INDENTURE
Dated as of [ ]
among
MMH HOLDINGS, INC.,
as the Issuer,
and
[ ],
as Trustee
------------------
$[ ]
12% Exchange Debentures due 2009
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1)......................................................... 7.10
(a)(2)......................................................... 7.10
(a)(3)......................................................... N.A.
(a)(4)......................................................... N.A.
(a)(5)......................................................... 7.10
(b)............................................................ 7.8; 7.10
(c)............................................................ N.A.
311(a)............................................................ 7.11
(b)............................................................ 7.11
(c)............................................................ N.A.
312(a)............................................................ 2.6
(b)............................................................ 10.3
(c)............................................................ 10.3
313(a)............................................................ 7.6
(b)(1)......................................................... 7.6
(b)(2)......................................................... 7.6; 7.7
(c)............................................................ 7.5; 7.6;
10.2
(d)............................................................ 7.6
314(a)............................................................ 4.8; 4.10;
10.2
(b)............................................................ N.A.
(c)(1)......................................................... 4.8; 10.4
(c)(2)......................................................... 10.4
(c)(3)......................................................... 4.8; 10.4
(d)............................................................ N.A.
(e)............................................................ 10.5
(f)............................................................ N.A.
315(a)............................................................ 7.1(b)
(b)............................................................ 7.5; 10.2
(c)............................................................ 7.1(a)
(d)............................................................ 7.1(c)
(e)............................................................ 6.11
316(a)(last sentence)............................................. 2.9
(a)(1)(A)...................................................... 6.5
(a)(1)(B)...................................................... 6.4
(a)(2)......................................................... N.A.
(b)............................................................ 6.7; 9.4
(c)............................................................ 9.4
317(a)(1)......................................................... 6.8
(a)(2)......................................................... 6.9
(b)............................................................ 2.4
318(a)............................................................ 10.1
(c)............................................................ 10.1
--------------------
"N.A." means Not Applicable.
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE...........................1
Section 1.1. Definitions....................................................1
Section 1.2. Incorporation by Reference of TIA.............................24
Section 1.3. Rules of Construction.........................................24
ARTICLE 2. THE NOTES..........................................................25
Section 2.1. Amount of Notes...............................................25
Section 2.2. Form and Dating...............................................25
Section 2.3. Execution and Authentication..................................25
Section 2.4 Registrar and Paying Agent.....................................26
Section 2.5 Paying Agent To Hold Assets in Trust...........................26
Section 2.6 Noteholder Lists...............................................27
Section 2.7 Transfer and Exchange..........................................27
Section 2.8 Replacement Notes..............................................28
Section 2.9 Outstanding Notes..............................................28
Section 2.10 Treasury Notes................................................29
Section 2.11 Temporary Notes...............................................29
Section 2.12 Cancellation..................................................29
Section 2.13 Defaulted Interest............................................29
Section 2.14 CUSIP Number..................................................30
Section 2.15 Deposit of Moneys.............................................30
Section 2.16 Book-Entry Provisions for Global Notes........................30
Section 2.17 Special Transfer Provisions...................................32
Section 2.18 Computation of Interest.......................................32
ARTICLE 3. REDEMPTION.........................................................32
Section 3.1 Notices to Trustee.............................................32
Section 3.2 Selection of Notes To Be Redeemed..............................32
Section 3.3 Notice of Redemption...........................................32
Section 3.4 Effect of Notice of Redemption.................................33
Section 3.5 Deposit of Redemption Price....................................33
Section 3.6 Notes Redeemed in Part.........................................34
ARTICLE 4. COVENANTS..........................................................34
Section 4.1. Payment of Notes..............................................34
Section 4.2. Maintenance of Office or Agency...............................34
Section 4.3. Limitation on Additional Indebtedness.........................35
Section 4.4. Limitation on Restricted Payments.............................35
Section 4.5. Legal Existence...............................................38
Section 4.6. Taxes ........................................................38
Section 4.7. Maintenance of Properties; Insurance; Books and Records.......38
Section 4.8. Compliance Certificate........................................39
Section 4.9. [Reserved.]...................................................39
Section 4.10. Reports to Commission and Holders............................39
Section 4.11. Waiver of Stay, Extension or Usury Laws......................40
Section 4.12. Limitation on Certain Asset Sales............................40
Section 4.13. Limitation on Preferred Stock of Restricted Subsidiaries.....43
Section 4.14. Limitation on Other Senior Subordinated Indebtedness.........43
Section 4.15. Limitations on Transactions with Affiliates..................44
Section 4.16. Limitation on Capital Stock of Restricted Subsidiaries.......45
Section 4.17. [Reserved.]..................................................45
Section 4.18. Payments for Consent.........................................45
Section 4.19. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.....................................46
Section 4.20. Change of Control Offer......................................47
ARTICLE 5. SUCCESSOR CORPORATION..............................................50
Section 5.1. Mergers, Consolidations and Sales of Assets...................50
Section 5.2. Successor Corporation Substituted.............................51
ARTICLE 6. DEFAULT AND REMEDIES...............................................51
Section 6.1. Events of Default.............................................51
Section 6.2. Acceleration..................................................53
Section 6.3. Other Remedies................................................53
Section 6.4. Waiver of Past Defaults.......................................54
Section 6.5. Control by Majority...........................................54
Section 6.6. Limitation on Suits...........................................55
Section 6.7. Rights of Holders To Receive Payment..........................55
Section 6.8. Collection Suit by Trustee....................................55
Section 6.9. Trustee May File Proofs of Claim..............................55
Section 6.10. Priorities...................................................56
Section 6.11. Undertaking for Costs........................................56
Section 6.12. Restoration of Rights and Remedies...........................56
ARTICLE 7. TRUSTEE............................................................57
Section 7.1. Duties of Trustee.............................................57
Section 7.2. Rights of Trustee.............................................58
Section 7.3. Individual Rights of Trustee..................................59
Section 7.4. Trustee's Disclaimer..........................................59
Section 7.5. Notice of Default.............................................59
Section 7.6. Reports by Trustee to Holders.................................59
Section 7.7. Compensation and Indemnity....................................60
Section 7.8. Replacement of Trustee........................................61
Section 7.9. Successor Trustee by Consolidation, Merger, Etc...............62
Section 7.10. Eligibility; Disqualification................................62
Section 7.11. Preferential Collection of Claims Against Company............62
Section 7.12. Paying Agents................................................62
ii
ARTICLE 8. AMENDMENTS, SUPPLEMENTS AND WAIVERS................................64
Section 8.1. Without Consent of Holders....................................64
Section 8.2. With Consent of Holders.......................................64
Section 8.3. Compliance with TIA...........................................65
Section 8.4. Revocation and Effect of Consents.............................66
Section 8.5. Notation on or Exchange of Securities.........................66
Section 8.6. Trustee To Sign Amendments, Etc...............................66
ARTICLE 9. DISCHARGE OF INDENTURE, DEFEASANCE.................................67
Section 9.1. Discharge of Indenture........................................67
Section 9.2. Legal Defeasance..............................................68
Section 9.3. Covenant Defeasance...........................................68
Section 9.4. Conditions to Legal Defeasance or Covenant Defeasance.........68
Section 9.5. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.......................70
Section 9.6. Reinstatement.................................................70
Section 9.7. Moneys Held by Paying Agent...................................71
Section 9.8. Moneys Held by Trustee........................................71
ARTICLE 10. MISCELLANEOUS.....................................................72
Section 10.1. Trust Indenture Act Controls.................................72
Section 10.2. Notices......................................................72
Section 10.3. Communications by Holders with Other Holders.................73
Section 10.4. Certificate and Opinion as to Conditions Precedent...........73
Section 10.5. Statements Required in Certificate and Opinion...............74
Section 10.6. Rules by Trustee and Agents..................................75
Section 10.7. Business Days; Legal Holidays................................75
Section 10.8. Governing Law................................................75
Section 10.9. No Adverse Interpretation of Other Agreements................75
Section 10.10. No Recourse Against Others..................................75
Section 10.11. Successors..................................................76
Section 10.12. Multiple Counterparts.......................................76
Section 10.13. Table of Contents, Headings, etc............................76
Section 10.14. Separability................................................76
ARTICLE 11. SUBORDINATION.....................................................76
Section 11.1. Notes Subordinated to Senior Indebtedness....................77
Section 11.2. No Payment on Notes in Certain Circumstances................77
Section 11.3. Payment Over of Proceeds upon Dissolution, Etc...............78
Section 11.4. Payments May Be Paid Prior to Dissolution....................79
Section 11.5. Subrogation..................................................79
Section 11.6. Obligations of the Company Unconditional.....................79
Section 11.7. Notice to Trustee............................................80
Section 11.8. Reliance on Judicial Order or Certificate of Liquidating
Agent......................................................80
Section 11.9. Trustee's Relation to Senior Indebtedness....................80
iii
Section 11.10. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness.............81
Section 11.11. Holders Authorize Trustee To Effectuate Subordination
of Notes..................................................81
Section 11.12. This Article Eleven Not To Prevent Events of Default........82
Section 11.13. Trustee's Compensation Not Prejudiced.......................82
iv
EXHIBITS
--------
Exhibit A ............. Form of Note
Exhibit B ............. Form of Legend and Assignment for Global Note
SCHEDULES
---------
Schedule A ............ Permitted Affiliate Agreements
Schedule B ............ Permitted Investments
v
INDENTURE dated as of [ , ], among MMH HOLDINGS, INC., a Delaware
corporation (the "Company"), as the Issuer, and [ ], as Trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 12%
Exchange Debentures due 2009:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acquired Indebtedness" means (a) Indebtedness of a Person
(including an Unrestricted Subsidiary) existing at the time such Person becomes
a Restricted Subsidiary or assumed in connection with the acquisition of assets
from such Person and (b) any Seller Note.
"Additional Excess Proceeds Offer" shall have the meaning provided
in Section 4.12(4).
"Affiliate" of any specified Person means any other Person
(including, without limitation, such Person's issue, siblings and spouse) that
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by," and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise. For purposes of this Indenture, the term "Affiliate," as it relates
to the Company, shall (a) include HarnCo for so long as HarnCo is entitled to
designate at least one member of the Board of Directors of the Company or any
successor to the Company and (b) not include CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp. or Indosuez
Capital, a division of Credit Agricole Indosuez or their respective Affiliates.
"Affiliate Transaction" shall have the meaning provided in Section
4.15.
"Agent" means the Registrar, Paying Agent or agent for service of
notices or demands.
"Agent Members" shall have the meaning provided in Section 2.16.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person becomes a Restricted Subsidiary of the Company, or is merged with or into
the Company or any Restricted Subsidiary of the Company or (b) the acquisition
by the Company or any Restricted Subsidiary of the Company of the assets of any
Person (other than a Restricted Subsidiary of the Company) which constitute all
or substantially all of the assets of such Person or comprise 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 the sale, transfer or other disposition
(including, without limitation, by merger or consolidation) (other than to the
Company or any of its Restricted Subsidiaries) in any single transaction or
series of related transactions of (a) any Capital Stock of or other equity
interest in any Restricted Subsidiary of the Company (other than directors'
qualifying shares to the extent required by applicable law), (b) all or
substantially all of the assets of the Company or of any Restricted Subsidiary
thereof, (c) real property or (d) all or substantially all of the assets, or any
Property, or part thereof, owned by the Company or any Restricted Subsidiary
thereof, or a division, line of business or comparable business segment of the
Company or any Restricted Subsidiary thereof; provided that Asset Sales shall
not include (i) sales, leases, conveyances, transfers or other dispositions to
the Company or to a Restricted Subsidiary or to any other Person if after giving
effect to such sale, lease, conveyance, transfer or other disposition such other
Person becomes a Restricted Subsidiary, (ii) the sale, lease, conveyance,
disposition or other transfer of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole as permitted by Section
5.1(a), (iii) any transfer, conveyance, sale, lease or other disposition of
Property or assets, the gross proceeds of which (exclusive of indemnities) do
not exceed $500,000, (iv) any sales, leases, conveyances, transfers or other
dispositions of Property or equipment that has become worn out, obsolete or
damaged or otherwise unsuitable for use in connection with the business of the
Company or any Restricted Subsidiary, as the case may be, (v) the incurrence of
any Liens, (vi) the making of any Restricted Payment permitted by Section 4.4,
(vii) transfers of cash and sales of Cash Equivalents and (viii) sales, leases,
conveyances, transfers or other dispositions of Property or equipment in the
ordinary course of business.
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i)
cash or Cash Equivalents received by the Company or any Restricted Subsidiary
from such Asset Sale, after (a) provision for all income or other taxes measured
by or resulting from such Asset Sale, (b) payment of all brokerage commissions,
underwriting and other fees and expenses related to such Asset Sale, (c)
provision for minority interest holders in any Restricted Subsidiary as a result
of such Asset Sale and (d) deduction of appropriate amounts to be provided by
the Company or a Restricted Subsidiary as a reserve, in accordance with GAAP,
against any liabilities associated with the assets sold or disposed of in such
Asset Sale and retained by the Company or a Restricted Subsidiary after such
Asset Sale, including, without limitation, pension and other post employment
benefit liabilities and liabilities related to environmental matters or against
any indemnification obligations associated with the assets sold or disposed of
in such Asset Sale; provided, that at such time as such amounts are no longer
reserved or such reserve is no longer necessary, any remaining amounts shall
become Asset Sale Proceeds to be allocated in accordance with Section 4.12 and
(ii) promissory notes and other noncash consideration received by the Company or
any Restricted Subsidiary from such Asset Sale or other disposition upon the
liquidation or conversion of such Notes or noncash consideration into cash.
"Agent" means any Registrar or Paying Agent.
2
"Available Asset Sale Proceeds" means, with respect to any Asset
Sale, the aggregate Asset Sale Proceeds from such Asset Sales that have not been
applied in accordance with clause (iii)(a), and which has not yet been the basis
for an Excess Proceeds Offer in accordance with clause (iii)(b), of Section
4.12.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Bankruptcy Proceedings" shall have the meaning provided in Section
11.3.
"Blockage Period" shall have the meaning provided in Section 5.1(c).
"Board of Directors" means (i) in the case of a Person that is a
limited partnership, the board of directors of its corporate general partner or
any committee authorized to act therefor (or, if the general partner is itself a
limited partnership, the board of directors of such general partner's corporate
general partner or any committee authorized to act therefor), (ii) 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 (iii) 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 a copy of a resolution certified pursuant
to an Officers' Certificate to have been duly adopted by the Board of Directors
of the Company and to be in full force and effect on the date of such
certificate, and delivered to the Trustee.
"Business Day" has the meaning provided in Section 10.7.
"Capital Stock" means, with respect to any Person, any and all
shares or other equivalents (however designated and whether or not voting) of
capital stock, partnership interests or any other participation, right or other
interest in the nature of an equity interest in such Person or any option,
warrant or other security convertible into any of the foregoing.
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Equivalents" means any of the following Investments: (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 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 foreign country recognized by the United
States or any political subdivision of any such state or foreign country, as the
case may be, or any public instrumentality thereof (including any taxing
authority) 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 Ratings Group ("S&P") or ▇▇▇▇▇'▇ Investors Service,
3
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,
time deposit accounts, operating accounts or bankers' acceptances maturing
within one year from the date of acquisition thereof issued or guaranteed by any
commercial banking institution organized under the laws of any jurisdiction
recognized by the United States of America and in which the Company or its
Subsidiaries actively conduct business, having at the date of acquisition
thereof combined capital and surplus of not less than U.S. $250,000,000 or the
foreign currency equivalent thereof; (v) repurchase obligations with a term of
not more than 30 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; (vi) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(i) through (v) above; and (vii) foreign bank deposits and cash equivalents in
jurisdictions where the Company or its Subsidiaries are then actively conducting
business, provided, that (a) all such deposits are required to be made in the
ordinary course of business, (b) such deposits do not exceed $1,000,000 in the
aggregate, and (c) the funds so deposited do not remain in such bank for more
than 10 days.
A "Change of Control" of the Company will be deemed to have occurred
at such time as (i) any Person (including a Person's Affiliates) or any Persons
acting together that would constitute a group (for purposes of Section 13(d) of
the Exchange Act, or any successor provision thereto) (a "Group"), other than a
Permitted Holder, becomes the beneficial owner (as defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of (a) 50%
or more of the total Voting Stock of the Company or (b) 50% of all classes of
Common Stock (whether voting or non-voting), taken as a whole, of the Company,
(iii) any Person (including a Person's Affiliates) or Group, other than a
Permitted Holder, becomes the beneficial owner of more than 30% of the total
Voting Stock of the Company, and the Permitted Holders beneficially own, in the
aggregate, a lesser percentage of the total Voting Stock of the Company than
such other Person or Group and the Permitted Holders do not have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the Company, (iv) there shall
be consummated any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which the Common
Stock of the Company would be converted into cash, securities or other Property,
other than a merger or consolidation of the Company in which the holders of the
Common Stock of the Company outstanding immediately prior to the consolidation
or merger hold, directly or indirectly, at least a majority of the Common Stock
of the surviving corporation immediately after such consolidation or merger, or
(v) during any period of two consecutive years, 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 has been approved by 66-2/3% of
the directors then still in office who either were directors at the beginning of
such period or whose election or recommendation for election was previously so
approved) cease to constitute a majority of the Board of Directors of the
Company.
"Change of Control Offer" shall have the meaning provided in Section
4.20.
4
"Change of Control Payment Date" shall have the meaning provided in
Section 4.20.
"Change of Control Purchase Price" shall have the meaning provided
in Section 4.20.
"Chartwell" means Chartwell Investments Inc. and its Affiliates.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means all Capital Stock of such Person
that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding-up of such Person, to any other class of Capital Stock of
such Person.
"Company" means the party named as such in the first paragraph of
this Indenture until a successor replaces such party pursuant to Article 5 of
this Indenture and thereafter means such successor.
"Company Request" means any written request signed in the name of
the Company by the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer or the Treasurer of
the Company and attested to by the Secretary or any Assistant Secretary of the
Company.
"Consolidated Interest Coverage Ratio" of any Person means the ratio
of (i) EBITDA of such Person for the four most recent consecutive fiscal
quarters for which financial statements are available or, if the Company is not
in compliance with its obligations in Section 4.10 on the date of determination,
the four most recent consecutive quarters ending on or prior to the date of
determination (in either such case, the "Four Quarter Period") to (ii)
Consolidated Interest Expense of such Person for such Four Quarter Period. In
addition to and without limitation of the foregoing, for purposes of this
definition, "EBITDA" and "Consolidated Interest Expense" shall be calculated
after giving effect on a pro forma basis to (i)(a) the incurrence of any
Indebtedness of such Person or any of its Restricted Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and (b) any incurrence or repayment of other Indebtedness (and the
application of the proceeds thereof), occurring on or after the first day of the
Four Quarter Period and on or prior to the date of determination, in each case
set forth in clauses (i)(a) and (b), as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the first
day of the Four Quarter Period (except that Indebtedness under any revolving
credit facility shall be deemed to be the average daily balance of such
Indebtedness during such Four Quarter Period) and (ii) any Asset Sales or Asset
Acquisitions (including (x) any Person who becomes a Restricted Subsidiary as a
result of any such Acquisition and including any Asset Sale or Asset Acquisition
during such Four Quarter Period by any such Person determined as if such Person
had been a Restricted Subsidiary at the time of such transaction; provided, that
all Indebtedness of such Person and any such
5
Restricted Subsidiaries shall be deemed to have been incurred on the first day
of the Four Quarter Period and (y) the increase or decrease, as the case may be,
in EBITDA directly attributable to such Asset Sale or Asset Acquisition, as the
case may be) occurring on or after the first day of the Four Quarter Period and
on or prior to the date of determination, as if such Asset Sale or Asset
Acquisition, as the case may be, (including the incurrence, assumption or
liability for any such Acquired Indebtedness) occurred on the first day of the
Four Quarter Period. For purposes of this definition, whenever pro forma effect
is to be given to an Asset Acquisition, the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness incurred in connection therewith shall be determined in good
faith by a responsible financial or accounting officer of the Company.
"Consolidated Interest Expense" means, with respect to any Person,
for any period, without duplication, (i) the aggregate amount of interest
charges (excluding fees and expenses incurred in connection with the
Transactions), whether expensed or capitalized, incurred or accrued by such
Person and its Restricted Subsidiaries, determined on a consolidated basis in
conformity with GAAP for such period, plus (ii) to the extent not included in
clause (i) above, an amount equal to the sum of: (A) imputed interest included
in Capitalized Lease Obligations, (B) all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers' acceptance
financing, (C) the net costs associated with Interest Rate Agreements, Currency
Agreements and other hedging obligations, (D) the interest portion of any
deferred payment obligations, (E) amortization of discount or premium on
Indebtedness, if any, (F) all capitalized interest and all accrued interest, (G)
all other non-cash interest expense, (H) all interest incurred or paid under any
guarantee of Indebtedness (including a guarantee of principal, interest or any
combination thereof) of any Person, and (I) all dividends or distributions on
Disqualified Capital Stock if payable to a Person other than the Company or a
Restricted Subsidiary (other than dividends paid or payable in shares of Capital
Stock (other than Disqualified Capital Stock) of the Company) declared and
payable in cash, minus (iii) to the extent included in clause (i) or (ii) above,
amortization or write-off of deferred financing costs (and original issue
discount to the extent it arises from the issuance of Capital Stock (other than
Disqualified Capital Stock) of the Company) during such period and, without
duplication, any charge related to any premium or penalty paid in connection
with redeeming or retiring any Indebtedness of the Company or its Restricted
Subsidiaries prior to the stated maturity thereof. If any Indebtedness
outstanding or to be incurred (x) bears a floating rate of interest, the
interest expense on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
Four Quarter Period (taking into account on a pro forma basis any Interest Rate
Agreement that has a remaining term as of the date of determination in excess of
12 months), and/or (y) was incurred under a revolving credit facility, the
interest expense on such Indebtedness shall be computed based upon the average
daily balance of such Indebtedness during the applicable period. If any
Indebtedness to be incurred bears, at the option of the Company or a Restricted
Subsidiary, a fixed or floating rate of interest, the interest expense on such
Indebtedness shall be computed by applying, at the option of the Company or such
Restricted Subsidiary, either a fixed or floating rate.
"Consolidated Net Income" means with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period on a
6
consolidated basis, determined in accordance with GAAP; provided, that (a) the
Net Income of any Person that is not a Restricted Subsidiary shall be included
only to the extent of the amount of dividends or other distributions
representing the Company's proportionate share of such Person's Net Income for
such period actually paid in cash to the Company or a Restricted Subsidiary
(subject to clause (b) below) by such Person during such period, (b) the Net
Income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions (other than pursuant to the New Credit Facility, the Senior Notes,
the Note Indenture or any other Indebtedness of the Company or any Restricted
Subsidiary of the Company containing, in the good faith judgment of the Board of
Directors of the Company, substantially the same or less restrictive limitations
on the payment of dividends or the making of other distributions than those
contained in the New Credit Facility, the Senior Notes, the Note Indenture, the
Notes or this Indenture) shall be excluded to the extent of such restriction or
limitation (regardless of any waiver thereof), (c)(i) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition and (ii) any net after tax gain (but not loss)
resulting from an Asset Sale by the Person in question or any of its
Subsidiaries other than in the ordinary course of business shall be excluded,
(d) non-cash gains and losses due solely to fluctuations in currency values
shall be excluded, (e) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets, any
earnings (or losses) of the successor corporation prior to such consolidation,
merger or transfer of assets shall be excluded, and (f) all items classified as
extraordinary, unusual or nonrecurring, including all items relating to the
Transactions and the pre-closing events relating thereto shall be excluded
(including the fees and expenses incurred in connection with the Transactions
and write-offs or other costs associated or arising in connection with the
Transactions). In computing Consolidated Net Income under clause (c) of the
first paragraph of Section 4.4, the Company or such Restricted Subsidiary (i)
shall use audited financial statements for the portion of the relevant period
for which such statements are available on the date of determination and
unaudited financial statements and other current financial data based on the
books and records of the Company for the remaining portion of such period and
(ii) shall be permitted to rely in good faith for the balance of the relevant
period for which audited financial statements are not available on the financial
statements and other financial data derived from the books and records of the
Company or such Restricted Subsidiary that are available on the date of
determination.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its Restricted Subsidiaries determined
on a consolidated basis in accordance with GAAP, less (to the extent included)
amounts attributable to Disqualified Capital Stock of such Person.
"Consolidated Tangible Assets" of any Person means the consolidated
tangible assets of such Person and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP as of the end of the most recent
fiscal quarter for which financial statements are available or, if the Company
is not in compliance with its obligations in Section 4.10 on the date of
determination, the end of the most recent quarter ending on or prior to the date
of determination.
7
"Corporate Trust Office" means _________________.
"Covenant Defeasance" has the meaning provided in Section 9.3.
"Credit Facilities" means one or more senior secured or unsecured
credit facilities providing, inter alia, for revolving credit loans, term loans,
bankers' acceptances and/or letters of credit between the Company or its
Restricted Subsidiaries and one or more lenders, including, in each case, any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced, restated or refinanced in whole or in part from
time to time.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any condition or event that is, or with the passing
of time or giving of any notice expressly required under Section 6.1 (or both)
would be, an Event of Default.
"Depository" means, with respect to the Notes issued in the form of
one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which Person must be a "clearing
agency" registered under the Exchange Act.
"Designated Senior Indebtedness" as to the Company or any
Subsidiary, as the case may be, means any Senior Indebtedness (a) under the
Credit Facilities, (b) under any Surety Arrangements or (c) which has at the
time of initial issuance an aggregate principal amount outstanding or available
under a committed facility in excess of $10 million and which has been so
designated as Designated Senior Indebtedness by the Board of Directors of the
Company at the time of initial issuance in a Board Resolution.
"Designation" shall have the meaning provided in the definition of
Restricted Payment contained in this Indenture.
"Discharge" shall have the meaning provided in Section 8.2(1).
"Disqualified Capital Stock" means any Capital Stock of the Company
or a Restricted Subsidiary thereof 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), 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 option of the holder thereof, in whole or in part, on or
prior to the Final Maturity Date of the Notes for any consideration other than
Capital Stock of the Company which is not Disqualified Capital Stock; provided,
that Preferred Stock of the Company that is issued with the benefit of
provisions requiring a change of control offer to be
8
made for such Preferred Stock in the event of a change of control of the
Company, which provisions have substantially the same effect as the provisions
of this Indenture described in Section 4.20 shall not be deemed to be
Disqualified Capital Stock solely by virtue of such provisions. Without
limitation of the foregoing, Disqualified Capital Stock shall be deemed to
include any Preferred Stock of a Restricted Subsidiary of the Company except for
Permitted Foreign Restricted Subsidiary Preferred Stock.
"EBITDA" means, for any Person, for any period, an amount equal to
(a) the sum of (i) Consolidated Net Income for such period, plus (ii) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income (minus
any provision for taxes utilized in computing net loss under clause (i) hereof
to the extent such provision reduced the net loss), plus (iii) Consolidated
Interest Expense for such period, plus (iv) depreciation for such period on a
consolidated basis to the extent reducing Consolidated Net Income, plus (v)
amortization of intangibles for such period on a consolidated basis to the
extent reducing Consolidated Net Income, plus (vi) amortization of original
issue discount to the extent it arises from the issuance of Capital Stock (other
than Disqualified Capital Stock) of the Company to the extent reducing
Consolidated Net Income, plus (vii) any charge related to any premium or penalty
paid in connection with redeeming or retiring any Indebtedness prior to its
stated maturity to the extent reducing Consolidated Net Income, plus (viii) any
other non-cash items reducing Consolidated Net Income for such period, minus (b)
all non-cash items increasing Consolidated Net Income for such period, minus (c)
all cash payments during such period relating to non-cash charges that were
added back in determining EBITDA in any prior period, (provided that payment of
such cash amounts did not reduce Consolidated Net Income) all for such Person
and its Restricted Subsidiaries determined in accordance with GAAP.
"Equity Investment" means the investment by MHE Investments, the
purchase by certain institutional investors of Units being issued by the
Company, and a retained equity investment by HarnCo, in each case, in the
Company.
"Event of Default" has the meaning provided in Section 6.1.
"Excess Proceeds Offer" shall have the meaning provided in Section
4.12.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulation of the Commission promulgated thereunder.
"Fair Market Value" means, with respect to any asset or Property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the transaction. Fair Market
Value shall be determined by the Board of Directors of the Company acting in
good faith and, in the case of determination involving assets or property in
excess of $2 million, shall be evidenced by a Board Resolution.
"Final Maturity Date" means April 1, 2009.
9
"Financings" means, collectively, the offering by ▇▇▇▇▇▇ of the
Senior Notes, the borrowings by ▇▇▇▇▇▇ and its Restricted Subsidiaries under the
New Credit Facility and the Equity Investment.
"Foreign Restricted Subsidiary" of any specified Person means any
Restricted Subsidiary the jurisdiction of incorporation, organization or
formation of which is outside of the United States, Canada, the United Kingdom
and South Africa.
"Four Quarter Period" shall have the meaning provided in the
definition of "Consolidated Interest Coverage Ratio."
"GAAP" means generally accepted accounting principles consistently
applied as in effect in the United States from time to time.
"Global Notes" shall have the meaning provided in Section 2.16.
"Guarantee" means a guarantee of the Senior Notes by a guarantor
under the Note Indenture, as in effect from time to time.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the performance
(or payment of damages in the event of non-performance) of all or any part of
such obligation, including, without limiting the foregoing, the payment of
amounts drawn down by letters of credit. A guarantee shall include, without
limitation, any agreement to preserve or maintain any other Person's financial
condition or to cause any other Person to achieve certain levels of operating
results.
"Guarantor" shall have the meaning assigned thereto in the Note
Indenture.
"HarnCo" means Harnischfeger Corporation, a Delaware corporation.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "incurrence," "incurred," "incurrable," and "incurring" shall have meanings
correlative to the foregoing); provided, that a change in GAAP that results in
an obligation of such Person that exists at such time becoming Indebtedness
shall not be deemed an incurrence of such Indebtedness.
10
"Indebtedness" means (without duplication), with respect to any
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any Property (excluding, without limitation, any balances that
constitute accounts payable or trade payables or liabilities arising from
advance payments or customer deposits for goods and services sold by such Person
or its Restricted Subsidiaries in the ordinary course of business, and other
accrued liabilities, in each case, arising in the ordinary course of business)
if and to the extent any of the foregoing indebtedness would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
and shall also include, to the extent not otherwise included (i) any Capitalized
Lease Obligations, (ii) guarantees of items of other Persons which would be
included within this definition for such other Persons (whether or not such
items would appear upon the balance sheet of the guarantor), including, without
limitation, guarantees of dividends for which such Person may be liable directly
or indirectly, (iii) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction (provided
that in the case of any such letters of credit, the items for which such letters
of credit provide credit support are those of other Persons which would be
included within this definition for such other Persons), (iv) Disqualified
Capital Stock of the Company or any Restricted Subsidiary thereof, including,
without limitation, any liquidation preference and mandatory redemption payment
obligations in respect thereof and (v) obligations of any such Person under any
Interest Rate Agreement or Currency Agreement applicable to any of the foregoing
(if and to the extent such Interest Rate Agreement or Currency Agreement
obligations would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP). The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations
included within the definition of Indebtedness, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided, that (i)
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the principal amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP but such Indebtedness shall only be
deemed to have been incurred on the date of original issuance thereof and in the
case of any securities constituting Indebtedness, the payment of interest upon
which is in such securities, such Indebtedness shall only be deemed to have been
incurred on the date of issuance of the original securities constituting such
Indebtedness, (ii) Indebtedness shall not include any liability for federal,
state, local, foreign or other taxes and (iii) contingent obligations of the
Company or any of its Restricted Subsidiaries under any Surety Obligation will
be deemed to be Indebtedness only upon the earlier of (a) the Company's or any
Restricted Subsidiary's obtaining knowledge of any payment by or in respect of
any provider in respect of any Surety Obligation, (b) the demand by any provider
for any reimbursement by the Company or any of its Restricted Subsidiaries of
any Surety Obligation or (c) the time at which the Company or any of its
Restricted Subsidiaries becomes obligated to make payment in respect of any
Surety Obligation as a result of the provider having made a payment in respect
of such Surety Obligation or as a result of such payment being required to be
made by such provider. Notwithstanding any other provision of the foregoing
definition, any trade or accounts payable arising from the purchase of goods or
11
materials or for services obtained in the ordinary course of business shall not
be deemed to be "Indebtedness" of the Company or any Restricted Subsidiaries for
purposes of this definition. Furthermore, guarantees of (or obligations with
respect to letters of credit supporting) Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Indenture" means this Indenture, as amended, restated or
supplemented from time to time.
"Initial Blockage Period" shall have the meaning provided in Section
11.2(b).
"Interest Payment Date" means the stated maturity of an installment
of interest on the Notes as specified on the Notes.
"Interest Rate Agreement" means, for any Person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"Investments" means, directly or indirectly, any advance (or other
extension of credit), loan or capital contribution to (by means of transfers of
Property to others, payments for Property or services for the account or use of
others or otherwise), any guarantee of any obligations or Indebtedness of any
other Person, the purchase of any stock, bonds, notes, debentures, partnership
or joint venture interests or other securities of, the acquisition, by purchase
or otherwise, of any evidence of beneficial ownership of, or interest in, any
Person. Upon the designation of an Unrestricted Subsidiary as a Restricted
Subsidiary or the acquisition by the Company or a Restricted Subsidiary of an
interest in any Person that, as a result thereof, becomes a Restricted
Subsidiary, the Company shall be deemed to have made an Investment equal to the
Fair Market Value of all Investments owned by such new Restricted Subsidiary.
Investments shall exclude (i) accounts receivable and other extensions of trade
credit, in each case, on commercially reasonable terms in accordance with normal
trade practices, (ii) prepaid expenses and workers' compensation, utility, lease
and similar deposits, in the ordinary course of business and (iii) acquisitions
of Property or assets paid for solely by the issuance of Capital Stock (other
than Disqualified Capital Stock) of the Company.
"Issue Date" means the date of original issuance of the Series A
Senior Preferred Stock.
"Joint Venture" of any specified Person means any corporation,
partnership, joint venture, limited liability company, association or other
business entity, whether now existing or hereafter organized or acquired, and
(a) which is engaged in a similar line of business as the Company or any
Restricted Subsidiary at the date of determination and (b)(i) in the case of a
corporation, of which not more than 50% of the total voting power of the Capital
Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, officers or trustees thereof is held by the Company
or any of its Restricted Subsidiaries, or (ii) in the case of a partnership,
joint venture, limited liability company, association or other business entity,
with respect to which the Company or any of its Restricted Subsidiaries has not
more than 50% of the ownership and voting power relating to the policies,
management and affairs thereof.
12
"Junior Capital Stock" means Capital Stock of the Company, including
the Series B Junior Preferred Stock and the Series C Junior Voting Preferred
Stock, that does not rank, as to the payment of dividends or other comparable
distributions or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Company, prior to or
on a parity with the Series A Senior Preferred Stock.
"Legal Defeasance" shall have the meaning provided in Section 9.2.
"Lien" means with respect to any Property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"MHE Investments" means MHE Investments, Inc., a Delaware
corporation.
"▇▇▇▇▇'▇" has the meaning provided such term in the definition of
Cash Equivalents contained herein.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Material Handling, Inc., a Delaware
corporation.
"Net Income" means, with respect to any Person for any period, the
net income (loss) of such Person determined in accordance with GAAP, plus the
amount of any decrease in the deferred tax asset for such period relating to the
actual cash tax benefit realized by such Person or the consolidated tax group of
which such Person is a member resulting from the election under Section
338(h)(10) of the Code in respect of the Transactions.
"Net Proceeds" means (a) in the case of any sale of Capital Stock by
the Company, the aggregate net proceeds received by the Company, after payment
of expenses, commissions and the like incurred in connection therewith, whether
such proceeds are in cash or in Property (valued at the Fair Market Value
thereof at the time of receipt) and (b) in the case of any exchange, exercise,
conversion or surrender of outstanding securities of any kind for or into shares
of Capital Stock of the Company which is not Disqualified Stock, the net book
value of such outstanding securities on the date of such exchange, exercise,
conversion or surrender (plus any additional amount required to be paid by the
holder to the Company upon such exchange, exercise, conversion or surrender)
less any and all payments made to the holders, e.g., on account of fractional
shares and less all expenses incurred by the Company in connection therewith.
"New Credit Facility" means the Credit Agreement, dated as of March
30, 1998, among the Company, ▇▇▇▇▇▇, Material Handling LLC, ▇▇▇▇▇▇ Material
Handling, Ltd., Mondel ULC, Kaverit Steel and Crane ULC, and Canadian Imperial
Bank of Commerce, as Administrative Agent, Credit Agricole Indosuez, as
Syndication Agent, BankBoston, N.A., as Documentation Agent, and the lending
institutions named therein.
13
"Non-Payment Event of Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any then outstanding Designated Senior Indebtedness.
"Note Indenture" means the Indenture relating to the Senior Notes,
as in effect on the Issue Date.
"Notes" means the Company's 12% Exchange Debentures due 2009, that
are issued pursuant to this Indenture, including the Secondary Notes.
"October 1997 Drop Down" means the transfer in October 1997 by
HarnCo of the assets of its Material Handling Equipment Division to Material
Handling, LLC, a wholly-owned subsidiary of the Company, or to one of its
Affiliates and the assumption by such entities of substantially all of the
liabilities of HarnCo and its Affiliates attributable thereto.
"Offering Memorandum" means the Offering Memorandum dated March 23,
1998 relating to the Company's offering and placement of the Series A Senior
Preferred Stock.
"Officer" with respect to any Person (other than the Trustee), means
the Chairman of the Board, the Chief Executive Officer, the President, any Vice
President and the Chief Financial Officer, the Treasurer or the Secretary of
such Person, or any other officer designated by the Board of Directors of such
Person, as the case may be.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President or any Vice President and the Chief Financial Officer or any
Treasurer of such Person that shall comply with applicable provisions of this
Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, which opinion meets the requirements of
Sections 10.4 and 10.5 hereof. The counsel may be an employee of or counsel to
the Company, any Subsidiary of the Company or the Trustee.
"Payment Blockage Period" shall have the meaning provided in Section
11.2(b).
"Payment Default" means any Default in the payment of principal of
(or premium, if any) or interest on or any other amount payable in connection
with Designated Senior Indebtedness.
"Permitted Affiliate Agreements" means the agreements between or
among the Company and any of MHE Investments, HarnCo, Chartwell or their
respective Affiliates described in Schedule A in effect immediately after the
initial issuance of the Series A Senior Preferred Stock on the Issue Date, and
as the same may be amended from time to time subject to the provisions of
Section 4.15; provided, that notwithstanding such provision, such agreements may
be extended from time to time or otherwise amended, to the extent that a
majority of the disinterested members of the Board of Directors of the Company
has determined in good faith
14
that no material adverse effect on the creditworthiness of the Company and its
Restricted Subsidiaries, taken as a whole, shall result as a consequence
thereby.
"Permitted Foreign Restricted Subsidiary Preferred Stock" means
securities of Foreign Restricted Subsidiaries of the Company denominated in
Preferred Stock that (a) otherwise have substantially the same characteristics
of voting or non-voting Common Stock of a Delaware corporation, (b) do not
obligate the issuer to pay current dividends or distributions in cash or
otherwise and (c) are not subject to any requirement of redemption or
repurchase.
"Permitted Holder" means Chartwell.
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Restricted Subsidiary arising
under or in connection with the Credit Facilities or Acquired Indebtedness in an
aggregate principal amount at any one time outstanding not to exceed the sum of
(a) $55 million, less the aggregate amount of all Net Proceeds of Asset Sales
applied to permanently reduce the outstanding amount of such Indebtedness, and
(b) the greater of (1) $75 million, less the aggregate amount of all Net
Proceeds of Asset Sales applied to permanently reduce the outstanding amount of
such Indebtedness or (2) the sum of (x) 80% of the book value of accounts
receivable of the Company and its Restricted Subsidiaries and (y) 45% of the
book value of consolidated inventory of the Company and its Restricted
Subsidiaries, in each case, determined at the time of such incurrence, less the
aggregate amount of all Net Proceeds of Asset Sales applied to permanently
reduce the outstanding amount of such Indebtedness; provided, that $15 million
of the Indebtedness incurred under this clause (b) may be incurred solely to
obtain letters of credit and to fund draws thereunder to provide credit support
for the Surety Arrangement or other Surety Obligations or other letters of
credit reasonably necessary in the ordinary course of business;
(ii) Indebtedness under Surety Obligations and under the Surety
Arrangement, in either case, that are due not later than 10 days after the
earlier of (a) the Company's or any Restricted Subsidiary's obtaining knowledge
of any payment by or in respect of any provider in respect of any Surety
Obligation, (b) the demand by any provider for any reimbursement by the Company
or any of its Restricted Subsidiaries of any Surety Obligation or (c) the time
at which the Company or any of its Restricted Subsidiaries becomes obligated to
make payment in respect of any Surety Obligation as a result of the provider
having made a payment in respect of such Surety Obligation or as a result of
such payment being required to be made by such provider;
(iii) Indebtedness under the Notes, this Indenture, the Senior
Notes, the Note Indenture and the Guarantees;
(iv) Indebtedness not covered by any other clause of this definition
which is outstanding on the Issue Date other than under the South African Credit
Facility;
(v) Indebtedness of the Company to any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary to the Company or another Restricted
Subsidiary; provided that Indebtedness of the Company or any Wholly-Owned
Subsidiary to any Restricted
15
Subsidiary (other than a Wholly-Owned Subsidiary) is incurred for borrowed
money; provided, further, that any Indebtedness otherwise referred to in this
clause (v) that is no longer held by a Restricted Subsidiary or the Company
(whether (i) as a result of a sale or transfer of such Indebtedness, (ii) as a
result of such Person no longer being the Company or a Restricted Subsidiary or
(iii) otherwise), shall, in each case, be deemed incurred at such time;
(vi) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire Property in the ordinary course of business, which
Indebtedness and Capitalized Lease Obligations, in the aggregate, outstanding on
any date of incurrence (and any Refinancing Indebtedness in respect thereof), do
not exceed 4% of the Consolidated Tangible Assets of the Company and its
Restricted Subsidiaries;
(vii) Interest Rate Agreements and Currency Agreements;
(viii) guarantees of obligations of the Company or its Restricted
Subsidiaries;
(ix) additional Indebtedness of the Company or its Restricted
Subsidiaries not to exceed an aggregate of $10 million in principal amount
outstanding at any time; and
(x.) Refinancing Indebtedness in respect of Indebtedness incurred
under clauses (iii), (iv), (v) and (vii) above or incurred pursuant to Section
4.3(a).
"Permitted Investments" means, for any Person, Investments made on
or after the Issue Date consisting of:
(i) Investments by the Company, or by a Restricted Subsidiary, in
the Company or a Restricted Subsidiary;
(ii) Cash Equivalents;
(iii) Investments by the Company, or by a Restricted Subsidiary
thereof, in a Person, if as a result of such Investment (a) such Person becomes
a Restricted Subsidiary of the Company or (b) such person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets (including the proceeds of such Investment) to, or is
liquidated into, the Company or a Restricted Subsidiary thereof;
(iv) non-cash consideration received in conjunction with the
consummation of an Asset Sale that is otherwise permitted by Section 4.12;
(v) Interest Rate Agreements and Currency Agreements;
(vi) any Investment existing on the Issue Date;
(vii) Investments received in settlement of obligations owed to the
Company or any Restricted Subsidiary as a result of bankruptcy or insolvency
proceedings or upon the foreclosure or enforcement of any Lien in favor of the
Company or any Restricted Subsidiary;
16
(viii) Investments required pursuant to any agreement or obligation
of the Company or a Restricted Subsidiary to make such Investments in effect on
the Issue Date, as described on Schedule B;
(ix) Investments required to be made pursuant to the Transactions,
as contemplated by the Permitted Affiliate Agreements; and
(x) Investments by the Company or any Restricted Subsidiary not
otherwise permitted under this definition, in an aggregate amount not to exceed
$15 million at any one time outstanding.
For purposes of clause (x) above, the amount of any Investment
outstanding, in respect of any Investment and the issuer thereof (and its
Subsidiaries), shall be equal to the excess of (a) the aggregate amount of all
Investments made therein by the Company or any Restricted Subsidiary on or after
the Issue Date (including the Fair Market Value of all such Investments not made
in cash or Cash Equivalents, valued at the time of such Investment) over (b) the
aggregate amount returned in cash or Cash Equivalents on or with respect to
Investments in such Person (whenever such Investment was made) whether through
the sale or other disposition of the Investment in such Person (or portion
thereof) or through interest payments, principal payments, dividends or other
distributions or payments; provided, that such payments or distributions shall
not be (and have not been) included in clause (c)(3) of the first paragraph of
Section 4.4 or otherwise included in Consolidated Net Income.
"Permitted Junior Securities" means debt or equity securities of the
Company or any successor corporation provided for by a plan of reorganization or
readjustment that are subordinated to the Notes at least to the same extent that
the Notes are subordinated to the payment of all Senior Indebtedness then
outstanding.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
"Physical Notes" means certificated Notes in registered form in
substantially the form set forth in Exhibit A.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Public Equity Offering" means any underwritten public offering of
shares of Common Stock (however designated and whether voting or non-voting) of
the Company or
17
▇▇▇▇▇▇ and any and all rights, warrants or options to acquire such Common Stock
pursuant to an effective registration statement (other than a registration
statement on Form S-4 or S-8) filed with the Commission in accordance with the
Securities Act.
"Purchase Money Indebtedness" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including sales and
excise taxes, installation and delivery charges and other direct costs of, and
other direct expenses paid or charged in connection with, such purchase or
construction) of an item of Property, the principal amount of which Indebtedness
does not exceed the sum of (i) 100% of such cost and (ii) reasonable fees and
expenses of such Person incurred in connection therewith.
"Recapitalization" means the recapitalization of the Company
pursuant to the Recapitalization Agreement.
"Recapitalization Agreement" means the Recapitalization Agreement,
dated as of January 28, 1998, among HarnCo, the sellers named therein and MHE
Investments., together with Amendment No. 1 thereto, dated as of March 4, 1998,
and Amendment No. 2 thereto, dated as of March 23, 1998.
"Record Date" means the Record Dates specified in the Notes.
"Redemption" shall have the meaning provided in Section 4.4(ii).
"Redemption Date" when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to the terms of the Notes.
"Redemption Price" means, when used with respect to any Note or part
thereof to be redeemed, the price fixed for redemption of such Note pursuant to
the terms of the Notes and this Indenture, plus accrued and unpaid interest
thereon, if any.
"Refinancing Indebtedness" means Indebtedness that refunds or
refinances any Indebtedness of the Company or its Restricted Subsidiaries
outstanding on the Issue Date or other Indebtedness permitted to be incurred by
the Company or its Restricted Subsidiaries pursuant to this Indenture but only
to the extent that (i) if the Indebtedness being refunded or refinanced is
Subordinated Indebtedness, the Refinancing Indebtedness is subordinated to
Notes, to at least the same extent as the Indebtedness being refunded or
refinanced, (ii) the Refinancing Indebtedness is scheduled to mature either (a)
no earlier than the Indebtedness being refunded or refinanced (b) at least 91
days after the Final Maturity Date, (iii) the portion, if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the Final
Maturity Date has a weighted average life to maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the
weighted average life to maturity of the portion of the Indebtedness being
refunded or refinanced that is scheduled to mature on or prior to the Final
Maturity Date, and, in the case of clause (ii) above and this clause (iii), such
Refinancing Indebtedness by its terms, or by the terms of any agreement or
instrument pursuant to which such Indebtedness is issued, does not permit
redemption or other retirement (including pursuant to any required offer to
purchase to be made by the Company or a Restricted Subsidiary) of such
Indebtedness at the
18
option of the holder thereof prior to the final stated maturity of the
Indebtedness being refinanced, other than a redemption or other retirement at
the option of the holder of such Indebtedness (including pursuant to a required
offer to purchase made by the Company or a Restricted Subsidiary) which is
conditioned on a change of control of the Company pursuant to provisions
substantially similar to those contained in this Indenture described in Section
4.20 or 4.12 or otherwise on terms substantially similar to those in such
Indebtedness being refinanced, (iv) such Refinancing Indebtedness is in an
aggregate principal amount that is equal to or less than the sum of (a) the
aggregate principal amount then outstanding under the Indebtedness being
refunded or refinanced, (b) the amount of accrued and unpaid interest, if any,
and premiums owed, if any, not in excess of pre-existing prepayment provisions
on such Indebtedness being refunded or refinanced and (c) the amount of
customary fees, expenses and costs related to the incurrence of such Refinancing
Indebtedness, and (v) such Refinancing Indebtedness is incurred by the same
Person that initially incurred the Indebtedness being refunded or refinanced,
except that the Company may incur Refinancing Indebtedness to refund or
refinance Indebtedness of any Wholly-Owned Subsidiary of the Company and any
Restricted Subsidiary may incur Refinancing Indebtedness to refund or refinance
Indebtedness of any other Restricted Subsidiary.
"Registrar" has the meaning provided in Section 2.3.
"Reinvestment Date" shall have the meaning provided in Section
4.12(iii).
"Replacement Assets" means (x) Properties or assets (other than cash
or Cash Equivalents or any Capital Stock or other security) that will be used in
a business of the Company and the Restricted Subsidiaries conducted on the Issue
Date or in a business reasonably related thereto or (y) Capital Stock of any
Person that will become on the date of acquisition thereof a Restricted
Subsidiary as a result of such acquisition.
"Representative" shall have the meaning provided in Section 11.2.
"Responsible Officer," when used with respect to the Trustee, means
an officer or assistant officer assigned to the corporate trust department of
the Trustee (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary, treasurer or assistant
treasurer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Payment" means any of the following: (i) the declaration
or payment of any dividend or any other distribution or payment of any kind or
character (whether in cash, Property or securities) on Capital Stock of the
Company or any Restricted Subsidiary of the Company or any payment made to the
direct or indirect holders (in their capacities as such) of Capital Stock of the
Company or Capital Stock of any Restricted Subsidiary of the Company (other than
(x) dividends or distributions payable solely in Capital Stock (other than
Disqualified Capital Stock) of the Company and (y) dividends or distributions
payable to the Company or to a Restricted Subsidiary of the Company and (z)
dividends or distributions from a Restricted Subsidiary of the Company that are
paid ratably to all Persons holding the Capital Stock of such
19
Restricted Subsidiary in proportion to the Capital Stock held by such Persons),
(ii) the purchase, redemption or other acquisition or retirement for value of
any Junior Capital Stock of the Company or any Capital Stock of any of its
Restricted Subsidiaries or any options, warrants or rights to purchase or
acquire such shares or any securities convertible or exchangeable into such
shares (other than any such shares, options, warrants, rights or securities (a)
that are owned by the Company or a Restricted Subsidiary of the Company;
provided, that such options, warrants, rights or securities are purchased,
redeemed or otherwise acquired for value by the issuer thereof, or (b) the
issuer of which is a Restricted Subsidiary; provided that, for purposes of this
clause (b), such purchase, redemption or other acquisition or retirement for
value is (A) permitted under clauses (viii) or (x) of the definition of
Permitted Investments or (B) in an amount, which, when added to all other
Restricted Payments made pursuant to this clause (b), is not greater than 10% of
Consolidated Tangible Assets of the Company and its Restricted Subsidiaries),
(iii) the making of any principal payment on, or the purchase, defeasance,
repurchase, redemption or other acquisition or retirement for value, prior to
any scheduled maturity, scheduled repayment or scheduled sinking fund payment,
of any Subordinated Indebtedness (other than Subordinated Indebtedness acquired
in anticipation of satisfying a scheduled sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition), (iv) the making of any Investment other than a Permitted
Investment, (v) any designation (other than pursuant to clause (x) of the
definition of Permitted Investments) of a Restricted Subsidiary as an
Unrestricted Subsidiary (a "Designation"), provided, that 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 that were
Restricted Subsidiaries, (vi) forgiveness of any Indebtedness of an Affiliate of
the Company to the Company or a Restricted Subsidiary, and (vii) any advisory
fee paid to an Affiliate with respect to a specific transaction (other than fees
payable on the Issue Date upon consummation of the Transactions). For purposes
of determining the amount expended for Restricted Payments, (a) cash distributed
or invested shall be valued at the face amount thereof and Property other than
cash shall be valued at its Fair Market Value, except that in determining the
amount of any Restricted Payment made under clause (v) above, the amount of such
Restricted Payment shall be equal to the greater of (i) the book value or (ii)
the Fair Market Value of the Company's direct and indirect proportionate
interest in such Subsidiary on such date and (b) upon the designation of an
Unrestricted Subsidiary as a Restricted Subsidiary, or the acquisition by the
Company or a Restricted Subsidiary of an interest in any Person that, as a
result thereof, becomes a Restricted Subsidiary, the Company shall be deemed to
have made a Restricted Payment equal to the Fair Market Value of the Capital
Stock or Subordinated Indebtedness of the Company or its Restricted Subsidiaries
owned by such new Restricted Subsidiaries.
"Restricted Subsidiary" means a Subsidiary of the Company other than
an Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date. The Board of Directors of the Company may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having been incurred at the
time of such action), (i) no Default or Event of Default shall have occurred and
be continuing, (ii) Indebtedness of such Person and its Subsidiaries outstanding
immediately following such redesignation would, if incurred at such time, be
permitted to be incurred this Indenture and (iii)
20
the provisions referred to in clause (b) of the last sentence of the definition
of Restricted Payment is complied with and any Investments pursuant to the
second sentence of the definition of Investments are permitted to be made
pursuant to this Indenture.
"Secondary Notes" shall have the meaning provided in the Notes.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Seller Note" means any Indebtedness of the Company or any
Restricted Subsidiary issued to a seller as a portion of the purchase price in
any Asset Acquisition by the Company or such Restricted Subsidiary from such
seller.
"Senior Indebtedness" means the principal of and premium, if any,
and interest (including post-petition interest) on, and any and all other fees,
expense reimbursement obligations and other amounts due pursuant to the terms of
all agreements, documents and instruments providing for, creating, securing or
evidencing or otherwise entered into in connection with (a) all Indebtedness of
the Company owed to lenders under any Credit Facility or any Surety Arrangement,
(b) all obligations of the Company with respect to any Interest Rate Agreement
or any Currency Agreement, (c) all obligations of the Company to reimburse any
bank or other person in respect of amounts paid under letters of credit,
banker's acceptances or other similar instruments, (d) all other Indebtedness of
the Company which does not provide that it is to rank in right of payment pari
passu with or subordinate to the Notes, and (e) all deferrals, renewals,
extensions and refundings of, and amendments, modifications and supplements to,
any of the Senior Indebtedness described above. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness will not include (i) Indebtedness
of the Company to any of its Subsidiaries, (ii) Indebtedness represented by the
Notes, (iii) any Indebtedness which by the express terms of the agreement or
instrument creating, evidencing or governing the same is junior or subordinate
in right of payment to any item of Senior Indebtedness (including, without
limitation, Indebtedness represented by Disqualified Capital Stock), (iv) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business, (v) Indebtedness incurred in
violation of this Indenture or (vi) any Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Code, is without recourse to such Person.
"Senior Notes" means the $200,000,000 aggregate principal amount of
9 1/2% Senior Notes due 2008 of ▇▇▇▇▇▇.
"Series A Senior Preferred Stock" means the 12% Series A Senior
Exchangeable Preferred Stock of the Company, liquidation preference $1,000 per
share.
"Series B Junior Preferred Stock" means the 12 1/4% Series B Junior
Exchangeable Preferred Stock of the Company, liquidation preference $1,000 per
share.
"Series C Junior Preferred Stock" means the 12 1/2% Series C Junior
Exchangeable Preferred Stock of the Company, liquidation preference $1,000 per
share.
21
"Significant Subsidiary" has the meaning set forth in Rule 1-02 of
Regulation S-X under the Securities Act and the Exchange Act, but shall not
include any Unrestricted Subsidiary.
"South African Credit Facility" means a Credit Facility in an
aggregate principal amount or with aggregate commitments not to exceed $5
million to be entered into by ▇▇▇▇▇▇ Mechanical Handling (Pty) Ltd.
"Subordinated Indebtedness" of the Company means any Indebtedness
(whether outstanding on the date hereof or hereafter incurred) which is by its
terms expressly subordinate or junior in right of payment to the Notes to
substantially the same extent as the Notes are subordinated to Senior
Indebtedness.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, limited liability company, association or other
business entity, whether now existing or hereafter organized or acquired, (i) in
the case of a corporation, of which more than 50% of the total Voting Stock is
held by such first-named person or any of its Subsidiaries or (ii) in the case
of a partnership, joint venture, limited liability company, association or other
business entity, with respect to which such first-named Person or any of its
Subsidiaries has at least a majority ownership and voting power relating to the
policies, management and affairs thereof.
"Surety Arrangement" means one or more surety arrangements
providing, inter alia, for the issuance of Surety Obligations between the
Company or any of its Restricted Subsidiaries and one or more providers,
provided to the Company or its Restricted Subsidiaries including, in each case,
any related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case, as amended, modified,
renewed, refunded, replaced, restated or refinanced from time to time.
"Surety Obligations" means any bonds, including bid bonds, advance
bonds, or performance bonds, letters of credit, warranties, and similar
arrangements between the Company and any of its Restricted Subsidiaries and one
or more providers, for the benefit of the Company's or any Restricted
Subsidiary's suppliers, vendors, insurers or customers including, in each case,
any related Notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case, as amended, modified,
renewed, refunded, replaced, restated or refinanced from time to time.
"Tax Allocation Agreement" means a tax allocation agreement among
the Company, ▇▇▇▇▇▇ and MHE Investments, as in effect on the Issue Date and as
the same may be amended from time to time subject to the provisions of Section
4.15 and provided, that no material adverse effect on the Company or on the
Holders of the Notes shall result as a consequence thereby.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture, except as otherwise provided in Section 9.3.
22
"Transactions" means, collectively, the Recapitalization, the
Financings and the October 1997 Drop Down and other related transactions
described in the section "The Transactions" contained in the Offering
Memorandum.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary and (b) any Subsidiary of the Company which is
classified (whether on or after the Issue Date) as an Unrestricted Subsidiary by
a resolution adopted by the Board of Directors of the Company; provided, that a
Subsidiary may be so classified as an Unrestricted Subsidiary only if (i) such
classification in compliance with the covenant set forth in Section 4.4, (ii)
such Subsidiary does not own beneficially any Capital Stock of the Company or
any Restricted Subsidiary (other than any Restricted Subsidiary of such
Subsidiary that is being designated as an Unrestricted Subsidiary at the time of
such classification) and (iii) all Indebtedness of the Company or any Restricted
Subsidiary to such Subsidiary is deemed incurred at the time of such
classification or at the time such Capital Stock is no longer so owned. The
Trustee shall be given prompt notice by the Company of each resolution adopted
by the Board of Directors of the Company under this provision, together with a
copy of each such resolution adopted. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, at any time, (a) be
liable for any Indebtedness of any Unrestricted Subsidiary or (b) be liable for
any Indebtedness that 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 maturity upon the occurrence of a
Default with respect to any Indebtedness of any Unrestricted Subsidiary.
"U.S. Government Obligations" means (a) securities that are direct
obligations of the United States of America for the payment of which its full
faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or a specific payment of principal or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
"Voting Stock" of any Person means the Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly-Owned Subsidiary" means any Restricted Subsidiary, all of
the outstanding Voting Stock (other than directors' qualifying shares) of which
are owned, directly or indirectly, by the Company.
23
Section 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, the portion of
such provision required to be incorporated herein in order for this Indenture to
be qualified under the TIA is incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
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 Commission rule
have the meanings assigned to them therein.
Section 1.3. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it herein, whether defined
expressly or by reference;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) words used herein implying any gender shall apply to every
gender;
(vi) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the Commission from time to time;
(vii) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount that would be shown
on a balance sheet of the issuer thereof dated such date in accordance with
generally accepted accounting principles; and
24
(viii) all references to $ means U.S. Dollars.
ARTICLE 2.
THE NOTES
Section 2.1. Amount of Notes
The Trustee shall authenticate (i) Notes for original issue on the
date of issuance hereof in the aggregate principal amount of $[ ] upon a written
order of the Company signed by two Officers of the Company and (ii) Secondary
Notes in accordance with terms of the Notes. Such written order shall specify
the amount of Notes to be authenticated and the date on which the Notes are to
be authenticated.
Section 2.2. Form and Dating.
The Notes and the Trustee's certificate of authentication with
respect thereto shall be substantially in the form set forth in Exhibit A, which
is incorporated in and forms a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, rule or usage to which the
Company is subject. Any such notations, legends or endorsements shall be
furnished to the Trustee in writing. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the Notes shall constitute,
and are expressly made, a part of this Indenture and, to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and agree to be bound thereby.
The Notes may be presented for registration of transfer or exchange
at the offices of the Registrar in the Borough of Manhattan, The City of New
York, State of New York.
Section 2.3. Execution and Authentication.
Two officers shall sign, or one Officer shall sign and one Officer
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Notes for the Company by manual or
facsimile signature.
If an officer whose signature is on a Note was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder. Notwithstanding the foregoing, if
any Note shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Note to the Trustee
for cancellation as provided in
25
Section 2.12, for all purposes of this Indenture such Note shall be deemed never
to have been authenticated and delivered hereunder and shall not be entitled to
the benefits of this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Notes. Unless otherwise provided
in the appointment, an authenticating agent may authenticate the Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
Each Paying Agent is designated as an authenticating agent for purposes of this
Indenture.
The Notes shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof; provided, that
Notes may be issued in denominations of less than $1,000 (but not less than
$1.00) upon the exchange of the Series A Senior Preferred Stock for the Notes
such that each holder of Series A Senior Preferred Stock shall receive Notes in
a principal amount equal to the full liquidation preference of the Series A
Senior Preferred Stock on the date of exchange; provided, further, that
Secondary Notes may be issued in denominations of less than $1,000 (but not less
than $1.00).
Section 2.4 Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Notes may be presented for registration of transfer or for exchange (the
"Registrar"), and an office or agency where Notes may be presented for payment
(the "Paying Agent") and an office or agency where notices and demands to or
upon the Company, if any, in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may have one or more additional Paying Agents. The
term "Paying Agent" includes any additional Paying Agent. Neither the Company
nor any Affiliate thereof may act as Paying Agent. The Company may change any
Paying Agent or Registrar without notice to any Noteholder.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to compensation in accordance with Section 7.7.
The Company initially designates the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the Notes
and this Indenture.
Section 2.5 Paying Agent To Hold Assets in Trust.
Each Paying Agent shall hold in trust for the benefit of the
Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal of or premium or
26
interest on the Notes (whether such money has been paid to it by the Company or
any other obligor on the Notes), and the Company and the Paying Agent shall
notify the Trustee of any Default by the Company (or any other obligor on the
Notes) in making any such payment. Money held in trust by the Paying Agent need
not be segregated except as required by law and in no event shall the Paying
Agent be liable for any interest on any money received by it hereunder. The
Company at any time may require the Paying Agent to pay all money held by it to
the Trustee and account for any funds disbursed and the Trustee may at any time
during the continuance of any Event of Default specified in Section 6.1(i) or
(ii), upon written request to the Paying Agent, require such Paying Agent to pay
forthwith all money so held by it to the Trustee and to account for any funds
disbursed. Upon making such payment, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
Section 2.6 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
the Noteholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least five Business Days before each Interest Payment Date,
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of the Noteholders.
Section 2.7 Transfer and Exchange
Subject to Section 2.16, when Notes are presented to the Registrar
with a request from the Holder of such Notes to register a transfer or to
exchange them for an equal principal amount of Notes of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided, that every Note presented or surrendered for registration
of transfer or exchange shall be duly endorsed or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorneys duly authorized in writing.
To permit registrations of transfers and exchanges, the Company shall issue and
execute and the Trustee shall authenticate new Notes evidencing such transfer or
exchange at the Registrar's request. No service charge shall be made to the
Noteholder for any registration of transfer or exchange. The Company may require
from the Noteholder payment of a sum sufficient to cover any transfer taxes or
other governmental charge that may be imposed in relation to a transfer or
exchange, but this provision shall not apply to any exchange pursuant to Section
2.11, 3.6, 4.12, 4.20 or 8.5 (in which events the Company shall be responsible
for the payment of such taxes). The Trustee shall not be required to exchange or
register a transfer of any Note for a period of 15 days immediately preceding
the selection of Notes to be redeemed or any Note selected for redemption (or
portion thereof selected for redemption).
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of the beneficial interests in such Global Note may
be effected only through a book-entry system maintained by the Holder of such
Global Note (or its agent), and that
27
ownership of a beneficial interest in the Global Note shall be required to be
reflected in a book entry.
Each Holder of a Note agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Note in violation of any provision of this Indenture
and/or applicable U.S. federal or state securities law.
Except as expressly provided herein, neither the Trustee nor the
Registrar shall have any duty to monitor the Company's compliance with or have
any responsibility with respect to the Company's compliance with any federal or
state securities laws.
Section 2.8 Replacement Notes
If a mutilated Note is surrendered to the Registrar or the Trustee,
or if the Holder of a Note claims that the Note has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Holder of such Note furnishes to the Company and the
Trustee evidence reasonably acceptable to them of the ownership and the
destruction, loss or theft of such Note and if the requirements of Section 8-405
of the New York Uniform Commercial Code as in effect on the date of this
Indenture are met. If required by the Trustee or the Company, an indemnity bond
shall be posted, sufficient in the judgment of both to protect the Company, the
Trustee or any Paying Agent from any loss that any of them may suffer if such
Note is replaced. The Company and the Trustee may each charge such Holder for
its respective expenses (including, without limitation, reasonable attorneys'
fees and disbursements) in replacing such Note. Every replacement Note shall
constitute an additional contractual obligation of the Company.
Section 2.9 Outstanding Notes.
The Notes outstanding at any time are all Notes that have been
authenticated by the Trustee except for (a) those canceled by it, (b) those
delivered to it for cancellation, (c) to the extent set forth in Sections 9.1
and 9.2, on or after the date on which the conditions set forth in Section 9.1
or 9.2 have been satisfied, those Notes theretofore authenticated and delivered
by the Trustee hereunder and (d) those described in this Section 2.9 as not
outstanding. Subject to Section 2.10, a Note does not cease to be outstanding
because the Company or one of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.8, it ceases to be
outstanding unless the Trustee receives written notice that the replaced Note is
held by a bona fide purchaser in whose hands such Note is a legal, valid and
binding obligation of the Company.
If the Paying Agent holds, in its capacity as such, on any
Redemption Date, any Change of Control Payment Date, any Excess Proceeds Offer
date or on the Final Maturity Date, money sufficient to pay all accrued interest
and principal with respect to the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
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Section 2.10 Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any declaration of acceleration or notice of Default
or direction, waiver or consent or any amendment, modification or other change
to this Indenture, Notes owned by the Company or any Affiliate of the Company
shall be disregarded as though they were not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such declaration, notice, direction, waiver or consent or any amendment,
modification or other change to this Indenture, only Notes as to which a
Responsible Officer of the Trustee has received an Officers' Certificate stating
that such Notes are so owned shall be so disregarded. Notes so owned which have
been pledged in good faith shall not be disregarded if the pledgee establishes
the pledgee's right so to act with respect to the Notes and that the pledgee is
not the Company, any other obligor or guarantor on the Notes or any of their
respective Affiliates.
Section 2.11 Temporary Notes.
Until definitive Notes are prepared and ready for delivery, the
Company 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 Company consider appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes.
Section 2.12 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall (subject to the
record-retention requirements of the Exchange Act) destroy canceled Notes and
deliver a certificate of destruction thereof to the Company. The Company may not
reissue or resell, or issue new Notes to replace, Notes that the Company has
redeemed or paid, or that have been delivered to the Trustee for cancellation.
Section 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, such
interest shall cease to be payable to the registered Holder on the relevant
Record Date and the Company shall pay the defaulted interest, plus (to the
extent permitted by law) any interest payable on the defaulted interest,
pursuant to Section 4.1 hereof, to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Company shall fix such special record date and
payment date and provide the Trustee at least 20 days' notice of the proposed
amount of defaulted interest to be paid and the special payment date and at the
same time the Company shall deposit with the Trustee the
29
aggregate amount proposed to be paid in respect of such defaulted interest. At
least 15 days before such special record date, the Company shall mail to each
Noteholder a notice that states the special record date, the payment date and
the amount of defaulted interest, and interest payable on defaulted interest, if
any, to be paid. The Company may make payment of any defaulted interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes are listed and, upon such notice as may be required
by such exchange, if, after written notice given by the Company to the Trustee
of the proposed payment pursuant to this sentence, such manner of payment shall
be deemed practicable by the Trustee.
Section 2.14 CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and if
so, such CUSIP number shall be included in notices of redemption or exchange as
a convenience to Holders; provided, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any such CUSIP number used by the Company in
connection with the issuance of the Notes and of any change in the CUSIP number.
Section 2.15 Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and the Final Maturity Date the Company shall have deposited with the Paying
Agent in immediately available funds or money sufficient to make cash payments,
or Secondary Notes, as the case may be, if any, due on such Interest Payment
Date or the Final Maturity Date, as the case may be, in a timely manner which
permits the Trustee to remit payment or Secondary Notes, as the case may be, to
the Holders on such Interest Payment Date or the Final Maturity Date, as the
case may be. The principal and interest on Global Notes shall be payable to the
Depository or its nominee, as the case may be, as the sole registered owner and
the sole holder of the Global Notes represented thereby. The principal and
interest on Physical Notes shall be payable at the office of the Paying Agent.
Section 2.16 Book-Entry Provisions for Global Notes.
(a) The Notes initially shall be represented by one or more notes in
registered Global form without interest coupons (the "Global Notes") and shall
bear legends as set forth in Exhibit B. The Global Notes initially shall be
registered in the name of the Depository or the nominee of such Depository, in
each case for credit to an account of an Agent Member and be delivered to the
Trustee as custodian for such Depository. The aggregate principal amount of any
Global Note shall be adjusted by the Trustee as necessary to reflect the
issuance of Secondary Notes, if any, relating to such Global Notes.
Members of, or direct or indirect participants in, the Depository
("Agent Members") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Notes, and the
30
Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of the Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.
(b) Transfers of Global Notes shall be limited to transfer in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository. In addition, a Global Note shall be exchangeable for Physical Notes
if (i) the Depository (x) notifies the Company that it is unwilling or unable to
continue as depository for such Global Note and the Company thereupon fails to
appoint a successor depository within 90 days of such notice or (y) has ceased
to be a clearing agency registered under the Exchange Act and the Company
thereupon fails to appoint a successor depository within 90 days of such notice,
(ii) the Company, at its option, notifies the Trustee in writing that it elects
to cause the issuance of such Physical Notes or (iii) there shall have occurred
and be continuing a Default or an Event of Default with respect to the Notes and
the registrar has received a written notice from the Depository to issue
Physical Notes. In all cases, Physical Notes delivered in exchange for any
Global Note or beneficial interests therein shall be registered in the names,
and issued in any approved denominations, requested by or on behalf of the
Depository (in accordance with its customary procedures).
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall upon receipt of a written order from the
Company authenticate and make available for delivery, one or more Physical Notes
of like tenor and amount.
(d) In connection with the transfer of Global Notes as an entirety
to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in writing in exchange for its beneficial
interest in the Global Notes, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in another
Global Note shall, upon transfer, cease to be an interest in such Global Note
and become an interest in such other Global Note and, accordingly, shall
thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
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(f) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
Section 2.17 Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE 3.
REDEMPTION
Section 3.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to paragraph 5 of the
Notes, at least 45 days but not more than 60 days prior to the Redemption Date
or during such other period as the Trustee may agree to (which agreement shall
not unreasonably be withheld) the Company shall notify the Trustee in writing of
the Redemption Date, the principal amount of Notes to be redeemed and the
Redemption Price and deliver to the Trustee an Officers' Certificate stating
that such redemption will comply with the conditions for optional redemption
contained in paragraph 5 of the Notes, as appropriate.
Section 3.2 Selection of Notes To Be Redeemed.
In the event that fewer than all of the Notes are to be redeemed,
the Trustee shall select the Notes to be redeemed, if the Notes are listed on a
national securities exchange, in accordance with the rules of such exchange or,
if the Notes are not so listed, either on a pro rata basis or by lot, or such
other method as it shall deem fair and equitable; provided, however, that the
Company shall have previously notified the Trustee in writing of any such
exchange on which the Notes are listed. The Trustee shall promptly notify the
Company of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture unless the context otherwise requires,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.3 Notice of Redemption.
At least 30 days and no more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by
first-class mail, to each Holder whose Notes are to be redeemed at his or her
last address as the same appears on the registry books maintained by the
Registrar pursuant to Section 2.3. Each notice for redemption shall identify the
Notes to be redeemed (including the CUSIP numbers thereof) and shall state:
(i) the Redemption Date;
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(ii) the Redemption Price and the amount of premium and accrued
interest, if any, to be paid;
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes in
aggregate principal amount equal to the unredeemed portion thereof will be
issued;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(vi) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date;
(vii) the provision of paragraph 5 of the Notes pursuant to which
the Notes called for redemption are being redeemed; and
(viii) the aggregate principal amount of Notes that are being
redeemed.
At the Company's written request made at least five Business Days
prior to the date on which notice is to be given, the Trustee shall give the
notice of redemption in the Company's name and at the Company's sole expense.
Section 3.4 Effect of Notice of Redemption.
Once the notice of redemption described in Section 3.3 is mailed,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price, including any premium, plus interest accrued to the
Redemption Date, if any. Upon surrender to the Paying Agent, such Notes called
for redemption shall be paid at the Redemption Price, including any premium,
plus interest accrued thereon to the Redemption Date; provided, that if the
Redemption Date is after a regular Record Date and on or prior to the Interest
Payment Date, the accrued interest shall be payable to the Holder of the
redeemed Notes registered on the relevant record date, and provided, further,
that if a Redemption Date is a Legal Holiday, payment shall be made on the next
succeeding Business Day and no interest shall accrue for the period from such
Redemption Date to such succeeding Business Day.
Section 3.5 Deposit of Redemption Price.
On or prior to 11:00 a.m., New York City time, on each Redemption
Date, the Company shall deposit with the Paying Agent in immediately available
funds money sufficient to pay the Redemption Price of and accrued interest on
all Notes to be redeemed on that date other than Notes or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation. The Paying Agent shall promptly return to the
33
Company any money deposited with the Paying Agent by the Company in excess of
the amounts necessary to pay the Redemption Price of, and accured interest on,
all Notes to be redeemed.
On and after any Redemption Date, if money sufficient to pay the
redemption price of and accrued interest on Notes called for redemption shall
have been made available in accordance with the preceding paragraph and the
payment thereof is not prohibited pursuant to the terms of this Indenture, the
Notes called for redemption will cease to accrue interest and the only right of
the Holders of such Notes will be to receive payment of the redemption price of
and, subject to the first proviso in Section 3.4, accrued and unpaid interest on
such Notes to the Redemption Date. If any Note surrendered for redemption shall
not be so paid, interest will be paid, from the Redemption Date until such
redemption payment is made, on the unpaid principal of the Note and any interest
not paid on such unpaid principal, in each case, at the rate and in the manner
provided in the Notes.
Section 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
ARTICLE 4.
COVENANTS
Section 4.1. Payment of Notes.
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes and this Indenture. An
installment of principal of or interest, and the Change of Control Purchase
Price and the Excess Proceeds Offer Purchase Price, on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent holds on
that date money designated for and sufficient to pay or, if interest is to be
paid in Secondary Notes, if the Trustee or Paying Agent holds on that date duly
authenticated Secondary Notes in an aggregate principal amount equal to, the
applicable installment of interest.
The Company shall pay interest on overdue principal (including
post-petition interest in a proceeding under any Bankruptcy Law), and overdue
interest, to the extent lawful, at the rate specified in the Notes.
Section 4.2. Maintenance of Office or Agency.
The Company shall maintain an office or agency where Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such
34
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee as set forth in Section 10.2.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company shall give prompt written notice to the Trustee of such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the address of the Trustee
as such office of the Company.
Section 4.3. Limitation on Additional Indebtedness
(a) The Company will not, and will not cause or permit any
Restricted Subsidiary of the Company to, directly or indirectly, incur (as
defined) any Indebtedness (including any Acquired Indebtedness); provided, that
if no Default or Event of Default shall have occurred and be continuing at the
time or as a consequence of the incurrence of such Indebtedness, the Company or
any Restricted Subsidiary may incur Indebtedness (including any Acquired
Indebtedness) if the Company's Consolidated Interest Coverage Ratio is greater
than 2.0 to 1.
(b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Permitted Indebtedness.
Section 4.4. Limitation on Restricted Payments.
The Company will not make, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make, any Restricted Payment after the
Issue Date, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such Restricted
Payment;
(b) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under Section 4.3(a); and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the Issue Date does
not exceed the sum (without duplication) of (1) 50% of the cumulative
Consolidated Net Income of the Company (or minus 100% of any cumulative deficit
in Consolidated Net Income) for the period (treated as one accounting period)
from the first day of the fiscal quarter in which the Issue Date occurs through
the last day of the fiscal quarter immediately preceding such Restricted
Payment, (2) 100% of the aggregate Net Proceeds in cash received by the Company
from the issuance or sale, after the Issue Date (other than to a Restricted
Subsidiary), of (A) Capital Stock (other than Disqualified
35
Capital Stock) of the Company or (B) any Indebtedness or other securities of the
Company that are convertible into or exercisable or exchangeable for Capital
Stock (other than Disqualified Capital Stock) of the Company which have been so
converted or exercised or exchanged (other than by a Restricted Subsidiary of
the Company) and (3) 100% of the net reduction in Investments (other than
Permitted Investments), subsequent to the Issue Date, in any Person, resulting
from payments of interest on Indebtedness, dividends, repayments of loans or
advances or other transfers or distributions of Property or return of capital
(but only to the extent such interest, dividends or repayments or other
transfers or distributions of Property or return of capital are not included in
the calculation of Consolidated Net Income), in each case to the Company or any
Restricted Subsidiary from any Person (including Unrestricted Subsidiaries) or
from redesignations (the designation of which did not constitute a Permitted
Investment) of Unrestricted Subsidiaries as Restricted Subsidiaries in
accordance with this Indenture, not to exceed in the case of any Person the
amount of Investments (other than Permitted Investments) previously made by the
Company or any Restricted Subsidiary in such Person. For purposes of determining
the amount expended for Restricted Payments under this clause (c), Property
other than cash (including a distribution of assets) shall be valued at its Fair
Market Value.
The provisions of this Section 4.4 shall not prohibit:
(i) the payment of any distribution within 60 days after the date of
declaration thereof, if at such date of declaration such payment would
comply with the provisions of this Indenture;
(ii) the retirement of any shares of Capital Stock of the Company or
Subordinated Indebtedness by conversion into, or by or in exchange for,
shares of Capital Stock (other than Disqualified Capital Stock) of the
Company, or out of, the Net Proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary of the Company) of other shares of
Capital Stock of the Company (other than Disqualified Capital Stock);
provided, that any such Net Proceeds are excluded from clause (c)(2) of
the immediately preceding paragraph for the purposes of this calculation
(and were not included therein at any time);
(iii) the redemption, repayment or retirement of Subordinated
Indebtedness in exchange for, by conversion into, or out of the Net
Proceeds of, (x) a substantially concurrent sale or incurrence of
Subordinated Indebtedness (other than any Indebtedness owed to a
Restricted Subsidiary) or (y) a substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of shares of Capital Stock of
the Company; provided, that any such Net Proceeds are excluded from clause
(c)(2) of the immediately preceding paragraph (and were not included
therein at any time);
(iv) the retirement of any shares of Disqualified Capital Stock by
conversion into, or by exchange for, shares of Disqualified Capital Stock
of the Company, or out of the Net Proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of other
shares of Disqualified Capital Stock of the Company;
36
(v) payments to MHE Investments or any other Person in respect of
which MHE Investments or such other Person is a member of the consolidated
tax group of the Company, for so long as MHE Investments or such other
Person owns such amount of the Capital Stock of the Company as will permit
it or a member of the consolidated tax group of MHE Investments or such
other Person to be entitled to file consolidated federal tax returns with
the Company, for income taxes pursuant to the Tax Allocation Agreement or
for the purpose of enabling MHE Investments or such other Person or any
such members to pay taxes other than income taxes, to the extent actually
owed and attributable to the operations of the Company and its
Subsidiaries or to MHE Investments' or such other Persons' ownership
thereof;
(vi) payments to MHE Investments, for so long as it owns not less
than a majority of the outstanding Common Stock of the Company, in amounts
sufficient to pay the ordinary operating and administrative expenses of
MHE Investments (including all reasonable professional fees and expenses),
including in connection with its complying with the Company's reporting
obligations (including filings with the Commission and any exchange on
which the Company's securities are traded) and obligations to prepare and
distribute business records in the ordinary course of business and the
Company's costs and expenses relating to taxes, other than those referred
to in clause (v) (which taxes are attributable to the operations of the
Company and its Restricted Subsidiaries or to MHE Investments' ownership
thereof); provided, that the aggregate payments paid in each fiscal year
pursuant to this clause (vi) will not exceed 0.20% of the consolidated net
sales of the Company and its Restricted Subsidiaries for such fiscal year;
(vii) the purchase, redemption, retirement or other acquisition for
value of Capital Stock of the Company or of any Person that directly or
indirectly controls (as defined in the definition of Affiliate) the
Company held by employees or former employees of the Company or any
Restricted Subsidiary (or their estates or beneficiaries under their
estates) upon death, disability, retirement, termination of employment and
pursuant to the terms of any agreement under which such Capital Stock was
issued, provided, that the aggregate Fair Market Value of the
consideration paid for such purchase, redemption, retirement or other
acquisition of such Capital Stock does not exceed $500,000 in any fiscal
year;
(viii) payments due under the Permitted Affiliate Agreements (other
than payments pursuant to clause (v) above) that would otherwise
constitute Restricted Payments; and
(ix) payments that would otherwise constitute Restricted Payments,
not to exceed $750,000 in the aggregate;
provided, that in calculating the aggregate amount of Restricted Payments made
subsequent to the Issue Date for purposes of clause (c) of the immediately
preceding paragraph, amounts expended pursuant to clause (i) (but only if the
declaration thereof has not been counted in a prior
37
period), (vi) (other than to the extent otherwise reducing Consolidated Net
Income), (vii) and (ix) shall be included, without duplication, in such
calculation and (ii), (iii), (iv), (v) and (viii) shall not be included in such
calculation. Nothing in the immediately preceding proviso is meant to affect
whether any amount expended pursuant to clause (v) should be reflected in
Consolidated Net Income.
If the Company makes a Restricted Payment which, at the time of the
making of such Restricted Payment, in the good faith determination of the Board
of Directors of the Company, would be permitted under the requirements of this
Indenture, such Restricted Payment shall be deemed to have been made in
compliance with this Indenture notwithstanding any subsequent adjustment made in
good faith to the Company's financial statements affecting Consolidated Net
Income.
Section 4.5. Legal Existence
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
legal existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
(as the same may be amended from time to time) of each Restricted Subsidiary and
the rights (charter and statutory), licenses and franchises of the Company and
its Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of its Restricted Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the
Noteholders.
Section 4.6. Taxes
The Company shall, and shall cause each of its Restricted
Subsidiaries to, pay prior to delinquency all material taxes, assessments, and
governmental levies except as contested in good faith and by appropriate
proceedings.
Section 4.7. Maintenance of Properties; Insurance; Books and Records
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries at all times to cause, all material properties used in and
necessary to the conduct of its and their business to be maintained and kept in
good condition, repair and working order (reasonable wear and tear excepted) and
shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereto; provided, however, that nothing in this
Section 4.7 shall prevent the Company or any of its Restricted Subsidiaries from
discontinuing the use, operation or maintenance of any of such Properties, or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Board of Directors of the Company or the Restricted Subsidiary of the
Company so concerned, or of an officer (or other agent employed by the
Restricted Company or of the Restricted Subsidiary so concerned) of the Company
or a Restricted Subsidiary having managerial responsibility for any such
Property, desirable in the
38
conduct of the business of the Company or such Restricted Subsidiary of the
Company, and if such discontinuance or disposal is not adverse in any material
respect to the Holders.
(b) To the extent available at commercially reasonable rates, the
Company shall maintain and shall cause its Restricted Subsidiaries, to the
extent such Restricted Subsidiaries maintain operations, to maintain insurance
with responsible carriers against such risks and in such amounts, and with such
deductibles, retentions, self-insured amounts and co-insurance provisions, as
are customarily carried by similar businesses, of similar size.
(c) The Company shall, and shall cause each of its Restricted
Subsidiaries to, keep proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets and
business of the Company and each Subsidiary of the Company, in accordance with
GAAP consistently applied to the Company and its Restricted Subsidiaries taken
as a whole.
(d) The Company shall and shall cause each of its Restricted
Subsidiaries to comply with all applicable statutes, laws, ordinances or
government rules and regulations to which they are subject, non-compliance with
which would materially adversely affect the business, earnings, assets or
financial condition of the Company and its Restricted Subsidiaries taken as a
whole.
Section 4.8. Compliance Certificate.
The Company will deliver to the Trustee on or after 90 days after
the end of the Company's fiscal year and on or before 45 days after the end of
each of the first, second and third fiscal quarters in each year an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that has occurred during such fiscal quarter or such fiscal year. If
they do, the certificate shall describe all such Defaults or Events of Default,
their status and the intended method of cure, if any.
Section 4.9.
[Reserved.]
Section 4.10. Reports to Commission and Holders.
Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Trustee and to the Holders of the Notes within 10 days after it is or would
have been required to file them with the Commission, (i) all annual and
quarterly financial information that would be required to be contained in a
filing with the Commission on Forms 10-K and 10-Q (without exhibits) if the
Company were required to file such forms, including a section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations and, with respect to the annual information only, a report thereon by
the Company's certified independent accountants and (ii) all current reports
that would be required to be filed with the Commission on Form 8-K (without
exhibits) if
39
the Company were required to file such reports. In addition, whether or not
required by the rules and regulations of the Commission, the Company will file a
copy of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing). In addition,
the Company shall furnish to the Trustee, the Holders of the Notes and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144(d)(4) under the
Securities Act and the exhibits omitted from the information furnished pursuant
to the preceding sentence, for so long as the Notes are not freely transferable
under the Securities Act. The Company will also comply with the other provisions
of ss. 314(a) of the Trust Indenture Act.
Section 4.11. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon or plead (as a defense or otherwise)
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law or any usury law which would prohibit or forgive the Company
from paying all or any portion of the principal of, premium, if any and/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 it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 4.12. Limitation on Certain 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 any of its Restricted Subsidiaries, as the case
may be, receives consideration at the time of such sale or other disposition
equal to the Fair Market Value thereof;
(ii) not less than 85% of the consideration received by the Company
or any of its Restricted Subsidiaries, as the case may be, is in the form of (a)
cash or Cash Equivalents; provided, that the amount of any liabilities (as shown
on the Company's or such Restricted Subsidiary's most recent balance sheet) of
the Company or any Restricted Subsidiary (other than contingent liabilities or
liabilities (including Subordinated Indebtedness) subordinated to the Notes or
Indebtedness without general recourse to the obligor thereof) that are assumed
or forgiven by the transferee of any such assets will be deemed to be cash for
the purposes of this clause (ii) if the Company or such Restricted Subsidiary is
released from any liability for such liabilities and (b) Replacement Assets; and
(iii) the Asset Sale Proceeds received by the Company or such
Restricted Subsidiaries are applied (a) either (x) to the extent the Company
elects, or is required, to the prepayment, repayment or purchase of Senior
Indebtedness of the Company or Indebtedness or
40
Capital Stock of any Restricted Subsidiary within 360 days following the receipt
of the Asset Sale Proceeds from any Asset Sale; provided, that any such
repayment shall result in a permanent reduction of the commitments thereunder in
an amount equal to the principal amount so repaid; or (y) to the extent the
Company elects, to acquisitions of assets (and Investments otherwise permitted
to be made in accordance with the terms of this Indenture) used or useful in
businesses similar or reasonably related to the business of the Company or its
Restricted Subsidiaries as conducted at the time of such Asset Sale; provided,
that such acquisitions or Investments occur on or prior to the 365th day
following receipt of such Asset Sale Proceeds (the "Reinvestment Date"); and (b)
if on the Reinvestment Date with respect to any Asset Sale, the Available Asset
Sale Proceeds exceed $10 million, the Company shall apply an amount equal to
such Available Asset Sale Proceeds to an offer to repurchase the Notes (and at
its option, to an offer to repurchase other pari passu Indebtedness; provided,
that the stated maturity date of such Indebtedness is no later than the stated
maturity date of the Notes), at a purchase price in cash equal to 100% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase (an "Excess Proceeds Offer"). To the extent that any amount of
Available Asset Sale Proceeds remains after the completion of such Excess
Proceeds Offer, the Company may use such remaining amount in any manner
permitted by this Indenture and the amount of Available Asset Sale Proceeds then
required to be otherwise applied in accordance with this Section 4.12 shall be
reset to zero.
The Company will comply with the following provisions in connection
with any Excess Proceeds Offer required to be made pursuant to this Section
4.12(iii):
(a) The Excess Proceeds Offer will remain open for a period of at
least 30 days following its commencement but not longer than 60 days, except to
the extent that a longer period is required by applicable law (the "Excess
Proceeds Offer Period"). On the Business Day following the termination of the
Excess Proceeds Offer Period (the "Excess Proceeds Offer Purchase Date"), the
Company will purchase the principal amount of Notes required to be purchased
pursuant to this Section 4.12(iii) (the "Excess Proceeds Offer Amount") or, if
less than the Excess Proceeds Offer Amount has been so validly tendered and not
properly withdrawn, all Notes validly tendered and not properly withdrawn in
response to the Excess Proceeds Offer. Payment for any Notes so purchased will
be made in the same manner as cash interest payments are made on the Notes. If
the Excess Proceeds Offer Purchase Date is on or after a Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such Record Date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Excess Proceeds Offer.
(b) Upon the commencement of an Excess Proceeds Offer, the Company
shall send, by first class mail, within 30 days following the Reinvestment Date,
a notice to the Trustee and each of the Holders. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Excess Proceeds Offer. The Excess Proceeds Offer shall be made
to all Holders. The notice, which shall govern the terms of the Excess Proceeds
Offer, shall state:
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(i) that the Excess Proceeds Offer is being made pursuant to this
Section 4.12, the Excess Proceeds Offer Period during which the Excess
Proceeds Offer shall remain open and whether the Company has elected to
offer to repurchase other pari passu Indebtedness;
(ii) the Excess Proceeds Offer Amount (including the calculations
used in determining the amount of Available Asset Sale Proceeds), the
Excess Proceeds Offer Purchase Price and the Excess Proceeds Offer
Purchase Date;
(iii) that any Notes which are not validly tendered or are not
otherwise accepted for payment shall continue to accrue interest;
(iv) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Excess Proceeds Offer shall
cease to accrue interest after the Excess Proceeds Offer Purchase Date;
(v) that any Holder electing to have a Note purchased pursuant to
any Excess Proceeds Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Company, a
depository, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Excess Proceeds
Offer Purchase Date;
(vi) that Holders shall be entitled to withdraw their election if
the Company, the depository or the Paying Agent, as the case may be,
receives, no later than the expiration of the Excess Proceeds Offer
Period, a telegram, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder delivered
for purchase and a statement that such Holder is withdrawing his election
to have such Note purchased;
(vii) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Excess Proceeds Offer Amount, the Company shall
select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(viii) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
(c) On or before the Excess Proceeds Offer Purchase Date, the
Company shall, to the extent lawful, (1) accept for payment, on a pro rata basis
to the extent necessary, the Excess Proceeds Offer Amount of Notes or portions
thereof so validly tendered and not properly withdrawn pursuant to the Excess
Proceeds Offer, or if less than the Excess Proceeds Offer Amount has been so
validly tendered and not properly withdrawn, all Notes validly tendered and
42
not properly withdrawn, (2) deposit by 11:00 a.m. New York City time, on such
date with the Paying Agent, an amount equal to Excess Proceeds Offer Amount,
plus accrued and unpaid interest in respect of all Notes, or portions thereof,
so accepted and (3) shall deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 4.12. The Company, the
depository or the Paying Agent, as the case may be, shall promptly (but in any
case not later than five days after the Excess Proceeds Offer Purchase Date)
mail or deliver to each tendering Holder an amount equal to the Excess Proceeds
Offer Purchase Price of the Notes validly tendered and not properly withdrawn by
such Holder and accepted by the Company for purchase. Upon surrender and
cancellation of a Physical Note that is purchased in part, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Physical Note a new Physical Note; provided, that
each such new Physical Note shall be in a principal amount at the Final Maturity
Date of $1,000 or an integral multiple thereof. Upon surrender of a Global Note
that is purchased in part pursuant to an Excess Proceeds Offer, the Paying Agent
shall forward such Global Note to the Trustee who shall make a notation on
Schedule A thereof to reduce the principal amount of such Global Note to an
amount equal to the unpurchased portion of such Global Note, as provided in the
Notes. Any Note not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Excess Proceeds Offer on the Excess Proceeds Offer Purchase Date. For
purposes of this Section 4.12, the trustee shall act as the Paying Agent.
If at any time the Company is required to make an Excess Proceeds
Offer, the Company is also required to make one or more similar offers (each, an
"Additional Excess Proceeds Offer") for any of its securities or those of any of
its Affiliates, the Company shall be entitled to make any such Additional Excess
Proceeds Offers simultaneously with such Excess Proceeds Offer; provided, that,
to the extent the Company is required to purchase any such other securities
pursuant to such Additional Excess Proceeds Offers, Available Asset Sale
Proceeds shall be reduced by an amount equal to the aggregate purchase price of
all such other securities purchased pursuant to such Additional Excess Proceeds
Offers.
In the event that the Company makes an Excess Proceeds Offer, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1 under,
the Exchange Act.
Section 4.13. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries to
issue any Preferred Stock (other than to the Company or a Wholly-Owned
Subsidiary), other than Permitted Foreign Restricted Subsidiary Preferred Stock,
or permit any Person (other than the Company or a Wholly-Owned Subsidiary) to
hold any such Preferred Stock unless the Company or such Restricted Subsidiary
would be entitled to incur or assume Indebtedness described in Section 4.3 in
the aggregate principal amount equal to the aggregate liquidation value of the
Preferred Stock to be issued or so held.
Section 4.14. Limitation on Other Senior Subordinated Indebtedness.
43
The Company will not incur, contingently or otherwise, any
Indebtedness that is both (i) subordinate in right of payment to any Senior
Indebtedness of the Company and (ii) senior in right of payment to the Notes.
For purposes of this Section 4.14, Indebtedness is deemed to be senior in right
of payment to the Notes if it is not explicitly subordinate in right of payment
to Senior Indebtedness at least to the same extent as the Notes are subordinate
to Senior Indebtedness.
Section 4.15. Limitations on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, Property or services) with any
Affiliate (each, an "Affiliate Transaction") or extend, renew, waive or
otherwise modify the terms of any Affiliate Transaction entered into prior to
the Issue Date unless (i) such Affiliate Transaction is between or among the
Company and the Restricted Subsidiaries or between or among Restricted
Subsidiaries; or (ii) the terms of such Affiliate Transaction are fair to the
Company or such Restricted Subsidiary, as the case may be, and the terms of such
Affiliate Transaction are at least as favorable as the terms which could be
obtained by the Company or such Restricted Subsidiary, as the case may be, in a
comparable transaction made on an arm's-length basis between unaffiliated
parties. In any Affiliate Transaction (or any series of related Affiliate
Transactions) involving an amount or having a Fair Market Value in excess of $2
million which is not permitted under clause (i) of the immediately preceding
sentence, the Company shall deliver to the Trustee a resolution of a majority of
the disinterested members of the Board of Directors of the Company which
reflects the approval of such Affiliate Transaction and a determination that
such Affiliate Transaction complies with clause (ii) of the immediately
preceding sentence. In any Affiliate Transaction (or series or related Affiliate
Transactions) which includes the payment of fees of $1 million or more to
Chartwell, the Company shall deliver to the Trustee a resolution of a majority
of the disinterested members of the Board of Directors of the Company which
reflects the approval of such affiliate Transaction. In addition, in any
Affiliate Transaction (or any series of related Affiliate Transactions)
involving an amount or having a Fair Market Value in excess of $10 million which
is not permitted under clause (i) of the immediately preceding sentence, the
Company must deliver to the Trustee, prior to the consummation of the
transaction or transactions, a written opinion from a nationally recognized
investment banking firm or other expert stating that such transaction or
transactions are fair to the Company or such Restricted Subsidiary, as the case
may be, from a financial point of view; provided, that no such opinion shall be
required in respect of the provision of services or sales of inventory or
products by the Company or any of its Restricted Subsidiaries to a Joint Venture
in the ordinary course of business.
(b) The provisions in clause (a) above will not apply to: (i) any
transaction or series of related transactions pursuant to the terms of the
Permitted Affiliate Agreements; (ii) reasonable fees and compensation paid to
and indemnity provided on behalf of officers, directors or employees of the
Company or any Restricted Subsidiary of the Company as determined in good faith
by the Company's Board of Directors or senior management; (iii) any payment that
44
would be permitted under the first paragraph or clauses (v) or (vi) of the
second paragraph of Section 4.4; (iv) any Permitted Investment (other than
Permitted Investments made pursuant to clause (x) of the definition of Permitted
Investments); or (v) loans or advances to employees and officers of the Company
or any of its Subsidiaries in the ordinary course of business to provide for the
payment of reasonable expenses incurred by such persons in the performance of
their responsibilities to the Company or such Subsidiary or in connection with
any relocation. The aggregate management, consulting and similar fees paid by
the Company or its Subsidiaries (excluding expenses and amounts paid pursuant to
the last sentence of this Section 4.15(b) or pursuant to clause (iii) of this
paragraph) to Chartwell shall not exceed $1 million during any fiscal year;
provided, that any such fees may accrue but shall not be paid by the Company any
time after the occurrence and during the continuance of a Default or Event of
Default until such Default or Event of Default is cured, whereupon such accrued
and unpaid fees may be paid in addition to other permitted fees. In addition,
the Company may pay advisory fees to an Affiliate of the Company (including
Chartwell) with respect to specific transactions, provided, that such payments
would be permitted under the first paragraph of Section 4.4. In addition, for
purposes of this Section 4.15, any transaction or series of related transactions
between the Company or any Restricted Subsidiary and an Affiliate of the Company
that is approved by a majority of the disinterested members of its Board of
Directors shall be deemed to comply with clause (ii) of the first sentence of
the preceding paragraph.
Section 4.16. Limitation on Capital Stock of Restricted Subsidiaries.
The Company will not (i) sell or otherwise convey or dispose of any
Capital Stock of a Restricted Subsidiary other than to a Wholly-Owned
Subsidiary, (ii) permit any of its Restricted Subsidiaries to sell or otherwise
convey or dispose of any Capital Stock of a Restricted Subsidiary of the Company
other than to the Company or a Wholly-Owned Subsidiary or (iii) permit any of
its Restricted Subsidiaries to issue any Capital Stock, other than to the
Company or a Wholly-Owned Subsidiary of the Company. The foregoing restrictions
shall not apply to (a) an Asset Sale consisting of not less than 85% of the
Capital Stock of a Restricted Subsidiary owned by the Company made in compliance
with Section 4.12, (b) the issuance of Preferred Stock in compliance with the
Section 4.13, (c) the issuance of director's qualifying shares if required by
applicable law or (d) the issuance of Capital Stock of a Foreign Restricted
Subsidiary to third parties; provided, that, immediately after such transaction
such Foreign Restricted Subsidiary remains a Foreign Restricted Subsidiary or
(e) the pledge or hypothecation of, or creation of any security interest on, any
Capital Stock by the Company or any of its Restricted Subsidiaries.
Section 4.17.
[Reserved.]
Section 4.18. 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
45
Noteholder for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Notes unless such consideration
is offered to be paid or agreed to be paid to all holders of the Notes which so
consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
Section 4.19. Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or
(B) with respect to any other interest or participation in, or measured by, its
profits, (ii) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries, (iii) make loans or advances or capital contributions to the
Company or any of its Restricted Subsidiaries that is a stockholder of such
Person or (iv) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries that is a stockholder of such Person, except for
such encumbrances or restrictions existing under or by reason of:
(i) encumbrances or restrictions as in effect on the Issue Date;
(ii) any Credit Facility (existing on the Issue Date), this
Indenture, the Notes, the Note Indenture, the Senior Notes, the Guarantees
and any Surety Arrangement (existing on the Issue Date) or any Surety
Arrangement arising after the Issue Date which, in the good faith judgment
of the Board of Directors of the Company, contains substantially the same
or less restrictive encumbrances or restrictions than those contained in
any Surety Arrangements existing on the Issue Date and any permitted
amendment, modification or supplement thereto and any permitted renewal,
refinancing, replacement or refunding thereof; provided that, in the good
faith judgment of the Board of Directors of the Company, such encumbrances
or restrictions are in the aggregate no more restrictive than those
contained in the agreements governing the Indebtedness being amended,
modified, supplemented, extended, refinanced, renewed, replaced, defeased
or refunded;
(iii) applicable law;
(iv) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries or of
any Person that becomes a Restricted Subsidiary as in effect at the time
of such acquisition or such Person becoming a Restricted Subsidiary
(except to the extent such Indebtedness was incurred in connection with or
in contemplation of such acquisition of such Person becoming a Restricted
Subsidiary), which encumbrance or restriction is not applicable to any
Person, or the Properties or assets of any Person, other than the Person,
or the Property or assets of the Person (including any Subsidiary of the
Person), so acquired;
46
(v) customary non-assignment provisions in leases, licenses or other
agreements entered into in the ordinary course of business and consistent
with past practices;
(vi) Refinancing Indebtedness; provided, that, in the good faith
judgment of the Board of Directors of the Company, such encumbrances or
restrictions are in the aggregate no more restrictive than those contained
in the agreements governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(vii) Indebtedness having restrictions and encumbrances no more
restrictive than those contained in this Indenture and the Notes or the
Note Indenture, the Senior Notes and the Guarantees; provided, that the
Company or ▇▇▇▇▇▇ is the primary obligor under such Indebtedness;
(viii) customary restrictions in security agreements or mortgages
securing Indebtedness of the Company or a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the Property subject to
such security agreements and mortgages;
(ix) customary restrictions in stock or asset purchase agreements to
the extent such restrictions apply to the Person selling stock or assets
(and/or such Person's Subsidiaries) solely during the period prior to the
closing under such agreements; or
(x) any encumbrance or restriction pursuant to an agreement relating
to an acquisition of Property, so long as the encumbrances or restrictions
in any such agreement relate solely to the Property so acquired (and are
not or were not created in anticipation of or in connection with the
acquisition thereof).
Nothing contained in this Section 4.19 shall prevent the Company or
any Restricted Subsidiary from (i) creating, incurring, assuming or suffering to
exist any Liens or (ii) restricting the sale or other disposition of property or
assets of the Company or any of its Restricted Subsidiaries that secure
Indebtedness of the Company or any of its Restricted Subsidiaries incurred in
accordance with this Indenture.
Section 4.20. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (the "Change of Control Offer") the
outstanding Notes at a purchase price (the "Change of Control Purchase Price")
equal to 101% of the principal amount thereof plus any accrued and unpaid
interest thereon to the Change of Control Payment Date (as hereinafter defined)
in accordance with the procedures set forth in this covenant.
Within 30 days of the occurrence of a Change of Control, the Company
shall (i) cause a notice of the Change of Control Offer to be sent at least once
to the Dow ▇▇▇▇▇ News Service or similar business news service in the United
States and (ii) send by first-class mail,
47
postage prepaid, to the Trustee and to each Holder of the Notes, at the address
appearing in the register maintained by the Registrar of the Notes, a notice
stating:
(a) that the Change of Control Offer is being made pursuant to this
covenant and that all Notes validly tendered will be accepted for payment;
(b) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day not earlier than 30 days nor later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"));
(c) that any Note not validly tendered will continue to accrue
interest;
(d) that, unless the Company defaults in the payment of the Change
of Control Purchase Price, any Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
(e) that Holders accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender the Notes to
the Paying Agent at the address specified in the notice prior to the close of
business on the Business Day preceding the Change of Control Payment Date;
(f) that Holders will be entitled to withdraw their acceptance if
the Paying Agent receives, not later than the close of business on the third
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase, and a statement that such
holder is withdrawing his election to have such Notes purchased;
(g) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered, provided, that each Note purchased and each such new Note
issued shall be in an original principal amount in denominations of $1,000 and
integral multiples thereof;
(h) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(i) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof validly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Notes or portions thereof so
tendered and (iii) deliver or cause to be delivered to the Trustee Notes or
portions thereof so accepted for cancellation. The Paying Agent shall promptly
mail to each Holder of Notes so accepted payment in an amount equal to the
purchase price for such Notes, and the Company shall execute and issue, and the
Trustee shall promptly authenticate and mail to such Holder, a new Note equal in
principal amount to any unpurchased portion of the
48
Notes surrendered; provided, that each such new Note shall be issued in an
original principal amount in denominations of $1,000 and integral multiples
thereof.
If any Credit Facilities are in effect or if the Senior Notes are
outstanding or if any other Indebtedness of the Company or its Restricted
Subsidiaries that requires a payment upon a Change of Control is outstanding, or
any amounts are owing thereunder or in respect thereof, at the time of the
occurrence of a Change of Control, prior to the mailing of the notice to Holders
described in the preceding second paragraph, but in any event within 30 days
following any Change of Control, the Company shall be required to (i) cause the
borrowers thereunder to repay in full all obligations under or in respect of
such Credit Facility or such other Indebtedness or offer to repay in full all
obligations under or in respect of such Credit Facility or such other
Indebtedness and repay within such 30-day period the obligations under or in
respect of such Credit Facility or such other Indebtedness of each lender who
has then irrevocably accepted such offer and cause the Company to repay within
such 30-day period in full all obligations in respect of the Senior Notes or
offer to repay in full all obligations in respect of the Senior Notes of each
holder who has then irrevocably accepted such offer or (ii) cause such borrowers
and the Company to obtain the requisite consent under such Credit Facility, or
such other Indebtedness, the holders of such other Indebtedness and from the
holders of the Senior Notes, respectively, to permit the repurchase of the Notes
as described above. The Company must first comply with the terms of the
preceding sentence before it shall be required to purchase Notes in the event of
a Change of Control; provided, that the Company's failure to comply with the
terms of the preceding sentence constitutes an Event of Default described in
clause (iii) of Section 6.01.
If the Company has issued any outstanding (i) Subordinated
Indebtedness or (ii) Capital Stock, and the Company is required to make a Change
of Control Offer or to make a distribution with respect to such Subordinated
Indebtedness or Capital Stock in the event of a Change of Control, the Company
shall not consummate any such offer or distribution with respect to such
Subordinated Indebtedness or Capital Stock until such time as the Company shall
have paid the Change of Control Purchase Price in full to the holders of Notes
that have validly accepted the Company's Change of Control Offer and shall
otherwise have consummated the Change of Control Offer made to holders of the
Notes.
In the event that a Change of Control occurs and the Holders of
Notes exercise their right to require the Company to purchase Notes, if such
purchase constitutes a "tender offer" for purposes of Rule 14e-1 under the
Exchange Act at that time, the Company will comply with the requirements of Rule
l4e-1 as then in effect with respect to such repurchase.
The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes such Change of Control Offer
contemporaneously with or upon a Change of Control in the manner, at the times
and otherwise in compliance with the requirements of this Indenture and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
ARTICLE 5.
49
SUCCESSOR CORPORATION
Section 5.1. Mergers, Consolidations and Sales of Assets.
(a) The Company will not consolidate or merge with or into any
Person, or sell, assign, lease, convey or otherwise dispose of (or cause or
permit any of its Restricted Subsidiaries to sell, assign, lease, convey or
otherwise dispose of (however effected, including, without limitation, by merger
or consolidation)) all or substantially all of the Company's assets (determined
on a consolidated basis for the Company and its Restricted Subsidiaries),
whether as an entirety or substantially an entirety in one transaction or a
series of related transactions, including by way of liquidation or dissolution,
to any Person unless, in each such case: (i)(x) the Company shall be the
continuing Person, or (y) the Person (if other than the Company) formed by such
consolidation or into which the Company or the Restricted Subsidiary, as the
case may be, is merged or to which the Properties and assets of the Company or
any Restricted Subsidiary, as the case may be, are transferred (such Person, the
"Surviving Entity") (1) shall be a corporation organized and existing under the
laws of the United States or any State thereof or the District of Columbia and
(2) shall expressly assume, by a supplemental indenture, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all of the obligations of
the Company under the Notes and this Indenture (upon which assumption the
Company shall be discharged of any and all obligations on the Notes and this
Indenture), and the obligations under this Indenture shall remain in full force
and effect; (ii) immediately before and immediately after giving effect to such
transaction (including, without limitation, giving effect to any Indebtedness
and Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred and be continuing; and (iii) immediately
after giving effect to such transaction on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions) the
Company (or the Surviving Entity if the Company is not continuing) (A) shall
have a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of the Company immediately prior to such transaction and (B) could incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
under Section 4.3; provided, that a Restricted Subsidiary may merge with and
into the Company without complying with this clause (iii)(B).
(b) In connection with any consolidation, merger or transfer of
assets contemplated by this Section 5.1, the Company shall deliver, or cause to
be delivered, to the Trustee, in form and substance reasonably satisfactory to
the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and the supplemental indenture in
respect thereto comply with this Section 5.1 and that all conditions precedent
herein provided for relating to such transaction or transactions have been
complied with.
(c) 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 Subsidiaries of the Company, the Capital Stock of which
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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
assets of the Company.
Section 5.2. Successor Corporation Substituted.
(a) Upon any transaction or series of transactions that are of the
type described in Section 5.1, and are effected in accordance with, conditions
described in the immediately preceding paragraphs, the Surviving Entity shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such Surviving
Entity had been named as the Company therein; and when a Surviving Entity duly
assumes all of the obligations and covenants of the Company pursuant to this
Indenture and the Notes, except in the case of a lease, the predecessor Person
shall be relieved of all such obligations.
(b) For all purposes of this Indenture and the Notes, Subsidiaries
of any Surviving Entity will, upon such transaction or series of transactions,
become Restricted Subsidiaries or Unrestricted Subsidiaries, to the extent and
as provided pursuant to this Indenture.
(c) If the successor corporation shall have succeeded to and been
substituted for the Company, such successor corporation may cause to be signed,
and may issue either in its on name or in the name of the Company prior to such
succession any or all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Notes which previously shall have been
signed and delivered by the Officers of the Company to the Trustees for
authentication, and any Notes which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the
Notes so issued and so endorsed shall in all respects have the same legal rank
and benefit under this Indenture as the notes theretofore or thereafter issued
and endorsed in accordance with the terms of this Indenture as though all such
Notes had been issued and endorsed at the date of the execution hereof.
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1. Events of Default.
An "Event of Default" occurs if there is a:
(i) default in payment of any principal of, or premium, if any, on
the Notes when due (whether or not prohibited by Article 11 hereto);
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(ii) default in the payment of any interest on any Notes when due,
which Default continues for 30 days or more (whether or not prohibited by
Article 11 hereto);
(iii) Default by the Company in the observance or performance of any
other covenant in the Notes or this Indenture for 60 days after written
notice from the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding (except in the case of a
Default with respect to Sections 4.12, 4.20 or 5.1 which shall constitute
an Event of Default with such notice requirement but without such passage
of time requirement);
(iv) failure to pay when due (within any applicable grace period)
principal, interest or premium with respect to any Indebtedness of the
Company or any Restricted Subsidiary thereof in an aggregate principal
amount of $5 million of more, or the acceleration of any such Indebtedness
in an aggregate principal amount of $5 million or more which Default shall
not be cured or waived;
(v) any final judgment or judgments which can no longer be appealed
for the payment of money in excess of $5 million shall be rendered against
the Company or any Restricted Subsidiary thereof (in excess of amounts
covered by insurance and as to which the insurance company has
acknowledged coverage) by a court of competent jurisdiction, and shall not
be bonded (such that a judgment creditor cannot proceed against assets of
the Company or any Subsidiary), vacated, discharged or satisfied for any
period of 60 consecutive days during which a stay of enforcement shall not
be in effect; or
(vi) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it
in an involuntary case,
(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due;
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against either of the Company or any
Significant Subsidiary in an involuntary case,
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(b) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the
property of either of the Company or any Significant
Subsidiary, or
(c) orders the liquidation of the Company or any Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
For purposes of clauses (vi) and (vii) above, any Restricted
Subsidiary which, when aggregated with all other Restricted Subsidiaries that
are not otherwise Significant Subsidiaries and as to which any event described
in clauses (vi) or (vii) above has occurred, would constitute a Significant
Subsidiary.
Section 6.2. Acceleration.
If an Event of Default (other than an Event of Default arising under
Section 6.1(vi) or (vii)) shall have occurred and be continuing, then the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Notes then outstanding may declare to be immediately due and payable, the entire
principal amount of all the Notes then outstanding, premium, if any, and accrued
and unpaid interest to the date of acceleration and such amounts shall
immediately become due and payable; provided, that after such acceleration but
before a judgment or decree based on acceleration is obtained by the Trustee,
the Holders of a majority in aggregate principal amount of outstanding Notes may
rescind and annul such acceleration if (i) all Events of Default, other than
nonpayment of principal, premium or interest, that has become due solely because
of acceleration, have been cured or waived as provided in this Indenture, (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, (iii) if the Company
has paid the Trustee its reasonable compensation and reimbursed the Trustee for
its expenses, disbursements and advances and (iv) in the event of the cure or
waiver of an Event of Default described in clause (vi) and (vii) of Section 6.1,
the Trustee shall have received an Officers' Certificate and an Opinion of
Counsel that such Event of Default has been cured or waived.
In the case that an Event of Default arising under Section 6.1 (vi)
or (vii) shall occur, the principal, premium, if any, and accrued and unpaid
interest with respect to all of the Notes shall be due and payable immediately
without any declaration or other act on the part of the Trustee or the Holders
of Notes. If, after the delivery of any such notice of acceleration with respect
to an Event of Default under Section 6.1(iv), any such payment Default or
acceleration relating to such other Indebtedness shall have been cured or
rescinded or such Indebtedness shall have been discharged within 30 days of such
default or acceleration in respect of such Indebtedness, then such Event of
Default specified in Section 6.1(iv) shall be deemed cured for all purposes of
this Indenture.
Section 6.3. Other Remedies.
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If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, premium, if any, and any interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture and may
take any necessary action requested of it as Trustee to settle, compromise,
adjust or otherwise conclude any proceedings to which it is a party.
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 to the
extent permitted by law.
Section 6.4. Waiver of Past Defaults.
Subject to Section 6.7, the holders of a majority in principal
amount of the Notes then outstanding have the right to waive any existing
Default or compliance with any provision of this Indenture or the Notes and its
consequences hereunder, except (i) an existing Default or Event of Default in
the payment of the principal of, premium, if any, on, or interest on, the Notes
(including in connection with an offer to purchase) or (ii) an existing Default
or Event of Default in respect of a provision that under Section 8.2 cannot be
amended without the consent of each Holder affected thereby. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon. The Company 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. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former position and rights hereunder and under the Securities, respectively.
Section 6.5. Control by Majority.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee by this Indenture or subject to Section 7.1 and
the TIA. The Trustee, however, may refuse to follow any direction that conflicts
with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Noteholder, not taking part in such
direction, and the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the action
so directed may not lawfully be taken or if the Trustee in good faith shall, by
a Responsible Officer, determine that the proceedings so directed may involve it
in personal liability; provided that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
Prior to taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
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Section 6.6. Limitation on Suits
No Holder of any Note will have any right to institute any
proceeding with respect to this Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default and unless the Holders of at least 25% in aggregate
principal amount of the outstanding Notes shall have made written request and
offered reasonable indemnity to the Trustee to institute such proceeding as
trustee, and unless the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the outstanding Notes a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. Notwithstanding the foregoing, such limitations shall
not apply to a suit instituted on such Notes on or after the due dates expressed
in such Notes. A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 6.7. Rights of Holders To Receive Payment
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal of, or premium, if any, and
interest on the Note on or after the respective due dates expressed in the Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
Section 6.8. Collection Suit by Trustee.
If an Event of Default in payment of principal, premium or interest
specified in clause (i) or (ii) 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 Company or any other obligor on the Notes for the whole amount of
unpaid principal, premium, if any, and accrued interest remaining unpaid,
together with interest on overdue principal and, to the extent that payment of
such interest is lawful, interest on overdue installments of interest, in each
case at the rate per annum set forth in the Notes and such further amounts as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.9. 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its Property and shall be
entitled and empowered to collect and receive any monies or other Property
payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent
55
that any such charges and expenses are not paid out of the estate in any such
proceedings and any custodian in any such judicial proceeding is hereby
authorized by each Noteholder to make such payments to the Trustee, and in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
or reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceedings.
Section 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article 6, it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each,
ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by a Holder or Holders of more than 10% in
aggregate principal amount of the Notes then outstanding.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any
56
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
ARTICLE 7.
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default actually known to a Responsible Officer
of the Trustee has occurred and is continuing, the Trustee shall exercise such
of the rights and powers vested in it by this Indenture and use the same degree
of care and skill in their exercise as a prudent man would exercise or use under
the same circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture but,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same 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:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
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(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.2, 6.5 or 6.6 hereof.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its rights, powers or duties or to take or omit to take
any action under this Indenture or take any action at the request or direction
of Holders if it shall have reasonable grounds for believing that repayment of
such funds is not assured to it or it does not receive an indemnity satisfactory
to it in its sole discretion against such risk, liability, loss, fee or expense
which may be incurred by it in connection with such performance.
(e) Whether or not therein expressly so provided, paragraphs (a),
(b), (c), (d) and (e) of this Section 7.1 shall govern every provision of this
Indenture that in any way relates to the Trustee.
(f) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it in its sole discretion
against any loss, liability, expense or fee.
(g) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by the law.
Section 7.2. Rights of Trustee.
Subject to Section 7.1 hereof:
(i) 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.
(ii) Before the Trustee acts or refrains from acting, it may consult
with counsel, require an Officers' Certificate or an Opinion of Counsel,
or both, which shall conform to the provisions of Section 10.4 and Section
10.5 hereof. The Trustee shall be protected and shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(iii) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
by it with due care.
(iv) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
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(v) The Trustee may consult with counsel of its selection, and the
written advice or opinion of such counsel as to matters of law shall be
full and complete authorization and protection from liability in respect
of any action taken, omitted or suffered by it hereunder in good faith and
in accordance with the advice or opinion of such counsel.
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 make loans to, accept deposits from, perform
services for or otherwise deal with either of the Company, or any Affiliates
thereof, with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, shall be subject to
Sections 7.10 and 7.11 hereof.
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 Company's use of the proceeds from the sale of Notes or any
money paid to the Company pursuant to the terms of this Indenture and it shall
not be responsible for any statement in the Notes or this Indenture other than
its certificate of authentication.
Section 7.5. Notice of Default
If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Noteholder notice of the Default within
90 days after it occurs. Except in the case of a Default in payment of the
principal of, or premium, if any, or interest on any Note the Trustee may
withhold the notice if and so long as the board of directors, the executive
committee, a committee of its Responsible Officers in good faith determines)
that withholding the notice is in the interests of the Noteholders.
Section 7.6. Reports by Trustee to Holders
If required by TIA Section 313(a), within 60 days after May 15 of
any year, commencing [ ], the Trustee shall mail to each Noteholder a brief
report dated as of such May 15 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c) and TIA Section
313(d).
Reports pursuant to this Section 7.6 shall be transmitted by mail:
(i) to all registered Holders of Notes, as the names and addresses
of such Holders appear on the Registrar's books; and
59
(ii) to such Holder of Notes as have, within the two years preceding
such transmission, filed their names and addresses with the Trustee for
that purpose.
A copy of each report at the time of its mailing to Noteholders
shall be filed with the Commission and each stock exchange on which the Notes
are listed. The Company shall promptly notify the Trustee when the Notes are
listed on any securities exchange or of any delisting thereof.
Section 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee and Agents from time to time
such compensation as shall be agreed in writing between the Company and the
Trustee for its services hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee and Agents upon request for all
reasonable disbursements, expenses and advances incurred or made by it in
connection with its duties under this Indenture, including the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee, any predecessor
Trustee and their agents for, and hold each of them harmless against, any and
all loss, damage, claim, liability or expense, including without limitation
taxes (other than taxes based on the income of the Trustee or such Agent) and
reasonable attorneys' fees and expenses incurred by each of them in connection
with the acceptance or performance of its duties under this Indenture, including
the reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder (including, without limitation, reasonable costs and expenses
of enforcing this Indenture against the Company (including this Section 7.7) and
settlement costs). The Trustee or Agent shall notify the Company in writing
promptly of any claim asserted against the Trustee or Agent for which it may
seek indemnity. However, the failure by the Trustee or Agent to so notify the
Company shall not relieve the Company of its obligations hereunder except to the
extent the Company is prejudiced thereby.
Notwithstanding the foregoing, the Company need not reimburse the
Trustee for any expense or indemnify it against any loss or liability incurred
by the Trustee through its negligence or bad faith. To secure the payment
obligations of the Company in this Section 7.7, the Trustee shall have a lien
prior to the Notes on all money or Property held or collected by the Trustee
except such 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 in right of payment to any other
liability or Indebtedness of the Company. The obligations of the Company under
this Section 7.7 to compensate, reimburse and indemnify the Trustee, Agents and
each predecessor Trustee and to pay or reimburse the Trustee, Agents and each
predecessor Trustee for expenses, disbursements and advances shall be joint and
several liabilities of the Company shall survive the satisfaction, discharge and
termination of this Indenture, including any termination or rejection hereof
under any bankruptcy law or the resignation or removal of the Trustee.
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When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(vi) hereof occurs, the expenses and the
compensation (including the reasonable fees and expenses of its agents and
counsel) for the services are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.8. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing. The
Holders of a majority in aggregate principal amount of the outstanding Notes may
remove the Trustee by notifying the Trustee and the Company in writing and may
appoint a successor Trustee with the Company's written consent which consent
shall not be unreasonably withheld. The Company may remove the Trustee at its
election if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy law;
(iii) a receiver or other public officer takes charge of the Trustee
or its property;
(iv) the Trustee otherwise becomes incapable of acting; or
(v) a successor corporation becomes successor Trustee pursuant to
Section 7.9 below.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify the Holders of such
event and promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee notifies the Company of its resignation or is removed, the
retiring Trustee, the Company or the Holders of a majority in aggregate
principal amount of the outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request of a Noteholder who has been a
Noteholder for at least six months, fails to comply with Section 7.10 hereof,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately following
such delivery, the retiring Trustee shall, subject to its rights under Section
7.7 hereof, transfer all Property held by it as Trustee to the successor
Trustee, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Noteholder. Notwithstanding replacement of the
Trustee pursuant to this Section 7.8, the Company's obligations under Section
7.7 hereof shall continue for the benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Consolidation, Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, subject to Section 7.10 hereof, the successor 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 certificates
of the Trustee shall have.
Section 7.10. Eligibility; Disqualification
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5) in every respect. The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. The Trustee shall
comply with TIA Section 310(b); provided, however, that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures under
which other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
Section 7.12. Paying Agents.
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The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to it and the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 7.12:
(a) that it will hold all sums held by it as agent for the payment
of principal of, or premium, if any, or interest on, the Notes (whether such
sums have been paid to it by the Company or by any obligor on the Notes) in
trust for the benefit of Holders of the Notes or the Trustee;
(b) that it will at any time during the continuance of any Event of
Default, upon written request from the Trustee, deliver to the Trustee all sums
so held in trust by it together with a full accounting thereof; and
(c) that it will give the Trustee written notice within three (3)
Business Days of any failure of the Company (or by any obligor on the Notes) in
the payment of any installment of the principal of, premium, if any, or interest
on, the Notes when the same shall be due and payable.
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ARTICLE 8.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.1. Without Consent of Holders.
Without the consent of any Holders of the Notes, the Company and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental to this Indenture for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company in this
Indenture and in the Notes; or
(2) to add to the covenants of the Company for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred upon
the Company; or
(3) to add additional Events of Default; or
(4) to provide for uncertificated Notes in addition to or in place
of certificated Notes; or
(5) to evidence and provide for the acceptance of appointment under
this Indenture by a successor Trustee; or
(6) to secure the Notes;
(7) to cure any ambiguity, to correct or supplement any provision in
this Indenture which may be defective or inconsistent with any other provision
in this Indenture, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that such actions pursuant to
this clause shall not adversely affect the interests of the Holders of the Notes
in any material respect; or
(8) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the TIA.
Section 8.2. With Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Notes, the Company and the Trustee
may enter into an indenture or indentures supplemental to this Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying, in any manner the rights of
the Holders of the Notes under this Indenture including the definitions
64
herein; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each outstanding Note affected thereby:
(1) change the stated maturity of any Note or of any installment of
interest on any Note, or reduce the amount payable in respect of the principal
thereof or the rate of interest thereon or any premium payable thereon, or
reduce the amount that would be due and payable on acceleration of the maturity
thereof, or change the place of payment where, or the coin or currency in which,
any Note or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the stated
maturity thereof;
(2) reduce the percentage in aggregate principal amount of the
outstanding Notes, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults thereunder and their consequences) provided for in this Indenture;
(3) modify in any material respect the obligations of the Company to
make Change of Control Offers upon a Change of Control or Excess Proceeds Offers
from the Available Asset Sale Proceeds; or
(4) modify or change any provision of this Indenture affecting the
contractual ranking in right of payment of the Notes in a manner adverse to the
Holders of the Notes, or
(5) make any change in Sections 6.4 or 6.7 or modify any of the
provisions of this Section 8.2, except to increase any such percentage required
for such actions or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby.
The Holders of not less than a majority in aggregate principal
amount of the outstanding Notes may on behalf of all of the Notes waive any past
Default under this Indenture and its consequences, except a Default (1) in any
payment in respect of the principal of (or premium, if any) or interest on any
Notes (including any Note which is required to have been purchased pursuant to a
Change of Control Offer or an Excess Proceeds Offer which has been made by the
Company), or (2) in respect of a covenant or provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder of
each outstanding Note affected thereby.
It shall not be necessary for the consent of the Holders of Notes
under this Section 8.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
Section 8.3. Compliance with TIA.
Every amendment to or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
65
Section 8.4. Revocation and Effect of Consents.
Until an amendment, supplement, waiver or other action becomes
effective, a consent to it by a Holder of a Note is a continuing consent
conclusive and binding upon such Holder and every subsequent Holder of the same
Note or portion thereof, and of any Note issued upon the transfer thereof or in
exchange therefor or in place thereof, even if notation of the consent is not
made on any such Note. Any such Holder or subsequent Holder, however, may revoke
the consent as to his Note or portion of a Note, if the Trustee receives the
written notice of revocation before the date the amendment, supplement, waiver
or other action becomes effective.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement, or waiver. If a record date is fixed, then, notwithstanding the
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 120 days
after such record date unless the consent of the requisite number of Holders has
been obtained.
After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Noteholder, unless it makes a change described in
any of clauses (1) through (5) of Section 8.2 hereof. In that case the
amendment, supplement, waiver or other action shall bind each Holder of a Note
who has consented to it and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's Note.
Section 8.5. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee (in accordance with the specific written direction of the Company)
shall request the Holder of the Note (in accordance with the specific written
direction of the Company) to deliver it to the Trustee. In such case, the
Trustee shall place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
Section 8.6. Trustee To Sign Amendments, Etc.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Senior Notes as aforesaid, the Trustee shall sign any
amendment, supplement or waiver authorized pursuant to this Article 8 if the
amendment, supplement or waiver does not adversely affect the
66
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment, supplement or waiver the Trustee shall be entitled to receive and,
subject to Section 7.1 hereof, shall be fully protected in relying upon an
Officers' Certificate and an Opinion of Counsel stating that such amendment,
supplement or waiver is authorized or permitted by this Indenture and is a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE 9.
DISCHARGE OF INDENTURE, DEFEASANCE
Section 9.1. Discharge of Indenture
The Company may terminate its obligations under this Indenture, when
(1) either: (A) all Notes theretofore authenticated and delivered have been
delivered to the Trustee for cancellation, or (B) all such Notes not theretofore
delivered to the Trustee for cancellation (i) have become due and payable, or
(ii) will become due and payable within 60 days or are to be called for
redemption within 60 days (a "Discharge") under irrevocable arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company, and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire indebtedness on the Notes, not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, on and interest to the date of deposit or stated maturity or
date of redemption, whichever is later; (2) the Company has paid or caused to be
paid all other sums then due and payable hereunder by the Company; and (3) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent under this Indenture
relating to the satisfaction and discharge of this Indenture have been complied
with.
After such delivery the Trustee upon request of the Company shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations specified below.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9,
4.2, 7.7, 9.5, 9.6, 9.7 and 9.8, the Company's optional redemption rights and
the rights, trust, powers and duties and immunities of the Trustee shall survive
until the Notes are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.7, 9.5, 9.6, 9.7 and 9.8 hereof shall survive.
The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or securities held by them at any time.
67
Section 9.2. Legal Defeasance.
The Company may at its option, by Board Resolution of the Board of
Directors of the Company, be discharged from its obligations with respect to the
Notes on the date the conditions set forth in Section 9.4 below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Notes and to have satisfied all its other
obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall, subject to
Section 9.6 hereof, execute instruments in form and substance reasonably
satisfactory to the Trustee and the Company acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of outstanding Notes to receive solely from
the trust funds described in Section 9.4 hereof and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (B) the Company's obligations
with respect to such Notes under Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9 and
4.2 hereof, (C) the rights, powers, trusts, duties, and immunities of the
Trustee hereunder (including claims of, or payments to, the Trustee under or
pursuant to Section 7.7 hereof), (D) the Company's rights of optional redemption
and (E) this Article 9. Subject to compliance with this Article 9, the Company
may exercise its option under this Section 9.2 with respect to the Notes
notwithstanding the prior exercise of its option under Section 9.3 below with
respect to the Notes.
Section 9.3. Covenant Defeasance
At the option of the Company, pursuant to a Board Resolution of the
Board of Directors of the Company, the Company shall be released from its
obligations under Sections 4.3 through 4.20 hereof, inclusive, and clauses (ii),
(iii)(A) and (B) of Section 5.1 hereof with respect to the outstanding Notes and
any covenant added to this Indenture subsequent to the Issue Date pursuant to
Section 8.1 on and after the date the conditions set forth in Section 9.4 hereof
are satisfied (hereinafter, "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section or portion thereof, whether directly or indirectly,
by reason of any reference elsewhere herein to any such specified Section or
portion thereof or by reason of any reference in any such specified Section or
portion thereof to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.1, but the remainder of this Indenture and the Notes shall be
unaffected thereby.
Section 9.4. Conditions to Legal Defeasance or Covenant Defeasance
The following shall be the conditions to application of Section 9.2
or Section 9.3 hereof to the outstanding Notes:
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(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 7.10 hereof who shall agree to comply with the provisions of this
Article 9 applicable to it) as funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Notes, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than the due date of any payment, money in an amount, or (C) a combination
thereof, in each case sufficient without reinvestment, in the opinion of a
nationally-recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee to pay discharge, and
which shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge, the entire indebtedness in respect of the principal of, premium, if
any, and accrued interest on the outstanding Notes at the stated maturity
thereof of such principal, premium, if any, or interest on, such Notes on the
stated maturity thereof, or (if the Company has made irrevocable arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name and at the expense of the Company) the Redemption Date
thereof, as the case may be, in accordance with the terms of this Indenture and
such Notes;
(2) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case (A) or (B) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such Notes
will not recognize gain or loss for federal income tax purposes as a result of
the deposit, defeasance and discharge to be effected with respect to such Notes
and will be subject to federal income tax on the same amount, in the same manner
and at the same times as would be the case if such deposit, defeasance and
discharge were not to occur;
(3) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
such outstanding Notes will not recognize gain or loss for federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such Notes and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur;
(4) no Default or Event of Default with respect to the outstanding
Notes shall have occurred and be continuing at the time of such deposit after
giving effect thereto or, in the case of Legal Defeasance, either: (A) the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that, based upon existing precedents, if the matter were properly briefed, a
court should hold that the deposit of moneys and/or U.S. Government Obligations
as provided in clause (1) would not constitute a preference voidable under
Section 547 or 548 of the federal Bankruptcy Laws; or (B) no Default or Event of
Default relating to bankruptcy or insolvency shall have occurred and be
continuing at any time on or prior to the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied
until after such 91st day);
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(5) such Legal Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the TIA (assuming
all Notes are in default within the meaning of the TIA); and
(6) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound;
(7) such Legal Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder; and
(8) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Legal Defeasance or Covenant Defeasance have been
complied with.
Section 9.5. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 9.4 hereof in respect of
the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent, to the Holders of such Notes, of
all sums due and to become due thereon in respect of principal, premium, if any,
and accrued interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 9.4 hereof or the principal, premium, if any, and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon a Company
Request any money or U.S. Government Obligations held by it as provided in
Section 9.4 hereof which, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 9.6. Reinstatement.
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If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.1, 9.2 or 9.3 hereof by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture, the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 9 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
9.1 hereof; provided, however, that if the Company has made any payment of
principal of, premium, if any, or accrued interest on any Notes because of the
reinstatement of their obligations, the Company 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.
Section 9.7. Moneys Held by Paying Agent
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon written demand of the Company, be paid to the Trustee, or if
sufficient moneys have been deposited pursuant to Section 9.1 hereof, to the
Company upon a Company Request, and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
Section 9.8. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or then
held by the Company in trust for the payment of the principal of, or premium, if
any, or interest on any Note that are not applied but remain unclaimed by the
Holder of such Note for two years after the date upon which the principal of, or
premium, if any, or interest on such Note shall have respectively become due and
payable shall be repaid to the Company upon a Company Request, or if such moneys
are then held by the Company in trust, such moneys shall be released from such
trust; and the Holder of such Note entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company for the
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Trustee or any such Paying Agent, before being required to make any such
repayment, may, at the expense of the Company either mail to each Noteholder
affected, at the address shown in the register of the Notes maintained by the
Registrar pursuant to Section 2.4 hereof, or cause to be published once a week
for two successive weeks, in a newspaper published in the English language,
customarily published each Business Day and of general circulation in The City
of New York, New York, a notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such mailing or publication, any unclaimed balance of such moneys then
remaining will be repaid to the Company. After payment to the Company or the
release of any money held in trust by the Company Noteholders entitled to the
money must look only to the Company for payment as general creditors unless
applicable abandoned property law designates another person.
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ARTICLE 10.
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provisions of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA ▇▇.▇▇. 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 10.2. Notices
Except for notice or communications to Holders any notice or
communication shall be given in writing and delivered in person, sent by
facsimile, delivered by commercial courier service or mailed by first-class
mail, postage prepaid, addressed as follows:
If to the Company:
MMH Holdings, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
72
Copy to:
Such notices or communications (other than those sent to Holders)
shall be effective when received and shall be sufficiently given if so given
within the time prescribed in this Indenture.
The Company or the Trustee by written notice to the others may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Noteholder shall be mailed
to him by first-class mail, postage prepaid, at his address shown on the
register kept by the Registrar and shall be given if so sent within the time
prescribed. Any notice or communication shall also be so mailed to any Person
described in TIA ss.313(c), to the extent required by the Trust Indenture Act.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
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 to a Noteholder is mailed in the manner provided
above, it shall be deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 10.3. Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 10.4. Certificate and Opinion as to Conditions Precedent.
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Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate (which shall include the statements set
forth in Section 10.5 below) 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
(ii) an Opinion of Counsel (which shall include the statements set
forth in Section 10.5 below) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, and may
state that it is so based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate of opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 10.5. Statements Required in Certificate and Opinion.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(ii) 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;
74
(iii) a statement that, in the opinion of such Person, it or he has
made such examination or investigation as is necessary to enable it or him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with.
Section 10.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or meetings of
Noteholders. The Registrar and Paying Agent may make reasonable rules for their
functions.
Section 10.7. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal Holiday. A "Legal
Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day on
which banking institutions are not required to be open in the State of New York.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
Section 10.8. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 10.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Company or any Subsidiary thereof. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 10.10. No Recourse Against Others.
No recourse for the payment of the principal of or premium, if any,
or interest on any of the Notes, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any of the Notes, or because of the creation of any Indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer, employee
or
75
director, as such, past, present or future, of the Company or of any successor
corporation or against the property or assets of any such incorporator,
stockholder, officer, employee or director, either directly or through the
Company or any successor corporation thereof, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
Notes are solely obligations of the Company, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, any incorprator,
stockholder, officer, employee or director of the Company or any successor
corporation thereof, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or the Notes or implied therefrom, and that any and
all such personal liability of, and any and all claims against every
incorporator, stockholder, officer, employee and director, are hereby expressly
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issuance of the Notes. It is understood that this
limitation on recourse is made expressly for the benefit of any such
incorporator, stockholder, officer, employee or director and may be enforced by
any of them.
Section 10.11. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind their respective successors. All agreements of the Trustee, any additional
trustee and any Paying Agents in this Indenture shall bind its successor.
Section 10.12. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
Section 10.13. Table of Contents, Headings, etc.
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 to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 10.14. Separability
Each provision of this Indenture shall be considered separable and
if for any reason any provision which is not essential to the effectuation of
the basic purpose of this Indenture or 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.
ARTICLE 11.
SUBORDINATION
76
Section 11.1. Notes Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of the Notes, by
its acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article 11; and each Person holding any
Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all obligations on the Notes by
the Company shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
or Cash Equivalents (or such payment shall be duly provided for to the
satisfaction of the holders of the Senior Indebtedness) of all obligations on
the Senior Indebtedness, that the subordination is for the benefit of, and shall
be enforceable directly by, the holders of Senior Indebtedness, and that each
holder of Senior Indebtedness, whether now outstanding or hereafter created,
incurred, assumed or guaranteed shall be deemed to have acquired Senior
Indebtedness, in reliance upon the covenants and provisions contained in this
Indenture.
Section 11.2. No Payment on Notes in Certain Circumstances.
(a) No payment or distribution (other than a payment or distribution
in the form of Permitted Junior Securities) of any assets or securities of the
Company of any kind or character (including, without limitation, cash, Property
and any payment or distribution which may be payable or deliverable by reason of
the payment of any other Indebtedness of the Company being subordinated to the
payment of the Notes by the Company) may be made by or on behalf of the Company,
including, without limitation, by way of set-off or otherwise, for or on account
of the Notes, or for or on account of the purchase, redemption or other
acquisition of the Notes, and neither the Trustee nor any Holder or owner of any
Notes shall take or receive from the Company, directly or indirectly in any
manner, payment in respect of all or any portion of Notes following the delivery
by the representative of the holders of Designated Senior Indebtedness (the
"Representative") to the Trustee of written notice of the occurrence of a
Payment Default, and in any such event, such prohibition shall continue until
such Payment Default is cured, waived in writing or ceases to exist. At such
time as the prohibition set forth in the preceding sentence shall no longer be
in effect, subject to the provisions of the following paragraph, the Company
shall resume making any and all required payments in respect of the Notes,
including any missed payments.
(b) Upon the occurrence of a Non-Payment Event of Default, no
payment or distribution (other than a payment or distribution in the form of
Permitted Junior Securities) of any assets of the Company of any kind may be
made by the Company, including, without limitation, by way of set-off or
otherwise, on account of the Notes, or on account of the purchase or redemption
or other acquisition of Notes, for a period (a "Payment Blockage Period")
commencing on the date of receipt by the Trustee of written notice from the
Representative of such Non-Payment Event of Default unless and until (subject to
any blockage of payments that may then be in effect under the preceding
paragraph) the earliest of (w) more than 179 days shall have elapsed since
receipt of such written notice by the Trustee, (x) such Non-Payment Event of
Default shall have been cured or waived in writing or shall have ceased to
exist, (y) such
77
Designated Senior Indebtedness shall have been paid in full or (z) such Payment
Blockage Period shall have been terminated by written notice to the Company or
the Trustee from such Representative, after which, in the case of clause (w),
(x), (y) or (z), the Company shall resume making any and all required payments
in respect of the Notes, including any missed payments. Notwithstanding any
other provision of this Indenture, in no event shall a Payment Blockage Period
commenced in accordance with the provisions of this Indenture described in this
paragraph extend beyond 179 days from the date of the receipt by the Trustee of
the notice referred to above (such period, an "Initial Blockage Period"). Any
number of additional Payment Blockage Periods may be commenced during the
Initial Blockage Period; provided, that no such additional Payment Blockage
Period shall extend beyond the Initial Blockage Period. After the expiration of
the Initial Blockage Period, no Payment Blockage Period may be commenced until
at least 360 consecutive days have elapsed since the commencement date of the
Initial Blockage Period. Notwithstanding any other provision of this Indenture,
no Non-Payment Event of Default with respect to Designated Senior Indebtedness
which existed or was continuing on the date of the commencement of any Payment
Blockage Period initiated by the Representative shall be, or be made, the basis
for the commencement of a second Payment Blockage Period initiated by the
Representative, whether or not within the Initial Blockage Period, unless such
Non-Payment Event of Default shall have been waived for a period of not less
than 90 consecutive days.
Section 11.3. Payment Over of Proceeds upon Dissolution, Etc.
(a) In the event of any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, arrangement, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or any
liquidation, dissolution or other winding-up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or any
general assignment for the benefit of creditors or other marshalling of assets
or liabilities of the Company (except in connection with the merger or
consolidation of the Company or its liquidation or dissolution following the
transfer of substantially all of its assets, upon the terms and conditions
permitted in Section 5.1 (all of the foregoing referred to herein individually
as a "Bankruptcy Proceeding" and collectively as "Bankruptcy Proceedings"), the
holders of Senior Indebtedness of the Company will be entitled to receive
payment and satisfaction in full in cash or Cash Equivalents of, or such payment
provided for, all amounts due on or in respect of all Senior Indebtedness of the
Company before the Holders of the Notes are entitled to receive or retain any
payment or distribution of any kind (other than a payment or distribution in the
form of Permitted Junior Securities) on account of the Notes.
(b) In the event that, notwithstanding the foregoing, the Trustee or
any Holder of Notes receives any payment or distribution of assets of the
Company of any kind, whether in cash, Property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before all
Senior Indebtedness of the Company is paid and satisfied in full, then such
payment or distribution (other than a payment or distribution in the form of
Permitted Junior Securities) will be held by the recipient in trust for the
benefit of holders of Senior Indebtedness and will be immediately paid over or
delivered to the holders of Senior
78
Indebtedness or their representative or representatives to the extent necessary
to make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution, or provision therefor,
to or for the holders of Senior Indebtedness.
Section 11.4. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article 11 or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
11.2 and 11.3, from making payments at any time for the purpose of making
payments of principal of and interest on the Notes, or from depositing with the
Trustee any monies for such payments, or (ii) in the absence of actual knowledge
by the Trustee that a given payment would be prohibited by Section 11.2 or 11.3,
the application by the Trustee of any monies deposited with it for the purpose
of making such payments of principal of, and interest on, the Notes to the
Holders entitled thereto unless at least one Business Day prior to the date upon
which such payment would otherwise become due and payable, the Trustee shall
have received the written notice provided for in Section 11.2(a) or in Section
11.7. The Company shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of the Company.
Section 11.5. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Indebtedness, the Holders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders by
virtue of this Article 11 which otherwise would have been made to the Holders
shall, as between the Company and the Holders, be deemed to be a payment by the
Company to or on account of the Senior Indebtedness, it being understood that
the provisions of this Article 11 are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
Section 11.6. Obligations of the Company Unconditional.
Nothing contained in this Article 11 or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Company and it
creditors other than the holders of Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of, premium, if any, on and any interest on the Notes as
and when the same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of any Senior Indebtedness, nor
shall anything herein or therein prevent the Holder or the Trustee on its behalf
from exercising all remedies otherwise permitted by applicable law upon Default
under this Indenture, subject to the rights, if any, under this Article 11 of
the holders of Senior Indebtedness in respect of cash, Property or securities of
the Company received upon the exercise of any such remedy.
79
Section 11.7. Notice to Trustee.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Notes pursuant to
the provisions of this Article 11. Regardless of anything to the contrary
contained in this Article 11 or elsewhere in this Indenture, the Trustee shall
not be charged with knowledge of the existence of any default or event of
default with respect to any Senior Indebtedness or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing from the Company, or from a
holder of Senior Indebtedness or a Representative therefor, and, prior to the
receipt of any such written notice, the Trustee shall be entitled to assume (in
the absence of actual knowledge to the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 11, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 11.8. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company, the
Trustee, subject to the provisions of Article 7 hereof, and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or the Holders, for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
11.
Section 11.9. Trustee's Relation to Senior Indebtedness.
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article 11 with respect to any
Senior Indebtedness which may at any time be held by it in it individual or any
other capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in
80
this Article 11, and no implied covenants or obligations with respect to the
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness.
Whenever a distribution is to be made or a notice given to holders
or owners of Senior Indebtedness, the distribution may be made and the notice
may be given to their Representative, if any.
Section 11.10. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders and without impairing or releasing
the subordination provided in this Article 11 or the obligations hereunder of
the Holders to the holders of the Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness, or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any Property pledged, mortgaged
otherwise securing Senior Indebtedness; (iii) release any Person liable in any
manner for the payment or collection of Senior Indebtedness; and (iv) exercise
or refrain from exercising any rights against the Company or any other Person.
Section 11.11. Holders Authorize Trustee To Effectuate Subordination of Notes.
Each Holder by its acceptance of them authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness and the
Holders, the subordination provided in this Article 11, and appoints the Trustee
its attorney-in-fact for such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency, receivership, or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the filing of a claim for
the unpaid balance of its Notes and accrued interest in the form required in
those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims,
81
then the holders of the Senior Indebtedness or their Representative are or is
hereby authorized to have the right to file and are or is hereby authorized to
file an appropriate claim for and on behalf of the Holders of said Notes.
Nothing herein contained shall be deemed to authorize the Trustee or the holders
of Senior Indebtedness or their Representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee or the holders of Senior Indebtedness or
their Representative to vote in respect of the claim of any Holder in any such
proceeding.
Section 11.12. This Article Eleven Not To Prevent Events of Default.
The failure to make a payment on account of principal of, premium,
if any, on or interest on the Notes by reason of any provision of this Article
11 will not be construed as preventing the occurrence of an Event of Default.
Section 11.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article 11 will apply to amounts due to the Trustee
pursuant to other Sections in this Indenture.
82
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
MMH HOLDINGS, INC.
By:
--------------------------
[TRUSTEE]
By:
--------------------------
83
EXHIBIT A
MMH HOLDINGS, INC.
12% Exchange Debentures due 2009
CUSIP No.: [ ]
No. [ ] $[ ]
MMH HOLDINGS, INC., a Delaware corporation (the "Company", which
term includes any successor corporation), for value received promises to pay to
[ ] or registered assigns, the principal sum [of $[ ] [ ] Dollars]
[indicated on Schedule A hereof]*, on , 2009.
Interest Payment Dates: [ ]
Record Dates: [ ]
Reference is made to the further provisions of this 12% Exchange
Debenture due 2009 (this "Note") contained herein, which will for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authorization hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit of this Indenture or be valid or
obligatory for any purpose.
--------
*Include for Global Notes.
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated:
MMH HOLDINGS, INC.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12% Exchange Debentures due 2009 described in the
within-mentioned Indenture.
Dated: [ ], as Trustee
By
-------------------------------
Authorized Signatory
A-2
(REVERSE OF NOTE)
MMH HOLDINGS, INC.
12% Exchange Debentures due 2009
1. Interest.
MMH HOLDINGS, Inc., a Delaware corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest semi-annually on April 1 and October 1 of
each year (an "Interest Payment Date"), commencing the Interest Payment Date
following the date of issuance of this Note. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance of this Note. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Capitalized terms used
herein and not defined shall have the meanings given them in the Indenture.
Notwithstanding anything herein to the contrary, on each Interest
Payment Date through and including April 1, 2003, the entire amount of the
interest payment on the Notes may be paid, at the option of the Company, in
additional Notes ("Secondary Notes") (valued at 100% of the principal amount
thereof). The Company may, at its option, pay cash in lieu of issuing any
Secondary Note to the extent the principal amount of such Secondary Note is not
an integral multiple of $1,000. The Company shall notify the Trustee of the
Company's election to pay interest in Secondary Notes not less than 5 days prior
to the Record Date for an Interest Payment Date. On each such Interest Payment
Date, the Trustee shall authenticate Secondary Notes for original issuance to
each holder of Notes on the preceding Record Date, as shown on the register of
the Notes, in the amount required to pay such interest. For purposes of
determining the principal amount of Secondary Notes to be issued in payment of
interest, the Company shall be entitled to aggregate as to each Holder the
principal amount of all Notes (including Secondary Notes) held of record by such
Holder.
2. Method of Payment.
The Company shall pay interest on this Note provided for in
Paragraph 1 above (except defaulted interest) to the person who is the
registered Holder of this Note at the close of business on March 15 or September
15 preceding the Interest Payment Date (whether or not such day is a business
day). A Holder must surrender this Note to a Paying Agent to collect principal
payments. The Company shall pay principal, premium, if any, and interest (to the
extent not paid in Secondary Notes) in money of the United States that at the
time of payment is legal tender for payment of public and private debts ("U.S.
Legal Tender"); provided, however, that the Company may pay principal, premium,
if any, and interest by check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment (including any indirect payment made in
Secondary Notes) to the Paying Agent or to a Holder at the Holder's registered
address.
A-3
3. Paying Agent and Registrar.
Initially, [ ] (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar without notice to
the Holders of the Notes. Neither the Company nor any of its subsidiaries or its
Affiliates may act as Paying Agent but may act as Registrar.
4. Indenture.
The Company issued the Notes under an Indenture, dated as of [ ]
(the "Indenture"), by and between the Company and the Trustee. The terms of this
Note 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. sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. This Note is subject
to all such terms, and Holders of this Note is referred to the Indenture and the
TIA for a statement of them. The Notes are limited in aggregate principal amount
to [$ ], plus any Secondary Notes issued as provided in paragraph 1 above and
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein.
5. Optional Redemption.
The Notes will be redeemable, at the Company's option, in whole or
in part, at any time from time to time on or after April 1, 2003, at the
following Redemption Prices (expressed as percentages of the principal amount)
together, in each case with if redeemed during the twelve-month period
commencing on April of the years set forth below, plus, in each case, accrued
interest thereon to the date of redemption:
Year Percentage
---- ----------
2003................................................106.000%
2004................................................104.000%
2005................................................102.000%
2006 and thereafter.................................100.000%
Notwithstanding the foregoing, the Company may redeem in the
aggregate all, but not less than all, of the Notes then outstanding at any time
prior to April 1, 2001, at a redemption price equal to 112.000% of the aggregate
principal amount so redeemed, plus accrued interest to the redemption date out
of the Net Proceeds of one or more Public Equity Offerings; provided, that any
such redemption occurs within 90 days following the closing of any such Public
Equity Offering.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Notes to be redeemed
at such Holder's registered
A-4
address. Notes in denominations of $1,000 or less may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Notes that have denominations larger than
$1,000.
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.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required, subject to certain limitations, to offer to purchase all of the
outstanding Notes at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of repurchase.
8. Limitation on Certain Asset Sales.
The Company is subject to certain conditions, obligated to make an
offer to purchase Notes at 100% of their principal amount plus accrued and
unpaid interest to the date of repurchase with certain net cash proceeds of
certain sales or other dispositions of assets in accordance with the Indenture.
9. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in denominations
of $1,000 and integral multiples of $1,000; provided, however, that Secondary
Notes and Notes issued in exchange for the Series A Senior Preferred Stock may
be issued in denominations of less than $1,000. A Holder shall register the
transfer of or exchange Notes in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Notes during a
period beginning 15 days before the mailing of a redemption notice for any Notes
or portions thereof selected for redemption.
[10. Persons Deemed Owners.
The registered Holder of a Note shall be treated as the owner of it
for all purposes.]
[10. The Global Note.
So long as this Global Note is registered in the name of the
Depository or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no
A-5
rights under the Indenture with respect to this Global Note held on their behalf
by the Depository or the Trustee as its custodian, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of this Global Note for all purposes. Notwithstanding the
foregoing, nothing herein shall (i) prevent the Company, the Trustee or any
agent of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by the Depository or (ii)
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of Notes.
The Holder of this Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in this Global Note through Agent Members, to take any action which a
Holder of Notes is entitled to take under the Indenture or the Notes.
Whenever, as a result of optional redemption by the Company, a
Change of Control Offer, an Excess Proceeds Offer or an exchange for Physical
Notes, this Global Note is redeemed, repurchased or exchanged in part, this
Global Note shall be surrendered by the Holder thereof to the Trustee who shall
cause an adjustment to be made to Schedule A hereof so that the principal amount
at Maturity of this Global Note will be equal to the portion not redeemed,
repurchased or exchanged and shall thereafter return this Global Note to such
Holder; provided that this Global Note shall be in a principal amount at
Maturity of $1,000 or an integral multiple of $1,000.]*
11. Unclaimed Funds.
If funds for the payment of principal, premium or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to the Company at its request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
12. Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Notes except for certain provisions thereof, and may be
discharged from its obligations to comply with certain covenants contained in
the Indenture and the Notes, in each case upon satisfaction of certain
conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
modified, amended or supplemented by the Company and the Trustee with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the Company and the Trustee may amend or
supplement the
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Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes or comply with any requirements of the Commission in
connection with the qualification of the Indenture under the TIA, or make any
other change that does not materially adversely affect the rights of any Holder
of a Note.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to make
Restricted Payments, to incur Indebtedness, to issue Preferred Stock or other
Capital Stock of Restricted Subsidiaries, to sell assets, to permit restrictions
on dividends and other payments by Restricted Subsidiaries to the Company, to
consolidate, merge or sell all or substantially all of its assets or to engage
in transactions with Affiliates. The limitations are subject to a number of
important qualifications and exceptions.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Notes then outstanding
may declare all the Notes to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Notes unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal, premium
or interest, including an accelerated payment) if it determines that withholding
notice is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company, its Subsidiaries or their respective Affiliates as if it were not
the Trustee.
17. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Notes or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Note by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
18. Authentication.
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This Note shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Note.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
21. Subordination.
The Indebtedness evidenced by the Notes is to the extent and in the
manner provided in the Indenture, subordinated and subject in right of payment
to the prior payment in full of all Senior Indebtedness, and this Note is issued
subject to such provisions. Each Holder of this Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture. Requests may be made to: MMH HOLDINGS,
INC., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:[ ].
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[SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount at Maturity of this Global Note shall be
[ ] [($ )]. The following decreases/increases in the principal amount at
Maturity of this Global Note have been made:
================================================================================
Total Principal
Decrease in Increase in Amount at Maturity Notation
Date of Principal Principal Following such Made by or
Decrease/ Amount at Amount at Decrease/ on Behalf of
Increase Maturity Maturity Increase Trustee
-------- -------- -------- -------- -------
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ASSIGNMENT FORM
I or we assign and transfer this Note to ________________________
_______________________________________________________________________________
______________________________________________________________________________.
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint____________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
--------------------------- ------------------------------
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee:
-------------------------------------
Participant in a recognized
Signature Guarantee Medallion
Program (or other signature
guarantor program reasonably
acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.12 or Section 4.20 of the Indenture, check the appropriate
box:
Section 4.12 [ ] Section 4.20 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section or Section of the Indenture, state the amount:
$______________
Date: Your Signature:
---------------- ---------------------
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee:
-----------------------------------------
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EXHIBIT B
[FORM OF LEGEND FOR GLOBAL NOTE]
Any Global Note authenticated and delivered hereunder shall bear a
legend in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE
(OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) ("DTC") TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IT REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR 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.
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