senior Notes
will have the right to require the Company to repurchase all or any part (in
integral multiples of $1.00) of such Holder's Senior Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest thereon to the date of purchase (the "Change of Control Payment").
Within ten days following any Change of Control, the Company shall mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Senior Notes on the date specified
in such notice, which date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "Change of Control Payment Date"),
pursuant to the procedures required by Section 3.09 hereof and described in such
notice. The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Senior Notes as a result of a Change of Control.
The Change of Control Offer shall remain open from the time of mailing
until the Business Day preceding the Change of Control Payment Date.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment all Senior Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Senior
Notes or portions thereof so tendered and (3) deliver or cause to be delivered
to the Trustee the Senior Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Notes or portions
thereof being purchased by the Company. The Paying Agent will promptly mail to
each Holder of Senior Notes so tendered the Change of Control Payment for such
Senior Notes, and the Trustee will promptly authenticate and mail (or cause to
be transferred by book entry) to each Holder a new Senior Note equal in
principal amount to any unpurchased portion of the Senior Notes surrendered, if
any; provided that each such new Senior Note will be in a principal amount of
$1.00 or an integral multiple 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.
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The Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
herein applicable to a Change of Control Offer made by the Company and purchases
all Senior Notes validly tendered and not withdrawn under such Change of Control
Offer.
SECTION 4.15. CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5 hereof, as the case may be, the
Company and each Subsidiary Guarantor shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate, partnership or other existence of each of its Subsidiaries in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Subsidiary and the rights
(charter and statutory), licenses and franchises of the Company and its
Subsidiaries; provided that the Company shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of the Company or any of its Subsidiaries, if the Board of Directors
of the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Senior Notes.
SECTION 4.16. LIMITATION ON ISSUANCES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly Owned
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Wholly Owned Subsidiary of the Company to any Person
(other than the Company or a Wholly Owned Subsidiary of the Company), unless (a)
such transfer, conveyance, sale, lease or other disposition is of all the
Capital Stock of such Wholly Owned Subsidiary and (b) the Net Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in accordance
with Section 4.10 hereof; and (ii) will not permit any Wholly Owned Subsidiary
of the Company to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Company or a Wholly Owned Subsidiary of the Company.
SECTION 4.17. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Subsidiary to, engage in
any business other than Permitted Businesses, except to such extent as would not
be material to the Company and its Subsidiaries, taken as a whole.
SECTION 4.18. ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of its Subsidiaries shall after the date hereof, (i)
transfer or cause to be transferred in one or a series of transactions (whether
or not related), any assets, businesses, divisions, real property or equipment
having an aggregate fair market value (as determined in good faith by the Board
of Directors of the Company) in excess of $1.0 million to any Subsidiary (other
than a Foreign Subsidiary) that is not a Subsidiary Guarantor; (ii) acquire or
create another Subsidiary (other than a Foreign Subsidiary); or (iii) any
Subsidiary of the Company, that is not a Subsidiary Guarantor guarantees any
Indebtedness of the Company other than the Senior Notes,
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or pledges any of its assets to secure any Indebtedness of the Company other
than the Senior Notes, then the Company shall cause such Subsidiary to (A)
execute and deliver to the Trustee a supplemental indenture in form and
substance substantially similar to EXHIBIT C hereto pursuant to which such
Subsidiary shall unconditionally Guarantee all of the Company's obligations
under the Senior Notes on the terms set forth in such supplemental indenture and
(B) deliver to the Trustee an opinion of counsel reasonably satisfactory to the
Trustee that such supplemental indenture has been duly executed and delivered by
such Subsidiary.
SECTION 4.19. PAYMENT FOR CONSENTS.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Senior Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
hereof or the Senior Notes unless such consideration is offered to be paid or is
paid to all Holders of the Senior Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Senior
Notes and this Indenture pursuant to a supplemental indenture in a form
substantially similar to EXHIBIT C hereto; (iii) immediately after such
transaction no Default or Event of Default exists; (iv) except in the case of a
merger of the Company with or into a Wholly Owned Subsidiary of the Company, the
Company or the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (A) will have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the
transaction and (B) will, at the time of such transaction, after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, have a Fixed Charge Coverage Ratio of at least 2
to 1 for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available; (v) each Subsidiary Guarantor,
unless it is the other party to the transactions described above, shall have by
supplemental indenture in a form substantially similar to EXHIBIT C hereto
confirmed that its Subsidiary Guarantee shall apply to the Company's or the
surviving Person's obligations under
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this Indenture and the Senior Notes; and (vi) the Senior Notes continue to be
secured by a lien in substantially all of the assets of the combined company
(other than the equipment, fixtures and real property of the Person merged with
or into the Company), junior only to liens in respect of the Credit Facilities.
Notwithstanding the foregoing, the Company is permitted to (i) consolidate or
merge with or into (whether or not the Company is the surviving corporation) any
Subsidiary Guarantor, and (ii) change the Company's or any Subsidiary's form of
organization from a corporation to a general or limited partnership or a limited
liability company; provided, however, neither the Company nor any Subsidiary
(other than a Foreign Subsidiary) is permitted to consolidate or merge with or
into any direct or indirect Foreign Subsidiary; and provided further that, in
conjunction with any such transaction, the Company and the Subsidiary Guarantors
shall take such actions as the Trustee may reasonably request in order to affirm
the Subsidiary Guarantees and the security interests of the Trustee in the
assets of the Company and the Subsidiary Guarantors.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and shall exercise every
right and power of the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein; provided, that, in
the case of any sale, assignment, transfer, lease, conveyance, or other
disposition of less than all of the assets of the predecessor Company, the
predecessor Company shall not be released or discharged from the obligation to
pay the principal of or interest on the Senior Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of interest on the
Senior Notes;
(ii) default in payment when due of principal of or premium, if any, on
the Senior Notes;
(iii) failure by the Company or any Subsidiary to comply with the
provisions described under Sections 3.09, 4.07, 4.09, 4.10 or 4.14
or Article 5 hereof;
(iv) failure by the Company or any Subsidiary for 60 days after notice
to comply with its other agreements in this Indenture or the Senior
Notes;
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(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Subsidiaries) whether such Indebtedness or guarantee
now exists, or is created after the date hereof, which default (A)
(i) is caused by a failure to pay when due at final stated maturity
(giving effect to any grace period related thereto) any principal
of or premium, if any, or interest on such Indebtedness (a "Payment
Default") or (ii) results in the acceleration of such Indebtedness
prior to its express maturity and (B) in each case, the principal
amount of any such Indebtedness as to which a Payment Default shall
have occurred, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million
or more;
(vi) failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $5.0 million, which judgments
are not paid, discharged or stayed within 60 days after their
entry;
(vii) the Company, any of its Significant Subsidiaries or any group of
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, pursuant to or within the meaning of any Bankruptcy
Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) admits in writing its inability generally to pay its debts as
the same become due;
(viii) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company, any of its Significant
Subsidiaries or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary, in an involuntary case
in which it is the debtor,
(ii) appoints a Custodian of the Company, any of its Significant
Subsidiaries or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary, or for all or
substantially all of the property of the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that taken,
taken together, would constitute a Significant Subsidiary, or
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(iii) orders the liquidation of the Company or any of its
Subsidiaries,
and the order or decree contemplated in clauses (i), (ii) or (iii),
remains unstayed and in effect for 60 consecutive days;
(ix) the termination of the Subsidiary Guarantee of any Subsidiary
Guarantor for any reason not permitted by this Indenture, or the
denial of any Person acting on behalf of any such Subsidiary
Guarantor of its Obligations under any such Subsidiary Guarantee;
or
(x) the Company shall amend, agree to amend, or agree to any waiver of,
the terms of any subordinated Indebtedness, including subordinated
Indebtedness to N.E.S. Investment Co., so as to adversely affect
the rights of the Holders of the Senior Notes.
To the extent that the last day of the period referred to in clauses (i),
(iii), (iv) or (vi) of the immediately preceding paragraph is not a Business
Day, then the first Business Day following such day shall be deemed to be the
last day of the period referred to in such clauses. Any "day" will be deemed to
end as of 11:59 p.m., New York City time.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default with respect to the
Company specified in clauses (vii) and (viii) of Section 6.01 hereof) occurs and
is continuing, the Trustee or the Holders of at least 35% in principal amount of
the then outstanding Senior Notes may declare the unpaid principal of, premium,
if any, and interest on all the Senior Notes to be due and payable by notice in
writing to the Company (and the Trustee, if given by the Holders) specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same shall become immediately due and payable.
If an Event of Default with respect to the Company, any Significant Subsidiary
or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary specified in clauses (vii) or (viii) of Section 6.01
hereof occurs, all outstanding Senior Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. The Holders of a majority in principal amount of the
then outstanding Senior Notes by written notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal or interest that has become due solely because of the acceleration)
have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, subject to the
limitations set forth in the Intercreditor Agreement, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Senior Notes or to enforce the performance of any provision of
the Senior Notes or this Indenture.
Subject to the limitations set forth in the Intercreditor Agreement, the
Trustee may maintain a proceeding even if it does not possess any of the Senior
Notes or does not produce
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any of them in the proceeding. A delay or omission by the Trustee or any Holder
of a Senior Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of at least a majority in principal amount of the Senior Notes
then outstanding (including consents obtained in connection with a tender offer
or exchange for Senior Notes) by notice to the Trustee may on behalf of the
Holders of all of the Senior Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of principal of or premium, if any, or interest on the Senior
Notes. Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Senior
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Senior Notes or that may involve
the Trustee in personal liability. The Trustee may take any other action which
it deems proper which is not inconsistent with any such direction.
SECTION 6.06. LIMITATION ON SUITS.
Subject to the limitations set forth in the Intercreditor Agreement, a
Holder of a Senior Note may pursue a remedy with respect to this Indenture, the
Subsidiary Guarantees or the Senior Notes only if:
(a) the Holder of a Senior Note gives to the Trustee written notice of a
continuing Event of Default or the Trustee receives such notice from
the Company;
(b) the Holders of at least 35% in principal amount of the then
outstanding Senior Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Senior Note or Holders of Senior Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Notes do not give the Trustee
a direction inconsistent with the request.
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A Holder of a Senior Note may not use this Indenture to prejudice the
rights of another Holder of a Senior Note or to obtain a preference or priority
over another Holder of a Senior Note.
SECTION 6.07. RIGHTS OF HOLDERS OF SENIOR NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Senior Note to receive payment of principal, premium, if any, and
interest on the Senior Note, on or after the respective due dates expressed in
the Senior Note (including in connection with an offer to purchase), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.0 1(i) or (ii) hereof occurs
and is continuing, subject to the limitations set forth in the Intercreditor
Agreement, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Senior Notes
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Senior Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Senior Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other securities or property payable or deliverable upon the
conversion or exchange of the Senior Notes or on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Senior
Notes or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Senior Notes for amounts due and unpaid on the
Senior Notes for principal, premium, if any, and interest ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Senior Notes for principal, premium, if any, and interest, respectively;
Third: without duplication, to the Holders for any other Obligations owing
to the Holders under this Indenture and the Senior Notes; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Senior Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Senior Note pursuant to Section 6.07 hereof, or a suit by Holders of more than
10% in principal amount of the then outstanding Senior Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing of which it
has knowledge, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of
care and skill in its exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture or the TIA and the
Trustee need perform only
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those duties that are specifically set forth in this Indenture
or the TIA and no others, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under
this Indenture at the request of any Holders, unless such Holder
shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on the truth of the statements and
correctness of the opinions contained in, and shall be protected
from acting or refraining from acting upon, any document believed by
it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of
Counsel. Prior to taking, suffering or admitting any action, the
Trustee may consult with counsel of the Trustee's own choosing and
the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any
Subsidiary Guarantor shall be sufficient if signed by an Officer of
the Company or Subsidiary Guarantor, as applicable.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have
offered to the Trustee reasonable security or indemnity satisfactory
to the Trustee against the costs, expenses and liabilities that
might be incurred by it in compliance with such request or
direction.
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SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
of Senior Notes and may otherwise deal with the Company, the Subsidiary
Guarantors or any Affiliate of the Company or any Subsidiary Guarantor with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture, the Subsidiary Guarantees or the
Senior Notes, it shall not be accountable for the Company's use of the proceeds
from the Senior Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any statement in the Senior Notes or any other document in connection with the
sale of the Senior Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Senior Notes a notice of the Default or Event of Default within 90 days after
it occurs. Except in the case of a Default or Event of Default in payment on any
Senior Note pursuant to Section 6.0 1(i) or (ii) hereof, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of the Senior Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SENIOR NOTES.
Within 60 days after each March 15 beginning with the March 15 following
the date of this Indenture, and for so long as Senior Notes remain outstanding,
the Trustee shall mail to the Holders of the Senior Notes a brief report dated
as of such reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted). The Trustee also shall
comply with TIA Section 313(b). The Trustee shall also transmit by mail all
reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Senior
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Company has informed the Trustee in writing the
Senior Notes are listed in accordance with TIA Section 313(d). The Company shall
promptly notify the Trustee when the Senior Notes are listed on any stock
exchange and of any delisting thereof.
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SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Subsidiary Guarantors shall pay to the Trustee from
time to time reasonable compensation for its acceptance of this Indenture and
services hereunder. To the extent permitted by law, 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 promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company and the Subsidiary Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Company and the Subsidiary Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company, the
Subsidiary Guarantors or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company and the Subsidiary Guarantors promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Company and the
Subsidiary Guarantors shall not relieve the Company and the Subsidiary
Guarantors of its obligations hereunder. The Company and the Subsidiary
Guarantors shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company and the
Subsidiary Guarantors shall pay the reasonable fees and expenses of such
counsel. The Company and the Subsidiary Guarantors need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company and the Subsidiary Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Subsidiary Guarantors' payment obligations
in this Section 7.07, the Trustee shall have a Lien prior to the Senior Notes on
all money or property held or collected by the Trustee, except that held in
trust to pay principal and interest on particular Senior Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(vii) or (viii) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
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SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Senior Notes may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Senior Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Senior
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Senior Note who
has been a Holder of a Senior Note for at least six months, fails to comply with
Section 7.10 hereof, such Holder of a Senior Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and the duties of the Trustee under
this Indenture. The successor Trustee shall mail a notice of its succession to
the Holders of the Senior Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided that all
sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee or any Agent, as applicable.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities. The Trustee and its direct parent shall at all times have a
combined capital surplus of at least $50.0 million as set forth in its most
recent annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company and the Subsidiary Guarantors may, at the option of their
respective Boards of Directors evidenced by a resolution set forth in an
Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Senior Notes and Subsidiary Guarantees upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each Subsidiary Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from their respective obligations with
respect to all outstanding Senior Notes and Subsidiary Guarantees on the date
the conditions set forth below are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Company and each Subsidiary
Guarantor shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Senior Notes and Subsidiary Guarantees, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.05 hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all their respective other obligations under such
Senior Notes and Subsidiary Guarantees and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for
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the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Senior Notes to
receive payments in respect of the principal of, premium, if any, and interest
on such Senior Notes when such payments are due from the trust referred to in
Section 8.04(a); (b)the Company's obligations with respect to such Senior Notes
under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10 and 4.02 hereof; (c) the
rights, powers, trusts, duties and immunities of the Trustee including without
limitation thereunder Section 7.07, 8.05 and 8.07 hereof and the Company's
obligations in connection therewith and (d) the provisions of this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each Subsidiary Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from its obligations under the covenants contained in
Sections 3.09, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11,4.12, 4.13, 4.14, 4.15, 4.16,
4.17, 4.18, 5.01 and 11.01 hereof with respect to the outstanding Senior Notes
and Subsidiary Guarantees on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Senior Notes and
Subsidiary Guarantees shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Senior Notes and Subsidiary Guarantees shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Senior Notes and Subsidiary
Guarantees, the Company or any of its Subsidiaries may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Senior Notes and Subsidiary Guarantees shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(i) through 6.01(vi)
and Section 6.01(ix) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Senior Notes and Subsidiary Guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Senior Notes, (i) cash in United
States dollars, (ii) non-callable Government Securities which
through the scheduled payment of principal,
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premium, if any, and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due date
of payment, cash in United States dollars in an amount, or (iii) a
combination thereof, in such amounts as shall be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge the principal of, premium, if
any, and interest on the outstanding Senior Notes on the stated
maturity or on the applicable redemption date, as the case may be,
and the Company must specify whether the Senior Notes are being
defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that
(A) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the date hereof,
there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Senior
Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and shall be
subject to federal income tax on the same amounts, in the same
manner and at the same time as would have been the case if such
Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that
the Holders of the outstanding Senior Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and shall be subject to federal income tax
on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default of Event or
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01(vii) and (viii) hereof are
concerned, at any time in the period ending on the 91st day after
the date of deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit,
the trust funds shall not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
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(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of Senior Notes over the
other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company
or others;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the Legal Defeasance
or the Covenant Defeasance have been complied with; and
(i) the Trustee shall have received such other documents and assurances
as the Trustee shall have reasonably required.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Senior
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Senior Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of such Senior Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Senior
Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the written request
of the Company and be relieved of all liability with respect to any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
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SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Senior Note and remaining unclaimed for one year after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its written request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Senior Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company and the Subsidiary Guarantors
under this Indenture, the Senior Notes and the Subsidiary Guarantees shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the
case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Senior Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Senior Notes to receive such payment from the money held
by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF THE SENIOR NOTES.
Notwithstanding Section 9.02 of this Indenture, without the consent of any
Holder of Senior Notes the Company and the Trustee may amend or supplement this
Indenture, the Senior Notes or the Subsidiary Guarantees:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes;
(c) to provide for the assumption of the Company's or a Subsidiary
Guarantor's obligations to the Holders of the Senior Notes in the
case of a merger, or consolidation pursuant to Article 5 or Article
10 hereof, as applicable;
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(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not
adversely affect the legal rights hereunder of any Holder of the
Senior Notes;
(e) to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the TIA; or
(f) to allow any Subsidiary Guarantor to guarantee the Senior Notes.
Upon the written request of the Company accompanied by a resolution of its
Board of Directors of the Company authorizing the execution of any such amended
or supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company and
the Subsidiary Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR NOTES.
Except as provided below in this Section 9.02, this Indenture, the Senior
Notes or the Subsidiary Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the Senior
Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer, for Senior
Notes), and, subject to any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of, or premium, if
any, or interest or Liquidated Damages, if any, on the Senior Notes (except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Senior Notes or the
Subsidiary Guarantees may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Senior Notes (including
consents obtained in connection with or a tender offer or exchange offer for the
Senior Notes).
Upon the request of the Company accompanied by a resolution of its Board
of Directors of the Company authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Senior Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company and the Subsidiary
Guarantors in the execution of such amended or supplemental Indenture unless
such amended or supplemental indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may,
but shall not be obligated to, enter into such amended or supplemental
indenture.
It shall not be necessary for the consent of the Holders of Senior Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof. After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Senior Note
affected thereby a notice briefly describing the amendment, supplement or
waiver.
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Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such amended
or supplemental Indenture or waiver.
Subject to Sections 6.02, 6.04 and 6.07 hereof, the Holders of a majority
in aggregate principal amount of the Senior Notes then outstanding may waive
compliance in a particular instance by the Company or the Subsidiary Guarantors
with any provision of this Indenture, the Senior Notes or the Subsidiary
Guarantees. However, without the consent of each Holder affected, an amendment,
or waiver may not (with respect to any Senior Note or Subsidiary Guarantee held
by a non-consenting Holder):
(a) reduce the principal amount of Senior Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Senior
Note or alter the provisions with respect to the redemption of the
Senior Notes (other than provisions relating to Sections 3.09, 4.10
and 4.14 hereof);
(c) reduce the rate of or change the time for payment of interest or
Liquidated Damages, if any, on any Senior Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest or Liquidated Damages, if any, on
the Senior Notes (except a rescission of acceleration of the Senior
Notes by the Holders of at least a majority in aggregate principal
amount of the Senior Notes and a waiver of the payment default that
resulted from such acceleration);
(e) make any Senior Note payable in money other than that stated in the
Senior Notes;
(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption or repurchase payment with respect to any Senior
Note (other than a payment required by Section 4.10 or 4.14 hereof);
(h) make any change in the amendment and waiver provisions of this
Article 9; or
(i) except as provided in Sections 8.02, 8.03 and 10.04 hereof, release
any of the Subsidiary Guarantors from their obligations under the
Subsidiary Guarantees or make any change in the Subsidiary
Guarantees that would adversely affect the Holders.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Subsidiary Guarantees
or the Senior Notes shall be set forth in an amended or supplemental Indenture
that complies with the TIA as then in effect.
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SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Senior Note is a continuing consent by the Holder and every
subsequent Holder of a Senior Note or portion of a Senior Note that evidences
the same debt as the consenting Holder's Senior Note, even if notation of the
consent is not made on any Senior Note. However, any such Holder or subsequent
Holder of a Senior Note may revoke the consent as to its Senior Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
The Company may, but shall not be obligated to, fix a record date for
determining which Holders of the Senior Notes must consent to such amendment,
supplement or waiver. If the Company fixes a record date, the record date shall
be fixed at (i) the later of 30 days prior to the first solicitation of such
consent or the date of the most recent list of Holders of Senior Notes furnished
for the Trustee prior to such solicitation pursuant to Section 2.05 hereof or
(ii) such other date as the Company shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Note thereafter authenticated. The Company in
exchange for all Senior Notes may issue and the Trustee shall authenticate new
Senior Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
and the Subsidiary Guarantors may not sign an amendment or supplemental
Indenture until their respective Boards of Directors approve it. In signing or
refusing to sign any amended or supplemental indenture the Trustee shall be
entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
11.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Company and the Subsidiary Guarantors in
accordance with its terms.
ARTICLE 10
GUARANTEE OF SENIOR NOTES
SECTION 10.01. SUBSIDIARY GUARANTEE.
Subject to Section 10.06 hereof, each of the Subsidiary Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Senior
Note authenticated and
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delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Senior
Notes and the Obligations of the Company hereunder and thereunder, that: (a) the
principal of, premium, if any, and interest on the Senior Notes will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal, premium, if any, (to the extent permitted by law) and interest on any
interest, if any, on the Senior Notes, and all other payment Obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full and performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Senior
Notes or any of such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so guaranteed or any performance so guaranteed for whatever reason the
Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately. An Event of Default under this Indenture or the Senior Notes shall
constitute an event of default under the Subsidiary Guarantees, and shall
entitle the Holders to accelerate the Obligations of the Subsidiary Guarantors
hereunder in the same manner and to the same extent as the Obligations of the
Company. The Subsidiary Guarantors hereby agree that their Obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Senior Notes or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Subsidiary
Guarantee will not be discharged except by complete performance of the
Obligations contained in the Senior Notes and this Indenture. If any Holder or
the Trustee is required by any court or otherwise to return to the Company, the
Subsidiary Guarantors, or any Senior Note Custodian, Trustee, liquidator or
other similar official acting in relation to either the Company or the
Subsidiary Guarantors, any amount paid by the Company or any Subsidiary
Guarantor to the Trustee or such Holder, this Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it shall not be entitled to, and hereby
waives, any right of subrogation in relation to the Holders in respect of any
Obligations guaranteed hereby. Each Subsidiary Guarantor further agrees that, as
between the Subsidiary Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes of
its Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed thereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purpose of its Subsidiary Guarantee. The Subsidiary Guarantors
shall have the right to seek contribution from any non-paying Subsidiary
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantees.
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SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof,
each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of EXHIBIT D hereto shall be endorsed by
manual or facsimile signature by an Officer of such Subsidiary Guarantor on each
Senior Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Subsidiary Guarantor, by manual or facsimile
signature, by an Officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set
forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Senior Note on which a Subsidiary Guarantee is endorsed, the Subsidiary
Guarantee shall be valid nevertheless.
The delivery of any Senior Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 10.03. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture shall prohibit a merger between a Subsidiary Guarantor and
another Subsidiary Guarantor or a merger between a Subsidiary Guarantor and the
Company.
(b) No Subsidiary Guarantor shall consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Subsidiary
Guarantor unless, other than with respect to a merger between a Subsidiary
Guarantor and another Subsidiary Guarantor or a merger between a Subsidiary
Guarantor and the Company, (i) subject to the provisions of Section 10.04
hereof, the Person formed by or surviving any such consolidation or merger (if
other than such Subsidiary Guarantor) assumes all the obligations of such
Subsidiary Guarantor pursuant to a supplemental indenture substantially in the
form of EXHIBIT C hereto, under the Senior Notes and this Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists; (iii) such Subsidiary Guarantor, or any Person formed by or
surviving any such consolidation or merger, will have Consolidated Net Worth
(immediately after giving effect to such transaction), equal to or greater than
the Consolidated Net Worth of such Subsidiary Guarantor immediately preceding
the transaction; (iv) the Company will, at the time of such transaction, after
giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, have a Fixed Charge Coverage
Ratio of at least 2 to 1 for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available; and (v) the
Senior Notes continue to be secured by a lien in substantially all of the assets
of the combined company (other than the equipment, fixtures and real property of
the Person merged with or into such Subsidiary Guarantor), junior only to liens
in respect of the Credit Facilities.
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(c) In the case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and substantially in the form of EXHIBIT C
hereto, of the Subsidiary Guarantee endorsed upon the Senior Notes and the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor Person
shall succeed to and be substituted for the Subsidiary Guarantor with the same
effect as if it had been named herein as a Subsidiary Guarantor: provided that,
solely for purposes of computing Consolidated Net Income for purposes of clause
(b) of the first paragraph of Section 4.07 hereof, the Consolidated Net Income
of any Person other than the Company and its Subsidiaries shall only be included
for periods subsequent to the effective time of such merger, consolidation,
combination or transfer of assets. Such successor Person thereupon may cause to
be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Senior Notes issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. All of the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.
SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS.
In the event of a sale or other disposition of all of the assets of any
Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the capital stock of any Subsidiary Guarantor, then
such Subsidiary Guarantor (in the event of a sale or other disposition, by way
of such a merger, consolidation or otherwise, of all of the capital stock of
such Subsidiary Guarantor) or the corporation acquiring the property (in the
event of a sale or other disposition of all of the assets of such Subsidiary
Guarantor) shall be released and relieved of any obligations under its
Subsidiary Guarantee; provided that (i) in the event of an Asset Sale, the Net
Proceeds from such sale or other dispositions are treated in accordance with the
provisions of Section 4.10 hereof and (ii) the Company is in compliance with all
other provisions of this Indenture applicable to such disposition. Upon delivery
by the Company to the Trustee of an Officers' Certificate to the effect of the
foregoing, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Subsidiary Guarantor from its Obligation under
its Subsidiary Guarantee. Any Subsidiary Guarantor not released from its
Obligations under its Subsidiary Guarantee shall remain liable for the full
amount of principal of, premium, if any, and interest on the Senior Notes and
for the other Obligations of such Subsidiary Guarantor under this Indenture as
provided in this Article 10.
SECTION 10.05. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
For purposes hereof, each Subsidiary Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Senior Notes and this Indenture and (ii) the amount, if any,
which would not have (A) rendered such Subsidiary Guarantor "insolvent" (as such
term is defined in the Bankruptcy Law and in the Debtor and Creditor Law of the
State of New York) or (B) left such Subsidiary Guarantor with unreasonably small
capital at the time its Subsidiary Guarantee of the Senior Notes was entered
into; provided that, it will be a presumption in any lawsuit or other proceeding
in which a Subsidiary Guarantor is a party that the amount guaranteed pursuant
to the Subsidiary Guarantee is the amount set
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forth in clause (i) above unless any creditor, or representative of creditors of
such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of
the Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of the Subsidiary Guarantor is the amount set forth in clause (ii)
above. In making any determination as to solvency or sufficiency of capital of a
Subsidiary Guarantor in accordance with the previous sentence, the right of such
Subsidiary Guarantor to contribution from other Subsidiary Guarantors, and any
other rights such Subsidiary Guarantor may have, contractual or otherwise, shall
be taken into account.
SECTION 10.06. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in each case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company, any Subsidiary Guarantor or
the Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or any Subsidiary Guarantor:
Continental Global Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With a copy to:
Squire & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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If to the Trustee:
▇▇▇▇▇ Fargo Bank, National Association
Corporate Trust Services
MAC N9303-120
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust
The Company, any Subsidiary Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given; at the time delivered by hand, if personally
delivered; five (5) Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail to its address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF SENIOR NOTES WITH OTHER HOLDERS OF
SENIOR NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Senior Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Subsidiary Guarantor
to the Trustee to take any action under this Indenture, the Company or such
Subsidiary Guarantor shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided
for in this Indenture relating to the proposed action have been
satisfied; and
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(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the Company
or any Subsidiary Guarantor, as such, shall have any liability for any
obligations of the Company under the Senior Notes, any Subsidiary Guarantee,
this Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Senior Notes by accepting a Senior
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Senior Notes and the Subsidiary
Guarantees.
SECTION 11.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SUBSIDIARY GUARANTEES AND THE SENIOR NOTES.
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SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company and the Subsidiaries Guarantors in this
Indenture, the Senior Notes and the Subsidiary Guarantees shall bind their
respective successors and assigns. All agreements of the Trustee in this
Indenture shall bind its successors and assigns.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture, the Senior Notes or in the
Subsidiary Guarantees 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 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADING, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE 12
COLLATERAL AND SECURITY
SECTION 12.01. COLLATERAL AND COLLATERAL DOCUMENTS.
(a) In order to secure the due and punctual payment of principal of and
interest on the Senior Notes when and as the same shall be due and payable,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, and interest on the overdue principal of and interest
(to the extent permitted by law), if any, on the Senior Notes and performance of
all other obligations of the Company to the Holders or the Trustee under this
Indenture and the Senior Notes, the Company and the Trustee have simultaneously
with the execution of this Indenture entered into the Collateral Documents,
pursuant to which the Company has granted to the Trustee for the benefit of the
Trustee and the Holders a Lien on and security interest in the Collateral. The
Trustee and the Company hereby agree that the Trustee holds liens and security
interests in the Collateral as a secured party or mortgagee, as the case may be,
in trust for the benefit of the Trustee, in its capacity as trustee, and for the
ratable benefit of the Holders pursuant to the terms of the Collateral
Documents. The Trustee is authorized and directed to enter into each of the
Collateral Documents, including the Intercreditor Agreement and the Security
Agreement, and to perform its obligations and exercise its rights thereunder in
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accordance therewith. Notwithstanding any other provision of this Indenture, the
Liens created under the Collateral Documents in respect of inventory and
accounts receivable included in the Collateral shall not be effective until the
Company has received relief from the Commission from the provisions of Section
314(d)(1) of the TIA which will permit the disposition of Collateral
contemplated by Section 12.04 of this Indenture without delivery of the
certificates or opinions required by Section 314(d)(1) of the TIA in respect of
the disposition of Collateral referred to in Section 12.04 hereof or such other
relief form the SEC as the Company, in good faith, determines is required so
that the operation of Section 314(d)(1) of the TIA is not materially burdensome
to the Company and its Affiliates. The Company will use all its best efforts to
obtain such relief as soon as possible after the date hereof and will keep the
Trustee reasonably informed of such efforts. To the extent there is a conflict
between the provisions of this Indenture and the provisions of any of the
Collateral Documents, the provisions of this Indenture shall govern.
(b) Each Holder, by accepting a Senior Note, consents and agrees to all
of the terms and provisions of the Collateral Documents, as the same may be in
effect from time to time or may be amended from time to time in accordance with
the provisions of the Collateral Documents and this Indenture, and authorizes
and directs the Trustee to act as mortgagee or secured party with respect
thereto.
(c) As set forth in and governed by the Collateral Documents, as among
the Holders of Senior Notes, the Collateral as now or hereafter constituted
shall be held for the equal and ratable benefit of the Holders of the Senior
Notes without preference, priority or distinction of any thereof over any other
by reason of difference in time of issuance, sale or otherwise, as security for
the Senior Notes.
SECTION 12.02. RECORDING; OPINIONS, ETC.
(a) The Company shall at its sole cost and expense perform any and all
acts and execute any and all documents (including, without limitation, the
execution, amendment or supplementation of any financing statement and
continuation statement or other statement) for filing under the provisions of
the UCC and the rules and regulations thereunder, or any other statute, rule or
regulation of any applicable federal, state or local jurisdiction, including any
filings in local real estate land record offices, which are necessary or
advisable and shall do such other acts and execute such other documents as may
be required under any of the Collateral Documents, from time to time, in order
to grant, perfect and maintain in favor of the Trustee for the benefit of the
Trustee and the Holders a valid and perfected Lien on the Collateral.
The Company shall from time to time promptly pay and satisfy all mortgage
and financing and continuation statement recording and/or filing fees, charges
and taxes relating to this Indenture and the Collateral Documents, any
amendments thereto and any other instruments of further assurance. Without
limiting the generality of the foregoing covenant, in the event at any time the
Trustee shall determine that additional mortgage recording, transfer or similar
taxes are required to be paid to perfect or continue any Lien on any Collateral,
the Company shall pay such taxes promptly upon demand by the Trustee.
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(b) The Company shall, with respect to (i) below, promptly after the
initial issuance of the Senior Notes, and with respect to (ii) below, upon
qualification of this Indenture under the TIA, furnish to the Trustee:
(i) Opinion(s) of Counsel either (a) substantially to the effect
that, in the opinion of such counsel, subject to customary
qualifications, this Indenture and the grant of a security
interest in the Collateral intended to be made by the
Collateral Documents and all other instruments of further
assurance, including, without limitation, financing
statements, have been properly recorded and filed to the
extent necessary to perfect the Lien on the Collateral created
by the Collateral Documents and reciting the details of such
action, and stating that as to the Liens created pursuant to
the Collateral Documents, such recordings and filings are the
only recordings and filings necessary to give notice thereof
and that no rerecordings or refilings are necessary to
maintain such notice (other than as stated in such opinion),
or (b) to the effect that, in the opinion of such counsel, no
such action is necessary to perfect such Lien;
(ii) on January 1 in each year beginning with January 1, 2005, an
Opinion of Counsel, dated as of such date, either (a) to the
effect that, in the opinion of such counsel, such action has
been taken with respect to the recordings, registerings,
filings, re-recordings, re-registerings and refilings of all
financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain
the Lien of each of the Collateral Documents and reciting with
respect to such Liens the details of such action or
referencing prior Opinions of Counsel in which such details
are given, and stating that all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the rights of the
Holders and the Trustee hereunder and under each of the
Collateral Documents with respect to the Liens, or (b) to the
effect that , in the opinion of such counsel, no such action
is necessary to maintain such Liens.
SECTION 12.03. RELEASE OF COLLATERAL.
Except as otherwise permitted by Sections 12.04 and 12.05, the Trustee
shall not release Collateral from the Lien of the Collateral Documents unless
such release is in accordance with the provisions of this Section 12.03, the
Intercreditor Agreement and the Collateral Documents. To the extent applicable,
the Company shall cause TIA Section 314(d) relating to the release of property
or Liens to be complied with.
(a) Satisfaction and Discharge; Defeasance. The Company shall be entitled
to obtain a full release of all of the Collateral from the Lien of this
Indenture and the Collateral Documents upon compliance with all of the
conditions precedent for satisfaction and discharge of all of the obligations of
the Company arising under the Senior Notes and this Indenture or for defeasance
pursuant to Section 8.02 or Section 8.03. Upon delivery by the Company to the
Trustee of an Officers' Certificate and Opinion of Counsel, subject to customary
qualifications, each to the
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effect that all of the conditions precedent have been complied with (which may
be the same Officers' Certificate and Opinion of Counsel required by Article 8),
the Trustee shall take all necessary action, at the request and expense of the
Company, to release and reconvey to the Company all of the Collateral, and shall
deliver such Collateral in its possession to the Company including, without
limitation, the execution and delivery of releases or waivers.
(b) Sales of Collateral Permitted by Section 4.10. The Company shall be
entitled to obtain a release of all or any part of the Collateral (other than
Trust Moneys) (the "Released Assets") subject to an Asset Sale upon compliance
with the condition precedent that the Company shall have delivered to the
Trustee the following:
(i) Release Notice. A notice (each, an "Asset Sale Release
Notice"), which shall (A) refer to this Section 12.03, (B) attach all the
documents referred to below, (C) describe with particularity the Released
Asset, (D) specify the value of such Released Asset on a date within 60
days of the Asset Sale Release Notice (the "Valuation Date"), (E) certify
that the purchase price received is equal to the Fair Market Value of the
Released Asset as of the date of such release, (F) state that the Released
Asset will not interfere with or impede the Trustee's ability to realize
the value of the remaining Collateral and will not impair the maintenance
and operation of the remaining Collateral, (G) confirm the sale of, or an
agreement to sell, such Released Interest in a bona fide sale to a Person
that is not an Affiliate of the Company or, in the event that such sale is
to an Affiliate, confirm that such sale is being made in accordance with
Section 4.11, (H) be accompanied by a counterpart of the instruments
proposed to give effect to the release fully executed and acknowledged (if
applicable) by all parties thereto other than the Trustee;
(ii) Officers' Certificate and Opinion of Counsel. An Officers'
Certificate and an Opinion of Counsel, subject to customary
qualifications, each stating that (A) such Asset Sale covers only the
Released Asset and complies with the terms and conditions of an Asset Sale
pursuant to Section 4.10(a), (B) all Net Proceeds from the sale of the
Released Asset will be applied pursuant to Section 4.10(b), (C) there is
no Event of Default in effect or continuing on the date thereof, (D) the
release of the Released Asset will not result in an Event of Default and
(E) all conditions precedent to such release have been complied with;
(iii) Regarding Real Property. If the Released Asset is only a
portion of a discrete parcel of Real Property, evidence that a title
company shall have committed to issue an endorsement to the title
insurance policy relating to the affected Mortgaged Property confirming
that after such release, the Lien of the applicable Mortgage continues
unimpaired as a perfected Lien having the priority set forth in Section
12.01(a) upon the remaining Mortgaged Property subject only to the
Permitted Liens and the Prior Liens;
(iv) Other Documents. Upon qualification of this Indenture under
the TIA, all documentation required by TIA Section 314(d).
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Upon compliance with the conditions set forth in (b) above, and the
delivery by the Company of such other documents that the Trustee may reasonably
require, the Trustee shall execute, acknowledge (if applicable) and deliver to
the Company such counterpart within 10 Business Days after receipt by the
Trustee of an Asset Sale Release Notice or applicable requirements of this
Section 12.03.
At any time when an Event of Default shall have occurred and be
continuing, no release of Collateral pursuant to the provisions of this
Indenture or the Collateral Documents shall be effective as against the Holders
of the Senior Notes.
SECTION 12.04. DISPOSITION OF COLLATERAL WITHOUT RELEASE.
(a) So long as no Event of Default shall have occurred and be continuing
or would result, the Company may, without any prior release or consent by the
Trustee, conduct ordinary course activities in respect of the Collateral which
do not individually or in the aggregate adversely affect the value of the
Collateral: selling or otherwise disposing of inventory in the ordinary course
of business; collecting, selling or otherwise disposing of accounts receivable
in the ordinary course of business; selling or otherwise disposing of any
Collateral subject to the Lien of this Indenture and the Collateral Documents
which has become worn out or obsolete in any single transaction or series of
related transactions that have a Fair Market Value of less than the greater of
(i) $25,000 and (ii) 1% of the aggregate principal amount of the outstanding
Senior Notes or through the replacement by Collateral of substantially
equivalent or greater value; altering, repairing, replacing, changing the
location or position of and adding to its structures, machinery, systems,
equipment, fixtures and appurtenances; demolishing, dismantling, tearing down or
scrapping any Collateral or abandoning any thereof.
(b) In the event that the Company has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the Collateral which under the provisions of this Section 12.04 may be sold,
exchanged or otherwise disposed of by the Company without any release or consent
of the Trustee, and the Company requests the Trustee to furnish a written
disclaimer, release or quitclaim of any interest in such property under any of
the Collateral Documents, the Trustee shall promptly execute such an instrument
upon delivery to the Trustee of (i) an Officers' Certificate by the Company
reciting the sale, exchange or other disposition made or proposed to be made and
describing in reasonable detail the property affected thereby, and stating and
demonstrating that such property is property which by the provisions of this
Section 12.04 may be sold, exchanged or otherwise disposed of or dealt with by
the Company without any release or consent of the Trustee and (ii) an Opinion of
Counsel, subject to customary qualifications, stating that the sale, exchange or
other disposition made or proposed to be made was duly made by the Company in
conformity with Section 12.04(a) and that the execution of such written
disclaimer, release or quitclaim is appropriate to confirm the propriety of such
sale, exchange or other disposition under this Section 12.04.
SECTION 12.05. EMINENT DOMAIN AND OTHER GOVERNMENTAL TAKINGS.
Subject to the provisions of the Collateral Documents, upon the exercise
of eminent domain authority with respect to any Collateral or should any of the
Collateral be sold pursuant to the exercise by the United States of America or
any State, municipality or other governmental
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authority of any right which any of them may then have to purchase, or to
designate a purchaser or to order a sale of, all or any part of the Collateral,
the Trustee shall release the property subject to such exercise of eminent
domain authority or purchase, but only upon receipt by the Trustee of the
following:
(a) an Officers' Certificate stating that an exercise of eminent domain
authority has occurred with respect to such property, or that such property has
been or will be sold pursuant to a right vested in the United States of America
or a state, municipality or other governmental authority to purchase, or to
designate a purchaser or order a sale of such property and the amount of the
proceeds of such sale, and that all conditions precedent herein provided for
relating to such release have been complied with;
(b) any Net Proceeds, to be held as Trust Moneys subject to the
disposition thereof pursuant to Article 13 and the applicable Collateral
Documents; provided, however, that in lieu of all or any part of such Net
Proceeds, the Company shall have the right to deliver to the Trustee a
certificate of the trustee, mortgagee or other holder of a Prior Lien on all or
any part of the property to be released, stating that such Net Proceeds, or a
specified portion thereof, has been deposited with such trustee, mortgagee or
other holder pursuant to the requirements of such Prior Lien, in which case the
balance of the award, if any, shall be delivered to the Trustee; and
(c) an Opinion of Counsel substantially to the effect:
(i) that an exercise of eminent domain authority has occurred with
respect to such property or such property is to be sold pursuant to the
exercise of a right vested in the United States of America or a State,
municipality or other governmental authority to purchase, or to designate
a purchaser or order a sale of, such property;
(ii) in the case of any taking, that the Net Proceeds for the
property so taken has become final or that the Board of Directors of the
Company has determined that an appeal from such award is not advisable in
the interests of the Company or the Holders of the Senior Notes;
(iii) in the case of any such sale, that the amount of the proceeds
of the property so sold is not less than the amount to which the Company
is legally entitled under the terms of such right to purchase or designate
a purchaser, or under the order or orders directing such sale, as the case
may be;
(iv) in the event that the Net Proceeds for such property or the
proceeds of such sale, or a specified portion thereof, shall be certified
to have been deposited with the trustee, mortgagee or other holder of a
Prior Lien, that the property to be released, or a specified portion
thereof, is or immediately before such taking or purchase was subject to
such Prior Lien, and that such deposit is required by such Prior Lien; and
(v) that the instrument or the instruments and the Net Proceeds or
proceeds of such sale which have been or are therewith delivered to and
deposited with the Trustee conform to the requirements of this Indenture
and any of the Collateral Documents and that, upon the basis of such
application, the Trustee is permitted by the terms hereof and of the
Collateral Documents to execute and deliver the release requested, and
that all
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conditions precedent herein provided for relating to such release have
been complied with.
In any proceedings for the taking or purchase or sale of any part of the
Collateral, by eminent domain or by virtue of any such right to purchase or
designate a purchaser or to order a sale, the Trustee may be represented by
counsel who may be counsel for the Company. Subject to the provisions of the
Intercreditor Agreement and the Collateral Documents, all cash or Cash
Equivalents received by the Trustee pursuant to this Section 12.05 shall be held
by the Trustee as Trust Moneys under Article 13 subject to application as
therein provided. Subject to the provisions of the Collateral Documents, all
purchase money and other obligations received by the Trustee pursuant to this
Section 12.05 shall be held by the Trustee as Collateral subject to application
as provided in Section 12.13.
SECTION 12.06. TRUST INDENTURE ACT REQUIREMENTS
The release of any Collateral, whether pursuant to any provision of this
Article 12 or Article 13, from any of the Collateral Documents or the release
of, in whole or in part, the Liens created by any of the Collateral Documents,
will not be deemed to impair the Lien of the Collateral Documents in
contravention of the provisions hereof if and to the extent the Collateral or
Liens are released pursuant to the applicable Collateral Documents and pursuant
to the terms hereof. The Trustee and each of the Holders acknowledge that a
release of Collateral or Liens strictly in accordance with the terms of the
Collateral Documents and the terms hereof will not be deemed for any purpose to
be an impairment of the Liens created pursuant to the Collateral Documents in
contravention of the terms of this Indenture. Without limitation, the Company
and each other obligor on the Senior Notes shall cause TIA Section 314(d), if
and to the extent applicable, relating to the release of property or securities
from the Liens of each hereof and of the Collateral Documents to be complied
with. Any certificate or opinion required by TIA Section 314(d) may be made by
an officer of the Company, except in cases which TIA Section 314(d) requires
that such certificate or opinion be made by an "independent appraiser" or other
"expert" (as such terms are set forth in TIA Section 314(d)).
SECTION 12.07. SUITS TO PROTECT COLLATERAL.
Subject to the provisions of the Intercreditor Agreement and the
Collateral Documents, the Trustee shall have the power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of any of the Collateral Documents or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders in the Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the Collateral or be
prejudicial to the interests of the Holders or the Trustee).
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SECTION 12.08. PURCHASER PROTECTED.
In no event shall any purchaser in good faith of any property purported to
be released hereunder be bound to ascertain the authority of the Trustee to
execute the release or to inquire as to the satisfaction of any conditions
required by the provisions hereof for the exercise of such authority or to see
to the application of any consideration given by such purchaser or other
transferee; nor shall any purchaser or other transferee of any property or
rights permitted by this Article 12 to be sold be under obligation to ascertain
or inquire into the authority of the Company to make any such sale or other
transfer.
SECTION 12.09. POWERS EXERCISABLE BY RECEIVER OR TRUSTEE.
In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article 12 upon the
Company with respect to the release, sale or other disposition of such property
may be exercised by such receiver or trustee, and an instrument signed by such
receiver or trustee shall be deemed the equivalent of any similar instrument of
the Company or of any officer or officers thereof required by the provisions of
this Article 12.
SECTION 12.10. DETERMINATIONS RELATING TO COLLATERAL.
In the event (i) the Trustee shall receive any written request from the
Company under any Collateral Document for consent or approval with respect to
any matter or thing relating to any Collateral or the Company's obligations with
respect thereto (including, without limitation, the determination as to whether
any portion of the Collateral constitutes Released Collateral) or (ii) there
shall be due to or from the Trustee under the provisions of any Collateral
Document any performance or the delivery of any instrument or (iii) the Trustee
shall become aware of any nonperformance by the Company of any covenant or any
breach of any representation or warranty of the Company set forth in any
Collateral Document, then, in each such event, the Trustee shall be entitled to
hire experts, consultants, agents and attorneys to advise the Trustee on the
manner in which the Trustee should respond to such request or render any
requested performance or response to such nonperformance or breach. The Trustee
shall be fully protected in the taking of any action recommended or approved by
any such expert, consultant, agent or attorney, or in taking any action agreed
to by a majority of Holders pursuant to Section 6.05.
SECTION 12.11. FORM AND SUFFICIENCY OF RELEASE.
In the event that the Company has sold, exchanged, or otherwise disposed
of or proposes to sell, exchange or otherwise dispose of any portion of the
Collateral which under the provisions of Sections 12.03, 12.04 and 12.05 may be
sold, exchanged or otherwise disposed of by the Company, and the Company
requests the Trustee to furnish a written disclaimer, release or quitclaim of
any interest in such property under any of the Collateral Documents, the Trustee
shall promptly execute such an instrument promptly after satisfaction of the
conditions set forth herein for delivery of such release. Notwithstanding the
preceding sentence, all purchasers and grantees of any property or rights
purporting to be released herefrom shall be entitled to rely upon any release
executed by the Trustee hereunder as sufficient for the purposes of this
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Indenture and as constituting a good and valid release of the property therein
described from the Lien of this Indenture and the Collateral Documents.
SECTION 12.12. POSSESSION AND USE OF COLLATERAL.
Subject to and in accordance with the provisions of this Indenture and the
Collateral Documents, so long as no Event of Default shall have occurred and be
continuing, the Company shall have the right to remain in possession and retain
exclusive control of the Collateral, to operate, manage, develop, use and enjoy
the Collateral and to collect, receive, use, invest and dispose of the
reversions, remainders, rates, interest, rents, issues, profits, revenues,
proceeds and other income thereof (other than Trust Moneys).
SECTION 12.13. DISPOSITION OF OBLIGATIONS RECEIVED.
All purchase money or other obligations received by the Trustee under this
Article 12 shall be held by the Trustee as a part of the Collateral. Upon
payment in cash or Cash Equivalents by or on behalf of the Company or the
obligor thereof to the Trustee of the entire unpaid principal amount of any such
obligation, to the extent not constituting Net Proceeds from an Asset Sale which
may possibly be required, through the passage of time or otherwise, to be used
to purchase Senior Notes pursuant to Section 4.10, the Trustee shall promptly
release and transfer such obligation and any mortgage securing the same upon
receipt of any documentation that the Trustee may reasonably require. Any cash
or Cash Equivalents received by the Trustee in respect of the principal of any
such obligations shall be held by the Trustee as Trust Moneys under Article 13
subject to application as therein provided. Unless and until the Senior Notes
are accelerated pursuant to Section 6.02, all interest and other income on any
such obligations, when received by the Trustee, shall be paid to the Company
from time to time in accordance with Section 13.07. If the Securities have been
accelerated pursuant to Section 6.02, any such interest or other income not
theretofore paid, when collected by the Trustee, shall be applied by the
Trustee, as the case may be, in accordance with Section 6.10.
SECTION 12.14. RELEASE UPON TERMINATION OF THE COMPANY'S OBLIGATIONS.
In the event that the Company delivers an Officers' Certificate certifying
that the provisions of Section 8.02 or 8.02 have been complied with, the Trustee
shall (i) execute and deliver such releases, termination statements and other
instruments as the Company may reasonably request evidencing the termination of
the Liens created by the Collateral Documents and (ii) not be deemed to hold the
Liens for the benefit of the Holders.
ARTICLE 13
APPLICATION OF TRUST MONEYS
SECTION 13.01. "TRUST MONEYS" DEFINED.
Subject to the terms and provisions of the Intercreditor Agreement, all
cash or Cash Equivalents received by the Trustee in accordance with the terms of
this Indenture and the Collateral Documents:
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(a) upon the release of property from the Lien of the Collateral
Documents, including, without limitation, all moneys received in respect of the
principal of all purchase money, governmental or other obligations; or
(b) as Net Proceeds upon the destruction of all or any part of the
Collateral (other than any liability insurance proceeds payable to the Trustee
for any loss, liability or expense incurred by it); or
(c) as a Net Proceeds upon a taking of all or any part of the
Collateral; or
(d) as proceeds of any other sale or other disposition of all or any
part of the Collateral by or on behalf of the Trustee or any collection,
recovery, receipt, appropriation or other realization of or from all or any part
of the Collateral pursuant to the Collateral Documents or otherwise; or
(e) pursuant to the Mortgages; or
(f) for application under this Article 13 as elsewhere provided in this
Indenture or the Collateral Documents, or whose disposition is not elsewhere
otherwise specifically provided for herein or in the Collateral Documents;
(all such moneys being herein sometimes called "Trust Moneys"); provided,
however, that Trust Moneys shall not include any property deposited with the
Trustee pursuant to Sections 3.06, 3.07, 3.08 or Article 8 or delivered to or
received by the Trustee for application in accordance with Section 6.10. Trust
Moneys shall be held by the Trustee for the benefit of the Holders as a part of
the Collateral and, if an Event of Default shall have occurred and be continuing
upon any entry upon or sale or other disposition of the Collateral or any part
thereof pursuant to the Collateral Documents, said Trust Moneys shall be applied
in accordance with Section 6.10. Prior to any such entry, sale or other
disposition, all or any part of the Trust Moneys may be withdrawn, and shall be
released, paid or applied by the Trustee, from time to time as provided in this
Article 13.
Promptly following the date hereof, the Trustee shall establish and, at
all times thereafter until this Indenture shall have terminated, shall maintain
an account which shall be entitled the "Collateral Account" (the "Collateral
Account"). The Collateral Account shall be established and maintained by the
Trustee at its corporate trust offices. All Trust Moneys which are received by
the Trustee shall be deposited in the Collateral Account and thereafter shall be
held, applied and/or disbursed by the Trustee in accordance with the terms of
this Article 13.
SECTION 13.02. WITHDRAWALS OF INSURANCE PROCEEDS AND CONDEMNATION AWARDS.
Subject to the provisions of the Intercreditor Agreement and the
Collateral Documents, to the extent that any Trust Moneys consist of either (i)
any Net Proceeds from an Asset Sale or (ii) any Net Proceeds from a taking or
pursuant to the exercise by the United States of America or any state,
municipality or other governmental authority of any right which it may then have
to purchase, or to designate a purchaser or to order a sale of any part of the
Collateral, such Trust Moneys may be withdrawn by the Company and shall be paid
by the Trustee upon a request by the Company to reimburse the Company for
expenditures made, or to pay costs incurred, by the
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Company to repair, rebuild or replace the property destroyed, damaged or taken,
upon receipt by the Trustee of the following:
(a) an Officers' Certificate of the Company, dated not more than
30 days prior to the date of the application for the withdrawal and
payment of such Trust Moneys:
(i) that expenditures have been made, or costs incurred, by
the Company in a specified amount for the purpose of making certain
repairs, rebuildings and replacements of the Collateral, which shall
be briefly described, and stating the fair value thereof to the
Company at the date of the expenditure or incurrence thereof by the
Company;
(ii) that no part of such expenditures or costs has been or
is being made the basis for the withdrawal of any Trust Moneys in
any previous or then pending application pursuant to this Section
13.02;
(iii) that there is no outstanding Indebtedness, other than
costs for which payment is being requested, for the purchase price
or construction of such repairs, rebuildings or replacements, or for
labor, wages, materials or supplies in connection with the making
thereof, which, if unpaid, might become the basis of a vendors',
mechanics', laborers', materialmen's, statutory or other similar
Lien upon any of such repairs, rebuildings or replacements, which
Lien might, in the opinion of the signers of such certificate,
materially impair the security afforded by such repairs, rebuildings
or replacements;
(iv) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of the Company's business;
(v) whether any part of such repairs, rebuildings or
replacements within six months before the date of acquisition
thereof by the Company has been used or operated by any person other
than the Company in a business similar to that in which such
property has been or is to be used or operated by the Company, and
whether the fair value to the Company, at the date of such
acquisition, of such part of such repairs, rebuildings or
replacement equals or exceeds the greater of (i) $25,000 and (ii) 1%
of the aggregate principal amount of the outstanding Senior Notes
and, if all of such facts are present, such part of said repairs,
rebuildings or replacements shall be separately described and it
shall be stated that an independent appraiser's or independent
financial adviser's certificate as to the fair value to the Company
of such separately described repairs, rebuildings or replacements
will be furnished under paragraph (b) of this Section 13.02;
(vi) that no Default or Event of Default shall have occurred
and be continuing; and
(vii) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with;
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(b) all documentation required under TIA Section 314(d);
(c) (i) In case any part of such repairs, rebuildings or
replacements constitutes Real Property:
(1) with respect to any such repairs, rebuildings or
replacements that are not encompassed within or are not erected upon
Mortgaged Property, an instrument or instruments in recoverable form
sufficient for the Lien of this Indenture and any mortgage to cover
such repairs, rebuildings or replacements which, if such repairs,
rebuildings or replacements include leasehold or easement interests,
shall include normal and customary provisions with respect thereto
and evidence of the filing of all such documents as may be necessary
to perfect such Liens;
(2) a policy of title insurance (or a commitment to issue
title insurance) insuring that the Lien of this Indenture and any
Mortgage constitutes a direct and valid and perfected mortgage Lien
on such repairs, rebuildings or replacements in an aggregate amount
equal to the fair value of such repairs, rebuildings or
replacements, together with such endorsements and other opinions as
are contemplated in Section 12.02(b), or with respect to any such
repairs, rebuildings or replacements that are encompassed within or
erected upon Mortgaged Property an endorsement to the title
insurance policy issued pursuant to Section 12.02(b) regarding the
affected Mortgaged Property confirming that such repairs,
rebuildings or replacements are encumbered by the Lien of the
applicable Mortgage;
(3) in the event that such repairs, rebuildings or
replacements have a fair value in excess of $250,000, a survey with
respect thereto; and
(4) evidence of payment or a closing statement indicating
payments to be made by the Company of all title premiums, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of counsel for the Trustee
(and any local counsel), that may be incurred to validly and
effectively subject such repairs, rebuildings or replacements to the
Lien of any applicable Collateral Document and to perfect such Lien;
and
(ii) in case any part of such repairs, rebuildings or replacements
constitutes personal property interests:
(1) an instrument in recoverable form sufficient for the
Lien of the Security Agreement to cover such repairs, rebuildings or
replacements; and
(2) evidence of payment or a closing statement indicating
payments to be made by the Company of all filing fees, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of
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counsel for the Trustee (and any local counsel), that may be
incurred to validly and effectively subject such repairs,
rebuildings or replacements to the Lien of any Collateral Document;
and
(d) an Opinion of Counsel, subject to customary qualifications,
substantially stating:
(i) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this
Indenture and the Collateral Documents, and that, upon the basis of
such request of the Company and the accompanying documents specified
in this Section 13.02, all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with, and
the Trust Moneys whose withdrawal is then requested may be lawfully
paid over under this Section 13.02;
(ii) that the Company has acquired title to said repairs,
rebuildings and replacements at least equivalent to its title to the
property destroyed, damaged or taken, and that the same and every
part thereof are free and clear of all Liens prior to the Lien of
any Collateral Documents, except Liens of the type permitted under
the applicable Collateral Document to which the property so
destroyed, damaged or taken shall have been subject at the time of
such destruction, damage or taken;
(iii) that all of the Company's right, title and interest in
and to said repairs, rebuildings or replacements, or combination
thereof, are then subject to the Lien of the Collateral Documents.
Upon compliance with the foregoing provisions of this Section 13.02,the
Trustee shall pay on the written request of the Company an amount of Trust
Moneys of the character aforesaid equal to the amount of the expenditures or
costs stated in the Officers' Certificate required by clause (i) of
subsection(a) of this Section 13.02, or the fair value to the Company of such
repairs, rebuildings and replacements stated in such Officers' Certificate (or
in such independent appraiser's or independent financial advisor's certificate,
if required),whichever is less.
SECTION 13.03. WITHDRAWAL OF TRUST MONEYS ON BASIS OF RETIREMENT OF SECURITIES.
(a) Except with respect to Trust Moneys received pursuant to
Section 12.03(b) and subject to release pursuant to Section 13.03(b) and
Section 13.04, and as otherwise permitted or required by the Collateral
Documents, the Trustee shall apply Trust Moneys from time to time to the
payment of the principal of and interest on any Senior Notes, or to the
redemption thereof or the purchase thereof upon tender or in the open
market or at private sale or upon any exchange or in any one or more of
such ways, including, without limitation, pursuant to a Change of Control
Offer under Section 4.14 or an Asset Sale Offer pursuant to Section 4.10,
as the Company shall request in writing, upon receipt by the Trustee of
the following:
Indenture
- 73 -
(i) a Board Resolution of the Company directing the
application pursuant to this Section 13.03 of a specified amount of
Trust Moneys and, if any such moneys are to be applied to payment,
designating the Senior Notes so to be paid and, in case any such
moneys are to be applied to the purchase of Senior Notes,
prescribing the method of purchase, the price or prices to be paid
and the maximum principal amount of Senior Notes to be purchased and
any other provisions of this Indenture governing such purchase;
(ii) cash in the maximum amount of the accrued interest, if
any, required to be paid in connection with any such purchase, which
cash shall be held by the Trustee, in trust for such purpose;
(iii) an Officers' Certificate, dated not more than five
Business Days prior to the date of the relevant application, stating
(A) that no Default or Event of Default exists unless such Default
or Event of Default would be cured thereby, and (B) that all
conditions precedent and covenants herein provided for relating to
such application of Trust Moneys have been complied with; and
(iv) an Opinion of Counsel stating that the documents and the
cash or Cash Equivalents, if any, which have been or are therewith
delivered to and deposited with the Trustee conform to the
requirements of this Indenture and that all conditions precedent
herein provided for relating to such application of Trust Moneys
have been complied with.
Upon compliance with the foregoing provisions of this Section 13.03(a),
the Trustee shall apply Trust Moneys as directed and specified by such Board
Resolution, up to, but not exceeding, the principal amount of the Senior Notes
so paid or purchased, using the cash deposited pursuant to paragraph(ii) of this
Section 13.03(a), to the extent necessary, to pay any accrued interest required
in connection with such purchase.
(b) To the extent that any Trust Moneys consist of Trust Moneys
received by the Trustee pursuant to the provisions of Section 4.10 and the
Company has made an Asset Sale Offer which is not fully subscribed to by
the Holders, the Trust Moneys remaining after completion of the Asset Sale
Offer may be withdrawn by the Company and shall be paid by the Trustee to
the Company (or as otherwise directed by the Company) upon the Company's
request to the Trustee and upon receipt by the Trustee of the following:
(i) A notice which shall (A) refer to this Section 13.03(b)
and (B) describe with particularity the Asset Sale from which such
Trust Moneys were held as Collateral, the amount of Trust Moneys
applied to the purchase of Senior Notes pursuant to the Asset Sale
Offer and the remaining amount of Trust Moneys to be released to the
Company;
(ii) An Officer's Certificate certifying that (A) the release
of the Trust Moneys complies with the terms and conditions of
Section 4.10, (B) there is no
Indenture
- 74 -
Default or Event of Default in effect or continuing on the date
thereof, (C) the release of the Trust Moneys will not result in a
Default or Event of Default hereunder, and (D) all conditions
precedent and covenants herein provided relating to such release
have been complied with;
(iii) All documentation required under TIA 314 Section (d);
and
(iv) An Opinion of Counsel stating that the documents that
have been or are therewith delivered to the Trustee conform to the
requirements of this Indenture and that all conditions precedent
herein provided for relating to such application of Trust Moneys
have been complied with.
SECTION 13.04. WITHDRAWAL OF TRUST MONEYS FOR REINVESTMENT.
To the extent that any Trust Moneys consist of Net Proceeds received by
the Trustee pursuant to the provisions of Section 4.10, and the Company intends
to reinvest such Net Proceeds in a Permitted Investment (the "Released Trust
Moneys"), such Trust Moneys may be withdrawn by the Company and shall be paid by
the Trustee to the Company (or as otherwise directed by the Company) upon the
Company's request to the Trustee and upon receipt by the Trustee of the
following:
(a) A notice which shall (i) refer to this Section 13.04, (ii)
contain all documents referred to below, (iii) describe with particularity
the Released Trust Moneys and the Asset Sale from which such Released
Trust Moneys were held as Collateral, (iv) describe with particularity the
Related Business Investment to be made with respect to the Released Trust
Moneys and (v) be accompanied by a counterpart of the instruments proposed
to give effect to the release fully executed and acknowledged (if
applicable) by all parties thereto other than the Trustee;
(b) An Officer's Certificate certifying that (i) the release of
the Released Trust Moneys complies with the terms and conditions of
Section 4.10, (ii) there is no Default or Event of Default in effect or
continuing on the date thereof, (iii) the release of the Released Trust
Moneys will not result in a Default or Event of Default hereunder and (iv)
all conditions precedent and covenants herein provided for relating to
such release and application of the Released Trust Moneys have been
complied with;
(c) If the Permitted Investment to be made is an investment in
Real Property:
(i) an instrument or instruments in recordable form
sufficient for the Lien of any Mortgage to cover such Real Property
which, if the Real Property is a leasehold or easement interest,
shall include normal and customary provisions with respect thereto
and evidence of the filing of all such financing statements and
other instruments as may be necessary to perfect such Liens;
(ii) a policy of title insurance (or a commitment to issue
title insurance) insuring that the Lien of this Indenture and any
Mortgage constitutes a direct and
Indenture
- 75 -
valid and perfected mortgage Lien of the priority contemplated in
Section 12.01(a) on such Real Property in an aggregate amount equal
to the fair value of the Real Property, together with an Officers'
Certificate stating that any specific exceptions to such title
insurance are Permitted Liens, together with such endorsements and
other opinions as are contemplated by Section 13.2(b)(ii);
(iii) in the event such Real Property has a fair value in
excess of $250,000, a Survey with respect thereto; and
(iv) evidence of payment or a closing statement indicating
payments to be made by the Company of all title premiums, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of one counsel for the
Trustee (and any local counsel), that may be incurred to validly and
effectively subject the Real Property to the Lien of any applicable
Collateral Document to perfect such Lien; and
(d) If the Permitted Investment is a personal property interest:
(i) an instrument in recordable form, if necessary,
sufficient for the Lien of any applicable Collateral Document to
cover such personal property interest; and
(ii) evidence of payment or a closing statement indicating
payments to be made by the Company of all filing fees, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of one counsel for the
Trustee (and any local counsel), that may be incurred to validly and
effectively subject the Related Business Investment to the Lien of
any Collateral Document.
(e) All documentation required under TIA Section 314(d); and
(f) An opinion of counsel stating that the documents that have
been or are therewith delivered to the Trustee conform to the requirements
of this Indenture and that all conditions precedent herein provided for
relating to such application of Trust Moneys have been complied with.
Upon compliance with the foregoing provisions of this Section, the Trustee
shall apply the Released Trust Moneys as directed and specified by the Company.
SECTION 13.05. POWERS EXERCISABLE NOTWITHSTANDING DEFAULT OR EVENT OF DEFAULT.
In case a Default or an Event of Default shall have occurred and shall be
continuing, the Company, while in possession of the Collateral (other than cash,
Cash Equivalents, securities and other personal property held by, or required to
be deposited or pledged with, the Trustee hereunder or under the Collateral
Documents), may do any of the things enumerated in Sections 13.02, 13.03 and
13.04 if the Holders of a majority in aggregate principal amount of the Senior
Indenture
- 76 -
Notes outstanding, by appropriate action of such Holders, shall consent to such
action, in which event any certificate filed under any of such Sections shall
omit the statement to the effect that no Default or Event of Default has
occurred and is continuing. This Section 13.05 shall not apply, however, during
the continuance of an Event of Default of the type specified in Section 6.01(i)
or (ii).
SECTION 13.06. POWERS EXERCISABLE BY TRUSTEE OR RECEIVER.
In case the Collateral (other than any cash, Cash Equivalents, securities
and other personal property held by, or required to be deposited or pledged
with, the Trustee hereunder or under the Collateral Documents) shall be in the
possession of a receiver or trustee lawfully appointed, the powers hereinbefore
in this Article 13 conferred upon the Company with respect to the withdrawal or
application of Trust Moneys may be exercised by such receiver or trustee, in
which case a certificate signed by such receiver or trustee shall be deemed the
equivalent of any Officers' Certificate required by this Article Eleven. If the
Trustee shall be in possession of any of the Collateral hereunder or under any
of the Collateral Documents, such powers may be exercised by the Trustee, in its
discretion.
SECTION 13.07. INVESTMENT OF TRUST MONEYS.
All or any part of any Trust Moneys held by the Trustee shall from time to
time be invested or reinvested by the Trustee in any Cash Equivalents pursuant
to the written direction of the Company, which shall specify the Cash
Equivalents in which such Trust Moneys shall be invested and the maturity date
of such investment. Unless an Event of Default occurs and is continuing, any
interest on such Cash Equivalents (in excess of any accrued interest paid at the
time of purchase) that may be received by the Trustee shall be forthwith paid to
the Company. Such Cash Equivalents shall be held by the Trustee as a part of the
Collateral, subject to the same provisions hereof as the cash used by it to
purchase such Cash Equivalents.
The Trustee shall not be liable or responsible for any loss resulting from
such investments or sales except only for its own grossly negligent action, its
own grossly negligent failure to act or its own willful misconduct in complying
with this Section 13.07.
[signature page follows]
Indenture
- 77 -
SIGNATURES
Dated as of ____________, 2004 CONTINENTAL GLOBAL GROUP, INC
By: ________________________________________
Name:___________________________________
Title: _________________________________
Dated as of ____________, 2004 CONTINENTAL CONVEYOR & EQUIPMENT COMPANY
By: ________________________________________
Name:___________________________________
Title: _________________________________
Dated as of ____________, 2004 ▇▇▇▇▇▇▇ CONVEYOR COMPANY
By: ________________________________________
Name: __________________________________
Title: _________________________________
TRUSTEE Dated as of ______________, 2004
▇▇▇▇▇ FARGO BANK, N.A.
By: _______________________________________
Name: _________________________________
Title: ________________________________
Indenture
S-1
EXHIBIT A
(Face of Senior Note)
9% Series A Senior Secured Note due 2008
NO.__ $____________________
CUSIP NO. 21144Y AD 0
CONTINENTAL GLOBAL GROUP, INC.
promises to pay to Cede & Co. or registered assigns, the principal
sum of _______________ Dollars on October 1, 2008.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
To the extent set forth in the Collateral Documents, a payment
hereof is secured, on an equal and ratable basis with all other Senior Notes, by
a valid, perfected interest in the Collateral (as defined in the Indenture), the
terms of which security interest are more fully set forth in the Collateral
Documents.
Dated: September __, 2004
CONTINENTAL GLOBAL GROUP, INC.
By: ________________________________________
Name:
Title:
This is one of the
Senior Notes referred to in the
within-mentioned Indenture:
Dated: September __, 2004
▇▇▇▇▇ Fargo Bank, N. A.,
as Trustee
By: _______________________________
Indenture
A-1
(Back of Senior Note)
9% Series A Senior Secured Note due 2008
[Unless and until it is exchanged in whole or in part for Senior Notes in
definitive form, this Series A Senior Note may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) ("▇▇▇"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the
registered owner hereof, Cede & Co., has an interest herein.](1)
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)' OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
OF THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) or (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL
ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF
AN AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE
-----------------------
(1) This paragraph should be included only if the Series A Senior Note is issued
in global form.
Indenture
A-2
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.](2)
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Continental Global Group, Inc., a Delaware corporation, or
its successor (the "Company"), promises to pay interest on the
principal amount of this Series A Senior Note at the rate of 9% per
annum. The Company will pay interest in United States dollars
(except as otherwise provided herein) semi-annually in arrears on
April 1 and October 1, commencing on October 1, 2004, or if any such
day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on this Series A Senior Note
shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from April 1, 2004. The
Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest
rate on this Series A Senior Note to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace period) at the same rate provided for
in the first clause of this sentence to the extent lawful. Interest
shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on this Series A
Senior Note (except defaulted interest) to the Person who is
registered Holder of this Series A Senior Note at the close of
business on the March 15 or September 15 next preceding the Interest
Payment Date, even if this Series A Senior Note is cancelled after
such record date and on or before such Interest Payment Date, except
as provided in Section 2.11 of the Indenture with respect to
defaulted interest. This Series A Senior Note shall be payable as to
principal, premium, if any, and interest at the office or agency of
the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of
interest may be made by check mailed to the Holder at its address
set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds shall be required with
respect to principal of, and interest, and premium, if any, on, all
Global Notes and to the Holder this Series A
------------
(2) This paragraph should be included only if the Series A Senior Note is issued
pursuant to an exemption from registration under the Securities Act other than
the exemption from registration provided by Section 3(a)(9) of the Securities
Act.
Indenture
A-3
Senior Note if such Holder shall have provided written wire transfer
instructions to the Company or the Paying Agent. Such payment shall
be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and
private debts.
3. PAYING AGENT AND REGISTRAR. Initially, ▇▇▇▇▇ Fargo Bank, N. A., the
Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holder of this Series A Senior Note. The
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued this Series A Senior Note under and
pursuant to an Indenture dated as of September __, 2004
("Indenture") among the Company, the Subsidiary Guarantors and the
Trustee. The terms of this Series A Senior Note include those stated
in the Indenture, if applicable, and those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Section 17aaa-77bbbb) (the "TIA"). This Series
A Senior Note is subject to all such terms, and the Holder is
referred to the Indenture and such Act for a statement of such
terms. The series of senior notes, of which this Series A Senior
Note is one (collectively, as they may from time to time be amended,
supplemented and replaced pursuant to the terms and conditions of
this Series A Senior Note and the Indenture, the "Series A Senior
Notes"), are general unsecured Obligations of the Company limited to
$65,000,000 in aggregate principal amount, plus amounts, if any,
sufficient to pay premium, if any, and interest on outstanding
Senior Notes as set forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
This Series A Senior Note shall be redeemable at the option of
the Company, in whole or in part, at any time upon not less than 30
nor more than 60 days' notice, at par, and without premium, together
with accrued and unpaid interest hereon to the redemption date.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund
payments with respect to this Series A Senior Note.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Holder of this
Series A Senior Note will have the right to require the Company to
repurchase all or any part (equal to $1.00 or an integral multiple
thereof) of this Series A Senior Note pursuant to the offer
described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest thereon, to the date of purchase. Within
10 days following any Change of Control, the Company will mail a
notice to the Holder of
Indenture
A-4
this Series A Senior Note describing the transaction or transactions
that constitute the Change of Control and setting forth the
procedures governing the Change of Control Offer required by the
Indenture.
(b) Within 15 days after the receipt of any Net Proceeds from an
Asset Sale, the Company shall apply such Net Proceeds to (i) repay
Indebtedness under the Credit Facility (if Net Proceeds are from a
sale of assets of the Company or a Subsidiary other than a Foreign
Subsidiary), (ii) repay Indebtedness under the Foreign Credit
Facility (if Net Proceeds are from a sale of assets of a Foreign
Subsidiary), (iii) offer to all Holders of Senior Notes (a "Net
Proceeds Offer") to purchase the maximum principal amount of Senior
Notes that may be purchased out of the Net Proceeds at an offer
price in cash equal to 100% of principal amount thereof, plus
accrued and unpaid interest to the date of purchase in accordance
with the procedures set forth in the Indenture, or (iv) any
Permitted Refinancing Indebtedness of the foregoing; provided,
however, the Company shall not be obligated to permanently reduce
availability under the Credit Facilities or the Foreign Credit
Facilities (or such Permitted Refinancing Indebtedness) in the event
Net Proceeds from an Asset Sale are used to pay off obligations
thereunder. If the aggregate principal amount of Senior Notes
surrendered by Holders thereof exceeds the amount of Net Proceeds,
the Trustee shall select the Series A Senior Notes to be purchased
on a pro rata basis.
(c) The Holders of the Series A Senior Notes that are the subject
of an offer to purchase will receive a Change of Control Offer or a
Net Proceeds Offer from the Company prior to any related purchase
date, and each such Holder may elect to have its Series A Senior
Notes purchased by completing the form titled "Option of Holder to
Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each
Holder whose Senior Notes are to be redeemed at its registered
address. Senior Notes in denominations larger than $1.00 may be
redeemed in part but only in whole multiples of $1.00, unless all of
the Series A Senior Notes held by a Holder are to be redeemed. On
and after the redemption date, interest ceases to accrue on the
Series A Senior Notes or portions thereof called for redemption.
9. COLLATERAL DOCUMENTS. In order to secure the due and punctual
payment of the principal of and interest on the Senior Notes and all
other amounts payable by the Company under the Indenture and the
Senior Notes when and as the same will be due and payable, whether
at maturity, by acceleration or otherwise, according to the terms of
the Senior Notes and the Indenture, the Company and the Subsidiary
Guarantors have granted security interests in and Liens on the
Collateral owned by the Company and the Subsidiary Guarantors to the
Trustee for the benefit of the Holders of Senior Notes pursuant to
the Indenture and the Collateral Documents. The Senior Notes will be
secured by Liens on and security interests in the Collateral and are
subject to certain permitted encumbrances. The
Indenture
A-5
Collateral is subject to the prior lien of Bank One, N.A. securing
amounts due under the Credit Facility.
Each Holder, by accepting a Senior Note agrees to all of the terms
and provisions of the Collateral Documents, as the same may be
amended from time to time pursuant to the respective provisions
thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and
provisions of the Collateral Documents and the terms and provisions
of the Indenture will not be deemed for any purpose to be an
impairment of the security under the Indenture.
10. DENOMINATIONS, TRANSFER, EXCHANGE. This Series A Senior Note is in
registered form without coupons in initial denomination of $1.00 and
integral multiples of $1.00. The transfer of this Series A Senior
Note may be registered and this Series A Senior Note may be
exchanged as provided in the Indenture. The Registrar and the
Trustee may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents; and the Company may
require the Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or
register the transfer of this Series A Senior Note or portion of
this Series A Senior Note selected for redemption, except for the
unredeemed portion of this Series A Senior Note if it is being
redeemed in part. Also, it need not exchange or register the
transfer of this Series A Senior Note for a period of 15 days before
a selection of Senior Notes to be redeemed or during the period
between a record date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of this Series A Senior
Note may be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following
paragraphs, the Indenture, the Series A Senior Notes and the
Subsidiary Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of
the Series A Senior Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of or,
tender offer or exchange offer for Senior Notes); and any existing
Default or Event of Default or compliance with any provision of the
Indenture, the Series A Senior Notes or the Subsidiary Guarantees
may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Senior Notes (including
consents obtained in connection with a tender offer or exchange
offer for Senior Notes). Notwithstanding anything to the contrary in
the immediately preceding sentence, without the consent of the
Holder of a Series A Senior Note affected by an amendment or waiver,
no amendment or waiver in respect of the Indenture, the Series A
Senior Notes and the Subsidiary Guarantees may (with respect to any
Senior Note or Subsidiary Guarantee held by a non-consenting
Holder):
Indenture
A-6
(a) reduce the principal amount of any Senior Note whose Holder
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Senior Note or alter the provisions with respect to the
redemption of the Series A Senior Notes (other than provisions
relating to Sections 3.09, 4.10 and 4.14 of the Indenture);
(c) reduce the rate of or change the time for payment of interest
on any Senior Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on any Senior
Note (except a rescission of acceleration of the Series A
Senior Notes by the Holders of at least a majority in
aggregate principal amount of the Series A Senior Notes and a
waiver of the payment default that resulted from such
acceleration);
(e) make any Senior Note payable in money other than that stated
in the Series A Senior Notes;
(f) make any change in Section 6.04 or 6.07 of the Indenture;
(g) waive a redemption or repurchase payment with respect to any
Senior Note (other than a payment required by Section 4.10 or
4.14 of the Indenture);
(h) make any change in the amendment and waiver provisions of this
Paragraph 11 or of Article 9 of the Indenture; or
(i) except as provided in Sections 8.02, 8.03 and 10.04 of the
Indenture, release any of the Subsidiary Guarantors from their
obligations under the Subsidiary Guarantees or make any change
in the Subsidiary Guarantees that would adversely affect the
Holders of the Series A Senior Notes.
Without the consent of any Holder of Senior Notes, the Company
and the Trustee may amend or supplement the Indenture, the
Subsidiary Guarantees or the Series A Senior Notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated
Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's or a
Subsidiary Guarantor's obligations to Holders of Senior Notes in the
case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of Senior
Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the
Commission in order to effect or maintain the qualification of the
Indenture under the TIA or to allow any Subsidiary Guarantor to
guarantee the Series A Senior Notes.
Indenture
A-7
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Series A Senior
Notes; (ii) default in payment when due of the principal of or
premium, if any, on the Series A Senior Notes: (iii) failure by the
Company or any Subsidiary to comply with the provisions described in
Sections 3.09, 4.07, 4.09, 4.10, 4.14, 4.18 or 5.01 of the
Indenture; (iv) failure by the Company or any Subsidiary for 60 days
after notice from the Trustee or the Holders of at least 35% in
principal amount of the Series A Senior Notes then outstanding to
comply with its other agreements in the Indenture or the Series A
Senior Notes; (v) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date
of the Indenture, which default (A) (i) is caused by a failure to
pay when due at final stated maturity (giving effect to any grace
period related thereto) any principal of or premium, if any, or
interest on such Indebtedness (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express
maturity and (B) in each case, the principal amount of any such
Indebtedness as to which a Payment Default shall have occurred,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $5.0 million or more; (vi)
failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $5.0 million, which judgments are
not paid discharged or stayed within 60 days after their entry;
(vii) certain events of bankruptcy or insolvency with respect to the
Company, any of its Significant Subsidiaries or any group of
Subsidiaries that, taken together, would constitute a Significant
Subsidiary; and (viii) the termination of the Subsidiary Guarantee
of any Subsidiary Guarantor for any reason not permitted by the
Indenture, or the denial of any Person acting on behalf of any
Subsidiary Guarantor of its Obligations under any such Subsidiary
Guarantee.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 35% in principal amount of the then
outstanding Senior Notes may declare all the Series A Senior Notes
to be due and payable by notice in writing to the Company and the
Trustee specifying the respective Event of Default and that it is a
"notice of acceleration" and the same shall become immediately due
and payable. Notwithstanding the foregoing, in the case of an Event
of Default arising from certain events of bankruptcy or insolvency
with respect to the Company, any Significant Subsidiary or any group
of Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Senior Notes will become due and payable
without further action or notice. Holders of the Series A Senior
Notes may not enforce the Indenture or the Series A Senior Notes
except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding
Senior Notes may direct the Trustee in its exercise of any trust or
power. The Holders of a majority in aggregate principal amount of
the Series A Senior Notes then outstanding, by notice to the
Trustee, may on behalf of the Holders of all of the
Indenture
A-8
Series A Senior Notes waive any existing Default or Event of Default
and its consequences under the Indenture, except a continuing
Default or Event of Default in the payment of interest on, or
principal of, the Series A Senior Notes. The Trustee may withhold
from Holders of the Series A Senior Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines
that withholding notice is in such Holders' interest. The Company is
required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default to deliver to the
Trustee a statement specifying such Default or Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform
services for the Company, the Subsidiary Guarantors or their
respective Affiliates, and may otherwise deal with the Company, the
Subsidiary Guarantors or their respective Affiliates, as if it were
not the Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder, of the Company or any Subsidiary
Guarantor, as such, shall have any liability for any obligations of
the Company or any Subsidiary Guarantor under this Series A Senior
Note, the Indenture or the Subsidiary Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of this Series A Senior Note by accepting this
Series A Senior Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of
this Series A Senior Note and any Subsidiary Guarantee.
16. AUTHENTICATION. This Series A Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company
has caused a CUSIP number to be printed on this Series A Senior
Note, and the Trustee may use such CUSIP number in notices of
redemption as a convenience to the Holder hereof. No representation
is made as to the accuracy of such number either as printed on this
Series A Senior Note or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers
placed thereon.
The Company shall furnish to the Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Indenture
A-9
Continental Global Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Indenture
A-10
ASSIGNMENT FORM
To assign this Series A Senior Note, fill in the form below: (I) or (we)
assign and transfer this Series A Senior Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Series A Senior Note on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________________
Date: ___________________
Your Signature: _________________________
(Sign exactly as your name appears on the
face of this Series A Senior Note)
Signature Guarantee:
Indenture
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Series A Senior Note purchased by the
Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of this Series A Senior Note
purchased by the Company pursuant to Section 4.10 or Section 4.14 of the
Indenture, state the amount you elect to have purchased:
$____________
Your Signature: _________________________
(Sign exactly as your name appears on the
face of this Series A Senior Note)
Signature Guarantee:
Tax Identification No.:_____________
Signature Guarantee.
Indenture
A-12
SCHEDULE OF EXCHANGES OF SENIOR NOTES(3)
THE FOLLOWING EXCHANGES OF A PART OF THIS GLOBAL NOTE FOR OTHER SENIOR NOTES
HAVE BEEN MADE:
Principal Amount of
this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount of decrease or Trustee or Senior
Date of Exchange of this Global Note this Global Note (or increase) Note Custodian
---------------- ------------------- ---------------- ------------- --------------
_________________________________________________________________________________________________________________
-------------
(3) This should be included if the Series A Senior Note is issued in global
form.
Indenture
A-13
EXHIBIT B
(Face of Senior Note)
13% Series B Senior Secured Note due 2008
NO.__ $____________________
CUSIP NO. 21144Y AE 8
CONTINENTAL GLOBAL GROUP, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of
______________ Dollars on October 1, 2008.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
To the extent set forth in the Collateral Documents, a payment
hereof is secured, on an equal and ratable basis with all other Senior Notes, by
a valid, perfected interest in the Collateral (as defined in the Indenture), the
terms of which security interest are more fully set forth in the Collateral
Documents.
Dated: September __, 2004
CONTINENTAL GLOBAL GROUP, INC.
By: ________________________________
Name:
Title:
This is one of the
Senior Notes referred to in the
within-mentioned Indenture:
Dated: September __, 2004
Indenture
B-1
▇▇▇▇▇ Fargo Bank, N. A.,
as Trustee
By: _______________________________
Indenture
B-2
(Back of Senior Note)
13% Series B Senior Secured Note due 2008
[Unless and until it is exchanged in whole or in part for Senior Notes in
definitive form, this Series B Senior Note may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) ("▇▇▇"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the
registered owner hereof, Cede & Co., has an interest herein.](1)
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)' OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
OF THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) or (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL
ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF
AN AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES LESS THAN $100,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY
----------
(1) This paragraph should be included only if the Series B Senior Note is issued
in global form.
Indenture
B-3
SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.](2)
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Continental Global Group, Inc., a Delaware corporation, or
its successor (the "Company"), promises to pay interest on the
principal amount of this Series B Senior Note at the rate of 9% per
annum. The Company will pay interest in United States dollars
(except as otherwise provided herein) semi-annually in arrears on
April 1 and October 1, commencing on October 1, 2004, or if any such
day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on this Series B Senior Note
shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from April 1, 2004. The
Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest
rate on this Series B Senior Note to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace period) at the same rate provided for
in the first clause of this sentence to the extent lawful. Interest
shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
Notwithstanding the foregoing, so long as no Event of Default has
occurred and is continuing, prior to the Maturity Date, the Company
may elect to pay all or any portion of any interest payment on this
Senior Note in-kind rather than in cash at a rate per annum of 13%,
in which case such portion of such interest payment shall compound,
effective as of such Interest Payment Date, by adding such accrued
and unpaid interest to the principal amount of this Senior Note and
accruing interest on the total new principal amount of this Senior
Note, resulting thereafter. The Company shall be deemed to have
elected to compound a portion of each interest payment that
constitutes interest on this Senior Note at a rate of 13% unless the
Company gives the Holder written notice at least 15 days prior to
the next succeeding Interest Payment Date that it intends to pay all
or a portion of such interest in cash on such Interest Payment Date.
----------
(2) This paragraph should be included only if the Series B Senior Note is issued
pursuant to an exemption from registration under the Securities Act other than
the exemption from registration provided by Section 3(a)(9) of the Securities
Act.
Indenture
B-4
2. METHOD OF PAYMENT. The Company will pay interest on this Series B
Senior Note (except defaulted interest) to the Person who is
registered Holder of this Series B Senior Note at the close of
business on the March 15 or September 15 next preceding the Interest
Payment Date, even if this Series B Senior Note is cancelled after
such record date and on or before such Interest Payment Date, except
as provided in Section 2.11 of the Indenture with respect to
defaulted interest. This Series B Senior Note shall be payable as to
principal, premium, if any, and interest at the office or agency of
the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of
interest may be made by check mailed to the Holder at its address
set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds shall be required with
respect to principal of, and interest, and premium, if any, on, all
Global Notes and to the Holder this Series B Senior Note if such
Holder shall have provided written wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, ▇▇▇▇▇ Fargo Bank, N. A., the
Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holder of this Series B Senior Note. The
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued this Series B Senior Note under and
pursuant to an Indenture dated as of September __, 2004
("Indenture") among the Company, the Subsidiary Guarantors and the
Trustee. The terms of this Series B Senior Note include those stated
in the Indenture and, if applicable, those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Section 17aaa-77bbbb) (the "TIA"). This Series
B Senior Note is subject to all such terms, and the Holder is
referred to the Indenture and such Act for a statement of such
terms. The series of senior notes, of which this Series B Senior
Note is one (collectively, as they may from time to time be amended,
supplemented and replaced pursuant to the terms and conditions of
this Series B Senior Note and the Indenture, the "Series B Senior
Notes"), are general unsecured Obligations of the Company limited to
$10,000,000 in original aggregate principal amount, plus amounts, if
any, sufficient to pay premium, if any, and interest on outstanding
Senior Notes as set forth in Paragraph 2 hereof and any additional
principal and interest contemplated by the second paragraph of
Paragraph 1 hereof.
5. OPTIONAL REDEMPTION.
This Series B Senior Note shall be redeemable at the option of
the Company, in whole or in part, at any time upon not less than 30
nor more than 60 days' notice, at par, and without premium, together
with accrued and unpaid interest hereon to the redemption date.
Indenture
B-5
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund
payments with respect to this Series B Senior Note.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Holder of this
Series B Senior Note will have the right to require the Company to
repurchase all or any part (equal to $1.00 or an integral multiple
thereof) of this Series B Senior Note pursuant to the offer
described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest thereon, to the date of purchase. Within
10 days following any Change of Control, the Company will mail a
notice to the Holder of this Series B Senior Note describing the
transaction or transactions that constitute the Change of Control
and setting forth the procedures governing the Change of Control
Offer required by the Indenture.
(b) Within 15 days after the receipt of any Net Proceeds from an
Asset Sale, the Company shall apply such Net Proceeds to (i) repay
Indebtedness under the Credit Facility (if Net Proceeds are from a
sale of assets of the Company or a Subsidiary other than a Foreign
Subsidiary), (ii) repay Indebtedness under the Foreign Credit
Facility (if Net Proceeds are from a sale of assets of a Foreign
Subsidiary), and (iii) offer to all Holders of Senior Notes (a "Net
Proceeds Offer") to purchase the maximum principal amount of Senior
Notes that may be purchased out of the Net Proceeds at an offer
price in cash equal to 100% of principal amount thereof, plus
accrued and unpaid interest to the date of purchase in accordance
with the procedures set forth in the Indenture, or (iv) any
Permitted Refinancing Indebtedness of the foregoing; provided,
however, the Company shall not be obligated to permanently reduce
availability under the Credit Facilities or the Foreign Credit
Facilities (or such Permitted Refinancing Indebtedness) in the event
Net Proceeds from an Asset Sale are used to pay off obligations
thereunder. If the aggregate principal amount of Senior Notes
surrendered by Holders thereof exceeds the amount of Net Proceeds,
the Trustee shall select the Series B Senior Notes to be purchased
on a pro rata basis.
(c) The Holders of the Series B Senior Notes that are the subject
of an offer to purchase will receive a Change of Control Offer or a
Net Proceeds Offer from the Company prior to any related purchase
date, and each such Holder may elect to have its Series B Senior
Notes purchased by completing the form titled "Option of Holder to
Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each
Holder whose Senior Notes are to be redeemed at its registered
address. Senior Notes in denominations larger than $1.00 may be
redeemed in part but only in whole
Indenture
B-6
multiples of $1.00, unless all of the Series B Senior Notes held by
a Holder are to be redeemed. On and after the redemption date,
interest ceases to accrue on the Series B Senior Notes or portions
thereof called for redemption.
9. COLLATERAL DOCUMENTS. In order to secure the due and punctual
payment of the principal of and interest on the Senior Notes and all
other amounts payable by the Company under the Indenture and the
Senior Notes when and as the same will be due and payable, whether
at maturity, by acceleration or otherwise, according to the terms of
the Senior Notes and the Indenture, the Company and the Subsidiary
Guarantors have granted security interests in and Liens on the
Collateral owned by the Company and the Subsidiary Guarantors to the
Trustee for the benefit of the Holders of Senior Notes pursuant to
the Indenture and the Collateral Documents. The Senior Notes will be
secured by Liens on and security interests in the Collateral and are
subject to certain permitted encumbrances. The Collateral is subject
to the prior lien of Bank One, N.A. securing amounts due under the
Credit Facility.
Each Holder, by accepting a Senior Note agrees to all of the terms
and provisions of the Collateral Documents, as the same may be
amended from time to time pursuant to the respective provisions
thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and
provisions of the Collateral Documents and the terms and provisions
of the Indenture will not be deemed for any purpose to be an
impairment of the security under the Indenture.
10. DENOMINATIONS, TRANSFER, EXCHANGE. This Series B Senior Note is in
registered form without coupons in initial denomination of $1.00 and
integral multiples of $1.00. The transfer of this Series B Senior
Note may be registered and this Series B Senior Note may be
exchanged as provided in the Indenture. The Registrar and the
Trustee may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents; and the Company may
require the Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or
register the transfer of this Series B Senior Note or portion of
this Series B Senior Note selected for redemption, except for the
unredeemed portion of this Series B Senior Note if it is being
redeemed in part. Also, it need not exchange or register the
transfer of this Series B Senior Note for a period of 15 days before
a selection of Senior Notes to be redeemed or during the period
between a record date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of this Series B Senior
Note may be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following
paragraphs, the Indenture, the Series B Senior Notes and the
Subsidiary Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of
the Series B Senior Notes then outstanding (including,
Indenture
B-7
without limitation, consents obtained in connection with a purchase
of or, tender offer or exchange offer for Senior Notes); and any
existing Default or Event of Default or compliance with any
provision of the Indenture, the Series B Senior Notes or the
Subsidiary Guarantees may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Senior
Notes (including consents obtained in connection with a tender offer
or exchange offer for Senior Notes). Notwithstanding anything to the
contrary in the immediately preceding sentence, without the consent
of the Holder of a Series B Senior Note affected by an amendment or
waiver, no amendment or waiver in respect of the Indenture, the
Series B Senior Notes and the Subsidiary Guarantees may (with
respect to any Senior Note or Subsidiary Guarantee held by a
non-consenting Holder):
(a) reduce the principal amount of any Senior Note whose Holder
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Senior Note or alter the provisions with respect to the
redemption of the Series B Senior Notes (other than provisions
relating to Sections 3.09, 4.10 and 4.14 of the Indenture);
(c) reduce the rate of or change the time for payment of interest
on any Senior Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on any Senior
Note (except a rescission of acceleration of the Series B
Senior Notes by the Holders of at least a majority in
aggregate principal amount of the Series B Senior Notes and a
waiver of the payment default that resulted from such
acceleration);
(e) make any Senior Note payable in money other than that stated
in the Series B Senior Notes;
(f) make any change in Section 6.04 or 6.07 of the Indenture;
(g) waive a redemption or repurchase payment with respect to any
Senior Note (other than a payment required by Section 4.10 or
4.14 of the Indenture);
(h) make any change in the amendment and waiver provisions of this
Paragraph 11 or of Article 9 of the Indenture; or
(i) except as provided in Sections 8.02, 8.03 and 10.04 of the
Indenture, release any of the Subsidiary Guarantors from their
obligations under the Subsidiary Guarantees or make any change
in the Subsidiary Guarantees that would adversely affect the
Holders of the Series B Senior Notes.
Indenture
B-8
Without the consent of any Holder of Senior Notes, the Company
and the Trustee may amend or supplement the Indenture, the
Subsidiary Guarantees or the Series B Senior Notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated
Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's or a
Subsidiary Guarantor's obligations to Holders of Senior Notes in the
case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of Senior
Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the
Commission in order to effect or maintain the qualification of the
Indenture under the TIA or to allow any Subsidiary Guarantor to
guarantee the Series B Senior Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Series B Senior
Notes; (ii) default in payment when due of the principal of or
premium, if any, on the Series B Senior Notes: (iii) failure by the
Company or any Subsidiary to comply with the provisions described in
Sections 3.09, 4.07, 4.09, 4.10, 4.14, 4.18 or 5.01 of the
Indenture; (iv) failure by the Company or any Subsidiary for 60 days
after notice from the Trustee or the Holders of at least 35% in
principal amount of the Series B Senior Notes then outstanding to
comply with its other agreements in the Indenture or the Series B
Senior Notes; (v) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date
of the Indenture, which default (A) (i) is caused by a failure to
pay when due at final stated maturity (giving effect to any grace
period related thereto) any principal of or premium, if any, or
interest on such Indebtedness (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express
maturity and (B) in each case, the principal amount of any such
Indebtedness as to which a Payment Default shall have occurred,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $5.0 million or more; (vi)
failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $5.0 million, which judgments are
not paid discharged or stayed within 60 days after their entry;
(vii) certain events of bankruptcy or insolvency with respect to the
Company, any of its Significant Subsidiaries or any group of
Subsidiaries that, taken together, would constitute a Significant
Subsidiary; and (viii) the termination of the Subsidiary Guarantee
of any Subsidiary Guarantor for any reason not permitted by the
Indenture, or the denial of any Person acting on behalf of any
Subsidiary Guarantor of its Obligations under any such Subsidiary
Guarantee.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 35% in principal amount of the then
outstanding Senior Notes may declare all the Series B Senior Notes
to be due and payable by notice in
Indenture
B-9
writing to the Company and the Trustee specifying the respective
Event of Default and that it is a "notice of acceleration" and the
same shall become immediately due and payable. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain
events of bankruptcy or insolvency with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding
Senior Notes will become due and payable without further action or
notice. Holders of the Series B Senior Notes may not enforce the
Indenture or the Series B Senior Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Senior Notes may direct the
Trustee in its exercise of any trust or power. The Holders of a
majority in aggregate principal amount of the Series B Senior Notes
then outstanding, by notice to the Trustee, may on behalf of the
Holders of all of the Series B Senior Notes waive any existing
Default or Event of Default and its consequences under the
Indenture, except a continuing Default or Event of Default in the
payment of interest on, or principal of, the Series B Senior Notes.
The Trustee may withhold from Holders of the Series B Senior Notes
notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in such
Holders' interest. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event
of Default to deliver to the Trustee a statement specifying such
Default or Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform
services for the Company, the Subsidiary Guarantors or their
respective Affiliates, and may otherwise deal with the Company, the
Subsidiary Guarantors or their respective Affiliates, as if it were
not the Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder, of the Company or any Subsidiary
Guarantor, as such, shall have any liability for any obligations of
the Company or any Subsidiary Guarantor under this Series B Senior
Note, the Indenture or the Subsidiary Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of this Series B Senior Note by accepting this
Series B Senior Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of
this Series B Senior Note and any Subsidiary Guarantee.
16. AUTHENTICATION. This Series B Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as
Indenture
B-10
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company
has caused a CUSIP number to be printed on this Series B Senior
Note, and the Trustee may use such CUSIP number in notices of
redemption as a convenience to the Holder hereof. No representation
is made as to the accuracy of such number either as printed on this
Series B Senior Note or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers
placed thereon.
The Company shall furnish to the Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Continental Global Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Indenture
B-11
ASSIGNMENT FORM
To assign this Series B Senior Note, fill in the form below: (I) or (we)
assign and transfer this Series B Senior Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________________ to transfer
this Series B Senior Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date: _________________
Your Signature: _________________________
(Sign exactly as your name appears on the
face of this Series B Senior Note)
Signature Guarantee:
Indenture
B-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Series B Senior Note purchased by the
Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of this Series B Senior Note
purchased by the Company pursuant to Section 4.10 or Section 4.14 of the
Indenture, state the amount you elect to have purchased:
$__________________
Your Signature: _________________________
(Sign exactly as your name appears on the
face of this Series B Senior Note)
Signature Guarantee:
Tax Identification No.:_____________
Signature Guarantee.
Indenture
B-13
SCHEDULE OF EXCHANGES OF SENIOR NOTES(3)
THE FOLLOWING EXCHANGES OF A PART OF THIS GLOBAL NOTE FOR OTHER SENIOR NOTES
HAVE BEEN MADE:
Principal Amount of
this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount of decrease or Trustee or Senior
Date of Exchange of this Global Note this Global Note (or increase) Note Custodian
---------------- ------------------- ---------------- ------------- --------------
_________________________________________________________________________________________________________________
----------
(3) This should be included if the Series B Senior Note is issued in
global form.
Indenture
B-14
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
___________, 2004 among Continental Global Group, Inc., a Delaware corporation
(the "Company"), Subsidiary Guarantor (the "New Subsidiary Guarantor"), a
subsidiary of the Company, and ▇▇▇▇▇ Fargo Bank, N.A., as trustee under the
indenture referred to below (the "Trustee"). Capitalized terms used herein and
not defined herein shall have the meaning ascribed to them in the Indenture (as
defined below).
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of __________, 2004, providing for the
issuance of (i) $65,000,000 in aggregate principal amount of 9% Series A Senior
Secured Notes due 2008 and (ii) $10,000,000 in aggregate principal amount of 13%
Series B Senior Secured Notes due 2008 (collectively, the "Senior Secured
Notes");
WHEREAS, Section 10.05 of the Indenture provides that under certain
circumstances the Company may cause, and Section 10.03 of the Indenture provides
that under certain circumstances the Company must cause, certain of its
subsidiaries to execute and deliver to the Trustee a supplemental indenture
pursuant to which such subsidiaries shall unconditionally guarantee all of the
Company's Obligations under the Senior Secured Notes pursuant to a Subsidiary
Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Senior Secured Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO SUBSIDIARY GUARANTEE. The New Subsidiary Guarantor
hereby agrees, jointly and severally with all other Subsidiary Guarantors, to
guarantee the Company's Obligations under the Senior Secured Notes and the
Indenture on the terms and subject to the conditions set forth in Article 10 of
the Indenture and to be bound by all other applicable provisions of the
Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of any Subsidiary
Guarantor, as such, shall have any liability for any obligations of the Company
or any Subsidiary Guarantor under the Senior Secured Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Indenture
C-1
Holder by accepting a Senior Secured Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Senior Secured Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Subsidiary
Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.
Dated: ____________________________ [NAME OF NEW SUBSIDIARY GUARANTOR]
By: ____________________________________
Name:
Title:
Dated: ____________________________ ▇▇▇▇▇ FARGO BANK, N.A.
as Trustee
By: ____________________________________
Name:
Title
Indenture
C-2
EXHIBIT D
SUBSIDIARY GUARANTEE
Reference is made to the Indenture (the "Indenture") dated as of
__________, 2004 among Continental Group, Inc. (the "Company"), Continental
Conveyor & Equipment Company ("Continental"), ▇▇▇▇▇▇▇ Conveyor Company
("▇▇▇▇▇▇▇" and together with Continental, the "Subsidiary Guarantors") and ▇▇▇▇▇
Fargo Bank, N.A. ("Trustee"). Capitalized terms used herein and not defined have
the same meanings given in the Indenture.
Subject to Section 10.05 of the Indenture, each Subsidiary Guarantor
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Senior Secured Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Senior Secured Notes and the Obligations of
the Company under the Senior Secured Notes or under the Indenture, that: (a) the
principal of, premium, if any, and interest on the Senior Secured Notes will be
promptly paid in full when due, subject to any applicable grace period, whether
at maturity, by acceleration, redemption or otherwise, and interest on overdue
principal, premium, if any, (to the extent permitted by law) and interest on any
interest, if any, on the Senior Secured Notes and all other payment Obligations
of the Company to the Holders or the Trustee under the Indenture or under the
Senior Secured Notes will be promptly paid in full and performed, all in
accordance with the terms thereof; and (b) in case of any extension of time of
payment or renewal of any Senior Secured Notes or any of such other payment
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration, redemption or
otherwise. Failing payment when so due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Subsidiary Guarantors will be
jointly and severally obligated to pay the same immediately.
The obligations of the Subsidiary Guarantor to the Holders and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article 10 of the Indenture are incorporated herein by reference. This
Subsidiary Guarantee is subject to release as and to the extent provided in
Section 10.04 of the Indenture.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon each Subsidiary Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Senior Secured Notes
and the Indenture and shall inure to the benefit of the successors and assigns
of the Trustee and the Holders and, in the event of any transfer or assignment
of rights by any Holder or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This is
a Subsidiary Guarantee of payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Senior Secured Note upon which
this Subsidiary Guarantee is
Indenture
D-1
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability shall be
limited to the lesser of (I) the aggregate amount of the Obligations of the
Company under the Senior Secured Notes and the Indenture and (II) the amount, if
any, which would not have (A) rendered such Subsidiary Guarantor "insolvent" (as
such term is defined in the Bankruptcy Law and in the Debtor and Creditor Law of
the State of New York) or (B) left such Subsidiary Guarantor with unreasonably
small capital at the time its Subsidiary Guarantee of the Senior Secured Notes
was entered into; provided that, it will be a presumption in any lawsuit or
other proceeding in which a Subsidiary Guarantor is a party that the amount
guaranteed pursuant to the Subsidiary Guarantee is the amount set forth in
clause (i) above unless any creditor, or representative of creditors of such
Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of such
Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of the Subsidiary Guarantor is limited to the amount set forth in
clause (ii) above. The Indenture provides that, in making any determination as
to the solvency or sufficiency of capital of a Subsidiary Guarantor in
accordance with the previous sentence, the right of such Subsidiary Guarantors
to contribution from other Subsidiary Guarantors and any other rights such
Subsidiary Guarantors may have, contractual or otherwise, shall be taken into
account.
Dated as of _____________, 2004 CONTINENTAL CONVEYOR & EQUIPMENT
COMPANY
By: ____________________________________
Name:
Title
Dated as of ____________, 2004 ▇▇▇▇▇▇▇ CONVEYOR COMPANY
By: ____________________________________
Name:
Title:
Indenture
D-2