EXHIBIT 4.1
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ADVANCED GLASSFIBER YARNS LLC
AND
AGY CAPITAL CORP.,
AS ISSUERS,
AND
THE BANK OF NEW YORK,
AS TRUSTEE
9-7/8% SENIOR SUBORDINATED NOTES DUE 2009
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INDENTURE
Dated as of January 21, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions................................................ 1
Section 1.2. Other Definitions.......................................... 23
Section 1.3. Incorporation by Reference of Trust Indenture Act.......... 24
Section 1.4. Rules of Construction...................................... 24
ARTICLE II
THE NOTES
Section 2.1. Form and Dating............................................ 25
Section 2.2. Execution and Authentication............................... 27
Section 2.3. Registrar and Paying Agent................................. 28
Section 2.4. Deposit of Monies; Paying Agent to Hold Money in Trust..... 28
Section 2.5. Noteholder Lists........................................... 29
Section 2.6. Book-Entry Provisions...................................... 29
Section 2.7. Legends.................................................... 30
Section 2.8. Transfer and Exchange...................................... 30
Section 2.9. Mutilated, Destroyed, Lost or Stolen Notes................. 36
Section 2.10. Temporary Notes............................................ 37
Section 2.11. Cancellation............................................... 37
Section 2.12. Payment of Interest; Defaulted Interest.................... 37
Section 2.13. Computation of Interest.................................... 38
Section 2.14. Add On Notes............................................... 39
Section 2.15. CUSIP Numbers.............................................. 39
ARTICLE III
COVENANTS
Section 3.1. Payment of Notes........................................... 39
Section 3.2. Maintenance of Office or Agency............................ 40
Section 3.3. Corporate Existence........................................ 40
Section 3.4. Payment of Taxes and Other Claims.......................... 40
Section 3.5. Compliance Certificate..................................... 41
Section 3.6 Maintenance of Properties.................................. 41
Section 3.7. Further Instruments and Acts............................... 41
Section 3.8. Waiver of Stay, Extension or Usury Laws.................... 41
Section 3.9. Limitation on Incurrence of Additional Indebtedness........ 42
Section 3.10. Limitation on Restricted Payments.......................... 42
Section 3.11. Limitation on Asset Sales.................................. 45
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Section 3.12. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries..................... 47
Section 3.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries............................... 47
Section 3.14. Designation of Unrestricted Subsidiaries.................... 48
Section 3.15. Limitation on Layered Indebtedness.......................... 49
Section 3.16. Limitation on Liens......................................... 49
Section 3.17. Limitation on Transactions with Affiliates.................. 50
Section 3.18. Change of Control........................................... 50
Section 3.19. Conduct of Business; Limitation on Activities of Capital.... 51
Section 3.20. Reports to Holders.......................................... 51
Section 3.21. Payments for Consent........................................ 52
ARTICLE IV
SUCCESSOR COMPANY
Section 4.1. Merger, Consolidation and Sale of Assets.................... 52
ARTICLE V
REDEMPTION OF NOTES
Section 5.1. Optional Redemption......................................... 54
Section 5.2. Applicability of Article.................................... 54
Section 5.3. Election to Redeem; Notice to Trustee....................... 54
Section 5.4. Notice of Redemption........................................ 55
Section 5.5. Section Deposit of Redemption Price......................... 56
Section 5.6. Notes Payable on Redemption Date............................ 56
Section 5.7. Notes Redeemed in Part...................................... 56
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default........................................... 56
Section 6.2. Acceleration................................................ 58
Section 6.3. Other Remedies.............................................. 59
Section 6.4. Waiver of Past Defaults..................................... 59
Section 6.5. Control by Majority......................................... 59
Section 6.6. Limitation on Suits......................................... 60
Section 6.7. Rights of Holders to Receive Payment........................ 60
Section 6.8. Collection Suit by Trustee.................................. 60
Section 6.9. Trustee May File Proofs of Claim............................ 60
Section 6.10. Priorities.................................................. 61
Section 6.11. Undertaking for Costs....................................... 61
ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee........................................... 61
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Section 7.2. Rights of Trustee........................................... 63
Section 7.3. Individual Rights of Trustee................................ 63
Section 7.4. Trustee's Disclaimer........................................ 63
Section 7.5. Notice of Defaults.......................................... 63
Section 7.6. Reports by Trustee to Holders............................... 64
Section 7.7. Compensation and Indemnity.................................. 64
Section 7.8. Replacement of Trustee...................................... 65
Section 7.9. Successor Trustee by Merger................................. 65
Section 7.10. Eligibility; Disqualification............................... 66
Section 7.11. Preferential Collection of Claims Against Issuers........... 66
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1. Termination of the Issuers' Obligations..................... 66
Section 8.2. Legal Defeasance and Covenant Defeasance.................... 67
Section 8.3. Conditions to Defeasance.................................... 68
Section 8.4. Application of Trust Money.................................. 70
Section 8.5. Repayment to Issuers........................................ 70
Section 8.6. Indemnity for U.S. Government Obligations................... 70
Section 8.7. Reinstatement............................................... 70
ARTICLE IX
AMENDMENTS
Section 9.1. Without Consent of Holders.................................. 70
Section 9.2. With Consent of Holders..................................... 71
Section 9.3. Compliance with Trust Indenture Act......................... 72
Section 9.4. Revocation and Effect of Consents and Waivers............... 72
Section 9.5. Notation on or Exchange of Notes............................ 73
Section 9.6. Trustee to Sign Amendments.................................. 73
ARTICLE X
SUBORDINATION OF THE NOTES
Section 10.1. Agreement to Subordinate................................... 73
Section 10.2. Liquidation, Dissolution, Bankruptcy....................... 74
Section 10.3. Default on Senior Indebtedness of the Issuers.............. 74
Section 10.4. Acceleration of Payment of Notes........................... 75
Section 10.5. When Distribution Must Be Paid Over........................ 75
Section 10.6. Subrogation................................................ 75
Section 10.7. Relative Rights............................................ 75
Section 10.8. Subordination May Not Be Impaired by Issuers............... 76
Section 10.9. Rights of Trustee and Paying Agent......................... 76
Section 10.10. Distribution or Notice to Representative................... 76
Section 10.11. Article X Not to Prevent Events of Default or Limit
Right to Accelerate................................... 76
Section 10.12. Trust Moneys Not Subordinated.............................. 76
Section 10.13. Trustee Entitled to Rely................................... 77
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Section 10.14. Trustee to Effectuate Subordination.......................... 77
Section 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness..... 77
Section 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions................................ 77
ARTICLE XI
GUARANTEE
Section 11.1. Guarantee.................................................... 78
Section 11.2. Limitation on Liability; Termination, Release and Discharge.. 79
Section 11.3. Right of Contribution........................................ 80
Section 11.4. No Subrogation............................................... 80
Section 11.5. Additional Note Guarantees................................... 81
ARTICLE XII
SUBORDINATION OF THE NOTE GUARANTEES
Section 12.1. Agreement to Subordinate..................................... 81
Section 12.2. Liquidation, Dissolution, Bankruptcy......................... 81
Section 12.3. Default on Senior Indebtedness of Note Guarantors............ 82
Section 12.4. Demand for Payment........................................... 83
Section 12.5. When Distribution Must Be Paid Over.......................... 83
Section 12.6. Subrogation.................................................. 83
Section 12.7. Relative Rights.............................................. 83
Section 12.8. Subordination May Not Be Impaired by Note Guarantors......... 83
Section 12.9. Rights of Trustee and Paying Agent........................... 84
Section 12.10. Distribution or Notice to Representative..................... 84
Section 12.11. Article XII Not to Prevent Defaults Under the Note
Guarantees or Limit Right to Demand Payment............. 84
Section 12.12. Trustee Entitled to Rely..................................... 84
Section 12.13. Trustee to Effectuate Subordination.......................... 85
Section 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness
of Note Guarantors...................................... 85
Section 12.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions................................ 85
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Trust Indenture Act Controls................................. 85
Section 13.2. Notices...................................................... 86
Section 13.3. Communication by Holders with Other Holders.................. 86
Section 13.4. Certificate and Opinion as to Conditions Precedent........... 86
Section 13.5. Statements Required in Certificate or Opinion................ 87
Section 13.6. Rules by Trustee, Paying Agent and Registrar................. 87
Section 13.7. GOVERNING LAW, ETC........................................... 87
Section 13.8. No Recourse Against Others................................... 88
Section 13.9. Successors................................................... 88
Section 13.10. Multiple Originals........................................... 88
Section 13.11. Severability................................................. 88
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Section 13.12. Qualification of Indenture.......................... 88
Section 13.13. Table of Contents; Headings......................... 88
EXHIBIT A FORM OF INITIAL NOTE
EXHIBIT B FORM OF EXCHANGE NOTE
EXHIBIT C FORM OF TRANSFER CERTIFICATE FOR TRANSFER TO QIBS
EXHIBIT D FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS
TO INSTITUTIONAL ACCREDITED INVESTORS
EXHIBIT E FORM OF CERTIFICATE TO BE DELIVERED BY HOLDERS OF BENEFICIAL
INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTE
EXHIBIT F FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
EXHIBIT G FORM OF NOTE GUARANTEE
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) ........................................... 7.10
(a)(2) ........................................... 7.10
(a)(3) ........................................... N.A.
(a)(4) ........................................... N.A.
(b) ........................................... 7.8; 7.10
(c) ........................................... N.A.
311(a) ........................................... 7.11
(b) ........................................... 7.11
(c) ........................................... N.A.
312(a) ........................................... 2.5
(b) ........................................... 13.3
(c) ........................................... 13.3
313(a) ........................................... 7.6
(b)(1) ........................................... N.A.
(b)(2) ........................................... 7.6
(c) ........................................... 7.6
(d) ........................................... 7.6
314(a) ........................................... 3.20
(b) ........................................... N.A.
(c)(1) ........................................... 13.4
(c)(2) ........................................... 13.4
(c)(3) ........................................... N.A.
(d) ........................................... N.A.
(e) ........................................... 13.5
315(a) ........................................... 7.2
(b) ........................................... 13.2
(c) ........................................... 7.1
(d) ........................................... 7.1
(e) ........................................... 6.11
316(a)(last sentence) ........................................... 1.1
(a)(1)(A) ........................................... 6.5
(a)(1)(B) ........................................... 6.4
(a)(2) ........................................... N.A.
(b) ........................................... 6.7
317(a)(1) ........................................... 6.8
(a)(2) ........................................... 6.9
(b) ........................................... 2.4
318(a) ........................................... 13.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
vi
EXECUTION COPY
INDENTURE dated as of January 21, 1999, between Advanced Glassfiber
Yarns LLC (the "Company") and AGY Capital Corp. ("Capital" and, together with
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the Company, the "Issuers"), as joint and several obligors, and The Bank of New
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York, as trustee (the "Trustee").
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Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the holders (the "Holders" or
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"Noteholders") of: (i) the Issuers' 9-7/8% Senior Subordinated Notes due 2009
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on the date hereof (the "Initial Notes"), (ii) any Add On Notes that may be
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issued after the Issue Date (all such securities in clauses (i) and (ii) being
referred to collectively as "Initial Notes") and (iii) if and when issued in
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exchange for Initial Notes as provided in the Registration Rights Agreement or a
similar agreement relating to Initial Notes (as hereinafter defined), the
Issuers' 9-7/8% Senior Subordinated Notes due 2009 (the "Exchange Notes", and
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together with the Initial Notes, the "Notes").
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
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"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary or
at the time it merges or consolidates with the Company or any of its Restricted
Subsidiaries or is assumed in connection with the acquisition of assets from
such Person and in each case not Incurred in connection with, or in anticipation
or contemplation of such acquisition, merger or consolidation. Such
Indebtedness shall be deemed to have been Incurred at the time such Person
becomes a Restricted Subsidiary or at the time it merges or consolidates with
the Company or a Restricted Subsidiary or at the time such Indebtedness is
assumed in connection with the acquisition of assets from such Person.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person.
The term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling," "controlled by" and "under common control with"
have meanings correlative of the foregoing; provided, however, that beneficial
ownership of 10% or more of the Voting Stock of a Person shall be deemed to be
control.
"AGY Holdings" means AGY Holdings, Inc., a Delaware corporation.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary, or shall be merged with or into the Company or
any Restricted Subsidiary, or (b) the acquisition by the Company or any
Restricted Subsidiary of the assets of any Person (other than a Subsidiary of
the Company) which constitute all or substantially all of the assets of such
Person
or comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, assignment or other transfer for value by the Company or any of its
Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any
Person other than the Company or a Restricted Subsidiary (including a Person
that is or will become a Restricted Subsidiary immediately after such sale,
issuance, conveyance, transfer, assignment or other transfer for value) of (a)
any Capital Stock of any Restricted Subsidiary; or (b) any other property or
assets (other than cash, Cash Equivalents or Capital Stock) of the Company or
any Restricted Subsidiary other than in the ordinary course of business;
provided, however, that Asset Sale shall not include, (i) the sale, conveyance,
disposition or other transfer of all or substantially all of the assets of the
Company and its Restricted Subsidiaries as permitted under Section 4.1 (ii) any
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sale of Capital Stock in, or Indebtedness or other securities of an Unrestricted
Subsidiary, (iii) a disposition of inventory or leases in the ordinary course of
business, (iv) dispositions of assets in any fiscal year with a Fair Market
Value not to exceed $2.0 million in the aggregate, (v) for purposes of Section
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3.11 only, the making of a Permitted Investment or Restricted Payment, and (vi)
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a disposition in the ordinary course of business of obsolete or worn-out
equipment.
"Asset Sale Transaction" means Asset Sales and, whether or not
constituting an Asset Sale, (i) any sale or other disposition of Capital Stock
and (ii) any sale or other disposition excluded from the definition of Asset
Sale by clause (b)(i) or (v) of such definition.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any other
applicable federal, state, or foreign bankruptcy, insolvency or similar law as
nor or hereafter constituted.
"Board of Directors" means (i) in the case of a Person that is a
corporation, the board of directors of such Person or any committee authorized
to act therefor and (ii) in the case of any other Person, the board of
directors, management committee or similar governing body or any authorized
committee thereof responsible for the management of the business and affairs of
such Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
(or person performing a similar function) to have been duly adopted by the Board
of Directors of such Person and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in New York City.
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
2
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all membership,
partnership or other equity or ownership interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at Least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $500.0 million; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"Certificated Notes" means Notes held in certificated form, other than
Global Notes, including IAI Notes.
"Change of Control" means the occurrence of one or more of the
following events:
(i) Prior to the first Public Equity Offering, (A) the Permitted
Holders cease to be the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, in the aggregate at
least of 51% of the total voting power of the Voting Stock of the Company,
(B) any Permitted Holder ceases to be the "beneficial owner," directly or
indirectly of at least 10% of the total voting power of the Voting Stock of
the Company or (C) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the "beneficial owner" (except that for purposes of this clause (C)
such person shall be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of a percentage of the total voting power of the Voting Stock
of the Company that is equal to or greater than the percentage of the total
voting power of the Voting Stock of the Company beneficially owned,
directly or indirectly, by any one Permitted Holder, whether, in the case
of each of clause (A), (B), or (C), as a result of the
3
issuance of securities of the Company or any parent company of the Company,
any merger, consolidation, liquidation or dissolution of the Company, any
direct or indirect transfer of securities by the Company or otherwise (for
purposes of this clause (i) and clause (ii) below, the Permitted Holders
shall be deemed to beneficially own any Voting Stock of a corporation (the
"specified corporation") held by any other corporation (the "parent
corporation") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate at least 51% of the
voting power of the Voting Stock of the parent corporation);
(ii) subsequent to the first Public Equity Offering, (A) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than one or more Permitted Holders, is or becomes the
beneficial owner (as defined in Rule 13d-3 and 13d-5 under the Exchange
Act, except that for purposes of this clause (ii) such person shall be
deemed to have "beneficial ownership" of all shares that any such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 35%
of the total voting power of the Voting Stock of the Company and (B) the
Permitted Holders "beneficially own" (as defined in this clause (ii)),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of the Company than such other person (for
the purposes of this clause (ii)), such other person shall be deemed to
beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person is the beneficial owner (as
defined in this clause (ii)), directly or indirectly, of more than 35% of
the voting power of the Voting Stock of such parent corporation and the
Permitted Holders "beneficially own" (as defined in this clause (ii)),
directly or indirectly, in the aggregate a lesser percentage of the voting
power of the Voting Stock of such parent corporation);
(iii) during any period of two consecutive years (or, in the case
this event occurs within the first two years after the Issue Date, such
shorter period as shall have begun on the Issue Date), individuals who at
the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office;
(iv) the Company consolidates with, or merges with or into, another
Person (other than the Company or a Wholly Owned Restricted Subsidiary) or
the Company or any of its Restricted Subsidiaries sell, conveys, assigns,
transfers, leases or otherwise disposes of all or substantially all of the
assets of the Company and its Restricted Subsidiaries (determined on a
consolidated basis for the Company and its Restricted Subsidiaries) to any
Person (other than the Company or any Wholly Owned Restricted Subsidiary),
other than any such transaction where immediately after such transaction
the Person or Persons that "beneficially owned" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act,
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except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time) immediately
prior to such transaction, directly or indirectly, a majority of the total
voting power of the then outstanding Voting Stock of the Company
"beneficially own" (as so determined), directly or indirectly, a majority
of the total voting power of the then outstanding Voting Stock of the
surviving or transferee Person;
(v) CSG becomes an Affiliate of GHC if such affiliation results in
the termination of the various intellectual property agreements between
▇▇▇▇▇ Corning and the Company; or
(vi) the Non-Compete Agreement ceases to be in full force and effect
at any time prior to September 30, 2003.
"Closing Date" means, with respect to any Initial Notes, the date on
which such Initial Notes are originally issued.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, or any
successor agency thereto with respect to the regulation or registration of
securities.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) Consolidated Income Tax Expense for such period;
(ii) Consolidated Interest Expense for such period; and (iii) Consolidated Non-
cash Charges for such period; less (A) all non-cash items increasing
Consolidated Net Income for such period and (B) all cash payments during such
period relating to non-cash charges that were added back in determining
Consolidated EBITDA in any prior period.
"Consolidated Fixed Charge Coverage Ratio" means, as of any date of
determination, the ratio of the aggregate amount of Consolidated EBITDA for the
four most recent full fiscal quarters for which financial statements are
available ending prior to the date of such determination (the "Four Quarter
Period") to Consolidated Fixed Charges for such Four Quarter Period. In
addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the Incurrence or repayment of any Indebtedness of the
Company or any of its Restricted Subsidiaries (and the application of the
proceeds thereof), including the Incurrence of any Indebtedness (and the
application of the proceeds thereof) giving rise to the need to make such
determination, occurring
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during or after such Four Quarter Period and on or prior to such date of
determination, as if such Incurrence or repayment, as the case may be (and the
application of the proceeds thereof), occurred on the first day of such Four
Quarter Period and (ii) any Asset Sale Transactions or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the need to
make such determination as a result of the Company or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) Incurring Acquired Indebtedness and including,
without limitation, by giving pro forma effect to any Consolidated EBITDA
(provided that such pro forma Consolidated EBITDA shall be calculated in a
manner consistent with the exclusions in the definition of "Consolidated Net
Income" but without giving effect to clause (c) of the definition of
Consolidated Net Income) attributable to the assets which are the subject of the
Asset Sale Transaction or Asset Acquisition during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to the last
day of the Four Quarter Period and on or prior to such date of determination, as
if such Asset Sale Transaction or Asset Acquisition (including the Incurrence of
any such Acquired Indebtedness) occurred on the first day of the Four Quarter
Period. If the Company or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the Incurrence of such guaranteed Indebtedness as if the
Company or any of its Restricted Subsidiaries had directly Incurred such
guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed
Charges" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the date of determination
and which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on such date of determination; (2) if interest on any
Indebtedness actually Incurred on such date of determination may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on such date of determination will be deemed to have been in effect
during the Four Quarter Period; and (3) notwithstanding clause (1) above,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements. For purposes of determining the Consolidated Fixed Charges Coverage
Ratio at any time prior to October 1, 1999, Consolidated EBITDA and Consolidated
Fixed Charges shall be calculated as follows: for the fiscal quarter ending
December 31, 1998, Consolidated EBITDA and Consolidated Fixed Charges shall
equal Consolidated EBITDA and Consolidated Fixed Charges, respectively, for such
fiscal quarter; for the fiscal quarter ending March 31, 1999, Consolidated
EBITDA and Consolidated Fixed Charges shall equal Consolidated EBITDA and
Consolidated Fixed Charges, respectively, for the two fiscal quarters then
ending; and for the fiscal quarter ending June 30, 1999, Consolidated EBITDA and
Consolidated Fixed Charges shall equal Consolidated EBITDA and Consolidated
Fixed Charges, respectively, for the three fiscal quarters then ending.
"Consolidated Fixed Charges" means, for any period the sum, without
duplication, of (i) Consolidated Interest Expense, plus (ii) the product of (x)
the amount of all dividend payments on any series of Preferred Stock of the
Company (other than dividends paid in Qualified Capital Stock) paid, accrued or
scheduled to be paid or accrued during such period
6
times (y) a fraction, the numerator of which is one and the denominator of which
is one minus the sum of (A) the maximum federal corporate income tax rate in
effect during such taxable year and (B) six percent.
"Consolidated Income Tax Expense" means, with respect to the Company
for any period, the product of (i) the net income of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP and (ii) the sum of (x) the maximum federal corporate
income tax rate in effect during such period and (y) six percent.
"Consolidated Interest Expense" means, for any period, the sum of,
without duplication: (i) the aggregate of cash and non-cash interest expense of
the Company and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, and in any event shall include,
without limitation (whether or not interest expense in accordance with GAAP),
(a) any amortization of debt discount and any amortization or write off of
deferred financing costs, (b) the net costs under Hedging Obligations related to
Indebtedness (including amortization of fees), (c) all capitalized interest, (d)
the interest portion of any deferred payment obligation, (e) commissions,
discounts and other fees and charges Incurred in respect of letters of credit or
bankers' acceptances and (f) any interest expense on Indebtedness of another
Person that is guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on the assets of such Person or one of its Restricted
Subsidiaries (whether or not such guarantee or Lien is called upon); and (ii)
the interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by the Company and its Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
on a consolidated basis, determined in accordance with GAAP; provided, however,
that there shall be excluded therefrom (a) net after-tax gains and losses
(assuming for tax purposes that no special allocations are made to any member of
the Company under Section 743 of the Code) from Asset Sale Transactions or
abandonments of reserves relating thereto, (b) net after-tax items (assuming for
tax purposes that no special allocations are made to any member of the Company
under Section 743 of the Code) classified as extraordinary or nonrecurring gains
or losses, (c) the net income of any Person acquired in a "pooling of interests"
transaction accrued prior to the date it becomes a Restricted Subsidiary or is
merged or consolidated with the Company or any Restricted Subsidiary, (d) the
net income (but not loss) of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by that Restricted Subsidiary
of that income is restricted by contract, operation of law or otherwise, (e) the
net income of any Person, other than a Restricted Subsidiary, except to the
extent of cash dividends or distributions paid to the Company or to a Restricted
Subsidiary by such Person, (f) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
Consolidated Net Income accrued at any time following the Issue Date and (g) all
gains and losses from the cumulative effect of any change in accounting
principles.
7
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP (excluding any such charge which requires an accrual of or
a reserve for cash charges for any future period).
"CSG" means Compagnie Saint-Gobain, a corporation organized under the
laws of France.
"Currency Agreement" means, in respect of any Person, any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which, with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Designated Senior Indebtedness" means, (a) in respect of the Company,
the Senior Credit Facility and any other Senior Indebtedness of the Company
which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $25.0 million and is specifically
designated by the Company in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" and (b) in respect of any Note
Guarantor, the Senior Credit Facility and any guarantee by such Note Guarantor
of Indebtedness of the Company referred to in clause (a) and (c) any other
Senior Indebtedness of such Note Guarantor which, at the date of determination,
has an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $25.0
million and is specifically designated by such Note Guarantor in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness."
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof, in any case, on or prior to the 91st
day after the final maturity date of the Notes.
"DTC" means The Depository Trust Company, its nominees and their
respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
8
"Exchange Offer Registration Statement" has the meaning assigned to it
in the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any such asset or assets may be determined conclusively by the Board of
Directors of the Company acting in good faith, and shall be evidenced by a Board
Resolution.
"Foreign Subsidiary" means, with respect to any Person, any direct or
indirect Subsidiary of such Person that is organized under the laws of any
jurisdiction outside the United States, any state thereof or the District of
Columbia.
"Four Quarter Period" has the meaning set forth in the definition of
"Consolidated Fixed Charge Coverage Ratio" above.
"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 may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"GHC" means Glass Holdings Corp., a Delaware corporation.
"GPI" means Groupe Porcher Industries, a corporation organized under
the laws of France.
"Hedging Obligations" means the obligations of any Person pursuant to
any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered in the Note Register.
"IAI" means an institutional "accredited investor," as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act, other than a QIB.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation on the balance sheet of such Person (and
"Incurrence," "Incurred" and "Incurring" shall have meanings correlative to the
foregoing). Indebtedness of any Person or any of its Subsidiaries existing at
the time such Person becomes a Restricted Subsidiary (or is merged into or
consolidated with the Company or any Restricted Subsidiary), whether or not such
Indebtedness was Incurred in connection with, as a result of, or in
contemplation of such Person becoming a Restricted Subsidiary (or being
9
merged into or consolidated with the Company or any Restricted Subsidiary),
shall be deemed Incurred at the time any such Person becomes a Restricted
Subsidiary or merges into or consolidates with the Company or any Restricted
Subsidiary. Accrual of interest, the accretion of accreted value and the payment
of regularly scheduled interest in the form of additional Indebtedness of the
same instrument will not be deemed to be an Incurrence of Indebtedness for
purposes of Section 3.9.
-----------
"Indebtedness" means with respect to any Person, without duplication,
(i) the principal amount (or, if less, the accreted value) of all obligations of
such Person for borrowed money, (ii) the principal amount (or, if less, the
accreted value) of all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all Capitalized Lease
Obligations of such Person, (iv) all obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations and all obligations under any title retention agreement (but
excluding trade accounts payable and other accrued liabilities arising in the
ordinary course of business that are not overdue by 90 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted), (v) all obligations of such Person for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations of such Person in
respect of Indebtedness referred to in clauses (i) through (v) above and clause
(viii) below, (vii) all Indebtedness of any other Person of the type referred to
in clauses (i) through (vi) which is secured by any Lien on any property or
asset of such Person, the amount of such Indebtedness being deemed to be the
lesser of the Fair Market Value of such property or asset or the amount of the
Indebtedness so secured, (viii) all obligations under Hedging Obligations of
such Person and (ix) all Disqualified Capital Stock issued by such Person with
the amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any.
For purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be the Fair Market Value thereof.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Financial Advisor" means an accounting firm, appraisal
firm, investment banking firm or consultant to Persons engaged in a Permitted
Business, in each case, of nationally recognized standing that is, in the
judgment of the Company's Board of Directors, qualified to perform the task for
which it has been engaged and which is independent in connection with the
relevant transaction.
"Interest Rate Agreement" of any Person means any interest rate
protection agreement (including, without limitation, interest rate swaps, caps,
floors, collars, derivative instruments and similar agreements) and/or other
types of interest hedging agreements.
10
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude accounts receivable or deposits
arising in the ordinary course of business. For purposes of Section 3.10,
------------
"Investment" shall include and be valued at the Fair Market Value of the net
assets of any Restricted Subsidiary at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the total amount of the
Company's "Investments" in such Subsidiary made prior to or at the time of such
redesignation less (y) that portion of the Fair Market Value of the net assets
of such Subsidiary at the time that such Subsidiary is so re-designated a
Restricted Subsidiary that is proportionate to the Company's share of the equity
interest in such Subsidiary; and (ii) any property transferred to or from an
Unrestricted Subsidiary will be valued at its Fair Market Value at the time of
such transfer. If the Company or any Restricted Subsidiary sells or otherwise
disposes of any Common Stock of a Restricted Subsidiary (including any issuance
and sale of Capital Stock by a Restricted Subsidiary) such that, after giving
effect to any such sale or disposition, such Restricted Subsidiary would cease
to be 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 Common Stock of such Restricted Subsidiary not sold or disposed of.
"Issue Date" means January 21, 1999.
"JH" means Jefferson Holdings, Inc., a Delaware corporation.
"JV Contract" means all supply, purchase, service and management
agreements, real property and equipment leases, co-location and space-sharing
and allocation agreements and requirements and off-take contracts and agreements
and other like agreements between or among the Company and the LLC Members and
their Affiliates existing on the Issue Date, together with all renewals,
extensions and amendments thereof, provided, that such renewals, extensions or
amendments do not materially change the rights and obligations of the Company or
any of its Restricted Subsidiaries, and all other such agreements entered into
after the Issue Date between or among the Company, any Subsidiary thereof, the
LLC Members and their Affiliates.
"Keep-Well Agreement" means the Keep-Well Agreement dated as of
September 30, 1998, between ▇▇▇▇▇ Corning and the Company, as in effect on the
Issue Date.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"LLC Members" means collectively, JH and AGY Holdings and,
individually, either of them.
11
"LLC Interest Sale and Purchase Agreement" means the LLC Interest Sale
and Purchase Agreement dated as of July 31, 1998 among ▇▇▇▇▇ Corning, the
Company and GHC, as in effect on the Issue Date.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents, including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents received by the Company or any of its Restricted Subsidiaries from
such Asset Sale, net of (a) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), (b) the amount of tax
distributions reasonably estimated to be required to be made to JH and AGY
Holdings as a result of such Asset Sale within two years of the date of such
Asset Sale, (c) repayment of Indebtedness that is required to be repaid in
connection with such Asset Sale, (d) appropriate amounts to be provided by the
Company or any Restricted Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the Company or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension and other post-
employment benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"Non-Compete Agreement" means the Non-Compete Agreement dated as of
September 30, 1998, by and among GPI, GHC, ▇▇▇▇▇ Corning and the Company, as in
effect on the Issue Date.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Note Custodian" means, with respect to each Global Note, the
custodian with respect to such Global Note (as appointed by DTC), or any
successor Person thereto and shall initially be the Trustee.
"Note Guarantee" means the guarantee of the Notes by each Note
Guarantor under Article 11 hereof.
"Note Guarantor" means all direct and indirect Restricted
Subsidiaries, other than Capital and Foreign Subsidiaries, but including,
without limitation, upon a Revocation of the Designation of a Subsidiary as an
Unrestricted Subsidiary.
"Note Register" means the register of Notes, maintained by the
Trustee, pursuant to Section 2.3.
-----------
"Obligations" means, with respect to any Indebtedness, any principal,
interest (including, without limitation, Post-Petition Interest), penalties,
fees, indemnifications, reimbursements, including, in the case of the Notes and
the Note Guarantees in respect thereof, damages, and other liabilities payable
under the documentation governing such Indebtedness.
12
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Treasurer, the Controller or the Secretary of any Person.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the chief executive officer, the president or any vice
president of such Person and the chief financial officer or any treasurer of
such Person.
"Operating Agreement" means the Amended and Restated Limited Liability
Company Operating Agreement for the Company dated as of September 30, 1998, by
and between JH and AGY Holdings, as amended and in effect on the Issue Date.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Issuers or the Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Issuers) in trust or set aside
and segregated in trust by the Issuers (if the Company shall act as its own
Paying Agent) for the Holders of such Notes; provided that, if the Notes
are to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Notes which have been paid pursuant to Section 2.9 or in
-----------
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect
of which there shall have been presented to the Trustee proof satisfactory
to it that such Notes are held by a bona fide purchaser in whose hands such
Notes are valid obligations of the Issuers; and
(iv) Notes which have been defeased pursuant to Article VIII;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Issuers or any other obligor upon the Notes or any Affiliate of either of
the Issuers or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes which a Trust Officer of the Trustee actually
knows to be so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
13
such Notes and that the pledgee is not either of the Issuers or any other
obligor upon the Notes or any Affiliate of either of the Issuers or of such
other obligor.
"Permitted Business" means the business or businesses conducted by the
Company and its Restricted Subsidiaries as of the Issue Date and any business
ancillary or complementary or reasonably related thereto.
"Permitted Holders" means any of ▇▇▇▇▇ Corning and its Affiliates and
GHC and GPI and their Affiliates.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness in respect of the Notes issued on the Issue Date
and Exchange Notes and any replacement Notes therefor, and the Note
Guarantees in respect thereof;
(ii) guarantees by any Note Guarantor of Indebtedness of the Company
other than the Notes; provided, however, that if any such guarantee is of
Subordinated Indebtedness, then the Note Guarantee of such Note Guarantor
shall be senior to such Note Guarantor's guarantee of such Subordinated
Indebtedness;
(iii) Indebtedness Incurred pursuant to the Senior Credit Facility in
an aggregate principal amount at any time outstanding not to exceed $315.0
million (including any amounts Incurred pursuant to clause (xiv) of this
definition) less the amount of any permanent prepayments of Indebtedness
made with the Net Cash Proceeds of an Asset Sale pursuant to the third
sentence of Section 3.11;
------------
(iv) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date, reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid
or permanent reductions thereon;
(v) Hedging Obligations entered into in the ordinary course of
business and not for speculative purposes;
(vi) Indebtedness of any Restricted Subsidiary owed to and held by
the Company or any Note Guarantor for so long as such Indebtedness is held
by the Company or such Note Guarantor, in each case subject to no Lien
securing Indebtedness other than Permitted Liens; provided, however, that
if as of any date any Person other than the Company or any Note Guarantor
holds any such Indebtedness or holds a Lien in respect of such Indebtedness
securing Indebtedness other than Permitted Liens, such date shall be deemed
the Incurrence of Indebtedness not constituting Permitted Indebtedness by
the issuer of such Indebtedness;
(vii) Indebtedness of the Company owed to and held by any Note
Guarantor that is unsecured and subordinated in right of payment to the
payment and performance of the Company's obligations under any Senior
Indebtedness, this Indenture, the Notes and the
14
Note Guarantees and subject to no Lien securing Indebtedness other than
Permitted Liens; provided, however, that if as of any date any Person other
than any Note Guarantor owns or holds any such Indebtedness or any Person
other than any Note Guarantor holds a Lien in respect of such Indebtedness
securing Indebtedness other than Permitted Liens, such date shall be deemed
the Incurrence of Indebtedness not constituting Permitted Indebtedness by
the Company;
(viii) Indebtedness of the Company or any of its Restricted
Subsidiaries arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except
in the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business; provided, however, that such Indebtedness is
extinguished within two business days of Incurrence;
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or any Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations in
connection with self-insurance or similar requirements in the ordinary
course of business;
(x) Refinancing Indebtedness in respect of Indebtedness (other than
Permitted Indebtedness) Incurred pursuant to Section 3.9 or Indebtedness
-----------
Incurred pursuant to clause (i) or (iv) of this definition of Permitted
Indebtedness;
(xi) Capitalized Lease Obligations and Purchase Money Indebtedness
of the Company and its Restricted Subsidiaries that do not exceed $10.0
million in the aggregate at any one time outstanding;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred in connection with the
disposition of any business, assets, or Restricted Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose
of financing such acquisition; provided, that the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received by the Company and the Restricted
Subsidiary in connection with such disposition;
(xiii) Additional Indebtedness of the Company or any Restricted
Subsidiary in an aggregate principal amount not to exceed $10.0 million at
any one time outstanding (which amount may, but need not, be Incurred in
whole or in part under the Senior Credit Facility); provided, that no more
than $5.0 million of Indebtedness permitted pursuant to this clause (xiii)
may be Incurred by Restricted Subsidiaries that are not Note Guarantors;
(xiv) Indebtedness of Foreign Subsidiaries which are Restricted
Subsidiaries may Incur Indebtedness in the form of local lines of credit
not to exceed $25.0 million in the
15
aggregate at any one time outstanding so long as such Indebtedness is
secured by a letter of credit issued pursuant to the Senior Credit
Facility; and
(xv) Indebtedness of the Company Incurred pursuant to the Keep-Well
Agreement.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary in any Person that is, or that result in any Person
becoming, immediately after such Investment, a Restricted Subsidiary or
constituting a merger or consolidation of such Person into the Company or with
or into a Restricted Subsidiary; (ii) Investments by any Restricted Subsidiary
in the Company; (iii) Investments in cash and Cash Equivalents; (iv) any
extension, modification or renewal of any Investments existing as of the Issue
Date (but not Investments involving additional advances, contributions or other
investments of cash or property or other increases thereof, other than as a
result of the accrual or accretion of interest or original issue discount or
payment-in-kind pursuant to the terms of such Investment as of the Issue Date);
(v) transactions or arrangements with officers, directors or employees of the
Company or any Subsidiary of the Company entered into in the ordinary course of
business (including compensation or employee benefit arrangements with any
officer or director of the Company or any Subsidiary of the Company permitted
under Section 3.17; (vi) Investments received as a result of the bankruptcy or
------------
reorganization of any Person or taken in settlement of or other resolution of
claims or disputes, and, in each case, extensions, modifications and renewals
thereof, (vii) Investments in the form of intercompany Indebtedness permitted to
be issued under Section 3.9; (viii) Investments made by the Company or its
-----------
Restricted Subsidiaries as a result of non-cash consideration permitted to be
received in connection with an Asset Sale made in compliance with Section 3.11
------------
and (ix) other Investments not to exceed $5.0 million at any one time
outstanding.
"Permitted Junior Securities" means any securities of the Company or
any other Person that are (i) equity securities without special covenants or
(ii) debt securities expressly subordinated in right of payment to all Senior
Indebtedness that may at the time be outstanding, to substantially the same
extent as, or to a greater extent than, the Notes are subordinated as provided
herein, in any event pursuant to a court order so providing and as to which (a)
the rate of interest on such securities shall not exceed the effective rate of
interest on the Notes on the Issue Date, (b) such securities shall not be
entitled to the benefits of covenants or defaults materially more beneficial to
the holders of such securities than those in effect with respect to the Notes on
the Issue Date and (c) such securities shall not provide for amortization
(including sinking fund and mandatory prepayment provisions) commencing prior to
the date six months following the final scheduled maturity date of the Senior
Indebtedness (as modified by the plan of reorganization pursuant to which such
securities are issued).
"Permitted Liens" means any of the following:
(i) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith,
16
if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made in respect thereof;
(ii) Liens Incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iii) any interest or title of a lessor under any Capitalized Lease
Obligation; provided, however, that such Liens do not extend to any
property which is not leased property subject to such Capitalized Lease
Obligation;
(iv) purchase money Liens to finance property of the Company or a
Restricted Subsidiary acquired in the ordinary course of business;
provided, however, that (A) the related purchase money Indebtedness shall
not exceed the cost of such property and shall not be secured by any
property of the Company or any Restricted Subsidiary other than the
property so acquired and (B) the Lien securing such Indebtedness shall be
created within 90 days of such acquisition;
(v) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(vi) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(vii) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or a Restricted Subsidiary, including rights of offset and set-off;
(viii) Liens securing Hedging Obligations that relate to Indebtedness
that is Incurred in accordance with Section 3.9 and that are secured by the
-----------
same assets as secure such Hedging Obligations;
(ix) Liens existing on the Issue Date and Liens to secure any
Refinancing Indebtedness which is Incurred to Refinance any Indebtedness
which has been secured by a Lien permitted under Section 3.16 and which
------------
Indebtedness has been Incurred in accordance with Section 3.9; provided,
-----------
however, that such new Liens (A) are not materially less favorable to the
Holders of Notes and are not materially more favorable to the lienholders
with respect to such Liens than the Liens in respect of the Indebtedness
17
being Refinanced and (B) do not extend to any property or assets other than
the property or assets securing the Indebtedness Refinanced by such
Refinancing Indebtedness;
(x) Liens securing Acquired Indebtedness Incurred in accordance with
Section 3.9; provided, however, that (A) such Liens secured such Acquired
-----------
Indebtedness at the time of and prior to the Incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and were not granted
in connection with, or in anticipation of the Incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and (B) such Liens
do not extend to or cover any property of the Company or any Restricted
Subsidiary other than the property that secured the Acquired Indebtedness
prior to the time such Indebtedness became Acquired Indebtedness of the
Company or a Restricted Subsidiary and are no more favorable to the
lienholders than the Liens securing the Acquired Indebtedness prior to the
Incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary; and
(xi) Liens securing other Indebtedness not in excess of $5.0 million
at any one time outstanding.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Post-Petition Interest" means all interest accrued or accruing after
the commencement of any insolvency or liquidation proceeding (and interest that
would accrue but for the commencement of any insolvency or liquidation
proceeding) in accordance with and at the contract rate (including, without
limitation, any rate applicable upon default) specified in the agreement or
instrument creating, evidencing or governing any Indebtedness, whether or not,
pursuant to applicable law or otherwise, the claim for such interest is allowed
as a claim in such insolvency or liquidation proceeding.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights over any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"Private Exchange Notes" means any Initial Notes exchanged for
Exchange Notes with a Private Placement Legend pursuant to the Registration
Rights Agreement.
"Purchase Money Indebtedness" means Indebtedness of the Company or any
Restricted Subsidiary Incurred for the purpose of financing all or any part of
the purchase price, or other cost of construction or improvement of any
property; provided, however, that the aggregate principal amount of such
Indebtedness does not exceed the lesser of the Fair Market Value of such
property or such purchase price or cost, including any Refinancing of such
Indebtedness that does not increase the aggregate principal amount (or accreted
amount, if less) thereof as of the date of Refinancing.
18
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A under the Securities Act).
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Redemption Date" means, with respect to any redemption of Notes, the
date of redemption with respect thereto.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary, to the extent that such Refinancing does not (i) result
in an increase in the aggregate principal amount of the Indebtedness of such
Person as of the date of such proposed Refinancing (plus the amount of any
premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses incurred by the Company
in connection with such Refinancing) or (ii) create Indebtedness with (A) a
Weighted Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier
than the final maturity of the Indebtedness being Refinanced; provided, however,
that (x) if such Indebtedness being Refinanced is Indebtedness of the Company,
then such Refinancing Indebtedness shall be Indebtedness of the Company, (y) if
such Indebtedness being Refinanced is Indebtedness of a Note Guarantor, then
such Indebtedness shall be Indebtedness of the Company and/or such Note
Guarantor and (z) if such Indebtedness being Refinanced is subordinate or junior
to the Notes or any Note Guarantee, then such Refinancing Indebtedness shall be
subordinate to the Notes or such Note Guarantee at least to the same extent and
in the same manner as the Indebtedness being Refinanced.
"Registered Exchange Offer" means the registration by the Issuers
under the Securities Act pursuant to a registration statement of the offer by
the Issuers to each Holder of the Initial Notes to exchange all the Initial
Notes held by such Holder for the Exchange Notes in an aggregate principal
amount equal to the aggregate principal amount of the Initial Notes held by such
Holder, all in accordance with the terms and conditions of the Registration
Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated January 21, 1999 among the Issuers and First Union Capital
Markets.
"Regulation S" means Regulation S under the Securities Act or any
successor regulation.
"Representative" means any trustee, agent or representative (if any)
for an issue of Senior Indebtedness of the Company.
19
"Restricted Add-On Notes" means Add-On Notes initially issued other
than in a public offering registered under the Securities Act.
"Restricted Period" means, with respect to any Initial Notes offered
and sold outside the United States in reliance on Regulation S, the 40
consecutive days beginning on and including the later of (A) the day on which
such Initial Notes are offered to persons other than distributors (as defined in
Regulation S under the Securities Act) and (B) the Closing Date for such Initial
Notes.
"Restricted Subsidiary" of the Company means Capital and any other
Subsidiary of the Company which at the time of determination is not an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act or any successor
rule.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party providing for
the leasing to the Company or a Restricted Subsidiary of any property, whether
owned by the Company or any Restricted Subsidiary at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person or to any other Person by whom funds have
been or are to be advanced on the security of such Property.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"Senior Credit Facility" means that certain Credit Agreement dated as
of September 30, 1998, by and between the Company, the guarantors from time to
time a party thereto, the lenders from time to time a party thereto and First
Union National Bank, as agent, pursuant to which the Company may, as of the
Issue Date, borrow up to $315.0 million in the aggregate at any one time
outstanding together with the documents related thereto (including, without
limitation, any guarantee agreements and security documents), as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder or
increasing the principal amount available thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Senior Indebtedness" means, at any date, with respect to any Person
(a) all Obligations of such Person under the Senior Credit Facility; (b) all
Hedging Obligations of such Person; (c) all Obligations of such Person under
letters of credit; and (d) all other Indebtedness of such Person permitted under
this Indenture, including principal, premium, if any, and interest (including
Post-Petition Interest) on such Indebtedness, unless the instrument under which
such Indebtedness is Incurred expressly provides that such Indebtedness is not
senior or superior in right of payment to the Notes in the case of the Company
or a Note Guarantee in the case of a Note Guarantor, and all renewals,
extensions, modifications, amendments or refinancings thereof in whole or in
part. Notwithstanding the foregoing, Senior Indebtedness shall not include (a)
to
20
the extent that it may constitute Indebtedness, any Obligation for Federal,
state, local or other taxes; (b) any Indebtedness among or between the Company
and any Subsidiary of the Company or any Affiliate of the Company or any of such
Affiliate's Subsidiaries (other than Indebtedness created by the Company in
connection with the guarantee of Indebtedness of a Subsidiary); unless and for
so long as such Indebtedness has been pledged to secure obligations under or in
respect of Senior Indebtedness; (c) to the extent that it may constitute
Indebtedness, any Obligation in respect of any trade payable Incurred for the
purchase of goods or materials, or for services obtained, in the ordinary course
of business; (d) that portion of any Indebtedness that is Incurred in violation
of this Indenture; (e) Indebtedness evidenced by the Notes or the Note
Guarantees; (f) Indebtedness of the Company or a Note Guarantor that is
expressly subordinate or junior in right of payment to any other Indebtedness of
the Company or a Note Guarantor; (g) to the extent that it may constitute
Indebtedness, any obligation owing under leases (other than Capitalized Lease
Obligations) or management agreements; (h) any obligation that by operation of
law is subordinate to any general unsecured obligations of such Person; and (i)
Indebtedness of the Company to the extent such Indebtedness is owed to and held
by any Federal, state, local or other governmental authority (excluding
Indebtedness owing to state or local governmental authorities in the form of
industrial revenue bonds or other state or local bond financings).
"Senior Subordinated Indebtedness" means, with respect to the Company,
the Notes and, with respect to any Note Guarantor, such Note Guarantor's Note
Guarantee and any other Indebtedness of the Company or such Note Guarantor that
specifically provides that such Indebtedness is to rank pari passu in right of
payment with the Notes or such Note Guarantee, as the case may be, and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company or such Note Guarantor which is not Senior
Indebtedness.
"Significant Subsidiary" shall have the meaning set forth in Rule 1-
02(w) of Regulation S-X under the Securities Act.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Indebtedness" means, with respect to the Company or any
Note Guarantor, any Indebtedness of the Company or such Note Guarantor, as the
case may be, which is expressly subordinated in right of payment to the Notes or
such Note Guarantor's Note Guarantee, as the case may be.
"Subsidiary" with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person; or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
21
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. (S)(S) 77aaa-77bbbb), as in effect on the date of this Indenture
------
(except as otherwise provided in this Indenture).
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Subsidiary" means any Subsidiary of the Company (other
than Capital) designated as such pursuant to Section 3.14. Any such designation
------------
may be revoked by a Board Resolution of the Company, subject to the provisions
of such covenant.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" with respect to any Person, means securities of any
class of Capital Stock of such Person entitling the holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of members of the Board of Directors
(or equivalent governing body) of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness (including any Disqualified Capital Stock) at any date, the number
of years obtained by dividing (a) the sum of the products obtained by
multiplying (x) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by (y) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (b) the then outstanding principal amount or liquidation
preference, as applicable, of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of the Company means any
Restricted Subsidiary of which all the outstanding Capital Stock (other than in
the case of a foreign Restricted Subsidiary, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by the Company or any Wholly Owned Restricted
Subsidiary.
22
Section 1.2. Other Definitions.
-----------------
Defined in
Term Section
---- -----------
"Additional Guarantee"................................................................. 11.5
"Additional Guarantor" 11.5
"Acceleration Notice".................................................................. 6.2
"Add On Notes"......................................................................... 2.14
"Affiliate Transaction"................................................................ 3.17
"Agent Member"......................................................................... 2.6(b)
"Authenticating Agent"................................................................. 2.2(d)
"Blockage Notice"...................................................................... 10.3
"Capital".............................................................................. Introduction
"Change of Control Offer".............................................................. 3.18(a)
"Change of Control Payment Date"....................................................... 3.18(a)
"Company".............................................................................. Introduction
"Company Order"........................................................................ 2.2(c)
"Corporate Trust Office"............................................................... 3.2(a)
"Covenant Defeasance".................................................................. 8.2(c)
"Defaulted Interest"................................................................... 2.12(b)
"Designation".......................................................................... 3.14(a)
"Designation Amount"................................................................... 3.14(a)
"Event of Default"..................................................................... 6.1
"Exchange Global Note"................................................................. 2.1(g)
"Exchange Notes"....................................................................... Introduction
"Global Note".......................................................................... 2.6(a)
"Guaranteed Obligations"............................................................... 11.1(a)
"Holders".............................................................................. Introduction
"IAI Note"............................................................................. 2.1(f)
"Initial Notes"........................................................................ Introduction
"Issuers".............................................................................. Introduction
"Legal Defeasance"..................................................................... 8.2(b)
"Net Proceeds Offer"................................................................... 3.11
"Net Proceeds Offer Payment Date"...................................................... 3.11
"Net Proceeds Offer Trigger Date"...................................................... 3.11
"Note Register"........................................................................ 2.3(a)
"Noteholders".......................................................................... Introduction
"Notes"................................................................................ Introduction
"Paying Agent"......................................................................... 2.3(a)
"Payment Blockage Period".............................................................. 10.3
"Private Placement Legend"............................................................. 2.7(b)
"Public Equity Offering"............................................................... Exhibit A
"Registrar"............................................................................ 2.3(a)
"Regulation S Certification"........................................................... 2.1(e)
"Regulation S Global Note"............................................................. 2.1(e)
23
"Regulation S Permanent Global Note"......................................................... 2.1(e)
"Regulation S Temporary Global Note"......................................................... 2.1(e)
"Release Date"............................................................................... 2.1(e)
"Replacement Assets"......................................................................... 3.11
"Resale Restriction Termination Date"........................................................ 2.7(b)
"Restricted Payment"......................................................................... 3.10
"Rule 144A Global Note"...................................................................... 2.1(d)
"Special Interest Payment Date".............................................................. 2.12
"Special Record Date"........................................................................ 2.12
"Surviving Entity"........................................................................... 4.1(a)
Section 1.3. Incorporation by Reference of Trust Indenture Act. This
-------------------------------------------------
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
Section 1.4. Rules of Construction. Unless the context otherwise
---------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular; and
(6) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP.
24
ARTICLE II
THE NOTES
Section 2.1. Form and Dating. (a) The Initial Notes are being
---------------
offered and sold by the Issuers pursuant to the Purchase Agreement. The Initial
Notes and the Trustee's certificate of authentication shall be substantially in
the form of Exhibit A hereto. The Exchange Notes and the Trustee's certificate
---------
of authentication shall be substantially in the form of Exhibit B hereto.
---------
(b) The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Issuers and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or DTC rule or usage. The Issuers and the Trustee shall approve
the form of the Notes and any notation, legend or endorsement on them. Each
Note shall be dated the date of its authentication.
(c) The Notes shall be issuable only in fully registered form, without
coupons, and only in denominations of $1,000 and any integral multiple thereof,
provided that, except as provided in Section 5.7, each IAI Note shall be in a
-----------
minimum denomination of $250,000.
(d) Initial Notes offered and sold to QIBs in the United States of
America in reliance on Rule 144A will be issued in the form of a permanent
global Note, without interest coupons, substantially in the form of Exhibit A
---------
(the "Rule 144A Global Note"). The Rule 144A Global Note will be duly executed
---------------------
by the Issuers, authenticated by the Trustee as hereinafter provided and
deposited with the Trustee, as Note Custodian. The Rule 144A Global Note may be
represented by more than one certificate, if so required by DTC's rules
regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Rule 144A Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as Note Custodian, as hereinafter provided.
(e) Initial Notes offered and sold outside the United States of
America in reliance on Regulation S will be issued on a Closing Date in the form
of a temporary global Note, in fully registered form without interest coupons,
substantially in the form set forth in Exhibit A (a "Regulation S Temporary
--------- ----------------------
Global Note"). Beneficial interests in a Regulation S Temporary Global Note
-----------
will be exchangeable for beneficial interests in a single permanent global Note,
in fully registered form without interest coupons (the "Regulation S Permanent
----------------------
Global Note", together with the Regulation S Temporary Global Note, the
-----------
"Regulation S Global Note") on or after the expiration of the Restricted Period
-------------------------
(the "Release Date") upon the receipt by the Trustee or its agent of a
------------
certification substantially in the form set forth in Exhibit E (a "Regulation S
--------- ------------
Certification"). Upon receipt by the Trustee or Paying Agent of a Regulation S
-------------
Certification, (i) with respect to the first such Regulation S Certification,
the Issuers shall execute and upon receipt of a Company Order for
authentication, the Trustee or Authenticating Agent shall authenticate and
deliver to the Note Custodian, the applicable Regulation S Permanent Global Note
and (ii) with respect to the first and all subsequent Regulation S
Certifications, the Note Custodian shall exchange on behalf of the applicable
beneficial owners the portion of the
25
Regulation S Temporary Global Note covered by such Regulation S Certifications
for a comparable portion of the applicable Regulation S Permanent Global Note.
Upon any exchange of a portion of a Regulation S Temporary Global Note for a
comparable portion of a Regulation S Permanent Global Note, the Note Custodian
shall endorse on the schedules affixed to each of such Regulation S Global Note
(or on continuations of such schedules affixed to each of such Regulation S
Global Note and made parts thereof) appropriate notations evidencing the date of
transfer and:
(x) with respect to the applicable Regulation S Temporary Global Note,
a decrease in the principal amount thereof equal to the amount covered
by the applicable certification;
and (y) with respect to the applicable Regulation S Permanent Global
Note, an increase in the principal amount thereof equal to the
principal amount of the decrease in the applicable Regulation S
Temporary Global Note pursuant to clause (x) above.
Each Regulation S Global Note will be duly executed by the Issuers,
authenticated by the Trustee as hereinafter provided and deposited with the
Trustee, as Note Custodian. The Regulation S Global Note may be represented by
more than one certificate, if so required by DTC's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Regulation S Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
Note Custodian, as hereinbefore or hereinafter provided.
(f) Initial Notes offered and sold or otherwise transferred to IAIs in
the United States of America will be issued in non-global, fully registered
form, without interest coupons, substantially in the form set forth in Exhibit
-------
A, duly executed by the Issuers and authenticated by the Trustee or
Authenticating Agent as hereinafter provided (each, an "IAI Note"). Upon such
--------
issuance, the Trustee shall register such IAI Note in the name of the beneficial
owner or owners of such note (or the nominee of such beneficial owner or owners)
and deliver the certificates for such IAI Notes to, or as directed by, the
respective beneficial owner or owners.
(g) All or part of any Rule 144A Global Note, Regulation S Global Note
and any IAI Note exchanged in the Registered Exchange Offer will be exchanged
for a permanent global Note in fully registered form, without interest coupons
(or beneficial interest therein) substantially in the form of Exhibit B,
---------
deposited with the Trustee, as Note Custodian, duly executed by the Issuers and
authenticated by the Trustee, as hereinafter provided (the "Exchange Global
---------------
Note"). The Exchange Global Note may be represented by more than one
certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate. The aggregate principal
amount of the Exchange Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as Note Custodian,
as hereinafter provided.
Section 2.2. Execution and Authentication. (a) Two Officers, one of
----------------------------
whom shall be the Chairman of the Board, the President, the Chief Executive
Officer or the Chief Financial
26
Officer of each of the Issuers, shall sign the Notes for the Issuers by manual
or facsimile signature. If an Officer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note, the Note shall
be valid nevertheless.
(b) A Note shall not be valid until an authorized signatory of the
Trustee manually authenticates the Note. The signature of the Trustee on a Note
shall be conclusive evidence that such Note has been duly and validly
authenticated and issued under this Indenture.
(c) At any time and from time to time after the execution and delivery
of this Indenture, the Trustee shall authenticate and make available for
delivery: (1) Initial Notes for original issue on the Issue Date in an aggregate
principal amount of $150,000,000, (2) Exchange Notes for issue only in a
Registered Exchange Offer pursuant to the Registration Rights Agreement, and
only in exchange for Initial Notes of an equal principal amount and (3) Add On
Notes in unlimited aggregate principal amount, and, if applicable, the related
exchange of Initial Notes for Exchange Notes, in each case upon a written order
of the Issuers signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of each of the Issuers (a "Company Order").
-------------
Such Company Order shall specify the amount of the Notes to be authenticated and
the date on which the original issue of Notes is to be authenticated and whether
the Notes are to be Initial Notes or Exchange Notes. The aggregate principal
amount of Notes which may be authenticated and delivered under this Indenture is
unlimited. Except as permitted in Section 2.14 or Section 2.15(b), all Notes
------------ ---------------
issued on the Issue Date and all Add On Notes shall be identical in all respects
other than issue dates, the date from which interest accrues and any changes
relating thereto. Notwithstanding anything to the contrary contained in this
Indenture, all Notes issued under this Indenture shall vote and consent together
on all matters as one class and no series of Notes will have the right to vote
or consent as a separate class on any matter.
(d) The Trustee may appoint an agent (the "Authenticating Agent")
--------------------
reasonably acceptable to the Issuers to authenticate the Notes. Unless limited
by the terms of such appointment, any such Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by the Authenticating
Agent.
(e) In case either of the Issuers, pursuant to Article IV, shall be
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an
entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which either of the Issuers
shall have been merged, or the Person which shall have received a conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article IV, any of
the Notes authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Notes executed in the
name of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Notes surrendered
for such exchange and of like principal amount; and the Trustee, upon Company
Order of the successor Person, shall
27
authenticate and deliver Notes as specified in such order for the purpose of
such exchange. If Notes shall at any time be authenticated and delivered in any
new name of a successor Person pursuant to this Section 2.2 in exchange or
-----------
substitution for or upon registration of transfer of any Notes, such successor
Person, at the option of the Holders but without expense to them, shall provide
for the exchange of all Notes at the time Outstanding for Notes authenticated
and delivered in such new name.
Section 2.3. Registrar and Paying Agent. (a) The Issuers shall
--------------------------
maintain an office or agency in the Borough of Manhattan, City of New York,
where Notes may be presented for registration of transfer or for exchange (the
"Registrar"), where Notes may be presented for payment (the "Paying Agent") and
---------- ------------
for the service of notices and demands to or upon the Issuers in respect of the
Notes and this Indenture. The Registrar shall keep a register of the Notes and
of their transfer and exchange (the "Note Register"). The Issuers may have one
-------------
or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent.
(b) The Issuers shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Issuers shall
notify the Trustee of the name and address of each such agent. If the Issuers
fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.7.
-----------
Either of the Issuers may act as Paying Agent, Registrar or co-registrar.
(c) The Issuers initially appoint the Trustee at its principal
corporate trust office in the Borough of Manhattan, City of New York (the
"Corporate Trust Office") as Registrar, Paying Agent and agent for service of
-----------------------
demands and notices in connection with the Notes and this Indenture, until such
time as the Trustee has resigned or a successor Trustee has been appointed or
until a successor registrar, Paying Agent or agent for service of demands and
notices in connection with the Notes and this Indenture has been appointed.
Section 2.4. Deposit of Monies; Paying Agent to Hold Money in Trust.
------------------------------------------------------
By at least 10:00 a.m. (New York City time) on the date on which any principal
of or interest on any Note is due and payable, the Issuers shall deposit with
the Paying Agent in immediately available funds money sufficient to pay such
principal or interest when due. The Issuers shall require each Paying Agent
(other than the Trustee) to agree in writing that such Paying Agent shall hold
in trust for the benefit of Noteholders or the Trustee all money held by such
Paying Agent for the payment of principal of or interest on the Notes and shall
notify the Trustee in writing of any default by the Issuers in making any such
payment. If either of the Issuers acts as Paying Agent, it shall segregate the
money held it as Paying Agent and hold it as a separate trust fund. The Issuers
at any time may require a Paying Agent (other than the Trustee) to pay all money
held by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section, the Paying Agent (if other than either
of the Issuers) shall have no further liability for the money delivered to the
Trustee. At any time that either of the Issuers is serving
28
as paying Agent for the Notes, upon any bankruptcy, reorganization or similar
proceeding with respect to either of the Issuers, the Trustee shall serve as
Paying Agent for the Notes.
Section 2.5. Noteholder Lists. The Trustee shall preserve in as
----------------
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders. If the Trustee is not the Registrar,
or to the extent otherwise required under the TIA, the Issuers shall furnish to
the Trustee, in writing at least seven Business Days before each interest
payment date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Noteholders.
Section 2.6. Book-Entry Provisions. (a) Each Rule 144A Global Note
---------------------
and Regulation S Global Note (each a "Global Note" and collectively, the "Global
Notes") initially shall (i) be registered in the name of DTC or the nominee of
DTC, (ii) be delivered to the Note Custodian and (iii) bear the appropriate
legends, as set forth in Exhibit A or Exhibit B, as the case may be.
--------- ---------
(b) Members of, or participants in, DTC ("Agent Members") shall have
-------------
no rights under this Indenture with respect to any Global Note held on their
behalf by DTC or by the Note Custodian or under such Global Note, and DTC may be
treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee
as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the
Trustee or any agent of the Issuers or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by DTC or impair,
as between DTC and its Agent Members, the operation of customary practices of
DTC governing the exercise of the rights of a Holder of a beneficial interest in
any Global Note. The registered Holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(c) Except as provided below, owners of beneficial interests in
Global Notes will not be entitled to receive Certificated Notes. If required to
do so pursuant to any applicable law or regulation, beneficial owners may obtain
Certificated Notes in exchange for their beneficial interests in a Global Note
upon written request in accordance with DTC's and the Registrar's procedures.
In addition, Certificated Notes (in the form of Exhibit A or Exhibit B, as
--------- ---------
applicable) shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Note if:
(i) DTC notifies the Issuers that it is unwilling or unable to
continue as depositary for such Global Note or DTC ceases to be a clearing
agency registered under the Exchange Act at a time when DTC is required to
be so registered in order to act as depositary, and in each case a
successor depositary is not appointed by the Issuers within 90 days of such
notice,
(ii) the Issuers execute and deliver to the Trustee and Registrar an
Officers' Certificate stating that such Global Note shall be so
exchangeable, or
29
(iii) an Event of Default has occurred and is continuing and the
Registrar has received a request from DTC.
In connection with the transfer of an entire Global Note to the beneficial
owners thereof pursuant to this subsection (c), such Global Note shall be deemed
to be surrendered to the Trustee for cancellation, and the Issuers shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by DTC in exchange for its beneficial interest in such Global
Note, an equal aggregate principal amount of Notes in definitive form of
authorized denominations.
(d) In connection with the exchange of a portion of a Certificated
Note for a beneficial interest in a Global Note, the Trustee shall cancel such
Certificated Note, and the Issuers shall execute, and the Trustee shall
authenticate and deliver, to the transferring Holder a new Certificated Note
representing the principal amount not so transferred.
Section 2.7 Legends.
-------
(a) Each Global Note shall bear the legend specified therefor in
Exhibit A or Exhibit B, as the case may be, on the face thereof.
--------- ---------
(b) Initial Notes that are not Regulation S Global Notes shall, prior
to the date which is two years after the Issue Date (or, in the case of
Restricted Add On Notes that are not Regulation S Global Notes, the Closing Date
therefor) (the "Resale Restriction Termination Date") and each Regulation S
-----------------------------------
Temporary Global Note shall, bear the Private Placement Legend specified in
Exhibit A on the face thereof (the "Private Placement Legend.")
--------- ------------------------
(c) Each Regulation S Temporary Global Note shall bear the legend
specified therefor in Exhibit A on the face thereof.
---------
Section 2.8. Transfer and Exchange.
---------------------
(a) The following provisions shall apply with respect to any proposed
transfer of a beneficial interest in a Rule 144A Global Note or an IAI Note
prior to the Resale Restriction Termination Date therefor:
(i) if the Holder of one or more IAI Note(s) wishes to transfer such
IAI Note(s) (or a portion thereof) to a QIB pursuant to Rule 144A, (x) upon
receipt by the Registrar of:
(A) such IAI Note(s), duly endorsed as provided herein,
(B) instructions from such Holder directing the Registrar to
credit or cause to be credited a beneficial interest in the Rule
144A Global Note equal to the principal amount (or portion
thereof) of such IAI Note(s) to be transferred, specifying the
participant account at DTC to be credited with such increase,
and, if the entire principal amount of such IAI Note(s) is not
being transferred,
30
to issue one or more IAI Notes to the transferor IAI in a
principal amount equal to the principal amount not transferred,
and
(C) a certificate in the form of Exhibit C duly executed by the
transferor, and
(y) subject to the rules and procedures of DTC, the Registrar shall:
(1) cancel the IAI Notes delivered to it;
(2) increase the Rule 144A Global Note and credit or
cause to be credited the participant account at DTC in
accordance with the foregoing; and
(3) if applicable, authenticate and deliver to the IAI
transferor one or more IAI Note(s) in accordance with
the foregoing.
(ii) If the Holder of one or more IAI Notes wishes to transfer such
IAI Note(s) (or any portion thereof) to an IAI, upon receipt by the
Registrar of:
(A) such IAI Note(s), duly endorsed as provided herein;
(B) instructions from such Holder directing the Registrar to
issue one or more IAI Notes in the amounts specified to the
transferee IAI and, if the entire principal amount of such IAI
Note(s) is not being transferred, the transferor IAI in an
amount equal to the principal amount not transferred; and
(C) a certificate in the form of Exhibit D duly executed by the
---------
transferee.
(iii) If the holder of a beneficial interest in a Rule 144A Global
Note wishes to transfer such interest (or a portion thereof) to an IAI, (x)
upon receipt by the Registrar of:
(A) instructions from the Holder of the Rule 144A Global Note
directing the Registrar to issue one or more IAI Notes in the
amounts specified to the transferee IAI, debit or cause to be
debited an equivalent amount of beneficial interest in the Rule
144A Global Note and specifying the participant account at DTC
to be debited with such decrease and
(B) a certificate in the form of Exhibit D from the IAI
---------
transferee,
and (y) subject to the rules and procedures of DTC, the Registrar shall:
(A) authenticate and deliver to the IAI transferee IAI Note(s)
in a principal amount equivalent to the principal amount of the
beneficial interest in the Rule 144A Global Note being
transferred in accordance with the foregoing and
31
(B) decrease the Rule 144A Global Note and debit the account of
the specified participant account at DTC for such amount in
accordance with the foregoing.
(iv) If (1) the holder of a beneficial interest in a Rule 144A Global
Note wishes to transfer such interest (or any portion thereof) to a Non-
U.S. Person pursuant to Regulation S and (2) such Non-U.S. Person wishes to
hold its interest in the Notes through a beneficial interest in the
Regulation S Global Note, (x) upon receipt by the Registrar of:
(A) instructions from the Holder of the Rule 144A Global Note
directing the Registrar to credit or cause to be credited a
beneficial interest in the Regulation S Global Note equal to the
principal amount of the beneficial interest in the Rule 144A
Global Note to be transferred, specifying the participant
accounts with DTC to be credited and debited and
(B) a certificate in the form of Exhibit F from the transferor
---------
and (y) subject to the rules and procedures of DTC, the Registrar shall:
(1) increase the Regulation S Global Note and credit or caused to be
credited the specified participant account at DTC for such amount in
accordance with the foregoing, and
(2) decrease the Rule 144A Global Note for such amount and debit or
cause to be debited the specified participant account at DTC for such
amount in accordance with the foregoing.
(v) Transfers of beneficial interests in the Rule 144A Global Note
not described in this Section 2.8 shall be made in accordance with the
-----------
rules and procedures of DTC.
(vi) After the expiration of the Resale Restriction Termination date,
beneficial interests in Rule 144A Global Notes and IAI Notes may be
transferred without requiring the certifications described above or any
additional certification.
(b) The following provisions shall apply with respect to any proposed
transfer of a beneficial interest in a Regulation S Temporary Global Note:
(i) if the holder of a beneficial interest in a Regulation S
Temporary Global Note wishes to transfer such interest (or any portion
thereof) to a QIB pursuant to Rule 144A, (x) upon receipt by the Registrar
of:
(A) instructions from the Holder of the Regulation S Temporary Global
Note directing the Registrar to credit or cause to be credited a
beneficial interest in the Rule 144A Global Note equal to the
principal amount of the beneficial interest in
32
the Regulation S Temporary Global Note to be transferred, specifying
the participant accounts at DTC to be credited and debited, and
(B) a certificate in the form of Exhibit C duly executed by the
---------
transferor, and
(y) in accordance with the rules and procedures of DTC, the Registrar
shall:
(1) increase the Rule 144A Global Note and credit or caused to be
credited the specified participant account at DTC for such amount in
accordance with the foregoing, and
(2) decrease the Regulation S Temporary Global Note amount and debit
or cause to be debited the specified participant account at DTC for
such amount in accordance with the foregoing.
(ii) if the holder of a beneficial interest in a Regulation S
Temporary Global Note wishes to transfer such interest (or a portion
thereof) to an IAI, (x) upon receipt by the Registrar of:
(A) instructions from the Holder directing the Registrar to issue one
or more IAI Notes in specified amounts in the name of the transferee
IAI, debit or cause to be debited an equivalent amount of beneficial
interest in the Regulation S Temporary Global Note and specifying the
participant account with DTC to be debited with such decrease and
(B) a certificate in the form of Exhibit D from the IAI transferee,
---------
and (y) subject to the rules and procedures of DTC, the Registrar shall:
(1) authenticate and deliver to the IAI transferee IAI Note(s) in an
equivalent amount to the beneficial interest in the Regulation S
Temporary Global Note being transferred in accordance with the
foregoing, and
(2) decrease the Regulation S Temporary Global Note debited to the
account of the specified participant for such amount in accordance
with the foregoing.
(ii) except for transfers of beneficial interests in the Regulation S
Temporary Global Note described in this Section 2.8, transfers of
-----------
beneficial interests in the Regulation S Temporary Global Note shall be
made in accordance with the rules and procedures of DTC.
(iii) Interests in a Regulation S Permanent Global Note may be
transferred without requiring the certification described above or any
additional certification.
33
(c) Any other transfer of (i) Initial Notes (other than Regulation S
Temporary Global Notes) prior to the expiration of the Resale Restriction
Termination Date therefor or (ii) a Regulation S Temporary Global Note, shall be
made only upon receipt by the Registrar and the Issuers of such Opinions of
Counsel, certifications and/or other information satisfactory to each of them in
order to ensure compliance with the Securities Act.
(d) Upon the transfer, exchange or replacement of Notes (or
beneficial interests in a Global Note) not bearing a Private Placement Legend,
the Registrar shall deliver Notes (or cause to be increased the principal amount
of a Global Note to reflect increases in the amount of beneficial interests
covered thereby) that do not bear a Private Placement Legend. Upon the
transfer, exchange or replacement of Notes (or beneficial interests in a Global
Note) bearing a Private Placement Legend, the Registrar shall deliver only Notes
that bear a Private Placement Legend unless
(i) such Notes (or beneficial interest) are exchanged in the
Registered Exchange Offer;
(ii) such Notes (or beneficial interest) are transferred pursuant to
an effective Registration Statement;
(iii) such Notes (or beneficial interest) are transferred, replaced
or exchanged following the expiration of the Resale Restriction Termination
Period therefor; or
(iv) in connection with such transfer, the Registrar (and, if the
Company is not then serving as the registrar, the Company) shall have
received an Opinion of Counsel satisfactory to it to the effect that
neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
The Issuers shall deliver to the Trustee an Officers' Certificate promptly upon
effectiveness, withdrawal or suspension of any Registration Statement applicable
to any Notes.
(e) If one or more Exchange Global Notes have been issued, upon the
transfer of any Note (or beneficial interest therein) for which a Private
Placement Legend would not be required pursuant to clause (d) for such Note (or
beneficial interest) following such transfer, such Note (or beneficial interest
therein) may be exchanged for a beneficial interest in the Exchange Global Note.
If no Exchange Global Note has been issued, upon the transfer of any Note
bearing a Private Placement Legend (or beneficial interest therein) for which a
Private Placement Legend would not be required pursuant to clause (d) for such
Note (or beneficial interest) following such transfer, such Note (or beneficial
interest therein) may be exchanged for a beneficial interest in a Global Note
without a Private Placement Legend.
(f) The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to this Article II. The Issuers
shall have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time upon the giving of
reasonable written notice to the Registrar.
34
(g) (i) To permit registrations of transfers and exchanges, the
Issuers shall, subject to the other terms and conditions of this Article
II, execute and the Trustee shall authenticate Certificated Notes and
Global Notes at the Registrar's or co-registrar's request.
(ii) In accordance with the Registration Rights Agreement, the
Trustee shall, upon receipt of a Company Order, exchange Initial Notes for
Exchange Notes or Private Exchange Notes, as the case may be.
(iii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to Section 3.11, Section 3.18 or Section
------------ ------------ -------
9.5).
(iv) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Note for a period beginning (1)
15 days before the mailing of a notice of an offer to repurchase or redeem
Notes and ending at the close of business on the day of such mailing or (2)
15 days before an interest payment date and ending on such interest payment
date.
(v) Prior to the due presentation for registration of transfer
of any Note, the Issuers, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and none of the
Issuers, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(vi) All Notes issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Notes surrendered
upon such transfer or exchange.
(h) No Obligation of the Trustee.
----------------------------
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Note, a member of, or a participant in, DTC or
other Person with respect to the accuracy of the records of DTC or its
nominee or of any participant or member thereof, with respect to any
ownership interest in the Notes or with respect to the delivery to any
participant, member, beneficial owner or other Person (other than DTC) of
any notice (including any notice of redemption) or the payment of any
amount or delivery of any Notes (or other security or property) under or
with respect to such Notes. All notices and communications to be given to
the Holders and all payments to be made to Holders in respect of the Notes
shall be given or made only to or upon the order of the registered Holders
(which shall be DTC or its nominee in the case of a Global Note). The
rights of
35
beneficial owners in any Global Note shall be exercised only through DTC
subject to the applicable rules and procedures of DTC. The Trustee may rely
and shall be fully protected in relying upon information furnished by DTC
with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or
among Depositary participants, members or beneficial owners in any Global
Note) other than to require delivery of such certificates and other
documentation or evidence as is expressly required by, and to do so if and
when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
Section 2.9. Mutilated, Destroyed, Lost or Stolen Notes. If a
------------------------------------------
mutilated Note is surrendered to the Registrar or if the Holder of a Note claims
that the Note has been lost, destroyed or wrongfully taken, the Issuers shall
issue and the Trustee shall authenticate a replacement Note if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Issuers, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Issuers and the Trustee to protect the Issuers, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Note is replaced, and, in the absence of notice to the Issuers
or the Trustee that such Note has been acquired by a bona fide purchaser, the
Issuers shall execute and upon Company Order the Trustee shall authenticate and
make available for delivery, in exchange for any such mutilated Note or in lieu
of any such destroyed, lost or stolen Note, a new Note of like tenor and
principal amount, bearing a number not contemporaneously Outstanding. In case
any such mutilated, destroyed, lost or stolen Note has become or is about to
become due and payable, the Issuers in their discretion may, instead of issuing
a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Issuers may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) in connection therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuers, any Note Guarantor (if
applicable) and any other obligor upon the Notes, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
36
Section 2.10. Temporary Notes. Until definitive Notes are ready for
---------------
delivery, the Issuers may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Issuers consider appropriate for temporary
Notes. Without unreasonable delay, the Issuers shall prepare and the Trustee
shall authenticate definitive Notes. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender of
the temporary Notes at any office or agency maintained by the Issuers for that
purpose and such exchange shall be without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes, the Issuers shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more definitive Notes representing an equal principal amount of
Notes. Until so exchanged, the Holder of temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as a Holder of definitive
Notes.
Section 2.11. Cancellation. The Issuers at any time may deliver
------------
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
return to the Issuers all Notes surrendered for registration of transfer,
exchange, payment or cancellation. The Issuers may not issue new Notes to
replace Notes it has paid or delivered to the Trustee for cancellation for any
reason other than in connection with a transfer or exchange.
Section 2.12. Payment of Interest; Defaulted Interest. (a) Interest
---------------------------------------
on any Note which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to the Person in whose name such Note
(or one or more predecessor Notes) is registered at the close of business on the
regular record date for such interest at the office or agency of the Issuers
maintained for such purpose pursuant to Section 2.3.
-----------
(b) Any interest on any Note which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder. Such defaulted interest ("Defaulted
---------
Interest") shall, without regard to any applicable grace periods, be paid by the
--------
Issuers at the rate of 2% per annum in excess of the rate shown on the Note, at
its election in each case, as provided in clause (i) or (ii) below:
(i) The Issuers may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective predecessor
Notes) are registered at the close of business on a Special Record Date (as
defined below) for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Issuers shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Note and the date (not less than 30 days after such notice) of the proposed
payment (the "Special Interest Payment Date"), and at the same time the
-----------------------------
Issuers shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this
37
clause provided. Thereupon the Trustee shall fix a record date (the
"Special Record Date") for the payment of such Defaulted Interest which
-------------------
shall be not more than 15 days and not less than 10 days prior to the
Special Interest Payment Date and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Issuers of such Special Record Date, and in the name
and at the expense of the Issuers, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date and Special
Interest Payment Date therefor to be given in the manner provided for in
Section 13.2 not less than 10 days prior to such Special Record Date.
------------
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor having been so
given, such Defaulted Interest shall be paid on the Special Interest
Payment Date to the Persons in whose names the Notes (or their respective
predecessor Notes) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause
(ii).
(ii) The Issuers may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Issuers
to the Trustee of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section 2.12, each
------------
Note delivered under this Indenture upon registration of, transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
Section 2.13. Computation of Interest. Interest on the Notes shall
-----------------------
be computed on the basis of a 360-day year of twelve 30-day months.
Section 2.14. Add On Notes. The Issuers may, from time to time,
------------
subject to compliance with any other applicable provisions of this Indenture
(including but not limited to Section 3.9), without the consent of the Holders,
-----------
create and issue pursuant to this Indenture additional notes having terms and
conditions identical to those of the Notes except for issue date ("Add On
------
Notes") (or the same except for the payment of interest accruing prior to the
-----
issue date of such Add On Notes or except for the first payment of interest
following the issue date of such Add On Notes and as provided in the following
sentence), which Add On Notes will be treated, together with any other
Outstanding Notes, as a single issue of securities. The Issuers may, in
connection with the issuance of any Add On Notes, by Board Resolution or
supplemental indenture make appropriate adjustments to this Article II
applicable to such Add On Notes in order to ensure compliance with the
Securities Act and any registration rights or similar agreement applicable to
such Add On Notes.
Section 2.15. CUSIP Numbers. (a) The Issuers in issuing the Notes
-------------
may use "CUSIP" or "ISIN" numbers (if then generally in use) and, if so, the
Trustee shall use CUSIP or ISIN numbers in notices of redemption as a
convenience to Holders; provided, however, that any
38
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such CUSIP or ISIN numbers.
(b) In the event that the Issuers shall issue and the Trustee shall
authenticate any Add On Notes pursuant to Section 2.2, the Issuers shall use
-----------
their best efforts to obtain the same CUSIP or ISIN number for such Add On Notes
as is printed on the Notes Outstanding at such time; provided, however, that if
any Add On Notes are determined, pursuant to an Opinion of Counsel, to be a
different class of security than the Notes Outstanding at such time for federal
income tax purposes, the Issuers may obtain a CUSIP or ISIN number for such
series of Add On Notes that is different from the CUSIP or ISIN number printed
on the Notes then Outstanding and if any Add On Notes are required to carry a
Private Placement Legend and other Notes Outstanding at such time are not or
vice versa, the Issuers may obtain and use a different CUSIP or ISIN number for
such Add On Notes for such time as such difference applies.
ARTICLE III
COVENANTS
Section 3.1. Payment of Notes. (a) The Issuers shall pay the
----------------
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal and
interest then due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the Noteholders on that date pursuant
to the terms of this Indenture.
(b) The Issuers shall pay, to the extent such payments are lawful,
interest (including Post-Petition Interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate specified therefor in the
Notes, and on Defaulted Interest (without regard to applicable grace periods) at
the rate specified therefor in the Notes.
(c) Notwithstanding anything to the contrary contained in this
Indenture, the Issuers may, to the extent required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
Section 3.2. Maintenance of Office or Agency. (a) The Issuers shall
-------------------------------
maintain each office or agency required under Section 2.3. The Issuers will
-----------
give prompt written notice to the Trustee of any change in the location of any
such office or agency. If at any time the Issuers 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 "Corporate Trust
Office"), and the Issuers hereby appoint the Trustee as their agent to receive
all such presentations, surrenders, notices and demands.
39
(b) The Issuers may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Issuers of their
obligation to maintain an office or agency in The City of New York for such
purposes. The Issuers will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
Section 3.3. Corporate Existence. Subject to Article IV, Section
------------------- -------
3.11 and Section 10.2, the Company will do or cause to be done all things
---- ------------
necessary to preserve and keep in full force and effect its corporate existence
and that of each Restricted Subsidiary and the corporate rights (charter and
statutory) licenses and franchises of the Company and each Restricted
Subsidiary; provided, however, that the Company shall not be required to
preserve any such existence (except the Company's), right, license or franchise
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
each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof
is not, and will not be, disadvantageous in any material respect to the Holders.
Section 3.4. Payment of Taxes and Other Claims. The Issuers will pay
---------------------------------
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Issuers or any Restricted Subsidiary or upon the income,
profits or property of the Issuers or any Restricted Subsidiary and (ii) all
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a material liability or Lien upon the property of the Issuers or any
Restricted Subsidiary; provided, however, that the Issuers shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate reserves, if
necessary (in the good faith judgment of management of the Company), are being
maintained in accordance with GAAP or where the failure to effect such payment
will not be disadvantageous to the Holders.
Section 3.5. Compliance Certificate. The Issuers shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Issuers they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they
do, the certificate shall describe the Default or Event of Default, its status
and what action the Issuers are taking or proposes to take with respect thereto.
The Issuers also shall comply with TIA (S) 314(a)(4).
Section 3.6. Maintenance of Properties. The Company and its
-------------------------
Restricted Subsidiaries shall cause all property used or useful in the conduct
of their business or businesses to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may be necessary
40
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided that nothing in this Section 3.6
-----------
shall prevent the Company or any of its Subsidiaries from discontinuing the
operation or maintenance of any of such property if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of its Subsidiaries and not disadvantageous in any material respect to
the Holders.
Section 3.7. Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the Issuers will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.8. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Issuers and each Note Guarantor covenant (to the extent that it
may lawfully do so) that they will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Issuers or such Note Guarantor from paying all or any portion of the principal
of or interest on the Notes as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that they may lawfully do so)
the Issuers and each Note Guarantor hereby expressly waive all benefit or
advantage of any such law, and covenants that they will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 3.9. Limitation on Incurrence of Additional Indebtedness.
---------------------------------------------------
(a) The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness; provided,
however, that the Company and any Note Guarantor may Incur Indebtedness if, at
the time of and immediately after giving pro forma effect to the Incurrence
thereof and the application of the proceeds therefrom, the Consolidated Fixed
Charge Coverage Ratio is greater than 2.0 to 1.0.
(b) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this covenant, the amount of Indebtedness issued at a price
that is less than the principal amount thereof will be equal to the amount of
the liability in respect thereof determined in accordance with GAAP.
Section 3.10. Limitation on Restricted Payments. The Company will
---------------------------------
not, and will not cause or permit any of its Restricted Subsidiaries to,
directly or indirectly, (a) declare or pay any dividend or make any distribution
(other than dividends or distributions payable in Qualified Capital Stock of the
Company or in warrants, rights or options to purchase or acquire shares of
Qualified Capital Stock of the Company or dividends or distributions payable to
the Company or a Restricted Subsidiary and pro rata dividends or distributions
to the Company and/or its Restricted Subsidiaries and to minority holders of
Capital Stock of Restricted
41
Subsidiaries) on or in respect of shares of Capital Stock of the Company or any
Restricted Subsidiary to holders of such Capital Stock, (b) purchase, redeem or
otherwise acquire or retire for value (other than any such purchase, redemption,
acquisition or retirement that constitutes a Permitted Investment) any Capital
Stock of the Company or any RestrictedSubsidiary or any warrants, rights or
options to purchase or acquire shares of any class of such Capital Stock (other
than any such Capital Stock, warrants, rights or options owned by the Company or
any Restricted Subsidiary), (c) make any principal payment on, purchase,
defease, redeem, prepay, decrease or otherwise acquire or retire for value,
prior to any scheduled final maturity, scheduled repayment or scheduled sinking
fund payment, as the case may be, any Subordinated Indebtedness, or (d) make any
Investment (other than Permitted Investments) (each of the foregoing actions set
forth in (but not excluded from) clauses (a), (b), (c) and (d) being referred to
as a "Restricted Payment"), if at the time of such Restricted Payment or
immediately after giving effect thereto, (i) a Default or an Event of Default
shall have occurred and be continuing or (ii) the Company is not able to Incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 3.9 or (iii) the aggregate amount of Restricted Payments
-----------
(including such proposed Restricted Payment) made subsequent to the Issue Date
(the amount expended for such purposes, if other than in cash, being the Fair
Market Value of such property) shall exceed the sum of: (A) 50% of cumulative
Consolidated Net Income (or if cumulative Consolidated Net Income shall be a
loss, minus 100% of such loss) accrued during the period (treated as one
accounting period) beginning on the first day of the fiscal quarter beginning on
January l, 1999 to the end of the most recent fiscal quarter for which
consolidated financial information of the Company is available; plus (B) 100% of
the aggregate net cash proceeds received by the Company from any Person (other
than a Restricted Subsidiary of the Company) from any capital contribution to
the Company or issuance and sale (other than to a Restricted Subsidiary) of
Qualified Capital Stock of the Company subsequent to the Issue Date or any
warrants, rights or options to purchase or acquire shares of Capital Stock of
the Company or from the issuance and sale (other than to a Restricted
Subsidiary) subsequent to the Issue Date of any Indebtedness of the Company or
any Restricted Subsidiary that has been converted into or exchanged for
Qualified Capital Stock of the Company (excluding any net cash proceeds applied
in accordance with the following paragraph); plus (C) without duplication of any
amounts included in clause (A) above or clause (D) below), in the case of the
disposition or repayment of, or the receipt by the Company or any Restricted
Subsidiary of any dividends or distributions from, any Investment constituting a
Restricted Payment made after the Issue Date, an amount equal to the lesser of
the amount of such Investment and the amount received by the Company or any
Restricted Subsidiary upon such disposition, repayment, dividend or
distribution; plus (D) without duplication of any amounts included in clause (C)
above, in the event the Company or any Restricted Subsidiary makes any
Investment in a Person that, as a result of or in connection with such
Investment, becomes a Restricted Subsidiary, an amount equal to the Company's or
any Restricted Subsidiary's existing Investment in such Person that was
previously treated as a Restricted Payment; plus (E) so long as the Designation
thereof was treated as a Restricted Payment made after the Issue Date, with
respect to any Unrestricted Subsidiary that has been redesignated as a
Restricted Subsidiary after the Issue Date in accordance with Section 3.14 an
------------
amount equal to the Company's Investment in such Unrestricted Subsidiary
(provided that such amount shall not in any case exceed the Designation Amount
with respect to such Restricted Subsidiary upon its Designation; plus (F) $5.0
million; provided; that the amount of Restricted
42
Payments permitted by this clause (F) will not be reduced by any negative amount
that occurs under clause (A) or clause (H); minus (G) the Designation Amount
(measured as of the date of Designation) with respect to any Subsidiary of the
Company which has been designated as an Unrestricted Subsidiary after the Issue
Date in accordance with Section 3.14; and minus (H) 50% of the distributions
------------
made pursuant to clause (5) of the succeeding paragraph.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any
dividend within 60 days after the date of declaration of such dividend if the
dividend would have been permitted on the date of declaration; (2) if no Default
or Event of Default shall have occurred and be continuing, the acquisition of
any shares of Capital Stock of the Company or any warrants, rights or options to
purchase or acquire shares of Capital Stock of the Company, (i) in exchange for
shares of Qualified Capital Stock of the Company or any warrants, rights or
options to purchase or acquire shares of Qualified Capital Stock of the Company
or (ii) through the application of the net proceeds of a substantially
concurrent sale for cash (other than to a Restricted Subsidiary of the Company)
of shares of Qualified Capital Stock of the Company or any warrants, rights or
options to purchase or acquire shares of Qualified Capital Stock of the Company;
provided however, that the value of any such Qualified Capital Stock or
warrants, rights and options issued in exchange for such acquired capital stock,
warrants, rights or options and any such net cash proceeds shall be excluded
from clause (iii)(B) of the preceding paragraph (and were not included therein
at any time); (3) if no Default or Event of Default shall have occurred and be
continuing, the voluntary prepayment, purchase, defeasance, redemption or other
acquisition or retirement for value of any Subordinated Indebtedness (i) in
exchange for shares of Capital Stock of the Company or any warrants, rights or
options to purchase or acquire shares of Capital Stock of the Company; provided,
however, that if such Capital Stock is, or such warrants, rights or options to
purchase such Capital Stock are convertible into or exchangeable at the option
of the holder thereof for, Disqualified Capital Stock, then such Disqualified
Capital Stock shall not (A) by its terms, or upon the happening of any event,
mature or be mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, or be redeemable at the option of the holder thereof, in any case, on
or prior to the final maturity of the Indebtedness permitted to be prepaid,
purchased, defeased, redeemed or acquired pursuant to this clause (3) and (B)
have a Weighted Average Life to Maturity less than the Indebtedness permitted to
be prepaid, purchased, defeased, redeemed or acquired pursuant to this clause
(3) or (ii) in exchange for Refinancing Indebtedness or through the application
of net proceeds of a substantially concurrent sale for cash (other than to a
Restricted Subsidiary of the Company) of (A) shares of Qualified Capital Stock
of the Company or any warrants, rights or options to purchase or acquire shares
of Qualified Capital Stock of the Company or (B) Refinancing Indebtedness; and
provided, further, that the value of such Capital Stock or warrants, rights or
options issued in exchange for such Subordinated Indebtedness and any such net
cash proceeds shall be excluded from clause (iii)(B) of the preceding paragraph
(and were not included therein at any time); (4) the making of loans or advances
to officers and directors of the Company or any Restricted Subsidiary entered
into in the ordinary course of business in an amount not to exceed $1.0 million
at any one time outstanding; (5) (a) the making of distributions in cash to JH
and AGY Holdings within 75 days after the end of each taxable year of the
Company in an amount equal to the greater of (i) the product of (A) the sum of
(x) the maximum federal corporate income tax rate in effect during such taxable
year and (y) six percent
43
and (B) the sum of the items of ordinary income and expense and net capital gain
allocated to JH or AGY Holdings, as the case may be, for such taxable year
(taking into account any special allocations resulting from adjustments under
section 743 of the Code) and (ii) actual income taxes then being assessed
against JH or AGY Holdings on items of ordinary income and expense and net
capital gain allocated to JH or AGY Holdings so long as, in each case,
immediately both before and after giving effect to such payments no Event of
Default shall then exist; (b) the making of distributions to JH with respect to
the purchase price under the LLC Sale and Purchase Agreement for net asset value
not to exceed $2.5 million and (6) the repurchase, redemption or other
acquisition or retirement for value of (i) any Capital Stock of the Company held
by any member of the Company's management pursuant to any management equity
subscription agreement or stock option agreement in effect as of the date of
this Indenture or entered into thereafter with members of the management of any
Person acquired after the Issue Date in connection with the acquisition of such
Person or (ii) Capital Stock of the Company held by employees, former employees,
directors or former directors pursuant to the terms of agreements (including
employment agreements) approved by the Board of Directors; provided, however,
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Capital Stock set forth in clauses (i) and (ii) shall not exceed
$750,000 in any twelve-month period and no Default or Event of Default shall
have occurred and be continuing immediately after any such transaction. In
determining the aggregate amount of Restricted Payments made subsequent to the
Issue Date in accordance with clause (iii) of the immediately preceding
paragraph, amounts expended pursuant to clauses (1) (without duplication for the
declaration of the relevant dividend) and (4) shall be included in such
calculation and amounts expended pursuant to clauses (2), (3), (5) and (6) shall
not be included in such calculation.
Section 3.11. Limitation on Asset Sales. The Company will not, and
-------------------------
will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless (i) the Company or the applicable Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the assets sold or otherwise disposed of and (ii) at least
75% of the consideration received for the assets sold by the Company or the
Restricted Subsidiary as the case may be, in such Asset Sale shall be in the
form of (A) cash or Cash Equivalents or (B) (1) long-term assets (including
intellectual property associated with the use of such long-term assets) to be
used by the Company or any Restricted Subsidiary in a Permitted Business or (2)
Capital Stock of a Restricted Subsidiary or a Person engaged primarily in a
Permitted Business that will become, upon such purchase, a Restricted Subsidiary
(collectively, "Replacement Assets"), provided that any securities, notes or
other obligations received by the Company or a Restricted Subsidiary from such
transfers that are converted within 90 days of receipt thereof by the Company or
such Restricted Subsidiary into cash or Cash Equivalents (to the extent so
received), shall be deemed to be cash or Cash Equivalents for purposes of this
provision. The amount of any Indebtedness of the Company or such Restricted
Subsidiary (other than Subordinated Indebtedness) that is actually assumed by
the transferee in such Asset Sale and from which the Company or such Restricted
Subsidiary is fully and unconditionally released shall be deemed to be cash for
purposes of determining the percentage of cash consideration received by the
Company or such Restricted Subsidiary. The Company or such Restricted
Subsidiary, as the case may be, may apply the Net Cash Proceeds of any such
Asset Sale within 270 days of such Asset Sale to (x) repay any Senior
Indebtedness and
44
permanently reduce the commitments, if any, with respect thereto, (y) purchase
from a Person other than the Company and its Restricted Subsidiaries Replacement
Assets or (z) any combination of (x) and (y); provided, however, that if the
Company or a Restricted Subsidiary makes an investment in Replacement Assets not
earlier than 90 days prior to such Asset Sale (or the execution by the Company
or a Restricted Subsidiary of a binding commitment to consummate such Asset
Sale, which commitment is not subject to any conditions precedent other than
obtaining necessary financing and the closing in respect of the Asset Sale that
is the subject of such binding commitment occurs within 90 days of the date such
commitment is executed), then such investment shall satisfy, to the extent of
the amount of such investment, the requirements of clause (y) above.
To the extent all or a portion of the Net Cash Proceeds of any Asset
Sale are not applied within 270 days of such Asset Sale as described in clause
(x), (y) or (z) of the immediately preceding paragraph (the "Net Proceeds Offer
Trigger Date"), the Issuers will make an offer to purchase (the "Net Proceeds
Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 20
business days following the date on which such offer is made (or such longer
period as may be required by law) nor more than 60 days following such Net
Proceeds Offer Trigger Date, from all Holders on a pro rata basis (and on a pro
rata basis with the holders of any other Senior Subordinated Indebtedness with
similar provisions requiring the Issuers to offer to purchase such Senior
Subordinated Indebtedness with the proceeds of Asset Sales), that principal
amount of Notes and such other Indebtedness equal to such unapplied Net Cash
Proceeds at a price, in the case of the Notes, equal to 100% of the principal
amount of the Notes to be purchased, plus accrued and unpaid interest thereon,
to the date of purchase (subject to the right of Holders of record on a record
date to receive interest due on an interest payment date that is on or prior to
such date of purchase). Notwithstanding the forgoing, the Issuers may defer the
Net Proceeds Offer until there is an aggregate amount of unapplied Net Cash
Proceeds equal to or in excess of $5.0 million resulting from one or more Asset
Sales (at which time, the entire amount of unapplied Net Cash Proceeds, and not
just the amount in excess of $5.0 million, shall be applied as required pursuant
to this paragraph).
Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 30 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders of Notes and
holders of other Senior Subordinated Indebtedness, if any, which are or is the
subject of a Net Proceeds Offer properly tender Notes or such other Senior
Subordinated Indebtedness in an aggregate amount exceeding the amount of
unapplied Net Cash Proceeds, Notes of tendering Holders and such other Senior
Subordinated Indebtedness of tendering holders will be purchased on a pro rata
basis (based on amounts tendered).
The Issuers will comply with the requirements of Rule 14e-l 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 purchase
of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of
any securities laws or regulations conflict with this
45
Section 3.11, the Issuers shall comply with the applicable securities laws and
------------
regulations and shall not be deemed to have breached their obligations under
this Section 3.11 by virtue thereof.
------------
Upon completion of a Net Proceeds Offer, the amount of Net Cash
Proceeds will be reset at zero. Accordingly, to the extent that the aggregate
amount of Notes and other Senior Subordinated Indebtedness tendered pursuant to
a Net Proceeds Offer is less than the aggregate amount of unapplied Net Cash
Proceeds, the Issuers may use any remaining Net Cash Proceeds for general
corporate purposes.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 4.1, the Surviving
-----------
Entity shall be deemed to have sold the properties and assets of the Company and
its Restricted Subsidiaries not so transferred for purposes of this covenant,
and shall comply with the provisions of this covenant with respect to such
deemed sale as if it were an Asset Sale. In addition, the Fair Market Value of
such properties and assets of the Company or its Restricted Subsidiaries deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this
covenant. If at any time any non-cash consideration received by the Company or
any Restricted Subsidiary, as the case may be, in connection with any Asset Sale
is converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this covenant.
Section 3.12. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries. The Company will not, and will not cause or
---------------------------------
permit any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or permit to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends or
make any other distributions on or in respect of its Capital Stock to the
Company or any other Restricted Subsidiary or pay any Indebtedness owed to the
Company or any other Restricted Subsidiary; (b) make loans or advances to, or
guarantee any Indebtedness or other obligations of, or make any Investment in,
the Company or any other Restricted Subsidiary; or (c) transfer any of its
property or assets to the Company or any other Restricted Subsidiary, except for
such encumbrances or restrictions existing under or by reason of: (1) applicable
law; (2) this Indenture; (3) the Senior Credit Facility as in effect on the
Issue Date, and any amendments or restatements thereof; provided, however, that
any such amendment or restatement is not materially more restrictive with
respect to such encumbrances or restrictions than those in existence on the
Issue Date; (4) customary non-assignment provisions of any contract and
customary provisions restricting assignment or subletting in any lease governing
a leasehold interest of any Restricted Subsidiary, or any customary restriction
on the ability of a Restricted Subsidiary to dividend, distribute or otherwise
transfer any asset which secures Purchase Money Indebtedness of such Restricted
Subsidiary; (5) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person or the properties or assets of the
Person so acquired; (6) restrictions with respect to a Restricted Subsidiary of
the Company imposed pursuant to a binding agreement which has been entered into
for the sale or disposition of Capital
46
Stock or assets of such Subsidiary; provided however, that such restrictions
apply solely to the Capital Stock or assets of such Restricted Subsidiary which
are being sold; (7) customary restrictions imposed on the transfer of
copyrighted or patented materials; (8) secured Indebtedness otherwise permitted
to be Incurred pursuant to Section 3.9 and 3.16, which encumbrance or
----------- ----
restriction is not applicable to any property or assets other than the property
or assets subject to the Lien securing such Indebtedness; (9) restrictions with
respect to a Restricted Subsidiary that is a Foreign Subsidiary contained in any
instrument governing Indebtedness of any such Restricted Subsidiary permitted
pursuant to clause (xiv) of the definition of Permitted Indebtedness; or (10) an
agreement governing Indebtedness Incurred to Refinance the Indebtedness issued,
assumed or Incurred pursuant to an agreement referred to in clause (3), (5) or
(8) above; provided, however, that such refinancing agreement is not materially
more restrictive with respect to such encumbrances or restrictions than those
contained in the agreement referred to in such clause (3), (5) or (8), as
determined by the Board of Directors in their reasonable good faith judgment.
Section 3.13. Limitation on the Sale or Issuance of Capital Stock of
------------------------------------------------------
Restricted Subsidiaries. The Company will not sell or otherwise dispose of any
-----------------------
shares of Capital Stock of a Restricted Subsidiary, and will not cause or permit
any Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock, except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) the sale of 100% of the shares of the
Capital Stock of any Restricted Subsidiary owned by the Company or any
Restricted Subsidiary effected in accordance with Section 3.11 and 4.1; (iii) in
------------ ---
the case of Restricted Subsidiaries other than Wholly Owned Restricted
Subsidiaries, issuance of Capital Stock on a pro rata basis to the Company and
its Restricted Subsidiaries and minority shareholders of such Restricted
Subsidiary (or on less than a pro rata basis to any such minority holder if such
minority holder does not acquire its pro rata amount); (iv) the sale of Capital
Stock of a Restricted Subsidiary or issuance by a Restricted Subsidiary of
Capital Stock if following such sale or issuance, (x) such Restricted Subsidiary
is no longer a Subsidiary, (y) the Company's continuing Investment in such
former Restricted Subsidiary is in compliance with Section 3.10 and (z) any sale
------------
of Capital Stock by the Company or such Restricted Subsidiary is made in
compliance with Section 3.11; provided, that, notwithstanding the foregoing,
------------
Capital shall, at all times prior to the reorganization of the Company as a
corporation, remain a Wholly Owned Restricted Subsidiary of the Company.
Section 3.14. Designation of Unrestricted Subsidiaries. The Company
----------------------------------------
may designate any Subsidiary of the Company (other than Capital) as an
"Unrestricted Subsidiary" (a "Designation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation:
(ii) at the time of and after giving effect to such Designation, the
Issuers could Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 3.9 and
-----------
47
(iii) the Issuers would be permitted to make an Investment at the
time of Designation (assuming the effectiveness of such Designation and
treating such Designation as an Investment at such time) pursuant to the
first paragraph of Section 3.10 in an amount (the "Designation Amount")
------------
equal to the amount of the Company's Investment in such Subsidiary on such
date.
Neither the Company nor any Restricted Subsidiary shall at any time
(x) provide credit support for, subject any of its property or assets (other
than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of,
or guarantee, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) unless such
credit support or guarantee constitutes an Investment permitted pursuant to
Section 3.10, (y) be directly or indirectly liable for any Indebtedness of any
------------
Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary,
except for any non-recourse guarantee given solely to support the pledge by the
Company or any Restricted Subsidiary of the Capital Stock of any Unrestricted
Subsidiary. For purposes of the foregoing, the Designation of a Subsidiary of
the Company as an Unrestricted Subsidiary shall be deemed to include the
Designation of all of the Subsidiaries of such Subsidiary.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:
(i) No Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by resolutions of
the Board of Directors of the Company, delivered to the Trustee certifying
compliance with the foregoing provisions.
Section 3.15. Limitation on Layered Indebtedness. The Company shall
----------------------------------
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
Incur any Indebtedness that is subordinate in right of payment to any other
Indebtedness, unless such Indebtedness is subordinate in right of payment to, or
ranks pari passu with, the Notes or, in the case of Restricted Subsidiaries that
are Note Guarantors, such Indebtedness is subordinate in right of payment to, or
ranks pari passu with, the Note Guarantees of such Note Guarantors.
No Note Guarantor will, directly or indirectly, Guarantee any
Indebtedness of the Issuers that is subordinate in right of payment to any other
Indebtedness of the Issuers unless such Guarantee is subordinate in right of
payment to, or ranks pari passu with, the Note Guarantee of such Note Guarantor.
48
Section 3.16. Limitation on Liens. The Company will not, and will not
-------------------
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
Incur any Liens of any kind against or upon any of their respective properties
or assets, whether owned on the Issue Date or acquired after the Issue Date, or
any proceeds therefrom, to secure any Indebtedness unless contemporaneously
therewith effective provision is made, (i) in the case of the Issuers to secure
the Notes and all other amounts due hereunder, and (ii) in the case of a Note
Guarantor, to secure such Note Guarantor's Note Guarantee and all other amounts
due hereunder, in each case, equally and ratably with such Indebtedness (or, in
the event that such Indebtedness is subordinated in right of payment to the
Notes or such Note Guarantee, prior to such Indebtedness) with a Lien on the
same properties and assets securing such Indebtedness for so long as such
Indebtedness is secured by such Lien, except for (A) Liens securing Senior
Indebtedness (including, without limitation, Indebtedness Incurred under the
Senior Credit Facility) and (B) Permitted Liens.
Section 3.17. Limitation on Transactions with Affiliates. (a) The
------------------------------------------
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (each an "Affiliate Transaction"), unless:
(i) the terms of such Affiliate Transaction are no less favorable than those
that could reasonably be expected to be obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate of the
Company; (ii) in the event that such Affiliate Transaction (other than a JV
Contract) involves aggregate payments, or transfers of property or services with
a Fair Market Value in excess of $5.0 million during any twelve-month period,
the terms of such Affiliate Transaction shall be approved by a majority of the
members of the Board of Directors of the Company (including a majority of the
disinterested members thereof), such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions, (iii) in the event that such
Affiliate Transaction constitutes a JV Contract which involves aggregate
payments or transfers of property or services with a Fair Market Value in excess
of $5.0 million during any twelve month period, the terms of which shall be
approved by a majority of the disinterested members of the Board of Directors of
the Company, such approval to be evidenced by a Board Resolution stating that
such members of the Board of Directors have determined that such transaction
complies with the foregoing provisions and (iv) in the event that such Affiliate
Transaction (other than a JV Contract) involves aggregate payments, or transfer
of property or services with a Fair Market Value, in excess of $10.0 million
during any twelve month period, the Company shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction or
series of related transactions to the Company and the relevant Restricted
Subsidiary (if any) from a financial point of view from an Independent Financial
Advisor and file the same with the Trustee. For purposes hereof, the members of
the Board of Directors representing the LLC Member which is not a party to such
Affiliate Transaction shall be deemed to be disinterested directors.
(b) Notwithstanding the foregoing, the restrictions set forth in
paragraph (a) shall not apply to (i) transactions with or among the Company and
any Restricted Subsidiary or
49
between or among Restricted Subsidiaries; (ii) reasonable fees and compensation
paid to, and any indemnity provided on behalf of, officers, directors,
employees, consultants or agents of the Company or any Restricted Subsidiary as
determined in good faith by the Company's Board of Directors; (iii) any
transactions undertaken pursuant to any contractual obligations or rights in
existence on the Issue Date (as in effect on the Issue Date), including any JV
Contracts; (iv) any Restricted Payments made in compliance with Section 3.10;
------------
(v) loans and advances to officers, directors and employees of the Company or
any Restricted Subsidiary for travel, entertainment, moving and other relocation
expenses, in each case made in the ordinary course of business; (vi) the
entering into by the Company and any of its consolidated Restricted Subsidiaries
of a tax sharing or similar arrangement.
Section 3.18. Change of Control. (a) Upon the occurrence of a Change
-----------------
of Control, each Holder will have the right to require that the Issuers purchase
all or a portion (in integral multiples of $1,000) of such Holder's Notes
pursuant to the offer described in this Section 3.18 (the "Change of Control
------------
Offer"), at a purchase price equal to 101% of the principal amount thereof plus
accrued and unpaid interest thereon to the date of purchase (subject to the
right of Holders of record on a record date to receive interest due on the
related interest payment date that is on or prior to such date of purchase).
Within 30 days following the date upon which the Change of Control occurred, the
Company must send, by first-class mail, a notice to each Holder, with a copy to
the Trustee, which notice shall govern the terms of the Change of Control Offer.
Such notice shall state, among other things, the purchase date, which must be no
earlier than 30 days nor later than 60 days from the date such notice is mailed,
other than as may be required by law (the "Change of Control Payment Date").
Holders electing to have a Note purchased pursuant to a Change of Control Offer
will be required to surrender the Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
business day prior to the Change of Control Payment Date.
(b) The Issuers will comply with the requirements of Rule 14e-l 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 purchase
of Notes pursuant to a Change of Control Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
-------
3.18, the Issuers shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached their obligations this
Section 3.18 by virtue thereof.
------------
Section 3.19. Conduct of Business; Limitation on Activities of
------------------------------------------------
Capital. The Company and its Restricted Subsidiaries will not engage in any
businesses other than a Permitted Business; provided, that, notwithstanding the
foregoing, the Company shall not permit Capital to acquire or hold any
significant assets or other properties or engage in any business activities.
Section 3.20. Reports to Holders. Notwithstanding that the Company
------------------
or Capital may not be subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, so long as any Notes remain outstanding, the Issuers
shall (i) provide the Trustee, the Holders and the Initial Purchasers with such
annual reports and such information, documents and other
50
reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections within 15 days after
the times specified for the filing of such information, documents and reports
under such Sections and (ii) beginning on the earlier of (x) the effective date
of the Exchange Offer Registration Statement and (y) 150 days following the
Issue Date, file with the Commission, to the extent permitted, the information,
documents and reports referred to in clause (i) within the periods specified
under such Sections. In addition, at any time when either the Company or Capital
is subject to or is not current in its reporting obligations under clause (ii)
of the preceding sentence, the Issuers will make available, upon request, to any
holder and any prospective purchaser of Notes the information required pursuant
to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers'
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 3.21. Payments for Consent. 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 Notes for or as an inducement to any consent, waiver or amendment of any
terms or provisions of the Notes, unless such consideration is offered to be
paid or agreed to be paid to all Holders of the Notes that so consent, waive or
agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
ARTICLE IV
SUCCESSOR COMPANY
Section 4.1. Merger, Consolidation and Sale of Assets. (a) Neither of
----------------------------------------
the Issuers will, in a single transaction or series of related transactions,
consolidate or merge with or into any Person (whether or not the Company is the
surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose
of (or cause or permit any Restricted Subsidiary to sell, assign, transfer,
lease, convey or otherwise dispose of) all or substantially all of the Company's
and its Restricted Subsidiaries' properties and assets (determined on a
consolidated basis for the Company and its Restricted Subsidiaries) to any
Person unless:
(i) either (1) the Company shall be the surviving or continuing
entity or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the Company's
Restricted Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under
the laws of the United States or any State thereof and (y) shall expressly
assume, by supplemental indenture (in
51
form and substance satisfactory to the Trustee), executed and delivered to
the Trustee, the due and punctual payment of the principal of, and premium,
if any, and interest on all of the Notes and the performance and observance
of every covenant of the Notes and this Indenture and the Registration
Rights Agreement on the part of the Company to be performed or observed;
(ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including giving effect
on a pro forma basis to any Indebtedness, including any Acquired
Indebtedness, Incurred in connection with or in respect of such
transaction), (A) the Company or such Surviving Entity, as the case may be,
shall be able to Incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 3.9 or (B) the
-----------
Consolidated Fixed Charge Coverage Ratio for the Company or such Surviving
Entity, as the case may be, would be greater than the Consolidated Fixed
Charge Coverage Ratio for the Company immediately prior to such
transaction;
(iii) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above
(including, without limitation, giving effect on a pro forma basis to any
Indebtedness, including any Acquired Indebtedness, Incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing;
(iv) each Note Guarantor (including Persons which become Note
Guarantors as a result of the transaction) shall have confirmed by
Supplemental Indenture that its Note Guarantee shall apply for such
Person's Obligations in respect of this Indenture and the Notes; and
(v) the Company or the Surviving Entity shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with the applicable provisions of this Indenture and that all
conditions precedent in this Indenture relating to such transaction have
been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
The provisions of clause (ii) above shall not apply to (x) any
transfer of the properties or assets of a Restricted Subsidiary of the Company
to the Company or to a Wholly Owned Restricted Subsidiary, (y) any merger of a
Restricted Subsidiary into the Company or (z) any merger of the Company into a
Restricted Subsidiary.
52
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the properties and assets of the Company and its
Restricted Subsidiaries in accordance with the foregoing, in which the Company
is not the continuing corporation, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
lease or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and under
the Notes with the same effect as if such surviving entity had been named as
such.
(b) Each Note Guarantor (other than any Note Guarantor whose Note
Guarantee is to be released in accordance with Section 11.2 will not, and the
------------
Company will not cause or permit any Note Guarantor to, consolidate with or
merge into any Person that is not a Note Guarantor unless such Person (if such
Person is the surviving entity) assumes by supplemental indenture all of the
obligations of such Note Guarantor in respect of its Note Guarantee.
ARTICLE V
REDEMPTION OF NOTES
Section 5.1. Optional Redemption. The Notes may be redeemed, as a
-------------------
whole or from time to time in part, subject to the conditions and at the
redemption prices specified in the form of Notes set forth in Exhibits A and B
----------------
hereto.
Section 5.2. Applicability of Article. Redemption of Notes at the
------------------------
election of the Issuers or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article.
Section 5.3. Election to Redeem; Notice to Trustee. (a) The
-------------------------------------
election of the Issuers to redeem any Notes pursuant to Section 5.1 shall be
-----------
evidenced by Board Resolutions. In case of any redemption at the election of
the Issuers, the Issuers shall, upon not less than 30 and not more than 60 days
prior to the Redemption Date fixed by the Issuers, notify the Trustee of the
provision of the Notes pursuant to which the redemption is being made, the
Redemption Date, the principal amount of Notes to be redeemed and shall deliver
to the Trustee such documentation and records as shall enable the Trustee to
select the Notes to be redeemed.
(b) In the event that less than all of the Notes are to be redeemed
at any time, selection of such Notes for redemption will be made by the Trustee
in compliance with the requirements of the principal national securities
exchange, if any, on which such Notes are listed or, if such Notes are not then
listed on a national securities exchange, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate; provided, however, that
no Notes of a principal amount of $1,000 or less shall be redeemed in part and
Notes of a principal amount in excess of $1,000 may be redeemed in part in
multiples of $1,000 only; and provided, further, that if a partial redemption is
made with the proceeds of a Public Equity Offering, selection of the Notes or
portions thereof for redemption shall, subject to the preceding proviso, be made
by the Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of DTC or a successor depositary), unless
such method is otherwise prohibited. Notice of redemption shall be mailed by
first-class mail at least 30 but not more than
53
60 days before the Redemption Date to each Holder of Notes to be redeemed at its
registered address. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in a principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the Redemption Date, interest
will cease to accrue on Notes or portions thereof called for redemption as long
as the Issuers had deposited with the Paying Agent funds in satisfaction of the
applicable redemption price.
(c) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
Section 5.4. Notice of Redemption. (a) Notice of redemption shall
--------------------
be given in the manner provided for in Section 13.2 not less than 30 nor more
------------
than 60 days prior to the Redemption Date, to each Holder of Notes to be
redeemed. At the Issuers' request, the Trustee shall give notice of redemption
in the Issuers' name and at the Issuers' expense; provided, however, that the
Issuers shall deliver to the Trustee, at least 45 days prior to the Redemption
Date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
following items.
(b) All notices of redemption shall state (in addition to the CUSIP
number, if any):
(1) the Redemption Date,
(2) the redemption price and the amount of accrued interest to
the Redemption Date payable as provided in Section 5.6, if any,
-----------
(3) if less than all Outstanding Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be Outstanding after such partial
redemption,
(4) in case any Note is to be redeemed in part only, the notice
which relates to such Note shall state that on and after the Redemption
Date, upon surrender of such Note, the Holder will receive, without charge,
a new Note or Notes of authorized denominations for the principal amount
thereof remaining unredeemed,
(5) that on the Redemption Date the redemption price (and
accrued interest, if any, to the Redemption Date payable as provided in
Section 5.6) will become due and payable upon each such Note, or the
-----------
portion thereof, to be redeemed, and, unless the Issuers default in making
the redemption payment, that interest on Notes called for redemption (or
the portion thereof) will cease to accrue on and after said date,
54
(6) the place or places where such Notes are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) the name and address of the Paying Agent,
(8) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price,
(9) the CUSIP or ISIN number, and that no representation is
made as to the accuracy or correctness of the CUSIP or ISIN number, if any,
listed in such notice or printed on the Notes, and
(10) the paragraph of the Notes pursuant to which the Notes are
to be redeemed.
Section 5.5. Section Deposit of Redemption Price. On or prior to 11
-----------------------------------
A.M. on the relevant Redemption Date, the Issuers shall deposit with the Trustee
or with a Paying Agent (or, if one of the Issuers is acting as Paying Agent,
segregate and hold in trust as provided in Section 2.4) an amount of money
-----------
sufficient to pay the redemption price of, and accrued interest on, all the
Notes which are to be redeemed on that date.
Section 5.6. Notes Payable on Redemption Date. Notice of redemption
--------------------------------
having been given in accordance with this Article V, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the redemption price
therein specified (together with accrued interest, if any, to the Redemption
Date), and from and after such date (unless the Issuers shall default in the
payment of the redemption price and accrued interest) such Notes shall cease to
bear interest. Upon surrender of any such Note for redemption in accordance
with said notice, such Note shall be paid by the Issuers at the redemption
price, together with accrued interest, if any, to the Redemption Date (subject
to the rights of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date). If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal, and premium, if any, shall, until paid, bear interest from the
Redemption Date at the rate borne by the Notes.
Section 5.7. Notes Redeemed in Part. Upon surrender of a Note which
----------------------
is to be redeemed in part, the Issuers shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Note at the
expense of the Issuers, a new Note or Notes, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Note so surrendered,
provided, that each such new Note will be in a principal amount of $1,000 or
integral multiple thereof.
55
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default. The following shall be "Events of
-----------------
Default":
(a) the failure to pay the principal of (or premium, if any, on) any
Note when due, at Stated Maturity, upon redemption or otherwise (including
the failure to make a required payment to purchase Notes tendered pursuant
to a Change of Control Offer or a Net Proceeds Offer) and whether or not
prohibited under Articles X and XII");
(b) the failure to pay any interest on any Notes when due, continued
for 30 days or more (whether or not prohibited under Articles X and XII");
(c) the failure to perform or comply with Section 4.1;
-----------
(d) the failure to perform or comply with any other covenant or
agreement contained herein or in the Notes continued for 30 days or more
after written notice to the Issuers from the Trustee or the Holders of at
least 25% in aggregate principal amount of the Outstanding Notes;
(e) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary, or the
acceleration of the final stated maturity of any such Indebtedness by
reason of a default or event of default in respect of such Indebtedness, in
any case if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for
failure to pay principal at final maturity or which has been so
accelerated, aggregates $7.5 million or more at any time;
(f) one or more judgments in an aggregate amount in excess of $7.5
million (to the extent not covered by third-party insurance as to which a
financially sound insurer has not disclaimed coverage) shall have been
rendered against the Company or any of its Restricted Subsidiaries and such
judgment or judgments remain undischarged, unpaid or unstayed for a period
of 60 days after such judgment or judgments become final and non-
appealable;
(g) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of either of the Issuers or any
Significant Subsidiary of the Company in an involuntary case or proceeding
under any Bankruptcy Law or (ii) a decree or order (A) adjudging either of
the Issuers or any Significant Subsidiary of the Company a bankrupt or
insolvent, or (B) approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of, or in respect
of, either of the Issuers or any Significant Subsidiary of the Company
under any Bankruptcy Law, or (C) appointing a Custodian of either of the
Issuers or any Significant Subsidiary of the Company or of any substantial
part of the property of either of the Issuers or any
56
Significant Subsidiary of the Company, or (D) ordering the winding-up or
liquidation of the affairs of either of the Issuers or any Significant
Subsidiary of the Company, and in each case, the continuance of any such
decree or order for relief or any such other decree or order unstayed and
in effect for a period of 60 consecutive calendar days; or
(h) (i) the commencement by either of the Issuers or any Significant
Subsidiary of the Company of a voluntary case or proceeding under any
Bankruptcy Law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent; or (ii) the consent by either of the Issuers or any
Significant Subsidiary of the Company to the entry of a decree or order for
relief in respect of either of the Issuers or any Significant Subsidiary of
the Company in an involuntary case or proceeding under any Bankruptcy Law
or to the commencement of any bankruptcy or insolvency case or proceeding
against either of the Issuers or any Significant Subsidiary of the Company;
or (iii) the filing by either of the Issuers or any Significant Subsidiary
of the Company of a petition or answer or consent seeking reorganization or
relief under any Bankruptcy Law; or (iv) the consent by either of the
Issuers or any Significant Subsidiary of the Company to the filing of such
petition or to the appointment of or taking possession by a Custodian of
either of the Issuers or any Significant Subsidiary of the Company or of
any substantial part of the property of either of the Issuers or any
Significant Subsidiary of the Company, or (v) the making by either of the
Issuers or any Significant Subsidiary of the Company of an assignment for
the benefit of creditors; or (vi) the admission by either of the Issuers or
any Significant Subsidiary of the Company in writing of its inability to
pay its debts generally as they become due; or (vii) the approval by
stockholders of either of the Issuers or any Significant Subsidiary of the
Company of any plan or proposal for the liquidation or dissolution of
either of the Issuers or any Significant Subsidiary of the Company; or
(viii) the taking of corporate action by either of the Issuers or any
Significant Subsidiary of the Company in furtherance of any such action; or
(i) the Note Guarantee of any Note Guarantor is held or declared to be
unenforceable or invalid in a judicial proceeding or ceases for any reason
to be in full force and effect (other than by reason of a release of such
Note Guarantor from its Note Guarantee in accordance with the terms herein)
or any Note Guarantor or any Person acting on behalf of any Note Guarantor
denies or disaffirms such Note Guarantor's obligations under its Note
Guarantee (other than by reason of a release of such Note Guarantor from
its Note Guarantee in accordance with the terms herein).
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The Issuers shall deliver to a Trust Officer of the Trustee, within 30
days after either Issuer obtains knowledge of the occurrence thereof, written
notice in the form of an Officers' Certificate of any Default or Event of
Default under clauses (c)-(f), (i) and (j) of this
57
Section 6.1, their status and what action the Issuers are taking or propose to
-----------
take in respect thereof.
Section 6.2. Acceleration.
------------
If an Event of Default (other than an Event of Default relating to
either of the Issuers specified in clauses (g) and (h) of Section 6.1) shall
-----------
occur and be continuing, the Trustee or the Holders of at least 25% in principal
amount of Outstanding Notes may declare the principal of (and premium, if any)
and accrued and unpaid interest on all the Notes to be due and payable by notice
in writing to the Issuers and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice"),
and the same shall become immediately due and payable. If an Event of Default
specified in 6.1(g) or 6.1(h) relating to either of the Issuers occurs and is
continuing, then all unpaid principal of, and premium, if any, and accrued and
unpaid interest on all of the Outstanding Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Notes, the Holders of a majority in principal amount of the Outstanding Notes
may rescind and cancel such declaration and its consequences (i) if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration, (ii) to the
extent the payment of such interest is lawful, interest on overdue installments
of interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid and (iii) if the Issuers have paid
the Trustee its reasonable compensation and reimbursed the Trustee for its
reasonable expenses, disbursements and advances. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
Section 6.3. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.4. Waiver of Past Defaults. Subject to Section 9.2, the
-----------------------
Holders of not less than a majority in principal amount of the Outstanding Notes
by written notice to the Trustee or by written consent may waive any existing
Default or Event of Default and its consequences, except a Default in the
payment of principal of, premium, if any, and interest and Additional Interest,
if any, on any Note. The Issuers shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents. When a Default or Event of
Default is waived, it is cured and ceases.
58
Section 6.5. Control by Majority. The Holders of a majority in
-------------------
principal amount of the Outstanding Notes may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. Subject to Sections 7.1
------------
and 7.2, however, the Trustee may refuse to follow any direction that conflicts
---
with law or this Indenture or, that the Trustee determines is unduly prejudicial
to the rights of other Noteholders; provided, however, that the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such
direction.
Section 6.6. Limitation on Suits. No Holder of any Notes will have
-------------------
any right to institute any proceeding hereunder, unless (i) such Holder gives to
a Trust Officer of the Trustee written notice of a continuing Event of Default,
(ii) Holders of at least 25% in principal amount of the Outstanding Notes make a
written request to pursue the remedy, (iii) such Holders of the Notes provide
security and indemnity satisfactory to the Trustee, (iv) the Trustee does not
comply within 60 days and (v) during such 60 day period the Holders of a
majority in principal amount of the Outstanding Notes do not give the Trustee a
written direction which, in the opinion of the Trustee, is inconsistent with the
request. Otherwise, no Holder of any Note will have any right to institute any
proceeding with respect to this Indenture or for any remedy thereunder, except
(i) a Holder of a Note may institute suit for enforcement of payment of the
principal of and premium, if any, or interest on such Note on or after the
respective due dates expressed in such Note or (ii) the institution of any
proceeding with respect to this Indenture or any remedy hereunder, including,
without limitation, acceleration, by the Holders of a majority in principal
amount of the Outstanding Notes; provided, however, that upon institution of any
proceeding or exercise of any remedy, such Holder or Holders provide the Trustee
with prompt notice thereof.
Section 6.7. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture (including, without limitation, Section
-------
6.6), the right of any Holder to receive payment of principal of, premium, if
---
any, or interest on the Notes held by such Holder, on or after the respective
due dates expressed in the Notes, 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 6.8. Collection Suit by Trustee. If an Event of Default
--------------------------
specified in clauses (a) or (b) of Section 6.1 occurs and is continuing, the
-----------
Trustee may recover judgment in its own name and as trustee of an express trust
against the Issuers for the whole amount then due and owing (together with
applicable interest on any overdue principal, and to the extent lawful, interest
on overdue interest) and the amounts provided for in Section 7.7.
-----------
Section 6.9. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders allowed
in any judicial proceedings relative to the Issuers, the Company's Subsidiaries
or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any Note
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the
59
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 7.7.
-----------
Section 6.10. Priorities. If the Trustee collects any money or
----------
property pursuant to this Article VI, it shall pay out the money or property in
----------
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
-----------
SECOND: if the Holders proceed against the Issuers directly without
the Trustee in accordance with this Indenture, to the Holders for their
collection costs;
THIRD: to the Holders for amounts due and unpaid on the 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 Notes
for principal and interest, respectively; and
FOURTH: to the Issuers or, to the extent the Trustee collects any
amount pursuant to Article XI hereof from any Note Guarantor, to such Note
Guarantor.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Issuers shall mail to each Noteholder and the Trustee a notice that states
the record date, the payment date and amount to be paid.
Section 6.11. Undertaking for Costs. In any suit for the enforcement
---------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by the Issuers, a suit by a Holder pursuant to Section 6.7 or a
-----------
suit by Holders of more than 10% in principal amount of the Outstanding Notes.
ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee. (a) If a Default or an Event of
-----------------
Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs; provided that if an Event of
Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders
60
unless such Holders have offered indemnity or security satisfactory to the
Trustee against loss, liability or expense.
(b) Except during the continuance of a Default or an Event of
Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether
or not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2 or Section 6.5.
----------- -----------
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
61
(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers shall be sufficient if
signed by an Officer of the Issuers.
(j) 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 security and indemnity
satisfactory to the Trustee against the costs, expenses (including reasonable
attorneys' fees and expenses) and liabilities that might be incurred by it in
compliance with such request or direction.
Section 7.2. Rights of Trustee. (a) Subject to Section 7.1, the
----------------- -----------
Trustee may rely on any document reasonably 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.
(a) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(b) 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.
(c) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(d) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
Section 7.3. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuers or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
------------- ----
Section 7.4. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Issuers' use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Issuers in this Indenture or in any document issued in connection with
the sale of the Notes or in the Notes other than the Trustee's certificate of
authentication.
Section 7.5. Notice of Defaults. If a Default or Event of Default
------------------
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Noteholder notice of the Default or Event of
Default within five days after it is known to a trust officer or written notice
of it is received by the Trustee. Except in the case of a Default or Event
62
of Default in payment of principal of, premium, if any, or interest on any Note
(including payments pursuant to the optional redemption or required repurchase
provisions of such Note, if any), the Trustee may withhold the notice if and so
long as a committee of its trust officers in good faith determines that
withholding the notice is not opposed to the interests of the Noteholders.
Section 7.6. Reports by Trustee to Holders. The Trustee shall comply
-----------------------------
with TIA (S) 313. The Issuers agree to notify promptly the Trustee whenever the
Notes become listed on any stock exchange and of any delisting thereof.
Section 7.7. Compensation and Indemnity. (a) The Issuers shall pay
--------------------------
to the Trustee and any predecessor trustee from time to time such compensation
as shall be agreed to in writing by the Company and the Trustee for its
acceptance of this Indenture and services hereunder as the Issuers and the
Trustee shall from time to time agree in writing. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuers shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
costs of preparing and reviewing reports, certificates and other documents,
costs of preparation and mailing of notices to Noteholders and reasonable costs
of counsel retained by the Trustee in connection with the delivery of an Opinion
of Counsel or otherwise, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts.
(b) The Issuers and the Note Guarantors shall jointly and severally
indemnify the Trustee against any and all loss, liability or expense (including
reasonable attorneys' fees and expenses) incurred by it without negligence or
bad faith on its part in connection with the administration of this trust and
the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
-----------
against any claims (whether asserted by any Noteholder, the Issuers or
otherwise). The Trustee shall notify the Issuers promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Issuers
shall not relieve the Issuers of their obligations hereunder. The Issuers shall
defend the claim and the Trustee may have separate counsel and the Issuers shall
pay the fees and expenses of such counsel provided that the Issuers shall not be
required to pay such fees and expenses if it assumes the Trustee's defense, and,
in the reasonable judgment of outside counsel to the Trustee, there is no
conflict of interest between the Issuers and the Trustee in connection with such
defense. The Issuers need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith.
(c) To secure the Issuers' payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes. The Trustee's right to receive
payment of any amounts due under this Section 7.7 shall not be subordinate to
-----------
any other liability or Indebtedness of either of the Issuers.
63
(d) The Issuers' payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in clauses (g) and (h) of Section 6.1 with
-----------
respect to either of the Issuers, the expenses are intended to constitute
expenses of administration under any Bankruptcy Law; provided, however, that
this shall not affect the Trustee's rights as set forth in this Section or
Section 6.10.
------------
Section 7.8. Replacement of Trustee. (a) The Trustee may resign at
----------------------
any time by so notifying the Issuers. The Holders of a majority in principal
amount of the Outstanding Notes may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Issuers shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
------------
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns or is removed by the Issuers or by the
Holders of a majority in principal amount of the Outstanding Notes and such
Holders or the Issuers do not reasonably promptly appoint a successor Trustee,
or if a vacancy exists in the office of the Trustee for any reason (the Trustee
in such event being referred to herein as the retiring Trustee), the Issuers
shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
-----------
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Outstanding Notes may petition, at the
Issuers' expense, any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, any Noteholder
------------
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section, the Issuers' obligations under Section 7.7 shall continue for the
-----------
benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets
64
to, another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
Section 7.10. Eligibility; Disqualification. The Trustee shall at
-----------------------------
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of either of the
Issuers are outstanding if the requirements for such exclusion set forth in TIA
(S) 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Issuers. The
-------------------------------------------------
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1. Termination of the Issuers' Obligations.
---------------------------------------
(a) This Indenture will be discharged and will cease to be of further
effect (except as to surviving rights, or registration of transfer or exchange
of the Notes, as expressly provided for below) as to all outstanding Notes when:
(i) either (A) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid
and Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuers and thereafter repaid to the
Issuers or discharged from such trust) have been delivered to the Trustee
for cancellation or (B) all Notes not theretofore delivered to the Trustee
for cancellation have become due and payable, or will be due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Issuers have irrevocably deposited or caused to be
deposited with the Trustee cash or U.S. Government Obligations sufficient
to pay and discharge the entire Indebtedness on the
65
Notes not theretofore delivered to the Trustee for cancellation, for
principal of, premium, if any, and interest on the Notes to the earlier of
the Stated Maturity or the Redemption Date together with irrevocable
instructions from the Issuers directing the Trustee to apply such funds
and/or the proceeds of such U.S. Government Obligations to the payment
thereof at maturity or redemption, as the case may be;
(ii) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result
in a breach or violation of, or constitute a default under, any other
instrument to which the Issuers are a party or by which it is bound;
(iii) the Issuers shall have paid all other sums payable by it
hereunder or under the Notes; and
(iv) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Issuers' obligations under
the Notes and this Indenture have been complied with. Such Opinion of
Counsel shall also state that such satisfaction and discharge does not
result in a default under any instrument evidencing debt senior to the
Notes or any other agreement or instrument then known to such counsel that
binds or affects the Issuers.
Notwithstanding the foregoing paragraph, the Issuers' obligations in
Sections 2.5, 2.8, 2.9, 3.1, 3.2, 3.8, 7.7 and in this Article VIII shall
------------ --- --- --- --- --- ---
survive until all Notes are no longer Outstanding. After all Notes are no
longer Outstanding, the Issuers' obligations in Sections 7.7, 8.4 and 8.5 shall
------------ --- ---
survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Issuers' obligations under the
Notes and this Indenture except for those surviving obligations specified above.
Section 8.2. Legal Defeasance and Covenant Defeasance.
----------------------------------------
(a) The Issuers may, at their option, at any time, elect to have
either paragraph (b) or (c) below be applied to all Outstanding Notes upon
compliance with the conditions set forth in Section 8.3.
-----------
(b) Upon the Issuers' exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.3, be deemed to have been
-----------
discharged from their Obligations with respect to all Outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Issuers shall
be deemed to have paid and discharged the entire Indebtedness represented by the
Outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.4 hereof and the other Sections of this Indenture
-----------
referred to in (i) and (ii) below, and to have satisfied all their
66
other Obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following provisions, which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of Outstanding Notes to receive solely from the trust fund described in
Section 8.4 hereof, and as more fully set forth in such Section 8.4, payments in
----------- -----------
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due, (ii) the Issuers' obligations with respect to such Notes
under Article II and Section 3.2 hereof, (iii) the rights, powers, trusts,
-----------
duties and immunities of the Trustee hereunder and the Issuers' obligations in
connection therewith and (iv) this Article VIII. Subject to compliance with
this Article VIII, the Issuers may exercise their option under this paragraph
(b) notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Issuers' exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.3 hereof, be released from
-----------
their Obligations under the covenants contained in Sections 3.4-3.6, 3.9-3.21
---------------- --------
and 4.1(a)(ii) hereof with respect to the Outstanding Notes on and after the
----------
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not outstanding for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be Outstanding for all other purposes hereunder (it being understood
that such Notes shall not be deemed outstanding for accounting purposes). For
this purpose, such Covenant Defeasance means that, with respect to the
Outstanding Notes, the Issuers may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event or Default under clauses of
Section 6.1(c)-(f), (i) or (j) hereof, but, except as specified above, the
----------------------- ---
remainder of this Indenture and such Notes shall be unaffected thereby.
Section 8.3. Conditions to Defeasance. The Issuers may exercise
------------------------
their legal defeasance option or its covenant defeasance option only if:
(1) the Issuers irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders cash in U.S. dollars, U.S. Government
Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest
on the Notes on the stated date for payment thereof or on the applicable
Redemption Date, as the case may be;
(2) in the case of Legal Defeasance, the Issuers shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee to the effect that (A) the Issuers have received
from, or there has been published by, the Internal Revenue Service a ruling
or (B) since the Issue Date, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon
67
such Opinion of Counsel shall state that, the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Issuers shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that the Holders will
not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(4) the Trustee shall have received an Officers' Certificate stating
that no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or insofar as Events of Default from bankruptcy
or insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(5) the Trustee shall have received an Officers' Certificate stating
that such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a Default under this Indenture or any
other material agreement or instrument to which the Issuers or any
Restricted Subsidiaries is a party or by which the Issuers or any of the
Company's Subsidiaries is bound (and in that connection, the Trustee shall
have received a certificate from the agent under the Senior Credit Facility
to that effect with respect to the Senior Credit Facility then in effect);
(6) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the
intent of preferring the Holders over any other creditors of the Issuers or
any Subsidiary of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Issuers or others;
(7) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with;
(8) the Issuers shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; and
(9) the Issuers deliver to the Trustee an Opinion of Counsel (subject
to customary assumptions and exclusions) to the effect that the trust
resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940.
Section 8.4. Application of Trust Money. The Trustee shall hold in
--------------------------
trust cash or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the
68
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Notes.
Section 8.5. Repayment to Issuers. (a) The Trustee and the Paying
--------------------
Agent shall promptly turn over to the Issuers upon request any excess money or
securities held by them upon payment of all the Obligations under this
Indenture.
(b) Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Issuers upon written request any money held by
them for the payment of principal of or interest on the Notes that remains
unclaimed for two years, and, thereafter, Noteholders entitled to the money must
look to the Issuers for payment as general creditors.
Section 8.6. Indemnity for U.S. Government Obligations. The Issuers
-----------------------------------------
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
Section 8.7. Reinstatement. If the Trustee or Paying Agent is unable
-------------
to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Obligations of the Issuers under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided, however, that, if
the Issuers have made any payment of interest on or principal of any Notes
because of the reinstatement of its obligations, the Issuers shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
Section 9.1. Without Consent of Holders. The Issuers, the Note
--------------------------
Guarantors and the Trustee may amend this Indenture or the Notes without notice
to or consent of any Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Surviving Entity of an obligation of the Issuers under this Indenture;
(3) to provide for uncertificated Notes in addition to or in place of
Certificated Notes; provided, however, that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code or in
a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code;
69
(4) to add guarantees with respect to the Notes or to secure the
Notes;
(5) to add to the covenants of the Issuers for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Issuers;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to make any change that does not, in the opinion of the Trustee,
adversely affect the rights of any Noteholder in any material respect;
(8) to provide for the issuance of the Exchange Notes pursuant to the
Registration Rights Agreement; or
(9) to provide for the issuance of Add-On Notes, which will have
terms identical to the other Notes except as specified in Section 2.14 or
------------
Section 2.15, and which will be treated, together with any other
------------
Outstanding Notes, as a single issue of Notes.
After an amendment under this Section becomes effective, the Issuers
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
Section 9.2. With Consent of Holders. The Issuers, the Note
-----------------------
Guarantors and the Trustee may amend this Indenture or the Notes without notice
to any Noteholder but with the written consent of the Holders of at least a
majority in principal amount of the Outstanding Notes (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes). It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent approves the substance
thereof. However, without the consent of each Noteholder affected, an amendment
may not:
(i) reduce the amount of Notes whose Holders must consent to an
amendment or waiver;
(ii) reduce the rate of or change or have the effect of changing the
time for payment of interest, including Defaulted Interest, on any
Notes;
(iii) reduce the principal of or change or have the effect of changing
the Stated Maturity of any Notes, or change the date on which any
Notes may be subject to redemption, or reduce the redemption price
therefor;
(iv) make any Notes payable in money other than that stated in the
Notes;
(v) make any change in provisions of this Indenture entitling each
Holder to receive payment of principal of, premium, if any, and
interest on such Note on or after the due date thereof or to bring
suit to enforce such payment, or permitting
70
Holders of a majority in principal amount of Notes to waive Defaults
or Events of Default;
(vi) amend, change or modify in any material respect the obligation
of the Issuers to comply with Sections 3.11 or 3.18;
------------- ----
(vii) modify the subordination provisions of this Indenture with
respect to the Issuers or any Note Guarantor in a manner that
adversely affects the rights of any Holder; or
(viii) eliminate or modify in any manner a Note Guarantor's
obligations with respect to its Note Guarantee which adversely affects
Holders in any material respect.
After an amendment under this Section becomes effective, the Issuers
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
An amendment under this Section 9.2 may not make any change that
-----------
adversely affects the rights under Article X or Article XII of any holder of
Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
Section 9.3. Compliance with Trust Indenture Act. Every amendment to
-----------------------------------
this Indenture or the Notes shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder's Note or portion of
the Note if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Noteholder. An amendment or waiver shall become
effective upon receipt by the Trustee of the requisite number of written
consents under Section 9.1 or 9.2 as applicable.
----------- ---
The Issuers may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 90
days after such record date.
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Section 9.5. Notation on or Exchange of Notes. If an amendment
--------------------------------
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Issuers or the Trustee so determine, the Issuers in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.
Section 9.6. Trustee to Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall receive indemnity reasonably satisfactory to it and to receive,
and (subject to Sections 7.1 and 7.2) shall be fully protected in relying upon,
--------------------
such evidence as it deems appropriate, including, without limitation, solely on
an Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.
ARTICLE X
SUBORDINATION OF THE NOTES
Section 10.1. Agreement to Subordinate. The Issuers agree, and each
------------------------
Noteholder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article X, to the prior payment in full in cash of all
Obligations due in respect of the Senior Indebtedness and that the subordination
is for the benefit of and enforceable by the holders of such Senior
Indebtedness; provided, however, that any payments made by ▇▇▇▇▇ Corning under
the Keep-Well Agreement shall not be subject to this Article X. Only Senior
Indebtedness of the Issuers shall rank senior to the Notes in accordance with
the provisions set forth herein. The Notes shall in all respects rank pari
passu with, or be senior to, all other Indebtedness of each of the Issuers. All
provisions of this Article X shall be subject to Section 10.12.
-------------
Section 10.2. Liquidation, Dissolution, Bankruptcy. Upon any payment
------------------------------------
or distribution of the assets of either of the Issuers to creditors upon a total
or partial liquidation or a total or partial dissolution of either of the
Issuers or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to either of the Issuers or their property:
(1) holders of Senior Indebtedness of either of the Issuers shall be
entitled to receive payment in full of such Senior Indebtedness before
Noteholders shall be entitled to receive any payment of principal of, premium,
if any, or interest on the Notes; and
(2) until such Senior Indebtedness is paid in full, any distribution
to which Noteholders would be entitled but for this Article X shall be made to
holders of such Senior Indebtedness as their interests may appear, except that
Noteholders may receive (a) Permitted
72
Junior Securities and (b) payments and other distributions made from any
defeasance trust created pursuant to Section 8.1 hereof.
-----------
Section 10.3. Default on Senior Indebtedness of the Issuers. The
---------------------------------------------
Issuers may not pay the principal of, premium, if any, or interest on the Notes
or make any deposit pursuant to Section 8.1 and may not repurchase, redeem or
-----------
otherwise retire any Notes (collectively, "pay the Notes") (other than Permitted
Junior Securities and payments and other distributions made from any defeasance
trust created pursuant to Section 8.1 hereof) if (i) any Designated Senior
-----------
Indebtedness of the Issuers is not paid when due or (ii) any other default on
such Designated Senior Indebtedness occurs and the maturity of such Designated
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, (x) the default has been cured or waived and any such acceleration
has been rescinded or (y) such Designated Senior Indebtedness has been paid in
full; provided, however, that the Issuers may pay the Notes without regard to
the foregoing if the Issuers and the Trustee receive written notice approving
such payment from the Representative of such Designated Senior Indebtedness with
respect to which either of the events set forth in clause (i) or (ii) has
occurred and is continuing. During the continuance of any default (other than a
default described in clause (i) or (ii) of the immediately preceding sentence)
with respect to any Designated Senior Indebtedness of the Issuers pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Issuers may not pay the Notes
for a period (a "Payment Blockage Period") commencing upon the receipt by the
Trustee (with a copy to the Issuers) of written notice (a "Blockage Notice") of
such default from the Representative of the holders of such Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period and
ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (i) by written notice to the Trustee and the Issuers from the Person
or Persons who gave such Blockage Notice, (ii) because a Representative of the
holders of such Designated Senior Indebtedness has notified the Trustee that the
default giving rise to such Blockage Notice is no longer continuing or (iii)
because such Designated Senior Indebtedness has been repaid in full in cash).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the first sentence of this Section
-------
10.3), unless the holders of such Designated Senior Indebtedness or the
----
Representative of such holders have accelerated the maturity of such Designated
Senior Indebtedness, the Issuers may resume payments on the Notes after such
Payment Blockage Period. The Notes shall not be subject to more than one
Payment Blockage Period in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness during such
period. For purposes of this Section 10.3, no Default or Event of Default which
------------
existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis of the commencement
of a subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such Default or Event of Default shall have been cured or waived for a
period of not less than 90 consecutive days.
Section 10.4. Acceleration of Payment of Notes. If payment of the
--------------------------------
Notes is accelerated because of an Event of Default, the Issuers or the Trustee
shall promptly notify the
73
Representative of the holders of the Designated Senior Indebtedness of either of
the Issuers of the acceleration.
Section 10.5. When Distribution Must Be Paid Over. If a distribution
-----------------------------------
is made to Noteholders that because of this Article X should not have been made
to them, the Noteholders who receive the distribution shall hold it in trust for
holders of Senior Indebtedness of either of the Issuers and pay it over to them
or their Representative as their interests may appear.
Section 10.6. Subrogation. After all Senior Indebtedness of either
-----------
of the Issuers is paid in full and until the Notes are paid in full, Noteholders
shall be subrogated to the rights of holders of such Senior Indebtedness to
receive distributions applicable to such Senior Indebtedness. A distribution
made under this Article X to holders of such Senior Indebtedness which otherwise
would have been made to Noteholders is not, as between the Issuers and
Noteholders, a payment by the Issuers on such Senior Indebtedness.
Section 10.7. Relative Rights. This Article X defines the relative
---------------
rights of Noteholders and holders of Senior Indebtedness of the Issuers. Nothing
in this Indenture shall:
(1) impair, as between the Issuers and Noteholders, the obligation of
the Issuers, which is absolute and unconditional, to pay principal of, premium,
if any, and interest on the Notes in accordance with their terms; or
(2) prevent the Trustee or any Noteholder from exercising its
available remedies upon a Default, subject to the rights of holders of Senior
Indebtedness of the Issuers to receive distributions otherwise payable to
Noteholders.
Section 10.8. Subordination May Not Be Impaired by Issuers. No right
--------------------------------------------
of any holder of Senior Indebtedness of the Issuers to enforce the subordination
of the Indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Issuers or by its failure to comply with this Indenture.
Section 10.9. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 10.3, the Trustee or Paying Agent may continue to make payments on the
------------
Notes and shall not be charged with knowledge of the existence of facts that
would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article X. The Issuers, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that, if the holders of an issue of Senior Indebtedness of the Issuers
have a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of either of the Issuers with the same rights it would have if it
were not Trustee. The Registrar and co-registrar and the Paying Agent may do
the same with like rights. The Trustee shall be entitled to all the rights set
forth in this Article X with respect to any Senior Indebtedness of either of the
Issuers which may at any time be held by it, to the same extent as any other
holder
74
of such Senior Indebtedness, and nothing in Article VII shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article X shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
-------
7.7.
---
Section 10.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Indebtedness
of either of the Issuers, the distribution may be made and the notice given to
their Representative (if any).
Section 10.11. Article X Not to Prevent Events of Default or Limit
---------------------------------------------------
Right to Accelerate. The failure to make a payment pursuant to the Notes by
-------------------
reason of any provision in this Article X shall not be construed as preventing
the occurrence of a Default. Nothing in this Article X shall have any effect on
the right of the Noteholders or the Trustee to accelerate the maturity of the
Notes.
Section 10.12. Trust Moneys Not Subordinated. Notwithstanding
-----------------------------
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of, premium, if any, and interest on the Notes
shall not be subordinated to the prior payment of any Senior Indebtedness or
subject to the restrictions set forth in this Article X, and none of the
Noteholders shall be obligated to pay over any such amount to the Issuers or any
holder of Senior Indebtedness of either of the Issuers or any other creditor of
either of the Issuers.
Section 10.13. Trustee Entitled to Rely. Upon any payment or
------------------------
distribution pursuant to this Article X, the Trustee and the Noteholders shall
be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
------------
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Noteholders or (iii) upon the Representative for the holders of Senior
Indebtedness of either of the Issuers for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Indebtedness and other Indebtedness of either of the Issuers, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article X. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of either
of the Issuers to participate in any payment or distribution pursuant to this
Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article X, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.1 and 7.2 shall be applicable to all actions or
------------ ---
omissions of actions by the Trustee pursuant to this Article X.
Section 10.14. Trustee to Effectuate Subordination. Each Noteholder
-----------------------------------
by accepting a Note authorizes and directs the Trustee on such Noteholder's
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination
75
between the Noteholders and the holders of such Senior Indebtedness of either of
the Issuers as provided in this Article X and appoints the Trustee as attorney-
in-fact for any and all such purposes.
Section 10.15. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
------------
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Noteholders or the Issuers or any
other Person, money or assets to which any holders of Senior Indebtedness of
either of the Issuers shall be entitled by virtue of this Article X or
otherwise.
Section 10.16. Reliance by Holders of Senior Indebtedness on
---------------------------------------------
Subordination Provisions. Each Noteholder by accepting a Note acknowledges and
------------------------
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
either of the Issuers, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XI
GUARANTEE
Section 11.1. Guarantee. (a) Each Note Guarantor hereby fully,
---------
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Note Guarantor, to each Holder of
the Notes and the Trustee the full and punctual payment when due, whether at
maturity, by acceleration, by redemption or otherwise, of the Obligations (such
guaranteed Obligations, the "Guaranteed Obligations"). Each Note Guarantor
further agrees (to the extent permitted by law) that the Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
it, and that it will remain bound under this Article X notwithstanding any
extension or renewal of any Obligation. Each of the Note Guarantors will agree
to pay, on a senior subordinated basis and in addition to the amounts stated
above, any and all expenses (including reasonable counsel fees and expenses)
incurred by the Trustee or the Holders in enforcing any rights under such Note
Guarantor's Note Guarantee.
(b) Each Note Guarantor waives presentation to, demand of payment from
and protest to the Issuers of any of the Obligations and also waives notice of
protest for nonpayment. Each Note Guarantor waives notice of any Default under
the Notes or the Obligations. The obligations of each Note Guarantor hereunder
shall not be affected by (a) the failure of any Holder to assert any claim or
demand or to enforce any right or remedy against the Issuers or any other Person
under this Indenture, the Notes or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Notes or
any other agreement; (d) the release
76
of any security held by any Holder or the Trustee for the Obligations or any of
them; (e) the failure of any Holder to exercise any right or remedy against any
other Note Guarantor; or (f) any change in the ownership of either of the
Issuers.
(c) Each Note Guarantor further agrees that its Note Guarantee herein
constitutes a guarantee of payment when due (and not a guarantee of collection)
and waives any right to require that any resort be had by any Holder to any
security held for payment of the Guaranteed Obligations.
(d) The Guaranteed Obligations shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than payment of the
Guaranteed Obligations in full), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense of
setoff, counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Guaranteed Obligations or
otherwise. Without limiting the generality of the foregoing, the Guaranteed
Obligations shall not be discharged or impaired or otherwise affected by the
failure of any Holder to assert any claim or demand or to enforce any remedy
under this Indenture, the Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Guaranteed Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of each Note Guarantor or would
otherwise operate as a discharge of such Note Guarantor as a matter of law or
equity.
(e) Each Note Guarantor further agrees that its Note Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any of the
Obligations is rescinded or must otherwise be restored by any Holder upon the
bankruptcy or reorganization of either of the Issuers or otherwise.
(f) In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against each Note Guarantor by
virtue hereof, upon the failure of the Issuers to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Note Guarantor hereby promises to and will, upon
receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in
cash, to the Holders an amount equal to the sum of (i) the unpaid amount of such
Obligations then due and owing and (ii) accrued and unpaid interest on such
Obligations then due and owing (but only to the extent not prohibited by law).
(g) Each Note Guarantor further agrees that, as between such Note
Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity
of the Guaranteed Obligations may be accelerated as provided in this Indenture
for the purposes of its Note Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations and (y) in the event of any such declaration of
acceleration of such Guaranteed Obligations, such Guaranteed Obligations
(whether or not due and payable) shall
77
forthwith become due and payable by the Note Guarantor for the purposes of this
Note Guarantee.
(h) Each Note Guarantee is, to the extent and in the manner set forth
in Article XII, subordinated and subject in right of payment to the prior
payment in full of all Senior Indebtedness of such Note Guarantor and is made
subject to such provisions of this Indenture.
Section 11.2. Limitation on Liability; Termination, Release and
-------------------------------------------------
Discharge. (a) The Guaranteed Obligations will be limited to the maximum amount
---------
as will, after giving effect to all other contingent and fixed liabilities of
such Note Guarantor and after giving effect to any collections from or payments
made by or on behalf of any other Note Guarantor in respect of the Guaranteed
Obligations of such other Note Guarantor or pursuant to its contribution
obligations under this Indenture, result in the Guaranteed Obligations of such
Note Guarantor under its Note Guarantee not constituting a fraudulent conveyance
or fraudulent transfer under federal or state law.
(b) Each Note Guarantor may consolidate with or merge into or sell its
assets to either of the Issuers or another Note Guarantor without limitation.
Each Note Guarantor may consolidate with or merge into or sell all or
substantially all its assets to a corporation, partnership or trust other than
the Issuers or another Note Guarantor (whether or not affiliated with the Note
Guarantor), except that if the surviving corporation of any such merger or
consolidation is a Subsidiary of the Company, such merger, consolidation or sale
shall not be permitted unless (i) the Person formed by or surviving any such
consolidation or merger assumes all the Guaranteed Obligations of such Note
Guarantor pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee in respect of the Notes, this Indenture and the Note
Guarantee, (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; and (iii) the Issuers deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Trustee with
respect to the foregoing matters. Upon the sale or disposition of a Note
Guarantor (by merger, consolidation, the sale of its Capital Stock or the sale
of all or substantially all of its assets) to a Person (whether or not an
Affiliate of the Note Guarantor) which is not a Subsidiary of the Company, which
sale or disposition is otherwise in compliance with this Indenture (including
Section 3.11), such Note Guarantor will be deemed released from all its
------------
Guaranteed Obligations and such Note Guarantee will terminate; provided,
however, that any such termination will occur only to the extent that all
obligations of such Note Guarantor under the Senior Credit Facility and all of
its guarantees of, and under all of its pledges of assets or other security
interests which secure, any other Indebtedness of each of the Issuers will also
terminate upon such release, sale or transfer.
(c) A Note Guarantor will be deemed released and relieved from its
Guaranteed Obligations and its Note Guarantee without any further action
required on the part of the Issuers or such Note Guarantor if, in accordance
with the provisions of this Indenture:
(i) there is a legal defeasance of the Notes;
(ii) there is a sale or other disposition of all or substantially all
of the assets of such Note Guarantor;
78
(iii) there is a sale or other disposition of all of the Capital Stock
of such Note Guarantor; or
(iv) such Note Guarantor is designated as an Unrestricted Subsidiary.
Section 11.3. Right of Contribution. Each Note Guarantor that makes
---------------------
a payment or distribution under a Note Guarantee will be entitled to a
contribution from each other Note Guarantor in a pro rata amount, based on the
net assets of each Note Guarantor determined in accordance with GAAP. The
provisions of this Section 11.3 shall in no respect limit the obligations and
------------
liabilities of each Note Guarantor to the Trustee and the Holders and each Note
Guarantor shall remain liable to the Trustee and the Holders for the full amount
guaranteed by such Note Guarantor hereunder.
Section 11.4. No Subrogation. Each Note Guarantor agrees that it
--------------
shall not be entitled to any right of subrogation in respect of any Guaranteed
Obligations until payment in full of all Obligations and all obligations to
which the Obligations are subordinated. If any amount shall be paid to any Note
Guarantor on account of such subrogation rights at any time when all of the
Obligations and all obligations to which the Obligations are subordinated shall
not have been paid in full, such amount shall be held by such Note Guarantor in
trust for the Trustee and the Holders, segregated from other funds of such Note
Guarantor, and shall, forthwith upon receipt by such Note Guarantor, be turned
over to the Trustee in the exact form received by such Note Guarantor (duly
endorsed by such Note Guarantor to the Trustee, if required), to be applied
against the Obligations or obligations to which the Obligations are
subordinated. Each Note Guarantor further agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity
of the Guaranteed Obligations may be accelerated as provided in Article VI for
the purposes of such Note Guarantor's Note Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Guaranteed Obligations, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article VI, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Note Guarantor for the purposes of this Section 11.4.
------------
Section 11.5. Additional Note Guarantees. The Issuers will cause any
-----------------------------------------
Person that shall become a Note Guarantor (an "Additional Guarantor") to
concurrently Guarantee (an "Additional Guarantee") the Issuers' Obligations
under this Indenture and the Notes by executing a Supplemental Indenture
substantially in the form of Exhibit G, it being understood that such Additional
---------
Guarantee shall be subordinated in right of payment to Senior Indebtedness of
such Additional Guarantor including Guarantees constituting Senior Indebtedness;
provided, however, that each Additional Guarantor will be automatically and
unconditionally released and discharged from its obligations under such
Additional Guarantee only in accordance with Section 11.2 above.
------------
79
ARTICLE XII
SUBORDINATION OF THE NOTE GUARANTEES
Section 12.1. Agreement to Subordinate. Each Note Guarantor agrees,
------------------------
and each Noteholder by accepting a Note agrees, that the Guaranteed Obligations
are subordinated in right of payment, to the extent and in the manner provided
in this Article XII, to the prior payment in full in cash of all Senior
Indebtedness of such Note Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness; provided,
however, that any payments made by ▇▇▇▇▇ Corning under the Keep-Well Agreement
shall not be subject to this Article XII. Only Senior Indebtedness of such Note
Guarantor shall rank senior to the Obligations of such Note Guarantor in
accordance with the provisions set forth herein. The Obligations of each Note
Guarantor shall in all respects rank pari passu with, or be senior to, all other
Indebtedness of such Note Guarantor.
Section 12.2. Liquidation, Dissolution, Bankruptcy. Upon any payment
------------------------------------
or distribution of the assets of any Note Guarantor to creditors upon a total or
partial liquidation or a total or partial dissolution of such Note Guarantor or
in a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Note Guarantor or its property:
(1) holders of Senior Indebtedness of such Note Guarantor shall be
entitled to receive payment in full of such Senior Indebtedness before
Noteholders shall be entitled to receive any payment pursuant to the Note
Guarantee of such Note Guarantor; and
(2) until the Senior Indebtedness of such Note Guarantor is paid in
full, any distribution to which Noteholders would be entitled but for this
Article XII shall be made to holders of such Senior Indebtedness as their
interests may appear, except that Noteholders may receive (a) Permitted Junior
Securities and (b) payments and other distributions made from any defeasance
trust created pursuant to Section 8.1 hereof.
-----------
Section 12.3. Default on Senior Indebtedness of Note Guarantors.
-------------------------------------------------
Each Note Guarantor may not pay the principal of, premium, if any, or interest
on the Notes or make any deposit pursuant to Section 8.1 and may not repurchase,
-----------
redeem or otherwise retire any Notes (collectively, "pay its Note Guarantee")
(other than Permitted Junior Securities and payments and other distributions
from any defeasance trust created pursuant to Section 8.1 hereof) if (i) any
-----------
Designated Senior Indebtedness of the relevant Note Guarantor is not paid when
due or (ii) any other default on Designated Senior Indebtedness of such Note
Guarantor occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded or (y)
such Designated Senior Indebtedness has been paid in full; provided, however,
that such Note Guarantor may pay its Note Guarantee without regard to the
foregoing if such Note Guarantor and the Trustee receive written notice
approving such payment from the Representative of the Designated Senior
Indebtedness of such Note Guarantor with respect to which either of the events
set forth in clause (i) or (ii) has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the immediately preceding sentence) with respect to any Designated Senior
Indebtedness of such Note Guarantor
80
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Note
Guarantor may not pay its Note Guarantee for the Payment Blockage Period
commencing upon the receipt by the Trustee (with a copy to such Note Guarantor)
of a Blockage Notice of such default from the Representative of the holders of
such Designated Senior Indebtedness and ending 179 days thereafter (or earlier
if such Payment Blockage Period is terminated (i) by written notice to the
Trustee and such Note Guarantor from the Person or Persons who gave such
Blockage Notice, (ii) because a Representative of the holders of such Designated
Senior Indebtedness has notified the Trustee that the default giving rise to
such Blockage Notice is no longer continuing or (iii) because such Designated
Senior Indebtedness has been repaid in full in cash). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section 12.3), unless the
------------
holders of such Designated Senior Indebtedness of such Note Guarantor or the
Representative of such holders have accelerated the maturity of such Designated
Senior Indebtedness such Note Guarantor may resume payments on its Note
Guarantee after the end of such Payment Blockage Period. Each Note Guarantee
shall not be subject to more than one Payment Blockage Period in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness of a Note Guarantor during such period. For
purposes of this Section 12.3, no Default or Event of Default which existed or
------------
was continuing on the date of the commencement of any Payment Blockage Period
with respect to the Designated Senior Indebtedness initiating such Payment
Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.
Section 12.4. Demand for Payment. If a demand for payment is made on
------------------
any Note Guarantor pursuant to Article XI, the Trustee shall promptly notify the
holders of the Designated Senior Indebtedness (or their Representatives) of such
Note Guarantor of such demand.
Section 12.5. When Distribution Must Be Paid Over. If a distribution
-----------------------------------
is made to Noteholders that because of this Article XII should not have been
made to them, the Noteholders who receive the distribution shall hold it in
trust for holders of the relevant Senior Indebtedness of such Note Guarantor and
pay it over to them or their Representative as their interests may appear.
Section 12.6. Subrogation. After all Senior Indebtedness of each
-----------
Note Guarantor is paid in full and until the Notes are paid in full, Noteholders
shall be subrogated to the rights of holders of such Senior Indebtedness to
receive distributions applicable to such Senior Indebtedness. A distribution
made under this Article XII to holders of such Senior Indebtedness which
otherwise would have been made to Noteholders is not, as between each Note
Guarantor and Noteholders, a payment by such Note Guarantor on such Senior
Indebtedness.
81
Section 12.7. Relative Rights. This Article XII defines the relative
---------------
rights of Noteholders and holders of Senior Indebtedness of each Note Guarantor.
Nothing in this Indenture shall:
(1) impair, as between each Note Guarantor and the Noteholders, the
obligation of such Note Guarantor, which is absolute and unconditional, to pay
its obligations to the extent set forth in Article XI; or
(2) prevent the Trustee or any Noteholder from exercising its
available remedies upon a default by any Note Guarantor under its obligations,
subject to the rights of holders of Senior Indebtedness of such Note Guarantor
to receive distributions otherwise payable to Noteholders.
Section 12.8. Subordination May Not Be Impaired by Note Guarantors.
----------------------------------------------------
No right of any holder of Senior Indebtedness of any Note Guarantor to enforce
the subordination of the obligations of such Note Guarantor shall be impaired by
any act or failure to act by such Note Guarantor or by its failure to comply
with this Indenture.
Section 12.9. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 12.3, the Trustee or Paying Agent may continue to make payments on each
------------
Note Guarantee and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article XII. The Issuers, each Note Guarantor, the Registrar or co-
registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness
of any Note Guarantor may give the notice; provided, however, that, if the
holders of an issue of Senior Indebtedness of any Note Guarantor has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Senior Indebtedness of any Note Guarantor which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
-----------
Section 12.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Indebtedness
of any Note Guarantor, the distribution may be made and the notice given to
their Representative (if any).
Section 12.11. Article XII Not to Prevent Defaults Under the Note
--------------------------------------------------
Guarantees or Limit Right To Demand Payment. The failure to make a payment
-------------------------------------------
pursuant to any Note Guarantee by reason of any provision in this Article XII
shall not be construed as preventing the occurrence of a Default under such Note
Guarantee. Nothing in this Article XII shall have any effect on the right of the
Noteholders or the Trustee to make a demand for payment on any Note Guarantor
pursuant to Article XI.
82
Section 12.12. Trustee Entitled to Rely. Upon any payment or
------------------------
distribution pursuant to this Article XII, the Trustee and the Noteholders shall
be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.2
------------
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Noteholders or (iii) upon the Representative for the holders of Senior
Indebtedness of any Note Guarantor for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness and other indebtedness of such Note Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XII. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of such Note
Guarantor to participate in any payment or distribution pursuant to this Article
XII, the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness of such
Note Guarantor held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article XII, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.1 and 7.2 shall be applicable to all actions or
------------ ----
omissions of actions by the Trustee pursuant to this Article XII.
Section 12.13. Trustee to Effectuate Subordination. Each Noteholder
-----------------------------------
by accepting a Note authorizes and directs the Trustee on such Noteholder's
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Noteholders and the holders of Senior
Indebtedness of any Note Guarantor as provided in this Article XII and appoints
the Trustee as attorney-in-fact for any and all such purposes.
Section 12.14. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness of Note Guarantors. The Trustee shall not be deemed to owe any
-------------------------------
fiduciary duty to the holders of Senior Indebtedness of any Note Guarantor and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Noteholders or the Issuers or any other Person, money or assets to
which any holders of such Senior Indebtedness shall be entitled by virtue of
this Article XII or otherwise.
Section 12.15. Reliance by Holders of Senior Indebtedness on
---------------------------------------------
Subordination Provisions. Each Noteholder by accepting a Note acknowledges and
------------------------
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
any Note Guarantor, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
83
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Trust Indenture Act Controls. If any provision of this
----------------------------
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Note Guarantor in addition to performing its
Guaranteed Obligations shall perform such other obligations as may be imposed
upon it with respect to this Indenture under the TIA.
Section 13.2. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail or facsimile
transmission addressed as follows:
if to the Issuers:
Advanced Glassfiber Yarns LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
The Issuers or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a registered Noteholder shall be
mailed to the Noteholder at the Noteholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 13.3. Communication by Holders with Other Holders.
-------------------------------------------
Noteholders may communicate pursuant to TIA (S) 312(b) with other Noteholders
with respect to their rights under this Indenture or the Notes. The Issuers,
the Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
84
Section 13.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Issuers to the Trustee to take or refrain
from taking any action under this Indenture, the Issuers shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
Section 13.5. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
Section 13.6. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by, or a meeting of, Noteholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.7. GOVERNING LAW, ETC. (A) THIS INDENTURE (INCLUDING EACH
-------------------
GUARANTEE) AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
85
(b) Each of the Issuers and the Note Guarantors hereby (i) agree that
any suit, action or proceeding against them arising out of or relating to this
Indenture or the Notes, as the case may be, may be instituted in any Federal or
state court sitting in The City of New York, (ii) waive to the extent permitted
by applicable law, any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding, and any claim that any
suit, action or proceeding in such a court has been brought in an inconvenient
forum, (iii) irrevocably submit or will submit, as the case may be, to the non-
exclusive jurisdiction of such courts in any suit, action or proceeding, (iv)
agree that final judgment in any such suit, action or proceeding brought in such
a court shall be conclusive and binding and may be enforced in the courts of the
jurisdiction of which they are subject by a suit upon judgment and (v) agree
that service of process by mail to the address specified herein shall constitute
personal service of such process on it in any such suit, action or proceeding.
Section 13.8. No Recourse Against Others. An incorporator, director,
--------------------------
officer, employee, stockholder or controlling person, as such, of either of the
Issuers or any Note Guarantor shall not have any liability for any Obligations
of the Issuers under the Notes, this Indenture or the Note Guarantees or for any
claim based on, in respect of or by reason of such Obligations or their
creation. By accepting a Note, each Noteholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Notes.
Section 13.9. Successors. All agreements of the Issuers and any Note
----------
Guarantor in this Indenture and the Notes shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 13.10. Multiple 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. One signed copy is enough to prove
this Indenture.
Section 13.11. Severability. In case any provision in this Indenture
------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 13.12. Qualification of Indenture. The Issuers shall qualify
--------------------------
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Issuers, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Notes and printing this
Indenture and the Notes. The Trustee shall be entitled to receive from the
Issuers any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
Section 13.13. Table of Contents; Headings. The table of contents,
---------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
86
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ADVANCED GLASSFIBER YARNS LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Attest:
/s/ ▇▇▇▇▇▇▇▇▇ Cuisson
-----------------------
▇▇▇▇▇▇▇▇▇ Cuisson
AGY CAPITAL CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Attest:
/s/ ▇▇▇▇▇▇▇▇▇ Cuisson
-----------------------
▇▇▇▇▇▇▇▇▇ Cuisson
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name:
Title:
EXHIBIT A
FORM OF FACE OF INITIAL NOTE
[Include the following legend for Global Notes only:]
THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO
HEREINAFTER.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[The following legend shall appear on all Certificated Notes prior to the
Resale Restriction Termination Date:]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIED WITH THE
FOREGOING RESTRICTIONS AS PROVIDED FOR IN THE INDENTURE.
[The following legend shall appear on all Regulation S Temporary Global
Notes and all other Notes (other than Regulation S Permanent Global Notes)
prior to the Resale Restriction Termination Date:]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY
A-1
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A ADOPTED UNDER THE
SECURITIES ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED
INVESTOR"), OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARIES THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A ADOPTED UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT IS ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, IN EITHER CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE NOTES OF U.S. $250,000, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, AND THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH REGULATION S ADOPTED UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
ADOPTED UNDER THE SECURITIES ACT.
A-2
[Include the legend below on all Regulation S Temporary Global Notes:]
THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT").
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO
RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.
No. [___] Principal Amount $[______________]
[If the Note is a Global Note include the following two lines:]
as revised by the Schedule of Increases and
Decreases in Global Note attached hereto
CUSIP NO. ____________
[If the Note is a Regulation S Global Note, delete the reference to CUSIP NO.
and replace it with:]
ISIN NO. ____________
A-3
9 7/8% Senior Subordinated Notes due 2009
Advanced Glassfiber Yarns LLC and AGY Capital Corp., as joint and
several obligors, promise to pay to [___________], or registered assigns, the
principal sum of [__________________] Dollars, as revised by the Schedule of
Increases and Decreases in Global Note attached hereto, on January 15, 2009.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Note are set forth on the other side of
this Note.
Advanced Glassfiber Yarns LLC
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
AGY Capital Corp.
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Bank of New York,
as Trustee, certifies that this is one of the Notes referred to in the
Indenture.
THE BANK OF NEW YORK
By____________________
Authorized Signatory Date: _____________, 1999
A-4
FORM OF REVERSE SIDE OF INITIAL NOTE
9 7/8% Senior Subordinated Notes due 2009
1. Interest
--------
Advanced Glassfiber Yarns LLC and AGY Capital Corp. (together with
their successors and assigns under the Indenture hereinafter referred to, being
herein called the "Issuers"), as joint and several obligors, promise to pay
interest on the principal amount of this Note at the rate per annum shown above.
The Issuers will pay interest semiannually on January 15 and July 15
of each year commencing July 15, 1999. Interest on the Notes will accrue from
the most recent date to which interest has been paid on the Notes or, if no
interest has been paid, from and including January 21, 1999. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Issuers shall pay interest on overdue principal and, to the extent
such payments are lawful, interest on overdue installments of interest (without
regard to any applicable grace periods) at the rate of 2.0% per annum in excess
of the rate shown on this Note.
2. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Note is due and payable, the Issuers shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Issuers will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of Notes
at the close of business on the January 1 or July 1 preceding the interest
payment date even if Notes are cancelled, repurchased or redeemed after the
record date and on or before the interest payment date. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Issuers will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
Notes represented by a Global Note (including principal, premium, if any, and
interest) will be made by the transfer of immediately available funds to the
accounts specified by the Depository Trust Company. The Issuers will make all
payments in respect of a Certificated Note (including principal, premium, if
any, and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on the Notes may also be made by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment.
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York will act as Trustee, Paying Agent and
Registrar. The Issuers may appoint and change any Paying Agent, Registrar or
co-registrar without notice to any Noteholder. Either of the Issuers may act as
Paying Agent, Registrar or co-registrar.
A-5
4. Indenture
---------
The Issuers issued the Notes under an Indenture dated as of January
21, 1999 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Issuers and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
------
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms. Each Noteholder by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as amended from time to time.
The Notes are general unsecured senior obligations of the Issuers
unlimited in aggregate principal amount; $150,000,000 in aggregate principal
amount will be initially issued on the Issue Date. This Note is one of the
Initial Notes referred to in the Indenture. The Initial Notes and the Exchange
Notes will be treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on, among other things: Additional
Indebtedness, Restricted Payments, Asset Sales, dividend and other payment
restrictions affecting Restricted Subsidiaries, the sale or issuance of Capital
Stock of Restricted Subsidiaries, layered Indebtedness, Liens, transactions with
Affiliates, Change of Control, conduct of business transactions with Affiliates
and the activities of Capital and payments for consent.
The Issuers may, from time to time, subject to compliance with any
other applicable provisions of this Indenture, without the consent of the
Holders, create and issue pursuant to this Indenture Add On Notes (or the same
except for the payment of interest accruing prior to the issue date of such Add
On Notes or except for the first payment of interest following the issue date of
such Add On Notes), which Add On Notes will be treated, together with any other
Outstanding Notes, as a single issue of securities.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Notes and all other amounts payable by the Issuers
under the Indenture and the Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Notes and the Indenture, future Restricted Subsidiaries (except Foreign
Subsidiaries) will unconditionally guarantee, jointly and severally, such
obligations on a senior basis pursuant to the terms of the Indenture.
5. Redemption
----------
Optional Redemption. The Notes will be redeemable, at the Issuers'
option, in whole at any time or in part from time to time, on and after January
15, 2004, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on January 15, of the year
set forth below, plus, in each case, accrued interest to the date of redemption
(subject to the right of Holders of record on a record date to receive interest
due on the related interest payment date that is on or prior to such date of
redemption):
A-6
YEAR PERCENTAGE
---- ----------
2004..................... 105.063%
2005..................... 103.375%
2006..................... 101.688%
2007 and thereafter...... 100.000%
Optional Redemption upon Public Equity Offerings. In addition, at any
time, or from time to time, on or prior to January 15, 2002 the Issuers may, at
their option, use the net cash proceeds of one or more Public Equity Offerings
(as defined below) to redeem in the aggregate up to 35% of the aggregate
principal amount of the Notes originally issued at a redemption price equal to
110.125% of the principal amount thereof, plus accrued and unpaid interest
thereon to the date of redemption (subject to the right of Holders of record on
a record date to receive interest due on the related interest payment date that
is on or prior to such date of redemption); provided, however, that after giving
effect to any such redemption at least 65% of the aggregate principal amount of
the Notes originally issued remains outstanding. In order to effect the
foregoing redemption with the proceeds of any Public Equity Offering, the
Issuers shall make such redemption not more than 60 days after the consummation
of such Public Equity Offering.
As used in the preceding paragraph, "Public Equity Offering" means an
underwritten public offering of Qualified Capital Stock of the Company or
Capital pursuant to a registration statement filed with the Commission in
accordance with the Securities Act of 1933, as amended (the "Securities Act"),
or any successor statute.
In the event that less than all of the Notes are to be redeemed at any
time, selection of such Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which such Notes are listed or, if such Notes are not then listed on
a national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however, that no Notes of
a principal amount of $1,000 or less shall be redeemed in part and Notes of a
principal amount in excess of $1,000 may be redeemed in part in multiples of
$1,000 only; and provided, further, that if a partial redemption is made with
the proceeds of a Public Equity Offering, selection of the Notes or portions
thereof for redemption shall, subject to the preceding proviso, be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of DTC or a successor depositary), unless
such method is otherwise prohibited. Notice of redemption shall be mailed by
first-class mail at least 30 but not more than 60 days before the Redemption
Date to each Holder of Notes to be redeemed at its registered address. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original Note. On and after the Redemption Date, interest will cease to
accrue on Notes or portions thereof called for redemption as long as the Issuers
have deposited with the Paying Agent funds in satisfaction of the applicable
redemption price pursuant to the Indenture.
▇-▇
▇. ▇▇▇▇▇▇▇▇▇▇ Provisions
---------------------
(1) Upon the occurrence of a Change of Control, each Holder will have
the right to require that the Issuers purchase all or a portion (in integral
multiples of $1,000) of such Holder's Notes pursuant to the offer described
below (the "Change of Control Offer"), at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest thereon to the date of
purchase (subject to the right of Holders of record on a record date to receive
interest due on the related interest payment date that is on or prior to such
date of purchase). Within 30 days following the date upon which the Change of
Control occurred, the Company must send, by first-class mail, a notice to each
Holder, with a copy to the Trustee, which notice shall govern the terms of the
Change of Control Offer. Such notice shall state, among other things, the
purchase date, which must be no earlier than 30 days nor later than 60 days from
the date such notice is mailed, other than as may be required by law (the
"Change of Control Payment Date"). Holders electing to have a Note purchased
pursuant to a Change of Control Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third business day prior to the Change of
Control Payment Date.
(2) To the extent all or a portion of the Net Cash Proceeds of any
Asset Sale are not applied within 270 days of such Asset Sale in certain ways
described in the Indenture (the "Net Proceeds Offer Trigger Date"), the Issuers
will make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net
Proceeds Offer Payment Date") not less than 20 business days following the date
on which such offer is made (or such longer period as may be required by law)
nor more than 60 days following such Net Proceeds Offer Trigger Date, from all
Holders on a pro rata basis (and on a pro rata basis with the holders of any
other Senior Subordinated Indebtedness with similar provisions requiring the
Issuers to offer to purchase such Senior Subordinated Indebtedness with the
proceeds of Asset Sales), that principal amount of Notes and such other
Indebtedness equal to such unapplied Net Cash Proceeds at a price, in the case
of the Notes, equal to 100% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest thereon, to the date of purchase
(subject to the right of Holders of record on a record date to receive interest
due on an interest payment date that is on or prior to such date of purchase).
Notwithstanding the foregoing, the Issuers may defer the Net Proceeds Offer
until there is an aggregate amount of unapplied Net Cash Proceeds equal to or in
excess of $5.0 million resulting from one or more Asset Sales (at which time,
the entire amount of unapplied Net Cash Proceeds, and not just the amount in
excess of $5.0 million, shall be applied as required pursuant to this
paragraph).
7. Denominations; Transfer; Exchange
---------------------------------
The Notes are in registered form without coupons in denominations of
principal amount of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required
A-8
by law or permitted by the Indenture. The Registrar need not register the
transfer of or exchange (i) any Notes selected for redemption (except, in the
case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) for a period beginning 15 days before the mailing of a notice of Notes
to be redeemed and ending on the date of such mailing or (ii) any Notes for a
period beginning 15 days before an interest payment date and ending on such
interest payment date.
8. Persons Deemed Owners
---------------------
The registered holder of this Note may be treated as the owner of it
for all purposes.
9. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Issuers at their request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Issuers and not to the Trustee for payment.
10. Discharge Prior to Redemption or Maturity
-----------------------------------------
Subject to certain conditions set forth in the Indenture, the Issuers
at any time may terminate some or all of their obligations under the Notes and
the Indenture if the Issuers deposit with the Trustee cash or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.
11. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the then Outstanding Notes and (ii)
any Default (other than with respect to nonpayment, or in respect of a provision
that cannot be amended without the written consent of each Noteholder affected)
or noncompliance with any provision may be waived with the written consent of
the Holders of a majority in principal amount of the then Outstanding Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Noteholder, the Issuers and the Trustee may amend the Indenture or the Notes
to, among other things, cure any ambiguity, omission, defect or inconsistency,
or to comply with Article IV of the Indenture, or to provide for uncertificated
Notes in addition to or in place of Certificated Notes, or to add guarantees
with respect to the Notes or to secure the Notes, or to add additional covenants
or surrender rights and powers conferred on the Issuers, or to comply with any
request of the Commission in connection with qualifying the Indenture under the
Act, or to make any change that does not adversely affect the rights of any
Noteholder, or to provide for the issuance of Exchange Notes.
A-9
12. Defaults and Remedies
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes may declare all the
Outstanding Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Notes
being due and payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
Outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Noteholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Issuers
---------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with and collect obligations
owed to it by the Issuers or their Affiliates and may otherwise deal with the
Issuers or their affiliates with the same rights it would have if it were not
Trustee.
14. No Recourse Against Others
--------------------------
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Issuers or any Note Guarantor shall not have
any liability for any obligations of the Issuers under the Notes or any Note
Guarantees, the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Note, each Noteholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
15. Authentication
--------------
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
16. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
A-10
[Include if this is not a Regulation S Note]
17. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuers have caused CUSIP numbers to be
printed on the Notes and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
[Include if this is a Regulation S Note]
17. ISIN Numbers
------------
The Issuers have caused ISIN numbers to be printed on the Notes and
have directed the Trustee to use ISIN numbers in notices of redemption as a
convenience to Noteholders. No representation is made as to the accuracy of
such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
18. Governing Law
-------------
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York, but without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
The Issuers will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:
Advanced Glassfiber Yarns LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-11
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the
Issuers. The agent may substitute another to act for him.
______________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:______________________________
(Signature must be guaranteed)
______________________________________________________________________________
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
A-12
[To be attached to Global Notes only:]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Date of Exchange Amount of decrease in Principal Amount of increase in Principal Principal Amount of this Global
Amount of this Global Note Amount of this Global Note Note following such decrease or
increase
--------------- ------------------------------ ------------------------------- --------------------------------
Date of Exchange Signature of authorized
signatory of Trustee or Note Custodian
--------------- ---------------------------------------
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 3.11 or Section 3.18 of the Indenture, check either box:
------------ ------------
[_] [_]
Section 3.11 Section 3.18
------------ ------------
If you want to elect to have only part of this Note purchased by the
Issuers pursuant to Section 3.11 or Section 3.18 of the Indenture, state the
------------ ------------
amount in principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ____________________________
(Sign exactly as your name appears on the
other side of the Note)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
A-14
EXHIBIT B
FORM OF FACE OF EXCHANGE NOTE
[Include the following two paragraphs for Global Notes only:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
No. [___] Principal Amount $[______________],
as revised by the Schedule of Increases and
Decreases in Global Note attached hereto
CUSIP NO. ____________
B-1
9 7/8% Senior Subordinated Notes due 2009
Advanced Glassfiber Yarns LLC and AGY Capital Corp., as joint and
several obligors, promise to pay to [______________], or registered assigns, the
principal sum of [_______________] Dollars, as revised by the Schedule of
Increases and Decreases in Global Note attached hereto, on ___, 2009.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Note are set forth on the other side of
this Note.
Advanced Glassfiber Yarns LLC
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
AGY Capital Corp.
By: _____________________________
Name:
Title:
By: ______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Bank of New York,
as Trustee, certifies that this is one of the Notes referred to in the
Indenture.
THE BANK OF NEW YORK
By______________________
Authorized Signatory Date: [_____________]
B-2
FORM OF REVERSE SIDE OF INITIAL NOTE
9 7/8% Senior Subordinated Notes due 2009
1. Interest
--------
Advanced Glassfiber Yarns LLC and AGY Capital Corp. (together with
their successors and assigns under the Indenture hereinafter referred to, being
herein called the "Issuers"), as joint and several obligors, promise to pay
interest on the principal amount of this Note at the rate per annum shown above.
The Issuers will pay interest semiannually on January 15 and July 15
of each year commencing July 15, 1999. Interest on the Notes will accrue from
the most recent date to which interest has been paid on the Notes or, if no
interest has been paid, from and including January 21, 1999. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Issuers shall pay interest on overdue principal and, to the extent
such payments are lawful, interest on overdue installments of interest (without
regard to any applicable grace periods) at the rate of 2.0% per annum in excess
of the rate shown on this Note.
2. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Note is due and payable, the Issuers shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Issuers will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of Notes
at the close of business on the January 1 or July 1 preceding the interest
payment date even if Notes are cancelled, repurchased or redeemed after the
record date and on or before the interest payment date. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Issuers will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
Notes represented by a Global Note (including principal, premium, if any, and
interest) will be made by the transfer of immediately available funds to the
accounts specified by the Depository Trust Company. The Issuers will make all
payments in respect of a Certificated Note (including principal, premium, if
any, and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on the Notes may also be made by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment.
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York will act as Trustee, Paying Agent and
Registrar. The Issuers may appoint and change any Paying Agent, Registrar or
co-registrar without notice to any Noteholder. Either of the Issuers may act as
Paying Agent, Registrar or co-registrar.
B-3
4. Indenture
---------
The Issuers issued the Notes under an Indenture dated as of January
21, 1999 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Issuers and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
------
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms. Each Noteholder by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as amended from time to time.
The Notes are general unsecured senior obligations of the Issuers
unlimited in aggregate principal amount; $150,000,000 in aggregate principal
amount will be initially issued on the Issue Date. This Note is one of the
Initial Notes referred to in the Indenture. The Initial Notes and the Exchange
Notes will be treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on, among other things: Additional
Indebtedness, Restricted Payments, Asset Sales, dividend and other payment
restrictions affecting Restricted Subsidiaries, the sale or issuance of Capital
Stock of Restricted Subsidiaries, layered Indebtedness, Liens, transactions with
Affiliates, Change of Control, conduct of business transactions with Affiliates
and the activities of Capital and payments for consent.
The Issuers may, from time to time, subject to compliance with any
other applicable provisions of this Indenture, without the consent of the
Holders, create and issue pursuant to this Indenture Add On Notes (or the same
except for the payment of interest accruing prior to the issue date of such Add
On Notes or except for the first payment of interest following the issue date of
such Add On Notes), which Add On Notes will be treated, together with any other
Outstanding Notes, as a single issue of securities.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Notes and all other amounts payable by the Issuers
under the Indenture and the Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Notes and the Indenture, future Restricted Subsidiaries (except Foreign
Subsidiaries) will unconditionally guarantee, jointly and severally, such
obligations on a senior basis pursuant to the terms of the Indenture.
5. Redemption
----------
Optional Redemption. The Notes will be redeemable, at the Issuers'
option, in whole at any time or in part from time to time, on and after January
15, 2004, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on January 15, of the year
set forth below, plus, in each case, accrued interest to the date of redemption
(subject to the right of Holders of record on a record date to receive interest
due on the related interest payment date that is on or prior to such date of
redemption):
B-4
YEAR PERCENTAGE
---- ----------
2004.................................. 105.063%
2005.................................. 103.375%
2006.................................. 101.688%
2007 and thereafter................... 100.000%
Optional Redemption upon Public Equity Offerings. In addition, at any
time, or from time to time, on or prior to January 15, 2002 the Issuers may, at
their option, use the net cash proceeds of one or more Public Equity Offerings
(as defined below) to redeem in the aggregate up to 35% of the aggregate
principal amount of the Notes originally issued at a redemption price equal to
110.125% of the principal amount thereof, plus accrued and unpaid interest
thereon to the date of redemption (subject to the right of Holders of record on
a record date to receive interest due on the related interest payment date that
is on or prior to such date of redemption); provided, however, that after giving
effect to any such redemption at least 65% of the aggregate principal amount of
the Notes originally issued remains outstanding. In order to effect the
foregoing redemption with the proceeds of any Public Equity Offering, the
Issuers shall make such redemption not more than 60 days after the consummation
of such Public Equity Offering.
As used in the preceding paragraph, "Public Equity Offering" means an
underwritten public offering of Qualified Capital Stock of the Company or
Capital pursuant to a registration statement filed with the Commission in
accordance with the Securities Act of 1933, as amended (the "Securities Act"),
or any successor statute.
In the event that less than all of the Notes are to be redeemed at any
time, selection of such Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which such Notes are listed or, if such Notes are not then listed on
a national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however, that no Notes of
a principal amount of $1,000 or less shall be redeemed in part and Notes of a
principal amount in excess of $1,000 may be redeemed in part in multiples of
$1,000 only; and provided, further, that if a partial redemption is made with
the proceeds of a Public Equity Offering, selection of the Notes or portions
thereof for redemption shall, subject to the preceding proviso, be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of DTC or a successor depositary), unless
such method is otherwise prohibited. Notice of redemption shall be mailed by
first-class mail at least 30 but not more than 60 days before the Redemption
Date to each Holder of Notes to be redeemed at its registered address. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original Note. On and after the Redemption Date, interest will cease to
accrue on Notes or portions thereof called for redemption as long as the Issuers
have deposited with the Paying Agent funds in satisfaction of the applicable
redemption price pursuant to the Indenture.
B-5
6. Repurchase Provisions
---------------------
(1) Upon the occurrence of a Change of Control, each Holder will have
the right to require that the Issuers purchase all or a portion (in integral
multiples of $1,000) of such Holder's Notes pursuant to the offer described
below (the "Change of Control Offer"), at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest thereon to the date of
purchase (subject to the right of Holders of record on a record date to receive
interest due on the related interest payment date that is on or prior to such
date of purchase). Within 30 days following the date upon which the Change of
Control occurred, the Company must send, by first-class mail, a notice to each
Holder, with a copy to the Trustee, which notice shall govern the terms of the
Change of Control Offer. Such notice shall state, among other things, the
purchase date, which must be no earlier than 30 days nor later than 60 days from
the date such notice is mailed, other than as may be required by law (the
"Change of Control Payment Date"). Holders electing to have a Note purchased
pursuant to a Change of Control Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third business day prior to the Change of
Control Payment Date.
(2) To the extent all or a portion of the Net Cash Proceeds of any
Asset Sale are not applied within 270 days of such Asset Sale in certain ways
described in the Indenture (the "Net Proceeds Offer Trigger Date"), the Issuers
will make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net
Proceeds Offer Payment Date") not less than 20 business days following the date
on which such offer is made (or such longer period as may be required by law)
nor more than 60 days following such Net Proceeds Offer Trigger Date, from all
Holders on a pro rata basis (and on a pro rata basis with the holders of any
other Senior Subordinated Indebtedness with similar provisions requiring the
Issuers to offer to purchase such Senior Subordinated Indebtedness with the
proceeds of Asset Sales), that principal amount of Notes and such other
Indebtedness equal to such unapplied Net Cash Proceeds at a price, in the case
of the Notes, equal to 100% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest thereon, to the date of purchase
(subject to the right of Holders of record on a record date to receive interest
due on an interest payment date that is on or prior to such date of purchase).
Notwithstanding the foregoing, the Issuers may defer the Net Proceeds Offer
until there is an aggregate amount of unapplied Net Cash Proceeds equal to or in
excess of $5.0 million resulting from one or more Asset Sales (at which time,
the entire amount of unapplied Net Cash Proceeds, and not just the amount in
excess of $5.0 million, shall be applied as required pursuant to this
paragraph).
7. Denominations; Transfer; Exchange
---------------------------------
The Notes are in registered form without coupons in denominations of
principal amount of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange
B-6
(i) any Notes selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Notes to be redeemed and
ending on the date of such mailing or (ii) any Notes for a period beginning 15
days before an interest payment date and ending on such interest payment date.
8. Persons Deemed Owners
---------------------
The registered holder of this Note may be treated as the owner of it
for all purposes.
9. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Issuers at their request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Issuers and not to the Trustee for payment.
10. Discharge Prior to Redemption or Maturity
-----------------------------------------
Subject to certain conditions set forth in the Indenture, the Issuers
at any time may terminate some or all of their obligations under the Notes and
the Indenture if the Issuers deposit with the Trustee cash or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.
11. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the then Outstanding Notes and (ii)
any Default (other than with respect to nonpayment, or in respect of a provision
that cannot be amended without the written consent of each Noteholder affected)
or noncompliance with any provision may be waived with the written consent of
the Holders of a majority in principal amount of the then Outstanding Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Noteholder, the Issuers and the Trustee may amend the Indenture or the Notes
to, among other things, cure any ambiguity, omission, defect or inconsistency,
or to comply with Article IV of the Indenture, or to provide for uncertificated
Notes in addition to or in place of Certificated Notes, or to add guarantees
with respect to the Notes or to secure the Notes, or to add additional covenants
or surrender rights and powers conferred on the Issuers, or to comply with any
request of the Commission in connection with qualifying the Indenture under the
Act, or to make any change that does not adversely affect the rights of any
Noteholder, or to provide for the issuance of Exchange Notes.
B-7
12. Defaults and Remedies
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes may declare all the
Outstanding Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Notes
being due and payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
Outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Noteholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Issuers
---------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with and collect obligations
owed to it by the Issuers or their Affiliates and may otherwise deal with the
Issuers or their affiliates with the same rights it would have if it were not
Trustee.
14. No Recourse Against Others
--------------------------
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Issuers or any Note Guarantor shall not have
any liability for any obligations of the Issuers under the Notes or any Note
Guarantees, the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Note, each Noteholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
15. Authentication
--------------
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
16. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
B-8
17. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuers have caused CUSIP numbers to be
printed on the Notes and have directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. Governing Law
-------------
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York, but without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
The Issuers will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:
Advanced Glassfiber Yarns LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
B-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the
Issuers. The agent may substitute another to act for him.
________________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:_____________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-10
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Principal Amount of Signature of authorized
Date of Amount of decrease in Principal Amount of increase in Principal this Global Note following signatory of Trustee or
Exchange Amount of this Global Note Amount of this Global Note such decrease or increase Note Custodian
________ _______________________________ _______________________________ __________________________ _______________________
B-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 3.11 or Section 3.18 of the Indenture, check either box:
------------ ------------
[_] [_]
Section 3.11 Section 3.18
------------ ------------
If you want to elect to have only part of this Note purchased by the
Issuers pursuant to Section 3.11 or Section 3.18 of the Indenture, state the
------------ ------------
amount in principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ____________________________
(Sign exactly as your name appears on the
other side of the Note)
Signature Guarantee:_______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-12